Proposed Rule2022-17067
Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 19, 2022
Issuing agencies
Defense DepartmentGeneral Services AdministrationNational Aeronautics and Space Administration
Abstract
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement an Executive Order pertaining to project labor agreements in Federal construction projects.
Full Text
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[Federal Register Volume 87, Number 160 (Friday, August 19, 2022)]
[Proposed Rules]
[Pages 51044-51052]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17067]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 7, 22, 36, and 52
[FAR Case 2022-003; Docket No. FAR-2022-0003, Sequence No. 1]
RIN 9000-AO40
Federal Acquisition Regulation: Use of Project Labor Agreements
for Federal Construction Projects
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement an Executive Order pertaining
to project labor agreements in Federal construction projects.
DATES: Interested parties should submit comments to the Regulatory
Secretariat Division at the address shown below on or before October
18, 2022 to be considered in the formulation of a final rule.
ADDRESSES: Submit comments in response to FAR Case 2022-003 to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Submit comments via the Federal eRulemaking portal
by searching for ``FAR Case 2022-003''. Select the link ``Comment Now''
that corresponds with ``FAR Case 2022-003.'' Follow the instructions
provided on the screen. Please include your name, company name (if
any), and ``FAR Case 2022-003'' on your attached document. If your
comment cannot be submitted using <a href="https://www.regulations.gov">https://www.regulations.gov</a>, call or
email the points of contact in the FOR FURTHER INFORMATION CONTACT
section of this document for alternate instructions.
Instructions: Please submit comments only and cite ``FAR Case 2022-
003'' in all correspondence related to this case. All comments received
will be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including
any personal and/or business confidential information provided. To
confirm receipt of your comment(s), please check <a href="https://www.regulations.gov">https://www.regulations.gov</a>, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst,
at 202-803-3188 or by email at <a href="/cdn-cgi/l/email-protection#0165606f602f636e766c606f416672602f666e77"><span class="__cf_email__" data-cfemail="4d292c232c632f223a202c230d2a3e2c632a223b">[email protected]</span></a>, for clarification
[[Page 51045]]
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755
or <a href="/cdn-cgi/l/email-protection#97d0c4d6c5f2f0c4f2f4d7f0e4f6b9f0f8e1"><span class="__cf_email__" data-cfemail="23647062714644704640634450420d444c55">[email protected]</span></a>. Please cite FAR Case 2022-003.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to implement
Executive Order (E.O.) 14063, Use of Project Labor Agreements for
Federal Construction Projects, issued February 4, 2022 (87 FR 7363,
February 9, 2022). E.O. 14063 mandates that Federal Government agencies
require the use of project labor agreements (PLAs) for large-scale
Federal construction projects, where the total estimated cost to the
Government is $35 million or more, unless an exception applies.
Agencies still have the discretion to require PLAs for Federal
construction projects that do not meet the $35 million threshold. The
E.O. also directs the Office of Management and Budget (OMB) to issue
implementation guidance to agencies on exceptions and reporting.
E.O. 14063 describes large-scale construction projects as often
posing special challenges to efficient and timely procurement by the
Federal Government. Large-scale construction projects often have
multiple employers at a single location and a lack of permanent
workforce, which makes it difficult for Federal contractors to predict
labor costs when bidding on contracts and to ensure that a steady
supply of labor exists on the contracts being performed. Additionally,
a labor dispute involving one employer can delay the entire project.
The E.O. explains that the lack of coordination among various
employers, or uncertainty about the employment terms and conditions of
various groups of workers, can create friction and disputes in the
absence of an agreed-upon resolution mechanism. PLAs may provide
structure and stability needed to reduce uncertainties for all parties
connected to a large-scale construction project.
The current FAR is based on the final rule in FAR Case 2009-005,
Use of Project Labor Agreements for Federal Construction Projects,
published April 13, 2010 (75 FR 19168). The final rule implemented E.O.
13502, which encouraged the use of PLAs for large-scale Federal
construction projects valued at $25 million or more in order to promote
economy and efficiency in Federal procurement. E.O. 13502 is revoked by
E.O. 14063 upon the effective date of the final rule in FAR Case 2022-
003.
II. Discussion and Analysis
DoD, GSA, and NASA are proposing to revise FAR subpart 22.5, Use of
Project Labor Agreements for Federal Construction Projects, to reflect
the change in policy pertaining to the use of PLAs. While the reasons
for using PLAs remain largely unchanged from the previous policy, use
of a PLA is no longer discretionary for large-scale Federal
construction projects. Agencies will be required to use a PLA for
large-scale Federal construction projects unless an exception applies.
The E.O. also expands the definition of ``construction,'' raises the
threshold for a large-scale construction project from $25 million to
$35 million, and establishes a series of exceptions to the PLA
requirements. A summary of the proposed changes follows.
A. FAR Part 1
FAR 1.106, OMB approval under the Paperwork Reduction Act, updates
the OMB control number that covers PLAs. OMB Control Number 9000-0175,
Use of Project Labor Agreements for Federal Construction Projects, was
approved in FAR case 2009-005 (see section G of that rule's preamble).
Effective March 31, 2019, the clause and provision previously included
in 9000-0175 were consolidated under OMB Control Number 9000-0066,
which covers a number of labor-related requirements.
B. FAR Part 7
Agency-head responsibilities at FAR 7.103(x) pertaining to the use
of PLAs are revised to reflect the change in policy consistent with
other requirements of agency planners.
C. FAR Part 22
FAR subpart 22.5 is revised to replace all references to revoked
E.O. 13502 with references to the new E.O. 14063.
