Rule2023-27736
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
December 22, 2023
Effective
January 22, 2024
Issuing agencies
Defense DepartmentGeneral Services AdministrationNational Aeronautics and Space Administration
Abstract
DoD, GSA, and NASA are issuing a final rule amending 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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<title>Federal Register, Volume 88 Issue 245 (Friday, December 22, 2023)</title>
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[Federal Register Volume 88, Number 245 (Friday, December 22, 2023)]
[Rules and Regulations]
[Pages 88708-88729]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27736]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 7, 22, 36, and 52
[FAC 2024-02; FAR Case 2022-003; Docket No. 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: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement an Executive Order
pertaining to project labor agreements in Federal construction
projects.
DATES: Effective January 22, 2024.
FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst,
at 202-803-3188 or by email at <a href="/cdn-cgi/l/email-protection#ff9b9e919ed19d9088929e91bf988c9ed1989089"><span class="__cf_email__" data-cfemail="680c090609460a071f050906280f1b09460f071e">[email protected]</span></a>, for clarification
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#75322634271012261016351206145b121a03"><span class="__cf_email__" data-cfemail="9addc9dbc8fffdc9fff9dafde9fbb4fdf5ec">[email protected]</span></a>. Please cite FAC 2024-02, FAR Case 2022-003.
SUPPLEMENTARY INFORMATION:
[[Page 88709]]
I. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 87 FR 51044 on August 19, 2022, 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. The
preamble to the proposed rule contained detailed information on the use
of PLAs.
DoD, GSA, and NASA received comments on the proposed rule from
8,334 respondents.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule. A discussion of the comments and the
changes made to the rule as a result of those comments are provided as
follows:
A. Summary of Significant Changes
The final rule removes proposed text that was intended to clarify
direction that prevented agencies from requiring a contractor or
subcontractor to enter into a PLA with any particular labor
organization when there were multiple signatory labor organizations
representing the same trade. While an agency still cannot require a
contractor or subcontractor to enter into a PLA with any particular
labor organization, the clarifying language added to the proposed rule
did not reflect how PLAs are established. When a PLA is established by
one or more labor organizations for a project, all entities are
required to enter into that PLA as there are not multiple PLAs on a
project. As a result, the text was removed at 22.504(c), Labor
organizations.
The final rule also removes similar text that prevented contractors
from requiring subcontractors to enter into a PLA with any particular
labor organization at FAR provision 52.222-33, Notice of Requirement
for Project Labor Agreement, and Alternates I, II, and III, and FAR
clause 52.222-34, Project Labor Agreement, and Alternates I and II. The
final rule text requires all subcontractors to become a party to the
PLA negotiated by the prime contractor.
B. Analysis of Public Comments
1. Effects on Competition and Marketplace Diversity
Comment: Numerous respondents raised concerns that the policy shift
reflected in E.O. 14063, from discretionary use of PLAs to a mandate,
will have a negative impact on agencies' ability to use competition to
achieve best value for the taxpayer. A respondent raised concerns that
even if a solicitation is open to all contractors, a Government mandate
for use of a PLA will limit the number of competitors able or willing
to compete on a project, especially with respect to non-unionized
contractors and small businesses. Based upon the results of a survey
conducted of the construction industry, a respondent indicated that
reduced participation would increase costs to the Government and,
ultimately, the taxpayers. Another respondent requested the Government
remain competitively neutral to open competition and to reduce barriers
to marketplace entrants. Similarly, another respondent requested that
the market dictate whether businesses will be successful. Numerous
others support ''open competition.''
Response: Section 5 of the E.O. provides agencies with the
authority to grant an exception, and specifically section 5(b) of the
E.O. provides an exception to the requirement for a PLA if the
requirement would substantially reduce the number of potential bidders
so as to frustrate full and open competition. Agencies may consider
criteria in FAR 22.504(d) to determine if the use of a PLA is
appropriate for the construction project. In determining whether fair
and reasonable pricing may be achieved, FAR 36.104(c)(2) directs
contracting officers to undertake 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 PLA, and to understand the availability of unions, and
unionized and non-unionized contractors.
