This post addresses the question of whether President Obama’s Executive Order No 13502 (Feb. 6, 2009) requires state or local governments to impose union-only project labor agreements (PLAs) on construction projects built with federal assistance. As further explained below, the Executive Order is quite clear on this point: Nothing in the Executive Order requires any state or local government to impose a union-only PLA on any federally assisted project.
By its terms, E.O. 13502 imposes obligations only on “executive agencies” of the federal government, as defined in Section 2 of the Executive Order. As to such agencies, and only such agencies, the Executive Order states that in awarding contracts or obligating funds in connection with large-scale construction projects, the federal agencies “may, on a project-by-project basis,” require the use of a project labor agreement by a contractor where certain limited conditions are met. See Section 3.
Section 5 of the Executive Order states that the order “does not require an executive agency to use a project labor agreement on any construction project….” So even within the federal government no PLAs are required by Executive Order No. 13502. In any event, the Executive Order imposes no obligations on state or local governments whatsoever.
Section 7 of the Executive Order calls upon the Office of Management and Budget (OMB) to make recommendations in the future about whether broader use of project labor agreements would be helpful on construction projects receiving federal financial assistance. Such projects could include state and local projects. However, OMB has not yet made any recommendations in response to this Section, and there is again nothing in this provision that requires state or local governments to impose projects labor agreements as a condition of receiving federal financial assistance, either now or in the future.
Section 8 of the Executive Order revokes President Bush’s Executive Order No. 13202 (as further amended in E.O. No. 13208). President Bush’s Order had, among other things, prohibited state and local governments from imposing union-only PLAs on any federally assisted construction project.
By revoking President Bush’s Order, Executive Order No. 13502 can be said to have removed the federal prohibition against state or local PLAs; nevertheless, the new Executive Order clearly did not thereby require any state or local action on federally assisted projects. Indeed, Executive Order No. 13502 does not direct or authorize state or local governments to do anything with regard to union-only PLAs, and the imposition of such anti-competitive bidding requirements remains subject to challenge under most state competitive bidding laws.
In conclusion, nothing in Executive Order No. 13502 requires (or even authorizes) any state or local government to impose a union-only PLA on any federally assisted construction projects.
To print a copy of this memo (blog post), please click here.
Update by TheTruthAboutPLAs.com, June 14, 2010:
To date, there has been no expansion of the scope of Executive Order 13502. In fact, Part C (4)(d) of the FAR’s final rule implementing Executive Order 13502 (released April 13, 2010, effective May 13, 2010) makes it very clear Executive Order 13502 and the FAR final rule does not apply to federally assisted projects:
d. Comments regarding the use of project labor agreements for initiatives other than large-scale Federal construction projects. A number of respondents recommended that the E.O.’s policy for encouraging the use of project labor agreements be broadened….
…Finally, a number of respondents addressed use of project labor agreements in connection with Federally-assisted projects….
Response: Modifying the coverage of the final rule to address expanded consideration of project labor agreements is outside the scope of this rulemaking. This rulemaking is intended to support the implementation of the policy set forth in section 1(b) of E.O. 13502, which is expressly directed at Federal acquisitions involving large-scale construction projects. Under section 5 of the E.O., agencies are not precluded from using project labor agreements on projects not covered by the order. GSA, DoD, and NASA note that this final rule does not limit agencies’ exercise of their authorities to require project labor agreements in appropriate circumstances and to the extent permitted by law. Finally, with respect to recommendations addressing construction projects funded by Federal grants, GSA, DoD, and NASA note that such transactions are outside their policy jurisdiction and the purview of the FAR.
In short, federal agencies cannot require that local, state or private recipients of federal money, grants, assistance etc. mandate a PLA as a condition of receiving federal assistance. The decision to mandate a PLA for a specific project is left up to the recipient of the federal assistance. In addition, contractors are always free to enter into a PLA voluntarily, as permitted and protected by the National Labor Relations Act.
Update July 18, 2011, May 15, 2012, and June 9, 2014:
To date, Executive Order No. 13502 has not been expanded to cover federal projects below the $25 million threshold or federally assisted projects via Section 7.
Despite the FAR rule clearly establishing the limited scope of the rule, political appointees in federal agencies courting Big Labor on behalf of the White House continue to promote the use of PLAs on federally assisted construction projects.
A Feb. 18, 2011, “Project Labor Agreement Announcement” email to an unknown number of state and local government agencies receiving federal assistance from Peter Rogoff, a political appointee of the Obama Administration who serves as the head of the Federal Transportation Administration (a division of the U.S. Department of Transportation), is a prime example of federal agencies promoting PLAs on federally assisted projects. In his email, Rogoff said:
“I encourage you to read this guidance and to make use of project labor agreements whenever possible.”
Learn more about this memo here.
A May 2014 report from the U.S. Department of Transportation’s Federal Highway Administration indicated there are a total of 259 contracts in four states worth $8.636 billion that received FHWA assistance and are subject to PLA mandates. In these instances, local recipients of federal FHWA money decided to require PLAs but the FHWA was required to approve the PLA mandates requested by the locality.
In addition, the U.S. Department of Housing and Urban Development (HUD) has been promoting government-mandated PLAs on construction projects supported by federal dollars from HUD in Boston, Portland and Oakland. See the remarks from HUD Secretary Shaun Donovan here and here.
These examples demonstrate how PLA mandates are pushed by federal agencies on federally assisted projects. Congress needs to pass legislation restoring neutrality in government contracting.
The Government Neutrality in Contracting Act (H.R. 735), introduced by Congressman John Sullivan (R-Okla.) and cosponsored by 176 other House members, essentially codifies into law President Bush’s executive orders ensuring fair and open competition on federal and federally assisted construction projects. It remains in the House Oversight and Government Reform Committee and was the subject of a subcommittee hearing last year. The Government Neutrality in Contracting Act (H.R. 436/S. 109 in the 113th Congress), introduced by Rep. Andy Harris (R-Md.) and Sen. David Vitter (R. La.) essentially codifies into law President Bush’s executive orders ensuring fair and open competition on federal and federally assisted construction projects. H.R. 436 remains in the House Oversight and Government Reform Committee and S.109 has been referred to the Senate Homeland Security and Governmental Affairs Committee in the 113th Congress.
In the 114th Congress, the Government Neutrality in Contracting Act (H.R. 1671/S. 71), introduced by Rep. Mick Mulvaney (R-S.C.) and Sen David Vitter (R-La.), essentially codifies into law President Bush’s executive orders ensuring government neutrality and fair and open competition on federal and federally assisted construction projects by restricting the use of government-mandated PLAs and preferences. Supported by a diverse coalition con construction industry and employer groups, H.R. 1671 remains in the House Oversight and Government Reform Committee and S.71 has been referred to the Senate Homeland Security and Governmental Affairs Committee.