Use of Project Labor Agreements for Federal Construction Projects

An Executive Order, entitled Use of Project Labor Agreements for Federal Construction Projects, is encouraging the use of project labor agreements for large-scale Federal construction projects in order to promote the economy and increase efficiency in Federal procurement. This executive order amends a pervious order signed by President Obama on February 6, 2009, and encourages Federal agencies to consider the use of project labor agreements, as they may deem appropriate, on large-scale construction projects where the total cost to the Government is $25 million or more. A project labor agreement is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions for employment for specific construction projects.

The executive order establishes requirements and standards that must be met by Federal agencies when using project labor agreements. Specifically, agreements must a) bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all provisions and contract documents; b) Allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements; c) Contain guarantees against strikes, lockouts, and similar site disruptions; d) Set forth effective and mutually binding procedures for resolving labor disputes arising during the project labor agreement; e) Provide other mechanisms for labor-management cooperation on matters of mutual interest, including productivity, quality of work, safety, and health; and f) Fully conform to all statutes, regulations, and executive orders.

The executive order states that agencies may, on a project-by-project basis, require the use of a project labor agreement by a contractor where use of an agreement would advance the Government’s interest in achieving efficiency, stability, compliance with laws and regulations, safety and health, and equal opportunity employment.

Large-scale construction projects pose special challenges to efficiency and timely procurement by the Federal Government. Furthermore, it is difficult to predict labor costs when bidding on contracts or to ensure a steady supply of labor, and labor disputes can delay an entire project. The use of a project labor agreement may prevent these problems from developing by providing structure and stability to large-scale construction projects, and can help promote efficient completion of Federal construction contracts.

In 1993, the Supreme Court recognized in Building and Construction Trades Council v. Associated Builders, 507 U.S. 218, that project labor agreements are valid pre-hire agreements under sections 8(e) and (f) of the National Labor Relations Act, which authorizes the use of these agreements in the construction industry. As of the summer of 2009, 21 of 25 Federal construction projects were, or were slated to be, covered by project labor agreements, and challenges to the use of such agreements have been successfully defended.
Further information regarding the project labor agreement order is available from the White House Office of the Press Secretary (Executive Order: Use of Project Labor Agreements for Federal Construction Projects | The White House).

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