FAR Council Proposes New Rule on Project Labor Agreements for Major Construction Projects

By Alexandra Barbee-Garrett, Peter J. Eyre & Thomas P. Gies on August 23, 2022

On August 18, 2022, the FAR Council issued a proposed amendment to the FAR implementing Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which requires the use of project labor agreements (PLAs) on any large-scale federal construction projects valued at or above $35 million unless an exception applies. The Order, and the proposed rule, also give agencies discretion to use PLAs on projects under that $35 million threshold.

In addition to expanding definitions of “construction,” “labor organization,” and “large-scale construction project” to align with E.O. 14063, the proposed rule would revise FAR 22.503 to reflect the change in policy that mandates agencies to require the use of PLAs when awarding large-scale federal construction contracts—including individual orders under Indefinite Delivery, Indefinite Quantity contracts—unless an exception applies. The proposed rule would make the PLA requirement a mandatory flow-down. The proposed rule would also allow agencies to include any additional agency-specific requirements in a PLA through FAR 22.504(b)(6), and would strike the current FAR 22.504(c), which grants agencies discretion to specify PLA terms and conditions.

Both the E.O. and the proposed rule implementing it provide an exception from the PLA requirements. The proposed rule would allow the senior procurement executive of an agency to grant a written exception to the PLA requirement in each of the following circumstances, as provided in the E.O.:

1. Requiring a PLA would not achieve economy and efficiency in Federal procurement, as described in 22.504(d);

2. Requiring a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition, i.e., where adequate competition at a fair and reasonable price could not be achieved; or

3. Requiring a PLA would be inconsistent with statutes, regulations, other E.O.s., or Presidential Memoranda.

This change in policy will become effective with the publication of the Final Rule, following a 60-day public comment period.

We will continue to monitor developments concerning this initiative.

(See Article)

Maine labor coalition scores major legislative win creating renewable energy jobs

April 29, 2022
Dan Neumann

The Maine Labor Climate Council, a new coalition made up of a dozen unions from across the state representing a variety of different industries, won its first major victory in the Maine Legislature this week.

The top priority bill for the council this session, LD 1969, introduced by Rep. Scott Cuddy (D-Winterport), went into law without Gov. Janet Mills’ signature on April 25. The law will require prevailing wages and equity standards on all large, utility-scale renewable energy projects including solar, wind, tidal, geothermal and hydropower. …

The new law mandates that contractors pay the prevailing wages customary for each occupation in an industry. The new law will also build a career path for Mainers wanting to get into the clean energy sector by developing pre-apprenticeship programs that will help them access union-registered apprenticeship programs.

LD 1969 also incentivizes employee ownership of renewable energy construction projects as well as the use of Projects Labor Agreements — pre-hire negotiated agreements that require strong labor standards regarding wages, hours, working conditions and dispute resolution methods. The law directs the Maine Public Utilities Commission to consider these factors when acquiring energy under Maine’s renewable portfolio standard, a law that establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

Maine’s renewable portfolio standard (RPS) establishes the portion of electricity sold in the state that must be supplied by renewable energy resources.

With the passage of the new law, Maine joins other states like Connecticut, Illinois, New York and New Jersey that have recently passed strong labor and equity standards in the renewable energy sector.

(Read More)

Project labor agreements on federal construction projects will benefit nearly 200,000 workers

Posted February 9, 2022 at 11:07 am by Ihna Mangundayao, Celine McNicholas, and Margaret Poydock

President Biden recently signed an executive order (EO) requiring project labor agreements on federal construction projects over $35 million, a move that is expected to affect $262 billion in federal construction contracting and improve job quality for nearly 200,000 workers.

Project labor agreements (PLAs) are used primarily in the construction industry to establish the terms of employment for all workers on a project. Generally, PLAs specify workers’ wages and fringe benefits and may include provisions requiring contractors to hire workers through union hiring halls, otherwise establish a unionized workforce, or develop procedures for resolving employment disputes. PLAs often include language that prevents workers from striking during the project while also preventing employers from locking workers out.

PLAs are effective mechanisms for controlling construction costs, ensuring efficient completion of projects, and establishing fair wages and benefits for all workers. PLAs also help ensure worker health and safety protections while providing a unique opportunity for workforce development. These agreements can be written to engage local populations, provide jobs for underrepresented groups, and develop experience for apprentices.