While many respondents expressed concerns about competition,
several other respondents argued that the E.O. and rule are consistent
with competitive bidding. Several respondents cited a study of
education construction spending indicating no statistically significant
difference in bids between surveyed projects requiring PLAs and those
that did not. See Emma Waitzman & Peter Philips, UC Berkeley Labor
Ctr., Project Labor Agreements and Bidding Outcomes: The Case of
Community College Construction in California 3, 48 (2017)).
Comment: Some respondents were concerned that the rule limits non-
union contractors bidding on Federal projects and requested
justification for only allowing union contractors to bid on Federal
contracts over $35M.
Response: Under the E.O., both union and non-union prime
contractors and subcontractors may compete for contracts and
subcontracts without regard to prior participation in collective
bargaining agreements (CBAs).
Comment: Numerous respondents asserted that the rule violates the
requirement for full and open competition in the Competition in
Contracting Act of 1984 (CICA) because PLAs discriminate and injure
competition among potential bidders who are not signatories to CBAs.
Another respondent added that the rule is arbitrary and capricious
because it requires Federal agencies to impose PLAs on bidders or
contractors without knowing the PLAs' terms.
Response: The E.O. and final rule do not violate CICA, which
generally requires full and open competition through competitive
procedures that are best suited under the circumstances of the
procurement, 41 U.S.C. 3301(a). CICA defines full and open competition
as meaning ``that all responsible sources are permitted to submit
sealed bids or competitive proposals on the procurement.'' See 41
U.S.C. 107. Neither the E.O. nor final rule bar any responsible sources
from submitting sealed bids or competitive proposals, nor do they
provide a preference for contractors already a party to a CBA. Section
4 of the E.O. requires a PLA to allow all contractors and
subcontractors to compete without regard to whether they are otherwise
parties to CBAs.
The E.O. and the final rule require PLAs to contain various terms
that guarantee against strikes, lockouts, and similar job disruptions.
In addition, under the final rule, an agency maintains the authority to
ensure that the PLA includes any additional terms that the agency deems
necessary to satisfy its needs. As a result, an agency will know the
material terms of any resulting PLA when it issues a solicitation that
requires a PLA.
2. Cost
Comment: Numerous respondents expressed concerns that mandatory
[[Page 88710]]
PLAs and compliance would increase the cost of construction projects
and undermine taxpayer investments in infrastructure projects,
resulting in fewer infrastructure improvements, less job creation, and
higher state and local taxes. Several respondents cited studies that
indicate the increase in cost is estimated at 12-20 percent. These
respondents relied on two reports from the Beacon Hill Institute, which
found that PLAs raised construction costs on Massachusetts construction
contracts by 12 percent or raised construction costs on Connecticut
contracts by about 20 percent. Other respondents expressed concerns
about costs and cited a report from the New Jersey Department of Labor
& Workforce Development, Annual Report to the Governor and Legislature:
use of Project Labor Agreements in Public Works Building Projects in
Fiscal Year 2008, which estimated that average costs per square foot
were higher for PLA projects than for non-PLA projects.
Alternatively, some respondents cited analyses that compared
projects built with PLAs to those built without and found that there
was no statistically significant difference in project costs after
controlling for factors such as the size and complexity of the project.
See, e.g., Dale Belman et al., Project Labor Agreements' Effect on
School Construction Costs in Massachusetts, 49 Indus. Rels. 44, 60
(2010)). Some respondents asserted that PLAs are effective mechanisms
for providing structure and stability to construction contracts,
controlling construction costs, ensuring efficient completion of
quality projects, and establishing fair wages and benefits for all
workers. Another respondent asserted that there is no reason to assume
union workers lead to higher costs because they are typically more
productive. Higher wage rates also may induce contractors to substitute
capital and other inputs for labor, which would mitigate the effects of
higher labor costs.