The definitions of ``construction,'' ``labor organization,'' and
``large-scale construction project'' are revised to reflect the
definitions in E.O. 14063. Conforming changes are made in the clause at
FAR 52.222-34, Project Labor Agreement.
The threshold for a large-scale construction project is increased
from $25 million to $35 million. This threshold will be subject to the
periodic adjustment for inflation of statutory acquisition-related
dollar thresholds in accordance with FAR 1.109, 41 U.S.C. 1908, and
section 2(c) of E.O. 14063.
FAR 22.503 is revised to reflect the change in policy that mandates
agencies to require the use of PLAs when awarding Federal construction
contracts that meet the threshold of a large-scale construction project
unless an exception applies. Agencies may continue to require PLAs for
projects that do not meet the $35 million threshold at their
discretion. The proposed rule maintains existing FAR guidance that
agencies may use when making a decision to require a PLA for such a
contract.
Some agencies use indefinite-delivery indefinite-quantity (IDIQ)
contracts to award orders for large-scale construction projects. IDIQ
contracts may cover multiple projects of varying values. For an order
at or above $35 million, an agency shall require a PLA, unless an
exception applies. An exception may only apply to the entire IDIQ
contract if the basis for the exception cited would apply to all
orders. Use of PLAs on orders is also not restricted to those projects
valued at or above the $35 million threshold. The offerors are alerted
in the provision at FAR 52.222-33, Notice of Requirement for Project
Labor Agreement, that a PLA may be required at the order stage. The
clause at FAR 52.222-34 allows the contracting officer to choose when
to require the executed PLA, with the order offer, after the offer but
prior to order award, or after award of the order.
FAR 22.504(c) is revised to remove direction that allowed agencies
to specify terms and conditions of the PLAs and to engage in efforts to
identify the appropriate terms and conditions for a particular
construction project. DoD, GSA, and NASA believe the language at
22.504(b)(6), which authorizes agencies to ensure the PLA includes any
additional requirements as the agency deems necessary to satisfy its
needs, is sufficient. Further, the E.O. directs that an agency may not
require contractors or subcontractors to enter into a PLA with any
particular labor organization. The proposed rule replaces the current
text at FAR 22.504(c) with this direction. Conforming changes are made
in the provision at FAR 52.222-33, Notice of Requirement for Project
Labor Agreement, and the clause at FAR 52.222-34, Project Labor
Agreement.
The E.O. provides an exception from the PLA requirements that, with
a written explanation, may be granted by a senior official. The
proposed rule interprets the senior official as the senior procurement
executive. The authority to grant an exception is added at FAR
22.504(d). The exception may be granted in each of the following
circumstances, as provided in the E.O.:
1. Requiring a PLA would not achieve economy and efficiency in
Federal procurement, as described in 22.504(d);
2. Requiring a PLA would substantially reduce the number of
potential bidders so as to frustrate full and open competition, i.e.,
where
[[Page 51046]]
adequate competition at a fair and reasonable price could not be
achieved; or
3. Requiring a PLA would be inconsistent with statutes,
regulations, other E.O.s., or Presidential Memoranda.
The decision regarding whether to grant an exception for an order
under an IDIQ contract should be made prior to issuing the notice of
intent to place an order.
D. FAR Part 52
The provision at FAR 52.222-33, Notice of Requirement for Project
Labor Agreement, and the clause at FAR 52.222-34, Project Labor
Agreement, include changes discussed in section II.C. of this preamble.
Additional minor changes are proposed for clarity.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), or for Commercial Services
This rule amends the provision at FAR 52.222-33 and the FAR clause
at 52.222-34. However, this rule does not impose any new requirements
on contracts at or below the SAT or for commercial products and
commercial services, including COTS items. Since the provision and
clause apply to large-scale Federal construction contracts, neither
would apply to acquisitions at or below the SAT or to acquisitions for
commercial products and commercial services, including COTS items.
IV. Expected Impact of the Rule
A project labor agreement (PLA) is defined as a pre-hire collective
bargaining agreement with one or more labor organizations that
establishes the terms and conditions of employment for a specific
construction project and is an agreement described in 29 U.S.C. 158(f).
PLAs are a tool that can be used to provide labor-management stability,
and ensure compliance with laws and regulations such as those governing
safety and health, equal employment opportunity, labor and employment
standards, and others. Requiring a PLA means that every contractor and
subcontractor engaged in construction on the project agree, for that
project, to negotiate or become a party to a project labor agreement
with one or more labor organizations.
Currently, the regulations at FAR 22.5 encourage the use of PLAs
for ``large-scale federal construction projects,'' which is defined as
projects with a total cost of $25 million or more. According to the
data collected by OMB, between the years of 2009 and 2021, there were a
total of approximately 2,000 eligible contracts and the requirement for
a PLA was used 12 times. Based on the information, on average there are
approximately 167 eligible awards annually and approximately one award
that includes the PLA requirement.
This rule implements E.O. 14063, Use of Project Labor Agreements
for Federal Construction Projects, which requires the use of PLAs in
large-scale Federal construction projects unless an exception applies.
In accordance with the E.O., the definition of ``large-scale federal
construction projects'' is amended from $25 million or more to $35
million or more. Based on Federal Procurement Data System (FPDS) data
from fiscal year (FY) data from FY 2019 through FY 2021, the average
number of construction awards, including orders against indefinite-
delivery indefinite-quantity contracts valued at $35 million or more,
were approximately 119 annually. The average cost of each award is
approximately $114 million.
