Biden signs executive order requiring project labor agreements for federal construction projects over $35M
The executive order came as part of a broader pledge by Biden to help unions as president
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President Biden signed an executive order Friday that would require certain federal construction projects to use project labor agreements (PLA's).
PLAs set standards for wages and other conditions with a labor organization prior to a project. Biden touted the move as a way to reduce costs and improve efficiency, although some have argued that PLAs increase costs.
Friday's executive order came as part of a broader pledge by Biden to help unions as president.
"I promised you you'd have a union president. And I am," Biden said in a speech to Ironworkers Local 5 in Upper Marlboro, Maryland.
President Biden and the White House COVID-19 Response Team participate in a virtual call with the National Governors Association from the South Court Auditorium of the Eisenhower Executive Office Building of the White House Complex Dec. 27, 2021. (Kent Nishimura / Los Angeles Times via Getty Images / Getty Images)
The order applies to projects over $35 million and, according to the White House, could affect $262 billion in federal contracting. It requires projects to involve an agreement with one or more labor organizations while allowing all contractors and subcontractors to compete regardless of whether they are parties to collective bargaining agreements.
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Former President George W. Bush previously signed an executive order that said agencies couldn't require or prohibit contractors from entering PLAs. That was later revoked by former President Obama who encouraged agencies to consider requiring the agreements.
On Friday, the Associated General Contractors of America warned that the executive order would inflate costs.
"Government-mandated project labor agreements undermine the collective bargaining process by imposing a separate agreement in a specific region that applies only to a limited number of construction firms and unions," a press release states.
"These imposed PLAs undercut the benefits of the collective bargaining agreements that were negotiated in good faith between employers and labor unions and will likely prompt many firms to think twice about participating in the bargaining process in the future."
The White House contends the agreements bring "structure and stability."
"Project labor agreements … provide structure and stability to large-scale construction projects," Biden's executive order states.
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"Such agreements avoid labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes and by prohibiting work stoppages, including strikes and lockouts. They secure the commitment of all stakeholders on a construction site that the project will proceed efficiently without unnecessary interruptions.
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"They also advance the interests of project owners, contractors and subcontractors, including small businesses. For these reasons, owners and contractors in both the public and private sector routinely use project labor agreements, thereby reducing uncertainties in large-scale construction projects. The use of project labor agreements is fully consistent with the promotion of small business interests."
In 2012, the Congressional Research Service said research on PLAs impact on construction costs was "inconclusive."