Response: As expressed in the E.O., PLAs may help mitigate
challenges to the efficient completion of quality construction
projects, such as a shortage in the supply of labor or labor dispute
delays. PLAs may provide structure and stability to construction
projects by securing the commitment of all stakeholders on a
construction project. There have been numerous studies which found that
there is no definitive and compelling evidence to support the assertion
that PLAs increase costs on Federal construction projects. In 2012, the
Congressional Research Service report, R41310 Project Labor Agreements,
studied the effects of PLAs on costs and found that the evidence was
``inconclusive.'' A study commissioned by the Department of Labor,
Implementation of Project Labor Agreements in Federal Construction
Projects: An Evaluation, was conducted in 2011 and concluded that the
research supporting the New Jersey Department of Labor and Workforce
Development report may be misleading, because it relied on bid costs
without taking into consideration other key variables, like geographic
location, project type, or work site environment. Subsequent research
revisited the Massachusetts school construction contracts discussed in
the Beacon Hill studies and concluded that, once additional variables
were taken into account, the effects were not statistically
significant. Dale Belman et al., The Effect of Project Labor Agreements
on the Cost of School Construction (2005) and Dale Belman et al.,
Project Labor Agreements' Effect on School Construction Costs in
Massachusetts (2010). Other research, that found no statistically
significant difference in cost between projects that utilized PLAs and
those that did not, includes Emma Waitzman & Peter Philips, UC Berkeley
Labor Ctr., Project Labor Agreements and Bidding Outcomes: The Case of
Community College Construction in California (2017) and an analysis of
130 affordable housing projects in Los Angeles, California, ``Did PLAs
on LA Affordable Housing Projects Raise Construction Costs?'' conducted
by Peter Philips & Scott Littlehale, (Univ. of Utah Dep't of Econ.,
Working Paper No. 2015-03, 2015).
If it appears that a PLA will significantly raise costs on a
particular Federal construction project and the Government could not
obtain and determine a fair and reasonable price, the FAR would
prohibit the award of the contract. The final rule provides an
exception at FAR 22.504(d)(ii) in the event that market research
indicates that requiring a PLA on a project would substantially reduce
the number of potential offerors to such a degree that the Government
could not meet its requirements at a fair and reasonable price.
Comment: Numerous respondents expressed concerns that employers and
employees will incur additional costs for fringe benefits and union
dues that are unnecessary and duplicative. The respondents were
concerned that non-union employees paying union dues will never realize
the benefits provided by the unions due to union vesting standards.
Response: Neither the E.O. nor the final rule require non-union
employees to pay union dues or join a union. Non-union contractors are
free to negotiate provisions in PLAs to accommodate existing fringe
benefits. For example, a PLA may allow non-union contractors to opt out
of contributing to health and welfare funds designated under the PLA,
if the benefits provided by the non-union contractor are equal in value
to those provided under the PLA.
Comment: Numerous respondents expressed concerns that inefficient
union work rules limit an employer's ability to effectively manage
employee skill sets and work assignments. The respondents claim that
union rules prohibit productivity practices employed by non-union
contractors such as multiskilling on contracts with PLAs. Numerous
other respondents asserted that PLAs prevent disputes and ensure a
steady workforce. Those respondents indicate that PLAs provide several
important benefits when coordinating work performed by multiple
contractors on complex projects, such as uniform work rules and project
schedules, expeditious dispute resolution, craft and subcontractor
jurisdictional alignment, and project scheduling trade sequencing.
Response: Generally, PLAs govern the work rules for all contractors
and subcontractors on a project, regardless of whether the contractor
or subcontractor has previously been party to a collective bargaining
agreement. Contractors can negotiate PLAs that include flexibility in
how work is assigned or to allow exceptions to generally applicable
work rules to meet unique needs.
Comment: Numerous respondents expressed concerns that the proposed
rule will increase the cost to the taxpayer for public works projects
passed by Congress, such as those funded under the Infrastructure
Investment and Jobs Act (IIJA) of 2021, which did not include PLA
requirements. Another respondent is concerned that the PLA requirement
contradicts the Congressional intent in the IIJA.