In accordance with the E.O., this rule provides exceptions to the
requirement to use PLAs for large-scale Federal construction projects.
Exceptions must be based on at least one of the conditions listed at
FAR 22.504(d). These conditions include when the requirement for a PLA
would not advance the Federal Government's interests; where market
research indicates a substantial reduction in competition to such a
degree that adequate competition at a fair and reasonable price could
not be achieved; or where the requirement would be inconsistent with
other statutes, regulations, E.O.s, or Presidential memoranda. There is
no data on the number of exceptions that may be granted since the
mandate and associated exceptions are new. It is possible there may be
a higher usage of exceptions in the initial year as industry and the
Government work to implement the requirement. Considering the lack of
available data on the proposed exceptions, it is estimated that
exceptions may be granted for 10 percent to 50 percent of covered
contracts; in other words, an estimated 60 to 107 construction contract
awards may require PLAs.
The current FAR provision at 52.222-33, Notice of Requirement for
Project Labor Agreement, provides a basic provision and 2 alternative
provisions for the contracting officer to select from. The provision
selected identifies whether all offerors, the apparent successful
offeror, or the awardee must provide a copy of the PLA. There is no
historical data on the selection of alternatives. Therefore, it is
assumed each alternative will apply one third of the time. This implies
one third of affected solicitations will require all offerors to
provide a PLA, and two thirds of affected solicitations will only
require one entity (apparent successful offeror or awardee) to provide
a PLA. To estimate the number of offerors that would be required to
provide a PLA, the Government estimates an average of 4 offers would be
submitted per award; i.e., an estimated 80-144 offerors (20-36 awards *
4 offers). Therefore, the total number of estimated entities that would
be required to submit PLAs at the prime contract level is 120-215
entities (40-71 apparent successful offerors or awardees + 80-144
offerors). It is estimated that 20 percent of the entities will be
small entities, therefore approximately 24-43 small entities and 96--
172 large entities may be required to submit PLAs. For the estimated
120-215 entities that will be required to have a PLA to submit an offer
or perform a contract, generally the entity will negotiate the terms
and conditions of the PLA with a union(s). It is assumed an entity will
require the owner or a senior executive, legal counsel, a project
manager, and 1-2 labor advisors, depending on the size of the
workforce, to support the negotiations. DoD, GSA, and NASA estimate
that 40 to 80 hours of time may be required in total for each party
involved in negotiating the PLA on behalf of the contractor. According
to the Bureau of Labor Statistics (BLS) National Occupational
Employment and Wage Estimates for May 2021, the mean hourly wage for
General and Operations Managers is $55.41/hour, $71.17 for Lawyers, and
$102.41 for Chief Executives. To reflect the variety of labor
categories necessary to estimate the impact, a mean hourly rate of
$76.33 is used for this calculation. The current BLS factor of 42
percent is applied to the mean wage to account for fringe benefits and
an additional 12 percent overhead factor is applied (See Attachment C
of OMB Circular A-76 Revised issued May 29, 2003), for a total loaded
wage of $121.40/hour ($76.33 * 142 percent * 112 percent). Also, it is
estimated that 1 hour is required by one member of the contractor's
workforce to submit the PLA to the Government on behalf of the
contractor. Using the BLS wage estimates for Office and Administrative
Support Occupations, the mean hourly rate for submitting the PLA is
estimated to be $33.21 (20.88 * 142 percent * 112 percent). The total
estimated impact for establishing and submitting PLAs in response to a
Government contract is $2.92-$10.45 million (120-215 entities *((5
[[Page 51047]]
participants * 40-80 hours * $121.40) + (1 person * 1 hour * $33.21)).
Taking midpoints of each range implies a primary estimate of $6.69
million.
The requirement for a PLA flows down to subcontractors through FAR
clause 52.222-34, paragraph (c). There is no data source that
identifies the number of subcontractors per contract, however, based
upon estimates from experts, it is estimated that for each contract
there is an average of 2 subcontractors. Therefore, the requirement for
PLAs is estimated to apply to 240--430 subcontractors (120-215 * 2).
Subcontractors that may be required to participate in a PLA will
generally review and sign on to the PLA negotiated by the prime
contractor. The subcontractor does not negotiate the PLA. However, the
subcontractor must read, understand, and implement the terms and
conditions included in the PLA. These actions are estimated to take 1
to 10 hours. Representatives on behalf of a subcontractor may include
the owner, project manager, or an attorney. Based upon the previously
provided BLS data, a total loaded wage of $121.40 reflects the variety
of labor categories necessary to estimate the impact of the proposed
rule on subcontractors. The total estimated impact for establishing and
submitting PLAs in response to a Government contract is estimated to be
$58,272 to $1.04 million (240-430 subcontractors * (2 participants * 1-
10 hours * $121.40)). Taking midpoints of each range implies a primary
estimate of $549,136.
For the Government, contracting officers will continue to conduct
market research and consider factors to support a decision to use, or
not to use, PLAs in large-scale construction projects. There will
continue to be instances where the use of PLAs will benefit the
Government and others where it is not feasible to use PLAs. This rule
establishes new procedures for the contracting officer to request an
exception to the requirement to use PLAs. The new procedures require
the contracting officer to prepare a written explanation to request an
exception and route the request for approval by the senior procurement
executive. The act of preparing and routing an exception request is
typically performed by a contract specialist customarily at the GS-12
step 5 level and is estimated to take an average of 2 hours. The hourly
rate of $65.77 is based upon the Office of Personnel Management (OPM)
Table for the Rest of the United States, effective January 2022, for a
GS-12 step 5 employee ($43.10 per hour) plus a 36.25 percent factor to
account for fringe benefits in accordance with current OMB memorandum
M-08-13 and a 12 percent overhead factor (See Attachment C of OMB
Circular A-76 Revised issued May 29, 2003). As stated previously, the
estimated number of exception requests per year is between 12 and 60;
therefore, the anticipated cost for preparing and routing requests is
$1,578-$7,892 (12-60 exceptions * 2 hours * $65.77). Taking midpoints
of each range implies a primary estimate of $4,735.
