Overview
This section establishes the federal policy mandating the use of Project Labor Agreements (PLAs) for large-scale construction projects under Executive Order 14063 to enhance economy and efficiency. It also provides agencies with the discretionary authority to require PLAs for smaller construction projects and specific task orders under indefinite-delivery indefinite-quantity (IDIQ) contracts.
Key Rules
- Mandatory Use: Agencies must require PLAs for contractors and subcontractors on large-scale construction projects unless a specific exception applies.
- IDIQ Requirements: For IDIQ contracts, PLAs are mandated for individual task orders valued at or above $35 million, though they may also be applied on an order-by-order basis for lower values.
- Discretionary Authority: Agencies may require PLAs on projects below the "large-scale" threshold if the agency determines it advances federal interests such as labor-management stability, safety compliance, and efficiency.
- Decision Factors for Smaller Projects: When evaluating the appropriateness of a PLA for smaller projects, agencies consider factors such as:
- The involvement of multiple trades or crafts.
- Regional shortages of skilled labor.
- Extended project durations.
- Local industry practices and the use of PLAs on comparable regional projects.
- Long-term program interests like workforce training.
Practical Implications
- Compliance Burden: Contractors and subcontractors bidding on federal construction projects exceeding $35 million must be prepared to negotiate or become party to a labor agreement with one or more labor organizations as a condition of award.
- Strategic Planning: For projects under the $35 million threshold, contractors should monitor the agency's justification factors (e.g., local labor market conditions and project complexity), as these will dictate whether a PLA becomes a mandatory solicitation requirement.