News Detail

OMB Issues Memorandum Detailing Implementation of Today's Final Rule Regarding the Use of Project Labor Agreements on Federal Construction Projects

Today, Acting Labor Secretary Julie Su, General Services Administrator Robin Carnahan, and Office of Management and Budget (OMB) Deputy Director Jason Miller were in Cleveland, OH to announce the rollout of the Federal Acquisition Regulatory (FAR) Council’s final rule mandating the use of project labor agreements (PLA) on federal construction projects estimated at $35 million or more. In conjunction with the rollout, OMB released a new memorandum detailing implementation of the final rule. The pre-publication version of the final rule is also available here.

SWACCA has been engaged on this rulemaking for more than two years. Our continuous advocacy on this rule included lobbying the Administration with arguments distilled in three sets of comments submitted in support of the PLA rule. These included SWACCA’s own comments in support of the PLA proposed rule which highlighted how PLAs provide structure and stability to large-scale construction projects and also help to prevent the misclassification of construction workers as independent contractors and ensure a level playing field for law-abiding contractors, like SWACCA members. The letter also emphasizes that, contrary to arguments from other industry groups, PLAs do not discourage or prevent any contractors from bidding on projects. SWACCA also made a significant contribution to the joint comment letter submitted by the Construction Employers of America (CEA) supporting the proposed rule and urging specific clarifications to the exceptions agencies can use to justify not using a PLA on large scale projects covered by the Executive Order. These comments supported the determination underlying the Executive Order and the proposed rule that PLAs promote economy and efficiency, noting that this determination has been maintained across the last three consecutive Administrations. And, SWACCA jointly sponsored with other CEA members an independent academic analysis of literature on PLAs by the Institute for Construction Economics Research (ICERES). In this analysis, ICERES reviewed existing peer-reviewed and non-peer-reviewed studies on the economic effects of PLAs, noting significant flaws in the methodology underlying the small number of reports that opponents of PLAs and the proposed rule cite when asserting that PLAs drive up costs and markedly reduce the number of contractors bidding on a project. The analysis makes clear that studies without these underlying methodological flaws belie arguments that PLAs increase costs or reduce qualified bids.

The release of today’s final rule is a significant achievement for SWACCA’s advocacy team and our allies in the unionized construction industry.

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