By Ben Brubeck
The Biden administration’s final rule, “Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects,” implements Executive Order 14063, which requires federal construction contracts of $35 million or more to be subject to controversial project labor agreements (PLAs).
The Biden administration’s burdensome, inflationary, and anti-competitive PLA mandate rule will needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers. Absent a successful legal challenge, this executive overreach will reward powerful special interests with government construction contracts at the expense of taxpayers and the principles of free enterprise and fair and open competition in government procurement.
When mandated by governments, PLAs increase construction costs to taxpayers by 12% to 20%, reduce opportunities for qualified contractors and their skilled craft professionals, and exacerbate the construction industry’s worker shortage of more than a half-million people in 2023.
Associated Builders and Contractors (ABC) will continue to fight on behalf of quality, experienced contractors harmed by this rule and the 88.3% of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects, but cannot do so because of PLA schemes.
In addition, ABC condemns Biden administration policies independent of this rulemaking that push PLAs on competitive grant programs administered by federal agencies, affecting nearly $260 billion worth of federally assisted infrastructure projects procured by state and local governments, as well as schemes by the Biden administration to coerce private developers of hundreds of billions of dollars’ worth of clean energy and domestic microchip manufacturing projects to mandate PLAs. Biden’s PLA policies circumvent congressional intent as none of these policies were passed in funding legislation.
Some background: on Aug. 19, 2022, the Federal Acquisition Regulatory Council issued its proposed rule implementing Executive Order 14063. In October 2022, ABC submitted more than 40 pages of comments to the Federal Acquisition Regulatory Council, calling on the Biden administration to withdraw its controversial proposed rule.
ABC’s opposition was shared by more than 50 members of the U.S. Senate and U.S. House of Representatives, 19 Republican governors, and a diverse coalition of construction-industry, small-business, and taxpayer advocates urging the administration to withdraw its proposal and additional policies promoting PLA mandates on federal and federally assisted construction projects.
At least 8,000 stakeholders across the country — including 2,500 ABC member contractors — submitted comments opposed to this proposed rule during the 60-day comment period. In a September 2022 survey of ABC contractor members, 98% opposed this proposed rule, and 97% said a construction contract that required a PLA would be more expensive compared to a contract procured via fair and open competition.
ABC plans to challenge this Biden administration scheme in the courts on behalf of taxpayers and the majority of the construction industry. In the interim, ABC will continue to oppose its special-interest-favoring policy using all tools in our advocacy and legal toolbox while educating stakeholders about the negative impact of government-mandated PLAs on federal and federally assisted projects.
Ben Brubeck is vice president of Regulatory, Labor, and State Affairs at Associated Builders and Contractors.