Legal Challenges Against Federal Government-Mandated Project Labor Agreements During President Obama’s First Term

0 January 22, 2013  Federal Construction

Here’s a brief review of legal challenges to federal government-mandated project labor agreements (PLAs) during President Obama’s first term.

On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule (pdf), effective May 13, 2010, implementing President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 into federal procurement regulations. It encourages federal agencies, on a project-by-project basis, to mandate PLAs on federal construction projects exceeding $25 million in total cost. The order also permits (it does not require) private, local and state recipients of federal assistance to mandate PLAs —a practice prohibited from 2001 to 2009 by President George W. Bush’s Executive Orders 13202 and 13208.

During President Obama’s first term, federal contractors (with assistance from ABC) filed five bid protests with the Government Accountability Office (GAO) against PLAs mandated by federal agencies. For the following federal projects, each bid protest resulted in the agency removing the PLA mandate in the face of the protest:

Legal arguments for these GAO bid protests focused on how PLA mandates fail to improve the economy and efficiency in federal contracting and violate federal regulations requiring full and open competition in federal procurement. Additional bid protest arguments mirror concerns raised by ABC in comments submitted to the FAR Council in response to its July 14, 2009,  proposed rule (FAR Case 2009-005, Use of Project Labor Agreements for Federal Construction Projects).

ABC’s comments to the proposed rule can be viewed here. (Review ABC member survey supplement to ABC comment here, ABC National’s comments addressing the impact of the rule on small businesses in violation of the Regulatory Flexibility Act here, and a blog post about surveys measuring the anti-competitive effect of PLAs on contractors here). Every comment submitted to the FAR Council, including close to 900 comments filed by ABC members, is available for public review here.

On April 21, 2010, ABC released, “The Final Rule Implementing the PLA Executive Order: Why it Should Be Challenged,” by ABC general counsel Maurice Baskin, Esq., Venable LLP.  This document lays out ABC’s argument for how the Obama administration’s actions violate federal procurement laws; discriminate against 85 percent of the construction industry workforce and many small businesses; and harm taxpayers. Check out the related blog post here.

Federal agencies will likely experience GAO bid protests and additional legal action if they needlessly mandate PLAs on federal construction projects during President Obama’s second term.

In addition, any expansion of Executive Order 13502 onto federal or federally assisted projects via Section 7 of the order will be met with an aggressive, legal, legislative, political and public relations response.

Successful bid protests have played a role in the merit shop community’s winning fight against federal PLA mandates documented here.

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