The review and approval of the exception request is normally
performed at the GS-15 or higher level and is estimated to take
approximately 1 hour. The hourly rate of $108.71 is based upon OPM
Table for the Rest of the United States, effective January 2022, for a
GS-15 step 5 employee ($71.24 per hour) plus the 36.25 percent factor
to account for fringe benefits and a 12 percent factor for overhead.
The estimated cost for review and approval is between $1,305-6,523 (12-
60 exceptions * 1 hour * $108.71). Taking midpoints of each range
implies a primary estimate of $3,914.
Public comments are invited on the use of these factors, including
whether there are other factors that might be more appropriate for use
in the construction industry.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is anticipated to be a significant regulatory action and,
therefore, was subject to review under section 6(b) of E.O. 12866,
Regulatory Planning and Review, dated September 30, 1993.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808),
before an interim or final rule takes effect, DoD, GSA, and NASA will
send the rule and the ``Submission of Federal Rules Under the
Congressional Review Act'' form to each House of the Congress and to
the Comptroller General of the United States. A major rule cannot take
effect until 60 days after it is published in the Federal Register.
This rule is not anticipated to be a major rule under 5 U.S.C. 804.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612, because
the use of a PLA is required only on large-scale construction projects
with a total estimated contract value of $35 million or more. However,
an Initial Regulatory Flexibility Analysis (IRFA) has been performed
and is summarized as follows:
DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement Executive Order (E.O.)
14063, Use of Project Labor Agreements for Federal Construction
Projects, dated February 4, 2022, which mandates that Federal
Government agencies require the use of project labor agreements
(PLAs) for large-scale Federal construction projects (total
estimated value of $35 million or more), unless an exception
applies. Agencies still have the discretion to require PLAs for
Federal construction projects that do not meet the $35 million
threshold.
The objective of the rule is to implement the E.O. 14063 change
in policy from discretionary use to requiring the use of PLAs for
Federal construction projects valued at $35 million or more.
This rule applies the requirement for PLAs to all construction
projects valued at $35 million or more, unless an exception applies.
However, it does not change the discretionary use of PLAs for
projects that do not meet the $35 million threshold. As a result,
small entities may be required to negotiate and become a party to a
PLA, as a prime or subcontractor.
Data generated from the Federal Procurement Data System (FPDS)
for fiscal years 2019, 2020, and 2021 has been used as the basis for
estimating the number of unique small entities expected to be
affected by the change from discretionary to mandatory use of PLAs
for large-scale construction projects.
An examination of this data reveals that the Government issued
an average of 119 large-scale construction awards annually. Of those
119 awards, an average of 15 percent were awarded to an average of
16 unique small entities annually.
It is estimated that 60-107 of the 119 large-scale construction
awards will require a PLA. An estimated one third of affected
solicitations will require all offerors to provide a PLA, and two
thirds of affected solicitations will only require one entity
(apparent successful offeror or awardee) to provide a PLA.
Therefore, the total number of estimated entities that would be
required to submit PLAs at the prime contract level is 120-215
entities (40-71 apparent successful offerors or awardees + 80-144
offerors).
It is estimated that under the new project labor agreement
requirements, the estimated number of small entities impacted by the
rule is 20 percent of the 120-215 entities.
[[Page 51048]]
Therefore, it is estimated that approximately 24-43 small entities
will be required to submit a project labor agreement.
DoD, GSA, and NASA acknowledge there is no data source that
identifies the number of subcontractors per contract, however, based
upon estimates from experts, it is estimated that each of the
entities required to submit project labor agreements may have
approximately 2 subcontractors; i.e. 240-430 subcontractors (120 *
2) (215 * 2). It is estimated that an equivalent percentage of small
entities are subcontractors as prime contractors. As a result, it is
estimated that 20 percent or 48-86 of the subcontractors are small
entities (240 * 0.2) (430 * 0.2).
Based upon this analysis, the number of small entities that may
be required to negotiate or become a party to a PLA is approximately
72 to 129 annually (24 + 48) (43 + 86). These numbers may fluctuate
based on the use of discretionary PLAs, any exceptions granted to
the required use of a PLA, or if the PLA is required by all
offerors, the apparent successful offeror, or the awardee. The
proposed rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known significant alternative approaches to the
proposed rule.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2022-003),
in correspondence.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501-3521) applies because
the proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat has submitted a request for
approval of a revised information collection requirement concerning
9000-0066, Labor-related Requirements, to the Office of Management and
Budget.
This rule affects the certification and information collection
requirements in the provision at FAR 52.222-33, Notice of Requirement
for Project Labor Agreement, and the FAR clause at 52.222-34, Project
Labor Agreements. The information collection requirements were
originally approved under OMB Control Number 9000-0175, Use of Project
Labor Agreements for Federal Construction Projects. The estimate used
in the current information collection was based on PLAs with a total
estimated contract value of $25 million or more and the discretionary
authority to use them. The burden hour estimates for the provision at
FAR 52.222-33 and the clause at FAR 52.222-34 previously included under
OMB Control Number 9000-0175 are consolidated with and approved under
OMB Control Number 9000-0066, Labor-related Requirements.