Response: The majority of projects funded by the IIJA will be
conducted under federally funded grants, rather than FAR-based
contracts. This final rule applies to FAR-based contracts; however,
nothing in this rule or the IIJA precludes contractors working on
grant-funded projects from entering into PLAs.
Comment: A respondent expressed concerns that the Government has
not provided data on the costs or benefits of the PLA mandate. The
respondent is concerned that the data does not justify
[[Page 88711]]
that the use of PLAs will promote economy and efficiency. Another
respondent stated analysis based on information obtained via the
Freedom of Information Act disproves the reasoning used in the E.O.
that PLAs promote economy and efficiency.
Response: The E.O., as implemented in the final rule, reflects the
President's judgment that large-scale construction projects may pose
special challenges to efficient and timely procurement and that the
increased use of PLAs may help address those challenges. (Section 1 of
the E.O.) For example, because construction employers typically lack a
permanent workforce, those employers may face difficulties predicting
labor costs while bidding on contracts and securing a steady supply of
skilled labor to complete those projects on time and on budget.
Moreover, because construction projects typically involve multiple
employers working on a single location, a labor dispute involving one
employer can delay an entire project. A lack of coordination among
various employers, or inconsistent or uncertain terms and conditions of
employment among various groups of workers, can also create friction
and disputes in the absence of an agreed-upon resolution mechanism.
These problems tend to be especially pronounced on large-scale
projects, which tend to be more complex and of longer duration. For
these reasons, expanding the use of PLAs is expected to promote the
economy and efficiency of Federal contracting by promoting efficient
and timely completion of projects by skilled labor. Given these
challenges, use of a PLA can further economy and efficiency in Federal
contracting by increasing coordination amongst multiple employers and
trade unions, preventing costly labor disputes, promoting labor
management stability, improving reliable access to skilled labor
(including by promoting equity), and bolstering contractors' compliance
with employment law.
Expanding the use of PLAs on a large-scale Federal construction
project can be particularly beneficial to the economy and efficiency of
Federal contracting amidst a challenging construction labor market. As
the Supreme Court explained in Boston Harbor, Congress expressly
authorized PLAs in section 8(f) of the National Labor Relations Act
(NLRA) ``to accommodate conditions specific to that industry''
including ``the contractor's need for . . . a steady supply of skilled
labor.'' Bldg. & Constr. Trades Council v. Associated Builders &
Contractors of Mass./R.I., Inc. (``Boston Harbor''), 507 U.S. 218,
231(1993).
Today, the construction industry faces a significant nationwide
labor shortage. See, e.g., Garo Hovnanian, Ryan Luby, and Shannon
Peloquin, Bridging the labor mismatch in US construction (2022).
Meanwhile, demand for construction workers' skilled labor is only
projected to grow. The Department of Labor projects, on average, that
there will be 646,100 job openings in the construction and extraction
occupations every year over the coming years. See, Bureau of Labor
Statistics, Construction and Extraction Occupations, Dep't of Labor
(Sept. 6, 2023). Measures that promote a steady supply of skilled labor
are expected to improve the economy and efficiency of Federal
contracting in the modern labor market.
PLAs can help reduce the effects of the construction labor shortage
on Federal contractors' projects in several ways. First, PLAs can
attract more high-skilled workers to Federal construction projects by
providing higher compensation for craft positions. Although both union
and non-union contractors reported difficulty filling job openings for
craft workers in 2021, after the pandemic-related disruptions to the
construction labor market, union contractors were 14 percent less
likely to struggle to fill craft positions. See Frank Manzo IV, Larissa
Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union Advantage
During the Construction Labor Shortage (2022). Second, PLAs provide
access to union hiring halls, which can help ensure a steady supply of
skilled labor. The same study found that union contractors were 21
percent less likely than non-union contractors to experience delays in
completing projects due to labor shortages. This recent data is
consistent with the Department of Labor (DOL) 2011 study,
Implementation of Project Labor Agreements in Federal Construction
Projects: An Evaluation, which found that a PLA reached by New York
City schools on a construction contract helped avert skilled labor
shortages over the course of the 5-year construction program. The study
found that there were ``no instances of shortages in skilled labor on
any of the'' city schools' projects, ``although such shortages occurred
regularly elsewhere in the city during this same period.'' Non-union
contractors are also more likely than union contractors to report
struggling to hire qualified craft workers, suggesting that PLAs can
promote high-quality, as well as on-time, construction of Federal
projects. This final rule is expected to help the Federal Government
efficiently complete important projects in a challenging construction
market.
