Trump administration narrows effort to nix project labor agreements for federal construction contracts

The Trump administration last month narrowed its efforts to unwind a Biden-era policy aimed at promoting federal contractors’ use of unionized labor on major construction projects, after a federal judge blocked the White House’s initial try.

In 2022, then-President Biden signed an executive order mandating that federal contractors sign project labor agreements with subcontractors and associated unions on construction projects that cost at least $35 million. A final rule implementing the edict was published by the Federal Acquisition Regulatory Council in January 2024.

But rather than rescind the executive order, officials in the Trump administration instead issued a pair of memos exempting projects at the Defense Department and at General Services Administration-governed land ports of entry from PLA requirements, and in some cases applying those exceptions to contract opportunities that had already been solicited.

In May, U.S. District Judge Rudolph Contreras, an Obama appointee, blocked those memos with a preliminary injunction, finding that the exceptions “effectively nullified” the requirements of Biden’s executive order, which required exceptions to be considered on a case-by-case basis and prospective in nature.

In a memo last month, Office of Management and Budget Director Russell Vought seemingly faulted agencies for the controversy and said the administration actually supports the usage of project labor agreements in some instances.

“Over the last several months, some agencies have issued overly broad Federal Acquisition Regulation deviations related to project labor agreements and the use of those agreements,” Vought wrote. “The deviations have signaled an inconsistent administration position relating to the use of PLAs. For clarity, the Trump administration supports the use of PLAs when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded.”

Vought noted that the FAR already allows for exemptions from the PLA requirement if market research indicates its inclusion would “substantially reduce” the number of potential bids on a project. And he amended OMB’s memorandum governing PLAs to clarify that if two or fewer are expected, or if the bidders indicate their price would increase by more than 10% due to the PLA requirement, an exception would be warranted.

“Agencies should use PLAs when practicable and cost-effective,” he wrote. “Agencies should rescind any deviations related to PLAs that were issued prior to the date of this guidance. Independent agency interpretation for PLA use should no longer occur.”