Obama lifts ban on labor agreements for federal construction projects

February 13 2009

Legislative Affairs

On February 6, President Obama issued an executive order allowing federal agencies to utilize a project labor agreement on federal and federally assisted construction projects. The new order encourages agencies to consider imposing a project labor agreement but does not require agencies to do so.

The order indicates that “it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects.” A “large-scale construction project” is defined as one with a total cost of $25 million or more to the federal government.

“This executive order restored the ability for agencies to utilize all of their available tools for purchasing flexibility. Project Labor Agreements have proven that they play a vital role both historically and currently on some of the largest projects in the construction industry. The reliance on this type of delivery system within the private sector of the industry has ensured that these projects are built on time and on budget using the highest skilled and safest workforce in the United States,” said TAUC CEO Steve Lindauer.

The order also provides that, “executive agencies may, on a project-by-project basis, require the use of a project labor agreement.” However, the order expressly states that it “does not require an executive agency to use a project labor agreement on any construction project.”

“If foreign companies like Toyota choose to use PLA’s to build their facilities even in the south, what does that say about efficiency and cost savings associated with these agreements? Those who contend that PLAs reduce the competition of bids in the construction industry are simply not dealing with the facts, as there is no malicious discriminatory practices taking place that only allow union contractors and workers to win these jobs. However they do create a level playing field that ensures workers are receiving a living wage, health and fringe benefits which create not just part time jobs, but careers and opportunities that advance the future of the construction industry in our country,” Lindauer noted.

Click here to view President Obama’s executive order.