Project labor agreements don’t raise construction costs

Evidence shows that PLAs do not increase construction costs. For example, New York City embarked on a $5.3 billion project in 2009, and the use of four PLAs was estimated to lead to 1,800 new jobs while saving the city approximately $300 million. A study from the Berkeley Labor Center also found that projects with PLAs attracted a “similar number of bidders” and “came in at a slightly lower price” when compared to projects without PLAs in place. Another 2015 paper from University of Utah economists compared nine PLA affordable housing projects with 121 affordable housing projects built without PLAs and found that the PLA projects were not more expensive to build.

(Read More)

(White House Briefing)

Biden joins ironworkers in Upper Marlboro to sign federal labor protections into law

Joshua Barlow
February 5, 2022, 10:32 PM

President Joe Biden joined union members at Ironworkers Local 5 in Upper Marlboro, Maryland, where he signed an executive order that gives construction workers new protections for federally contracted projects.

According to the White House, the executive order requires federal construction contracts worth more than $35 million to use project labor agreements.

The order, which goes into effect immediately, will affect an estimated 200,000 union workers in an industry that has taken severe economic hits due to the pandemic.

Project labor agreements (PLA) are legal mechanisms by which the terms and conditions for workers on an individual project are determined. Within the new executive order, any contractor who is awarded a federal contract must co-sign the PLA with any union representing their labor force.

(Read More)

FACT SHEET: President Biden Signs Executive Order to Boost Quality of Federal Construction Projects

White House Briefing Room
FEBRUARY 03, 2022 | STATEMENTS AND RELEASES

Biden-Harris Administration will make federal procurement more economical and efficient by improving coordination and minimizing disruptions on large federal construction projects

Tomorrow, the President will sign an Executive Order to improve timeliness, lower costs and increase quality in federal construction projects. Federal construction projects span the country – from the maintenance of nuclear sites to base construction to waterways and flood projects. By requiring the use of project labor agreements (PLAs) on federal construction projects above $35 million, the Order will help alleviate the management and coordination challenges that can stymie progress on major construction projects. This helps projects get completed on time and helps the government get the best value for taxpayers’ dollars.

Based on FY2021 figures, this Order could affect $262 billion in federal government construction contracting and improve job quality for the nearly 200,000 workers on federal construction contracts. Additionally, the President’s Executive Order directs the departments of Defense and Labor, along with the Office of Management Budget, to lead a training strategy for the nearly 40,000-person strong contracting workforce on the implementation of this Order’s policy.

This Executive Order is just one of many steps the Biden-Harris Administration is taking that will improve the efficiency of federal procurement. Since taking office, the President fulfilled his commitments to strengthen Buy American rules, and secured a reliable supply of experienced, quality workers for federal service contracts. As of January 30th, federal contractors in new or extended contracts must pay a $15/hour minimum wage, as the President directed in Executive Order 14026.

This new Executive Order, while only applicable to federal procurement, advances the Administration’s commitment to rebuild the nation’s infrastructure, on-time and at reasonable cost. The Order will only apply to provisions in the Bipartisan Infrastructure Law that are direct federal procurement, which excludes construction projects financed through grant dollars to non-federal entities. The Executive Order will benefit taxpayers, contractors, and workers by:

  • Alleviating the coordination challenges on large, complex projects. Multi-million-dollar projects can present real management challenges to the primary contractor on the project, which has to work with multiple businesses and multiple types of skilled labor to complete a project. PLAs can help coordinate diverse contractors and sub-contractors and their employees working on a project and prevent disputes between subcontractors. Additionally, workers will have more confidence in the management of the project and a greater commitment to completing the project if they have a voice at the table. This helps projects get completed on time by minimizing work disruptions. On-time projects save the government, and taxpayers, money.
  • Raising quality standards for contractors bidding on federal projects. PLAs help raise the standards of all bidders on federal contracts. Contractors who offer lower wages or do not train their workers will need to raise their standards to compete with other high-wage, high-quality companies. Businesses with well-trained workers will be more likely to bid for and win federal contracts. Well-trained, high quality workers are more productive, completing projects well and on time.
  • Reducing uncertainty in the contracting process. PLAs standardize the work rules, compensation costs, and dispute settlement processes on construction projects. This standardization helps create more certainty for the government and, therefore, taxpayers, about the costs and completion rate for projects.
  • Increasing training for the federal contracting workforce. The Executive Order directs the Departments of Defense and Labor, along with the Office of Management and Budget, to lead a training strategy for the contracting workforce on Project Labor Agreements and the implementation of this Order. This training will create a more uniform and accessible experience for contractors interacting with departments and agencies across the federal government.