A. Estimated Public Reporting Burden
Public reporting burden for this collection of information is
estimated to average 1.0 hour per response, including the time for
reviewing instructions, searching existing data sources, gathering, and
maintaining the data needed, and completing and reviewing the
collection of information. This is not the time to negotiate the PLA,
which is not an information collection requirement; the time covered is
only the time to copy and submit the PLA to the contracting officer.
FAR provision 52.222-33, Notice of Requirement for Project Labor
Agreement, is prescribed at FAR 22.505(a) for use in solicitations for
the acquisition of large-scale construction projects. A large-scale
construction project is defined as one within the United States with a
total cost to the Federal Government of $35 million or more. According
to FPDS, the Government awarded an average of 119 large-scale
construction contracts to approximately 110 unique entities each year,
to include orders against indefinite-delivery indefinite-quantity
contracts, valued at $35 million or more, from FY 2019 through 2021.
The Government also considered that exceptions to the required use of a
PLA may be granted under certain conditions and estimates that
approximately 12 to 60 (10 percent to 50 percent of 119) exceptions
will be granted for the required use of a PLA each year. Due to the
lack of historical data, the Government is using a range to estimate
the number of PLAs that will be required from a low of 60 (50 percent)
to a high of 107 (90 percent).
Although agencies have the discretion to require a PLA when the
estimated value of the construction project is less than the $35
million threshold, the Government estimates that agencies will choose
to require PLAs for less than 1 percent of construction awards each
year.
It is projected that for all contracts requiring a PLA (60-107),
the contracting officer will identify if all offerors, the apparent
successful offeror, or the awardee is required to negotiate or become a
party to a PLA. There is no historical data on when the contracting
officer requires the PLA. Therefore, it is assumed that the
alternatives will apply \1/3\ of the time equally (\60/3\ or \107/3\),
meaning approximately 20 to 36 awards will require all offerors to
provide a PLA and 40 to 71 awards will require the apparent successful
offeror or awardee. The Government estimates that an average of 4
offers will be submitted for each of the estimated awards, resulting in
an estimated 120 to 215 respondents. The annual reporting burden
estimates that 120 to 215 of the respondents would be requested to
submit a PLA. The Government estimates that each respondent will
require between 40 (low) and 80 (high) hours to implement a PLA for a
project. This includes time for offerors to consult with advisors,
negotiate, ensure compliance with terms and conditions of the PLA and
implement the PLA.
The annual reporting burden for FAR provision 52.222-33, Notice of
Requirement for Project Labor Agreement, is estimated based upon the
ranges described above and illustrated as follows:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Range of burden based upon 40
hours
Range of burden based upon 80
hours
----------------------------------------------------------------------------------------------------------------
Respondents..................................... 120 215 120 215
Responses per respondent........................ 1 1 1 1
Total annual responses.......................... 120 215 120 215
Preparation hours per responses................. 200 200 400 400
Total response burden hours..................... 24,000 43,000 48,000 86,000
----------------------------------------------------------------------------------------------------------------
[[Page 51049]]
The application of the provision is expanded to recognize IDIQ
contracts and the resultant ability to require or not require PLAs on
an order-by-order basis under the IDIQ. The change in policy that makes
the use of a PLA mandatory unless an exception applies may also
increase the estimates while the increased threshold for defining a
large-scale construction project may have a balancing effect. It is
expected that the use of discretionary PLAs and agency-issued
exceptions will further impact public and Government burden. In
addition, the hourly rates have increased from 2021 to 2022.
FAR clause 52.222-34, Project Labor Agreement, is prescribed at FAR
22.505(a) for use in contracts for the acquisition of large-scale
construction projects. Each of the 60 to 107 awardees is expected to
have one recordkeeper to maintain the PLA and associated records for
the participants through the life of the contract.
The annual recordkeeping burden for FAR clause 52.222-34, Project
Labor Agreement, is estimated using the range of 60 to 107 awardees as
follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
Range of awardees
------------------------------------------------------------------------
Estimated recordkeepers................. 60 107
Estimated records per recordkeeper...... 1 1
Total annual records.................... 60 107
Estimated hours/record.................. 3 3
Total recordkeeping burden hours........ 180 321
------------------------------------------------------------------------
The total estimated annual public burden hours associated with the
FAR provision and clause is estimated between 24,180 (24,000 reporting
hours + 180 recordkeeping hours) and 86,321 (86,000 reporting + 321
recordkeeping hours).
B. Request for Comments Regarding Paperwork Burden.
Submit comments, including suggestions for reducing this burden,
not later than October 18, 2022 through <a href="http://www.regulations.gov">http://www.regulations.gov</a> and
follow the instructions on the site. All items submitted must cite OMB
Control No. 9000-0066, Labor Related Requirements. Comments received
generally will be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check <a href="https://www.regulations.gov">https://www.regulations.gov</a>, approximately two to three days after submission
to verify posting. If there are difficulties submitting comments,
contact the GSA Regulatory Secretariat Division at 202-501-4755 or
<a href="/cdn-cgi/l/email-protection#8bccd8cad9eeecd8eee8cbecf8eaa5ece4fd"><span class="__cf_email__" data-cfemail="de998d9f8cbbb98dbbbd9eb9adbff0b9b1a8">[email protected]</span></a>.
