In 2009, President Obama signed Executive Order 13502, which encourages federal agencies to mandate project labor agreements (PLAs) on large-scale federal construction projects exceeding $25 million in total cost on a case-by-case basis. Many merit shop advocates of fair and open competition predicted it would lead to billions of dollars’ worth of federal construction contracts being awarded to unionized contractors and their all-union workforces—without true competition from qualified merit shop contractors.
Industry experts feared the executive order would result in taxpayers needlessly paying nearly 20 percent more per federal contract procured with a PLA requirement. Faced with finite building budgets, it would generate less building and create fewer jobs for the experienced men and women employed by merit shop contractors who deliver projects safely, on time and on budget every day to the federal government.
Stakeholders turned to Associated Builders and Contractors (ABC) to defend fair and open competition in federal contracting. ABC and the merit shop contracting community mobilized an aggressive campaign of effective public relations, political, legal and legislative strategies to restrict the devastating impact of anti-competitive and costly government-mandated PLAs on federal, state and local public works projects.
The campaign is producing impressive results. Efforts helped prevent PLA mandates and preferences on nearly 99 percent of federal contracts exceeding $25 million from FY2009-FY2013, freeing up a total of $64.78 billion worth of work from PLA requirements so all qualified firms can fairly compete to win these contracts.
From FY2009-FY2013, ABC member prime contractors won 61 percent of large-scale federal contracts subject to President Obama’s pro-PLA Executive Order 13502. That’s 577 contracts valued at a total of $40.31 billion won by ABC members.
Legal tactics proved effective at stopping federal PLA mandates. Federal contractors, with the support of ABC, filed five Government Accountability Office (GAO) bid protests against PLAs mandated by four different federal agencies on large-scale federal construction projects. In each instance, federal agencies abandoned the PLA requirements after GAO officials suggested they violate federal contracting laws in specific circumstances.
The latest legal victory against a PLA mandate on a U.S. Department of Labor (DOL) Job Corps Center in Manchester, N.H., was the DOL’s second failed attempt to require a PLA on the project. It was also the first apples-to-apples comparison of a federal project bid with and without a PLA requirement. Advocates of fair and open competition were not surprised when the PLA-free project experienced three times as many bidders and bid prices that were 16 percent lower than when the project was bid with a PLA mandate, saving taxpayers more than $6.2 million.
Helping merit shop contractors respond to more than 225 surveys issued by federal agencies to determine if a PLA is appropriate for a federal project has been another effective strategy in the fight against PLAs. A robust response from the merit shop contracting community resulted in no PLA requirements on any surveyed projects.
More importantly, ABC’s campaign prevented the expansion of Executive Order 13502 onto federal projects costing less than $25 million, as well as thwarted an additional push for costly PLA mandates on private, state and local projects receiving federal assistance.
Since 2011, 17 states responded to the threat of discriminatory PLA mandates and preferences by adopting legislation or executive orders banning government-mandated PLAs on state, local and publicly funded projects, bringing the total number of states to enact such measures to 21.
In 2014, Mississippi, South Dakota and Alabama enacted laws prohibiting state government entities from requiring contractors to sign a PLA or other agreements with labor unions as a condition of performing work on public construction projects.
Dozens of communities across the country also have enacted similar rules for public works contracting.
These efforts ensure a level playing field, increase competition, reduce costs and eliminate cronyism in public works contracting at the local and state level.
However, some states controlled by union-friendly Democrats have enacted legislation or executive orders pushing the use of PLAs on state and state-assisted projects. In addition, federal agencies have encouraged state and local governments to require PLAs on billions of dollars worth of state and local projects receiving federal money and other forms of federal assistance.
While our campaign is making remarkable progress, lawmakers requiring and encouraging the use of PLA mandates cost taxpayers a fortune and harm qualified merit shop contractors and their skilled trades employees.
Continuing the Fight
Faced with another 30 months of President Obama’s pro-PLA policies, ABC will continue to make defending fair and open competition in public contracting a top priority. In the 113th Congress, ABC is promoting the Government Neutrality in Contracting Act (S. 109/H.R. 436), which would restore a level playing field in federal contracting by preventing entities procuring federal and federally assisted projects from requiring PLAs as a condition of winning a taxpayer-funded contract.
Because the passage of a legislative solution to the PLA problem in a divided federal government in a mid-term election year will be highly unlikely, ABC will continue to complement effective legislative, legal and regulatory strategies with a communications and grassroots campaign to educate federal agency procurement officials, lawmakers, industry stakeholders, the media and taxpayers about the harmful effects of special interest PLA schemes.
The merit shop contracting community can overcome economic and political adversity, but it needs industry leaders to dedicate resources to fight for fair and open competition until a political solution is achievable.