(See White House Briefing)

(See Official White House Presidential Action on PLAs) released Feb. 4, 2022

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$15B California school construction bond to go before voters (CA)

AUTHOR – Kim Slowey
PUBLISHED – Sept. 16, 2019

Dive Brief:

  • California lawmakers have agreed on the terms of a $15 billion construction bond program that will now go before state voters in March. The money would go toward public preschool, K-12 and higher education construction and modernization projects.
  • If approved by voters, the lion’s share of the funding – $9 billion – will be used for preschool and K-12 projects: $2.8 billion for new construction; $5.2 billion for modernization; $500 million for charter schools; and $500 million for career technical schools. The University of California and the system’s Hastings College of the Law in San Francisco will be able to tap into $2 billion, as will California State University facilities and the California Community Colleges system.
  • The state’s General Services Department will prioritize projects for facilities that have posed health or life safety hazards, followed by those proposed by school districts with financial hardships; school facilities that have concerns with lead in water; projects that have been waiting for approval for two quarters; and new construction or modernization projects that will ease overcrowding.

Dive Insight:

If voters approve the legislation next year, that’s good news for the California contractors that specialize in school construction, but it has also raised questions from some about the role that project labor agreements (PLAs) play in the measure.

In Section 17070.56(a)(2) of the bill, within each priority category, those projects that use a PLA will be given first consideration. So, for example, if there are 10 projects that are meant to deal with some health or safety hazard, the projects that use a PLA will be given priority over the others.

(Read More)

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Your Turn: Project labor agreement needed in Worcester Red Sox deal (MA)

By Frank Callahan
March 14, 2019

The city of Worcester, the Worcester Red Sox and Madison Downtown Holdings, a private developer, are building a $240-million downtown project that includes a new, $90-million, 10,000-seat stadium for the Boston Red Sox Triple-A Minor League affiliate team. Most see this as good news for the community. And it can be if the stakeholders embrace the use of a project labor agreement to ensure safety, equity and fairness for the workers who build the stadium.

Unfortunately, some contractor lobbying groups who advocate to pay workers lower wages are engaged in a cynical campaign aimed at ensuring the prosperity generated by this large proposal isn’t shared with the actual workers doing the work. They also don’t care if the project is done in the safest way possible, or with the best-trained workers possible.

Every fan sitting in that stadium over the decades that will follow its opening deserves to know that Worcester built its stadium in the safest way possible with the best-trained workforce. That’s just one reason why the union building trades are speaking up for a project labor agreement to ensure the safety of workers and the public in Worcester.

Project labor agreements, also called community workforce agreements or project stabilization agreements, emerged in the early 20th century as basic pre-hire agreements between the owner or contractor and the local building trades unions.

By the 1980s, these agreements were common in both the public and private sectors. Modern PLAs are negotiated on a case-by-case basis, and include sophisticated provisions that keep jobs running smoothly, promote efficiencies, and nurture the development of a skilled workforce. Most importantly, they prevent worker exploitation, wage theft and other illegal or unsafe acts that can harm local workers on a non-PLA job site.

For years, wealthy special interests have tried to undermine workers’ rights and advance narratives around the concepts of unions being outdated and unneeded. Despite the anti-worker spin promoted by organizations like the Merit Construction Alliance, public support for unions is growing. Meanwhile, union membership and the need for PLAs are also both on the rise in Massachusetts.

The building trade unions have been creating economic prosperity and a pathway to the middle class for workers throughout Central Massachusetts for generations. Right now, many Worcester area families could benefit from a good, union job in the construction industry.

Sadly, efforts are afoot in Worcester to lower safety, wage and training standards for working people on the new stadium project, putting Worcester workers at risk of losing life or limb, and in the position of earning less for the same work that is done elsewhere in the state. That simply would not be fair.

(Read More)

PLAs good for construction industry

KIMBERLY GLASSMAN
MARCH 5, 2018

On Feb. 12, an op-ed in the HBJ (“State must end project labor agreements”) by the Connecticut chapter of the Associated Builders and Contractors presented an over-simplified and inaccurate description of project labor agreements.