Public comments are particularly invited on:
<bullet> The necessity of this collection of information for the
proper performance of the functions of Federal Government acquisitions,
including whether the information will have practical utility.
<bullet> The accuracy of the estimate of the burden of this
collection of information.
<bullet> Ways to enhance the quality, utility, and clarity of the
information to be collected; and
<bullet> Ways to minimize the burden of the collection of
information on respondents, including the use of automated collection
techniques or other forms of information technology.
Requesters may obtain a copy of the information collection
documents from the GSA Regulatory Secretariat Division by calling 202-
501-4755 or emailing <a href="/cdn-cgi/l/email-protection#3c7b6f7d6e595b6f595f7c5b4f5d125b534a"><span class="__cf_email__" data-cfemail="83c4d0c2d1e6e4d0e6e0c3e4f0e2ade4ecf5">[email protected]</span></a>. Please cite OMB Control No.
9000-0066, Labor-related Requirements, in all correspondence.
List of Subjects in 48 CFR Parts 1, 7, 22, 36, and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 1, 7,
22, 36, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 1, 7, 22, 36, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
0
2. In section 1.106 amend the table by:
0
a. Removing the entry for FAR segment ``22.5''; and
0
b. Adding in sequence, entries for ``52.222-33'' and ``52.222-34''.
The additions read as follows:
1.106 OMB approval under the Paperwork Reduction Act.
* * * * *
------------------------------------------------------------------------
FAR segment OMB control No.
------------------------------------------------------------------------
* * * * *
52.222-33............................................. 9000-0066
52.222-34............................................. 9000-0066
* * * * *
------------------------------------------------------------------------
* * * * *
PART 7--ACQUISITION PLANNING
0
3. Amend section 7.103 by revising paragraph (x) to read as follows:
7.103 Agency-head responsibilities.
* * * * *
(x) Ensuring that agency planners use project labor agreements when
required (see subpart 22.5 and 36.104).
* * * * *
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
0
4. Revise section 22.501 to read as follows:
22.501 Scope of subpart.
This subpart prescribes policies and procedures to implement
Executive Order 14063, Use of Project Labor Agreements for Federal
Construction Projects, dated February 4, 2022 (87 FR 7363).
0
5. Amend section 22.502 by revising the definitions of
``Construction'', ``Labor organization'' and ``Large-scale construction
project'' to read as follows:
22.502 Definitions.
* * * * *
Construction means construction, reconstruction, rehabilitation,
modernization, alteration, conversion, extension, repair, or
improvement of buildings, structures, highways, or other real property.
Labor organization means a labor organization as defined in 29
U.S.C. 152(5) of which building and construction employees are members.
Large-scale construction project means a Federal construction
project within the United States for which the total estimated cost of
the construction contract(s) to the Federal Government is $35 million
or more.
* * * * *
[[Page 51050]]
0
6. Revise section 22.503 to read as follows.
22.503 Policy.
(a) Executive Order (E.O.) 14063, Use of Project Labor Agreements
for Federal Construction Projects, requires agencies to use project
labor agreements in large-scale construction projects to promote
economy and efficiency in the administration and completion of Federal
construction projects.
(b) When awarding a contract in connection with a large-scale
construction project (see 22.502), agencies shall require use of
project labor agreements for all contractors and subcontractors engaged
in construction on the project, unless an exception at 22.504(d)
applies.
(c) An agency may require the use of a project labor agreement on
projects where the total cost to the Federal Government is less than
that for a large-scale construction project, if appropriate.
(1) An agency may, if appropriate, require that every contractor
and subcontractor engaged in construction on the project agree, for
that project, to negotiate or become a party to a project labor
agreement with one or more labor organizations if the agency decides
that the use of project labor agreements will--
(i) Advance the Federal Government's interest in achieving economy
and efficiency in Federal procurement, producing labor-management
stability, and ensuring compliance with laws and regulations governing
safety and health, equal employment opportunity, labor and employment
standards, and other matters; and
(ii) Be consistent with law.
(2) Agencies may consider the following factors in deciding whether
the use of a project labor agreement is appropriate for a construction
project where the total cost to the Federal Government is less than
that for a large-scale construction project:
(i) The project will require multiple construction contractors and/
or subcontractors employing workers in multiple crafts or trades.
(ii) There is a shortage of skilled labor in the region in which
the construction project will be sited.
(iii) Completion of the project will require an extended period of
time.
(iv) Project labor agreements have been used on comparable projects
undertaken by Federal, State, municipal, or private entities in the
geographic area of the project.
(v) A project labor agreement will promote the agency's long term
program interests, such as facilitating the training of a skilled
workforce to meet the agency's future construction needs.
(vi) Any other factors that the agency decides are appropriate.
(d) For indefinite-delivery indefinite-quantity (IDIQ) contracts
the use of a project labor agreement may be required on an order-by-
order basis rather than for the entire contract. For an order at or
above $35 million, an agency shall require the use of a project labor
agreement, unless an exception applies. See 22.504(d)(3) and
22.505(b)(3).
0
7. Amend section 22.504 by--
0
a. In paragraph (b) introductory text removing the words ``The
project'' and adding the words ``A project'' in their place;
0
b. Revising paragraph (c); and
0
c. Adding paragraph (d).
The revision and addition read as follows.
22.504 General requirements for project labor agreements.
* * * * *
(c) Labor organizations. An agency may not require contractors or
subcontractors to enter into a project labor agreement with any
particular labor organization when the project labor agreement includes
multiple signatory labor organizations representing the same trade.
