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    Home » Budgets & Funding » Contractors Say Fed. Project Labor Rules Will Add Costs
    Budgets & Funding

    Contractors Say Fed. Project Labor Rules Will Add Costs

    BEX StaffBy BEX StaffOctober 5, 2022No Comments3 Mins Read
    Credit: Phoenix Business Journal
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    By Associated Builders and Contractors

    According to a September 2022 survey of Associated Builders and Contractors contractor members, 98% oppose President Biden’s proposed rule mandating project labor agreements on federal construction projects of $35M or more. PLA schemes exclude almost nine out of 10 workers from participating in these contracts.

    “The overwhelming opposition to PLA mandates demonstrates that fair and open competition on federal and federally assisted infrastructure projects is a win-win for taxpayers and the U.S. economy because it ensures all Americans and qualified companies are welcome to fairly compete to rebuild America’s infrastructure,” said ABC VP of Regulatory, Labor and State Affairs Ben Brubeck. “In contrast, the Biden administration’s proposed rule requiring government mandated PLAs on federal contracts of $35M or more, and other policies promoting PLAs on federally assisted construction projects, will needlessly increase costs by 12% to 20% and reduce competition from quality contractors and the 87.4% of construction workers who freely choose not to join a union.”

    According to the survey:

    • 97% of survey respondents said a construction contract that required a PLA would be more expensive compared to a contract procured via free and open competition.
    • 99% said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions.
    • 97% of respondents said that government-mandated PLAs decrease economy and efficiency in government contracting.
    • 96% expected a requirement to result in less competition from subcontractors.
    • 95% of survey respondents said the requirements of government-mandated PLAs for firms to contribute to union benefits programs harm employees and 96% said they undermine investments in workforce development programs.

    “Between 2009 and 2021, federal agencies mandated just 12 PLAs on 2,075 federal construction projects of $25M or more, illustrating that when given the option, PLA mandates are unnecessary on federal construction projects,” said Brubeck. “ABC members are top federal contractors – they were awarded 57% of the value of $127B worth of large-scale federal construction projects during this time period – but are needlessly excluded by the Biden administration’s policies promoting PLAs, which favor unionized contractors and labor.”

    The majority of survey respondents said PLA mandates would either result in construction projects that are less safe (65%) or have no impact on safety (34%). Three-quarters (75%) said PLAs would result in poorer quality or have no impact on quality (24%). Fully 85% said PLA mandates decrease the likelihood of completing a project on time and on budget, with 9% saying there would be no impact. 

    In addition, 94% of survey respondents said a PLA would result in worse local hiring outcomes for a project. Almost 69% of respondents agreed that a PLA would decrease the hiring of women, veteran and disadvantaged business enterprises and construction workers, which have traditionally been unaffiliated with labor unions, while another 27% of respondents felt that PLAs would have no effect in hiring these disadvantaged populations and contractors.

    The survey of ABC member contractors was conducted between Sept. 7 and 23 following the Biden administration’s Aug. 19 release of the Federal Acquisition Regulation Council’s proposed rule (FAR Case 2022-003, Use of Project Labor Agreements for Federal Construction Projects RIN: 9000-AO40) implementing President Biden’s Feb. 4 Executive Order 14063.

    ABC and a coalition of construction industry, small business and taxpayer advocates strongly oppose the Obama and Biden administration’s pro-PLA policies and have  advocated for federal legislation, the Fair and Open Competition Act (S. 403/H.R. 1284), which prohibits government-mandated PLAs on federal and federally assisted projects.  (Source)

    ABC Associated Builders and Contractors Ben Brubeck Biden Administration Executive Order 14063 Federal Acquisition Regulation Council Federal policy labor rules Obama Administration PLA project labor agreements Use of Project Labor Agreements for Federal Construction Projects
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