A project labor agreement, or PLA, is a pre-hire agreement that sets construction project employment terms. They’re often used on complex projects that require the services of multiple contractors and subcontractors over a sustained period of time. PLAs are a common procurement method for the state of Connecticut, municipalities and private developers.

The Associated Builders and Contractors (ABC) likes to tout their membership numbers. However, they represent only 1 percent of construction companies in the United States. According to the National Labor College, a meager 22,260 apprentices were enrolled in ABC programs, compared to over 420,000 apprentices enrolled in union-funded programs.

Though we appreciate ABC’s attempt to paint the use of PLAs as a partisan issue by invoking Gov. Malloy’s decision to utilize the agreements, they fail to disclose other elected leaders’ use of them. Republican Mayor Mark Boughton recently signed a PLA for Danbury High School. Former Republican Mayor John Harkins signed PLAs for both the Victoria Soto Elementary School and Stratford High School. And former Gov. John Rowland signed a historic PLA on Adriaen’s Landing in Hartford.

(Read More)

(IL) governor candidate Bob Daiber talks prevailing wage, right to work

Prevailing wage, PLAs supported

By Kelsey Schulz
POSTED ON JANUARY 29, 2018

WOOD RIVER – Bob Daiber expressed his support of prevailing wage and project labor agreements, as well as his opposition to “right to work” laws, during a press conference in Wood River Monday.

Speaking at the Carpenters Union Hall, 277 E. Madison Ave., the Democratic candidate for the governor touched on those topics and more in front of a crowd that included 19 local labor leaders.

“As many of you know I’ve been a strong advocate for organized labor my entire political career,” said Daiber, who is also the Madison County Regional Superintendent of Schools. “I’m here today as a candidate for governor to continue my ongoing pledge to labor that we can move forward in this state collectively with good paying jobs.”

On prevailing wage: “I support prevailing wages, I always have. There’s no place in the workplace to drive down wages. If we do away with prevailing wages in the state then we are going to be competing with as to who as a worker is going to work for less and that is not a place that we want to go. When we have good jobs in the state that are based on prevailing wage we have workers that are being able to make a living wage and are less dependant upon the state for benefits and that’s the direction I want to move Illinois.”

On project labor agreements: “The project labor agreements are simply agreements between labor and management that help get jobs done on time, on budget with no shutdowns and workers being able to go to work each and every day without any work stoppages.”

On right to work: “Last year, I signed a pledge saying ‘no’ to right to work (for less) in the state of Illinois, because I am an advocate for collective bargaining both in the public and private sectors. As governor, I will sit down with AFSCME at the table and we will work out a contract for all state workers in Illinois because they too deserve to have good paying jobs and benefits.”

(Read More)

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Prevailing wage, project labor agreements protect living standards for construction workers

By ROBBIE HUNTER
July 6, 2017 at 12:01 am

In an era of political hyperventilation, it might be a good idea for some critics to take a deep breath before they launch into their attacks on the prevailing wage laws and project labor agreements that protect the living standards of construction workers in California and across the nation.

From Washington, D.C., to Los Angeles, anti-union writers in recent weeks have incorrectly branded the 1931 Davis-Bacon Act that wrote the prevailing wage into the law on taxpayer-funded construction projects as born of racism and a rip-off of public funds. The same critics also have falsely characterized project labor agreements as costly to taxpayers and unfair to nonunion construction companies.

Now, for the facts.

Two Republican congressmen, Sen. James Davis of Pennsylvania and U.S. Rep. Roger Bacon of New York, sponsored their legislation 86 years ago to establish a minimum wage on taxpayer-funded construction projects, based on local measures of central tendency in any of the covered construction trades.

The idea behind the prevailing wage is to keep unscrupulous operators from low-bidding the legitimate competition to the detriment of the local workforce. The effect has been to allow blue-collar workers – 400,000 of whom are represented by the State Building and Construction Trades Council of California – to maintain their place in the American middle class.

Of the false charges that have been lodged of late about Davis-Bacon, perhaps the most repugnant is the smear that recirculates every so often that the act originated as an outgrowth of racism. The critics troll through the historic record to quote some congressmen in the debate over Davis-Bacon who supported the law based on their own warped view that it was designed to protect higher-paid white workers in the northeast represented by the authors of the law from “cheap colored labor” that would be imported to their districts from the South. The critics fail, however, to report Congressman Bacon’s reply that imported workers came in white skin as well as black.

(Read More)