(d) Exceptions to project labor agreement requirements--(1)
Exception. The senior procurement executive may grant an exception from
the requirements at 22.503(b), providing a specific written explanation
of why at least one of the following conditions exists with respect to
the particular contract:
(i) Requiring a project labor agreement on the project would not
advance the Federal Government's interests in achieving economy and
efficiency in Federal procurement. The exception shall be based on one
or more of the following factors:
(A) The project is of short duration and lacks operational
complexity.
(B) The project will involve only one craft or trade.
(C) The project will involve specialized construction work that is
available from only a limited number of contractors or subcontractors.
(D) The agency's need for the project is of such an unusual and
compelling urgency that a project labor agreement would be
impracticable.
(ii) Market research indicates that requiring a project labor
agreement on the project would substantially reduce the number of
potential offerors to such a degree that adequate competition at a fair
and reasonable price could not be achieved. (See 10.002(b)(1) and
36.104). A likely reduction in the number of potential offerors is not,
by itself, sufficient to except a contract from coverage under this
authority unless it is coupled with the finding that the reduction
would not allow for adequate competition at a fair and reasonable
price.
(iii) Requiring a project labor agreement on the project would
otherwise be inconsistent with statutes, regulations, Executive orders,
or Presidential memoranda.
(2) When determining whether the exception in paragraph (d)(1)(ii)
of this section applies, contracting officers shall consider current
market conditions and the extent to which price fluctuations may be
attributable to factors other than the requirement for a project labor
agreement (e.g., costs of labor or materials, supply chain costs).
Agencies may rely on price analysis conducted on recent competitive
proposals for construction projects of a similar size and scope.
(3) Timing of the exception--(i) Contracts other than IDIQ
contracts. The exception must be granted for a particular contract by
the solicitation date.
(ii) IDIQ contracts. An exception shall be granted prior to the
solicitation date if the basis for the exception cited would apply to
all orders. Otherwise, exceptions shall be granted for each order by
the time of the notice of the intent to place an order (e.g.,
16.505(b)(1)).
0
8. Revise section 22.505 to read as follows.
22.505 Solicitation provision and contract clause.
When a project labor agreement is used for a construction project,
the contracting officer shall--
(a)(1) Insert the provision at 52.222-33, Notice of Requirement for
Project Labor Agreement, in all solicitations containing the clause
52.222-34, Project Labor Agreement.
(2) Use the provision with its Alternate I if the agency will
require the submission of a project labor agreement from only the
apparent successful offeror, prior to contract award.
(3) Use the provision with its Alternate II if an agency allows
submission of a project labor agreement after contract award except
when Alternate III is used.
(4) Use the provision with its Alternate III when Alternate II of
52.222-34 is used.
(b)(1) Insert the clause at 52.222-34, Project Labor Agreement, in
all solicitations and contracts associated with the construction
project.
[[Page 51051]]
(2) Use the clause with its Alternate I if an agency allows
submission of the project labor agreement after contract award except
when Alternate II is used.
(3) Use the clause with its Alternate II in IDIQ contracts when the
agency will have project labor agreements negotiated on an order-by-
order basis and one or more orders will not use a project labor
agreement.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
0
9. Amend section 36.104 by adding paragraph (c) to read as follows:
36.104 Policy.
* * * * *
(c)(1) Agencies shall require the use of a project labor agreement
for Federal construction projects valued at or above $35 million,
unless an exception applies (see subpart 22.5).
(2) Contracting officers conducting market research for Federal
construction contracts shall ensure that the procedures at 10.002(b)(1)
involve a current and proactive examination of the market conditions in
the project area to determine national, regional, and local entity
interest in participating on a project that requires a project labor
agreement, and to understand the availability of unions, and unionized
and non-unionized contractors. Contracting officers may coordinate with
agency labor advisors, as appropriate.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
10. Amend section 52.222-33 by--
0
a. Revising the date of the provision;
0
b. Revising paragraphs (a) and (b);
0
c. Removing from paragraph (c) introductory text ``Consistent with
applicable law, the project'' and adding ``The project'' in its place;
0
d. Removing from paragraph (c)(1) ``offeror and all'' and adding
``Offeror and'' in its place;
0
e. Removing from paragraph (c)(2) ``offeror'' and adding ``Offeror'' in
its place;
0
f. Removing from paragraph (d) ``this contract'' and adding ``the
resulting contract'' in its place;
0
g. Removing from paragraph (e) ``offeror'' and adding ``Offeror'' in
its place;
0
h. In Alternate I:
0
i. Revising the date;
0
ii. Removing from the introductory text ``22.505(a)(1)'' and ``clause''
and adding ``22.505(a)(2)'' and ``provision'' in their places,
respectively;
0
iii. Revising paragraph (b);
0
i. In Alternate II:
0
i. Revising the date;
0
ii. Removing from the introductory text ``22.505(a)(2)'' and ``clause''
and adding ``22.505(a)(3)'' and ``provision'' in their places,
respectively;
0
iii. Revising paragraph (b); and
0
j. Adding Alternate III.
The revisions and addition read as follows:
52.222-33 Notice of Requirement for Project Labor Agreement.
* * * * *
Notice of Requirement for Project Labor Agreement (Date)
* * * * *
(a) Definitions. As used in this provision, the following terms are
defined in clause 52.222-34 of this solicitation entitled Project Labor
Agreement: ``construction,'' ``labor organization,'' ``large-scale
construction project,'' and ``project labor agreement.''
(b)(1) Offerors shall negotiate or become a party to a project
labor agreement with one or more labor organizations for the term of
the resulting construction contract.
