Associated Builders and Contractors celebrated a Feb. 7 decision by the U.S. Department of Defense that will restore merit-based competition for taxpayer-funded construction projects procured by military agencies.
“The DoD’s new policy effectively eliminates President Joe Biden’s controversial rule requiring anti-competitive, inflationary, union-favoring project labor agreements on federal construction projects of $35 million or more––but only for DoD construction solicitations,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The DoD’s policy remains in effect until it is rescinded. Other federal civilian agencies are still subject to Biden’s harmful pro-PLA rule.
“ABC has fought hard to restore merit-based fair and open competition in federal contracting so all Americans and all qualified construction firms can compete on a level playing field to build and rebuild America,” said Brubeck. “While we are pleased with the DoD’s policy change, ABC will continue its tireless efforts advocating for this pro-taxpayer policy to be adopted governmentwide permanently.”
The Biden PLA policy has been widely criticized by the construction industry, taxpayer watchdogs and lawmakers for needlessly inflating construction costs, delaying projects and effectively steering contracts to unionized firms and union labor at the expense of taxpayers and federal laws requiring fair and open competition.
“ABC has testified before Congress that, when mandated by government, PLAs increase construction costs by an estimated 12% to 20%, reduce competition from qualified contractors and their employees, steal money from the paychecks of token nonunion workers permitted on PLA projects and exacerbate the construction industry’s worker shortage,” said Brubeck. “Typical PLA mandates discourage competition from some of the best bidders and 9 out of 10 U.S. construction industry workers by forcing contractors to sign special union collective bargaining agreements, hire workers from union halls and apprenticeship programs and accept compulsory union representation on behalf of any members of their existing workforces. This exposes those workers to union wage theft of up to 34% of their compensation unless they join a union and vest in union benefits plans.”
On Jan. 9, ABC and 24 other construction and business groups in the Build America Local coalition sent a letter to President Donald Trump requesting an executive order that would restore fair and open competition on federal and federally assisted construction projects, which would save taxpayers an estimated $10 billion annually.
Last month, ABC welcomed a Jan. 19 decision by the U.S. Court of Federal Claims that ruled in favor of experienced ABC members and other federal contractors that filed 12 bid protests against three federal agencies––including the DoD’s U.S. Army Corps of Engineers and the Naval Facilities Engineering Systems Command––that mandated PLAs in solicitations for construction services as a result of a Federal Acquisition Regulatory Council rule effective Jan. 22, 2024, implementing Biden’s Executive Order 14063.
Judge Ryan T. Holte struck down PLA mandates on the protested projects for violating federal competitive bidding statutes but stopped short of rescinding the Biden rule requiring PLAs on all future solicitations of $35 million or more. Evidence presented to the court indicated that federal agencies determined PLA mandates triggered by the Biden rule would increase costs and reduce competition on federal construction projects. The contracting community is awaiting additional action in the case as federal agencies work to implement policy complying with the judge’s ruling.
On March 28, 2024, ABC and its Florida First Coast chapter filed suit in federal court to block Biden’s PLA final rule on construction contracts procured by federal agencies, asserting it is beyond the scope of executive authority and violates the U.S. Constitution, the First Amendment and the Administrative Procedure Act, among others. The case is fully briefed and plaintiffs are awaiting a decision on the overall case and a ruling on the motion for preliminary injunction filed in April.
ABC members won 54% of the $205.56 billion in federal contracts worth $35 million or more during fiscal years 2009-2023 and built award-winning projects safely, on time and on budget, without unnecessary government-mandated PLAs. Prior to the Biden final rule, when given the option, the federal government decided to mandate PLAs just 12 times out of 3,222 federal construction contracts of $25 million or more.
The percent of construction workers in the U.S. construction industry who do not belong to a union increased to a record high 89.7%, according to a U.S. Bureau of Labor Statistics report released last month.