Under new requirements set to take effect on January 22, contractors engaging in large-scale federal infrastructure projects with the U.S. government will need to negotiate pre-hire collective bargaining agreements (PLAs) with unions. This change, resulting from an executive order issued by President Joe Biden last February, amends the Federal Acquisition Regulations. The order mandates PLAs for federal construction projects exceeding $35 million, contrasting with the previous rule from the Obama administration that suggested but did not require PLAs.
PLAs, which are negotiated terms between contractors and workers — often unionized — define terms and conditions for all workers on federal projects. The Biden administration’s order, titled “Use of Project Labor Agreements for Federal Projects,” aims to enhance efficiencies, increase transparency, and improve conditions for construction workers. “This means that projects funded by my Investing in America agenda will move faster and without delays, giving taxpayers better bang for their buck,” Biden commented. “Workers will have the security and peace of mind that collectively bargained wages and benefits bring, better pathways to good-paying jobs, and stronger health and safety protections.”
The rule has drawn criticism from construction trade groups, including the Associated Builders and Contractors (ABC). They argue that PLAs limit taxpayer-funded public works contracts to union-signatory contractors, raising costs and reducing opportunities for qualified contractors and their skilled workers. ABC’s Vice President of Regulatory, Labor, and State Affairs, Ben Brubeck, claims the rule could increase construction costs by 12% to 20% and exacerbate the industry’s worker shortage. Nonunion contractors can still bid on government projects but must adhere to a PLA if awarded a contract. ABC estimates this could add 15% to 27% to contract costs. PLAs are commonly used in publicly funded projects and, in some areas, for large private projects.
According to The Beacon Hill Institute, an economic think tank, the use of PLAs is contentious, particularly as union membership declines and nonunion construction firms grow. Bureau of Labor Statistics data shows that less than 13% of U.S. construction workers are unionized, though the figure is slightly higher within roofing. The United Union of Roofers, Waterproofs, and Allied Workers claims about 16% of the roofing labor force. ABC has expressed opposition to Biden administration policies that encourage PLAs in competitive grant programs, affecting a significant amount of federally assisted infrastructure projects. Brubeck announced ABC’s intent to challenge the rule in court.
On the other hand, union leaders have supported the move. Sean McGarvey, president of North America’s Building Trades Unions (NABTU), highlighted PLAs’ effectiveness in addressing labor supply issues and strengthening health and safety standards. Brent Booker of the Laborers’ International Union of North America also praised the executive order for its potential benefits to the middle class. The AFL-CIO estimates that the rule will provide approximately 200,000 construction workers with collectively bargained wages, benefits, and safety protections, regardless of union membership status.
Breaking supply chain news is just a click away at The Supply Chain Report. Enhance your knowledge of international trade at ADAMftd.com with free tools.
#FederalInfrastructure #ProjectLaborAgreements #CollectiveBargaining #BidenAdministration #ConstructionIndustry #UnionSupport #InfrastructureReform #WorkerSafety #ConstructionCosts #ABC #NABTU #LaborUnions #EconomicImpact #InvestingInAmerica #PLAs
