Overview
This section prescribes the mandatory elements and prohibited practices for Project Labor Agreements (PLAs) in federal construction, ensuring they promote labor-management stability and competitive bidding. It also establishes the specific criteria and high-level approval process required for an agency to grant an exception to a PLA mandate.
Key Rules
- Mandatory Inclusion: PLAs must bind all contractors and subcontractors on a project, include guarantees against strikes and lockouts, and establish formal procedures for resolving labor disputes.
- Open Competition: PLAs must allow all contractors and subcontractors to compete for contracts regardless of whether they are already parties to other collective bargaining agreements.
- Union Neutrality: Agencies are expressly prohibited from requiring contractors to enter into an agreement with a specific labor organization.
- Exception Criteria: The Senior Procurement Executive (SPE) may grant a written exception if a PLA does not advance economy or efficiency (e.g., the project is short-term, involves only one trade, or is specialized), or if market research shows it would significantly impair competition and fair pricing.
- Market Analysis: When seeking an exception due to reduced competition, contracting officers must provide evidence that price fluctuations are tied to the PLA rather than general market factors like supply chain costs.
- Timing: For standard contracts, exceptions must be finalized by the solicitation date; for IDIQ contracts, they are generally required before the solicitation or at the specific task-order level.
Practical Implications
- Administrative Flow-Down: Prime contractors must ensure every subcontractor—regardless of size or tier—is contractually bound to the PLA terms, necessitating rigorous subcontract management.
- Burden of Proof for Exceptions: Agencies cannot waive PLA requirements based on a simple assumption of higher costs; they must produce a data-driven justification that demonstrates a lack of "fair and reasonable" pricing resulting from the requirement.
- Labor Harmony: By requiring no-strike clauses and dispute resolution mechanisms, the FAR uses PLAs as a tool to mitigate the risk of schedule delays caused by labor unrest on large-scale federal projects.