U.S. DOT Promotes Government-mandated Project Labor Agreements in Infrastructure Grant Program

0 February 24, 2021  Featured, Federal Construction, State & Local Construction

In a concerning development for the merit shop contracting community and hardworking taxpayers, the U.S. Department of Transportation is encouraging the use of government-mandated project labor agreements on federally assisted construction projects funded through a grant program administered by the DOT’s Build America Bureau.

On Feb. 17, the DOT announced it is seeking applicants for the FY 2021 round of the Infrastructure for Rebuilding America (INFRA) discretionary grant program, providing $889 million to fund transportation projects of national and regional significance.

The U.S. DOT has changed its fiscal year 2021 INFRA Notice of Funding Opportunity to reflect the Biden administration’s “priorities around creating good-paying jobs, ensuring safety, advancing racial equity, addressing climate change and building innovative, transformative projects.”

According to the FY2021 INFRA program’s NOFO, the DOT is evaluating applications containing the inclusion of plans “related to project labor agreements and inclusive local participation goals” favorably “to the extent permitted by federal law and DOT regulations.”

“The DOT’s abrupt policy shift in support of government-mandated project labor agreements on INFRA grants is troubling and may undermine the administration’s laudable priorities at a time when small, minority and women-owned businesses and their diverse workforces seek opportunities to rebuild their communities and recover from the COVID-19 pandemic,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “The truth is, government-mandated project labor agreements increase construction costs by 12% to 20%, discourage experienced contractors and their qualified workforce from competing to build transformational taxpayer-funded projects and deny good-paying jobs to the more than 87% of the U.S. construction industry workers who chose not to affiliate with unions.”

In a Feb. 4 letter to President Joe Biden, ABC expressed concerns about government-mandated PLAs and the “expansion of existing policies that needlessly limit competition and increase costs on taxpayer-funded federal and federally assisted construction projects.”

“As the construction industry faces a 9.4% unemployment rate due to the recession caused by COVID-19 and America’s infrastructure remains critically underfunded, we need to be doing all we can to maximize taxpayer investments in infrastructure while helping all construction workers find quality jobs to rebuild their communities,” according to the letter.

The change to the DOT’s FY 2021 INFRA NOFO is not a blanket PLA mandate on INFRA-funded projects procured by state and local stakeholders, but it demonstrates the first expansion of DOT and Biden administration policies promoting the use of controversial government-mandated PLAs.

Of note, DOT’s Federal Highway Administration is already in the practice of evaluating and approving PLAs mandated by state and local governments for FHWA-funded construction projects.

According to 2021 Federal Highway Administration data, state and local lawmakers mandated PLAs on 513 state and local construction projects (totaling an estimated $12.88 billion) that received federal assistance and formal approval from the FHWA from May 2010 through Dec. 22, 2020.

Of note, the 25 states that have responded to the threat of discriminatory PLA mandates and preferences—by enacting Fair and Open Competition Act legislation prohibiting government-mandated PLAs on state and local taxpayer-funded construction projects to some degree—may offer a level of protection against pro-PLA policy strings attached to federal grant dollars and other forms of federal assistance. At a minimum, these state measures send a message to the federal government that PLA mandates are not welcome on taxpayer-funded construction projects.

ABC will continue its fight against government-mandated PLAs on federal, state and local taxpayer-funded construction projects because taxpayers deserve more efficient and effective policies that will encourage all qualified contractors and their skilled workforce to compete to build long-lasting, quality projects at the best price.

FY 2021 INFRA applications must be submitted by March 19, 2021, through grants.gov.

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