(2) The Offeror shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
* * * * *
Alternate I (Date) * * *
(b)(1) The apparent successful offeror shall negotiate or become a
party to a project labor agreement with one or more labor organizations
for the term of the resulting construction contract.
(2) The Offeror shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
* * * * *
Alternate II (Date). * * *
(b)(1) If awarded the contract, the Offeror shall negotiate or
become a party to a project labor agreement with one or more labor
organizations for the term of the resulting construction contract.
(2) The Offeror shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
Alternate III (Date). As prescribed in 22.505(a)(4), substitute the
following paragraph (b) in lieu of paragraphs (b) through (e) of the
basic provision:
(b)(1) If awarded the contract, the Offeror may be required by the
agency to negotiate or become a party to a project labor agreement with
one or more labor organizations for the term of the order. The
Contracting Officer will require that an executed copy of the project
labor agreement be submitted to the agency--
(i) With the order offer;
(ii) Prior to award of the order; or
(iii) After award of the order.
(2) The Offeror shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
0
11. Amend section 52.222-34 by--
0
a. Revising the date of the clause;
0
b. Adding in alphabetical order the definitions ``Construction'' and
``Large-scale construction project'' in paragraph (a);
0
c. Revising the definition ``Labor organization'' in paragraph (a);
0
d. Removing from paragraph (b) ``this contract in accordance with
solicitation provision 52.222-33, Notice of Requirement for Project
Labor Agreement'' and adding ``the contract'' in its place;
0
e. Revising paragraph (c);
0
f. In Alternate I:
0
i. Revising the date;
0
ii. Removing from paragraph (b) ``Consistent with applicable law, the
Contractor shall negotiate a'' and adding ``The Contractor shall
negotiate or become party to a'' in its place;
0
iii. Removing from paragraph (c) introductory text ``Consistent with
applicable law, the project'' and adding ``The project'' in its place;
0
iv. Removing from paragraph (c)(1) ``and all'' and adding ``and'' in
its place;
0
v. Removing from paragraph (c)(4) ``the project'' and adding ``the term
of the project'' in its place;
0
vi. Revising paragraph (f); and
0
g. Adding Alternate II.
The revisions and additions read as follows:
52.222-34 Project Labor Agreement.
* * * * *
Project Labor Agreement (Date)
(a) * * *
Construction means construction, reconstruction, rehabilitation,
modernization, alteration, conversion, extension, repair, or
improvement of buildings, structures, highways, or other real property.
Labor organization means a labor organization as defined in 29
U.S.C. 152(5) of which building and construction employees are members.
[[Page 51052]]
Large-scale construction project means a Federal construction
project within the United States for which the total estimated cost of
the construction contract(s) to the Federal Government is $35 million
or more.
* * * * *
(c) Subcontracts. (1) The Contractor shall include the substance of
this clause, including this paragraph (c), in all subcontracts with
subcontractors engaged in construction on the construction project.
(2) The Contractor shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
* * * * *
Alternate I (Date). * * *
* * * * *
(f) Subcontracts. (1) The Contractor shall require subcontractors
engaged in construction on the construction project to agree to any
project labor agreement negotiated by the prime contractor pursuant to
this clause, and shall include the substance of paragraphs (d) through
(f) of this clause in all subcontracts with subcontractors engaged in
construction on the construction project.
(2) The Contractor shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
Alternate II (Date). As prescribed in 22.505(b)(3), substitute the
following paragraphs (b) through (f) for paragraphs (b) through (f) of
the basic clause:
(b) When notified by the agency (e.g., by the notice of intent to
place an order under 16.505(b)(1)) that this order will use a project
labor agreement, the Contractor shall negotiate or become a party to a
project labor agreement with one or more labor organizations for the
term of the order. The Contracting Officer shall require that an
executed copy of the project labor agreement be submitted to the
agency--
(1) With the order offer;
(2) Prior to award of the order; or
(3) After award of the order.
(c) The project labor agreement reached pursuant to this clause
shall--
(1) Bind the Contractor and subcontractors engaged in construction
on the construction project to comply with the project labor agreement;
(2) Allow contractors and subcontractors to compete for contracts
and subcontracts without regard to whether they are otherwise parties
to collective bargaining agreements;
(3) Contain guarantees against strikes, lockouts, and similar job
disruptions;
(4) Set forth effective, prompt, and mutually binding procedures
for resolving labor disputes arising during the term of the project
labor agreement;
(5) Provide other mechanisms for labor-management cooperation on
matters of mutual interest and concern, including productivity, quality
of work, safety, and health; and
(6) Fully conform to all statutes, regulations, Executive orders,
and agency requirements.
(d) Any project labor agreement reached pursuant to this clause
does not change the terms of this contract or provide for any price
adjustment by the Government.
(e) The Contractor shall maintain in a current status throughout
the life of the order any project labor agreement entered into pursuant
to this clause.
(f) Subcontracts. (1) For each order that uses a project labor
agreement, the Contractor shall--
(i) Require subcontractors engaged in construction on the
construction project to agree to any project labor agreement negotiated
by the prime contractor pursuant to this clause; and
(ii) Include the substance of paragraphs (d) through (f) of this
clause in all subcontracts with subcontractors engaged in construction
on the construction project.
(2) The Contractor shall not require subcontractors to enter into a
project labor agreement with any particular labor organization when the
project labor agreement includes multiple signatory labor organizations
representing the same trade.
[FR Doc. 2022-17067 Filed 8-18-22; 8:45 am]
BILLING CODE 6820-EP-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.