A study also found that using PLAs on Federal construction projects
may reduce turnover and absenteeism. There is less turnover among craft
workers working under CBAs than those that are not. See Frank Manzo IV,
Larissa Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union
Advantage During the Construction Labor Shortage (2022). Studies
suggest that unionized workplaces may be safer than non-union
workplaces, meaning that PLAs may promote productivity by preventing
absenteeism or job losses due to workplace injuries. See, e.g., Alison
D. Morantz, Coal Mine Safety: Do Unions Make a Difference, Indus. &
Labor Relations Review (2012).
Because all employers on a PLA are required to enter the same
agreement with coordinated work rules, PLAs can streamline
administration of large-scale construction projects. On complex
projects without a PLA, contractors may work with multiple trade unions
and, as a result, may struggle to coordinate multiple collective
bargaining agreements providing for different start times, break times,
rules governing overtime, holidays, and dispute resolutions procedures.
Those differences can create undue costs, delays, and inefficiencies in
Federal construction projects which can be effectively addressed
through a PLA. As a study commissioned by the Department of Labor
explained, uniform work rules on PLAs promote efficiency, productivity,
and cost savings. See Dep't of Labor, Implementation of Project Labor
Agreements in Federal Construction Projects: An Evaluation (2011).
Moreover, the study concluded, by standardizing the terms and
conditions of employment at the outset of a project, PLAs can promote
predictability of project costs. Id. at 3-4. For example, a four-year
PLA used by the New York City School Construction Authority (NYCASA) to
rehabilitate and renovate city schools saved $221 million dollars over
a five-year PLA by standardizing construction workers' shifts. Id. at
4-5.
The E.O. requires PLAs on Federal construction projects to contain
no-strike and no-lockout clauses. As a result, this requirement is
expected to prevent costly delays associated with labor disputes.
According to the 2011 DOL study, during the period covered by the
NYCASA PLA, a strike by a trade union resulted ``in a shutdown of
numerous large construction projects across the City and substantial
delay and related costs'' to parties involved--while construction on
the projects
[[Page 88712]]
covered by NYCASA's PLA continued uninterrupted. An audit analyzing the
results of the NYCASA PLA found that there was ``no disruption of work
or threat of strike on any of the projects'' covered by the PLA ``at
any time'' that the PLA was in effect.
For these reasons and others, the final rule reflects the language
provided in section 1 of the E.O., which states that the increased use
of PLAs on large-scale construction projects can help address special
challenges to efficient and timely Federal procurement. Finally, when
an agency determines that a PLA requirement would not advance the
Government's interests in achieving economy and efficiency, the agency
may, on a case-by-case basis, utilize an exception provided in section
5 of the E.O.
3. Procurement Delays
Comment: Some respondents expressed concerns that mandatory PLAs
will cause procurement delays, contradicting the rule's stated
objective, to ``promote economy and efficiency'' in the administration
and completion of Federal construction projects. These respondents
assert that use of PLAs may result in costly bid protests, litigation,
and other delays.
Response: While procurement delays may be caused by numerous other
factors, there is no conclusive evidence to support that specifically
requiring a PLA will be the sole reason for additional delays or
litigation. Rather, the final rule reflects the judgment that the
overall effect of PLAs is expected to promote timely construction of
Federal projects. Section 1 of the E.O. states that expanding the use
of PLAs will help prevent delays by preventing costly labor disputes on
Federal construction projects, promote a reliable stream of skilled
labor on Federal projects, and promote coordination across multiple
employers and unions. For example, a PLA executed by the New York City
School Construction Authority (NYCASA) to rehabilitate and renovate
city schools helped avert substantial delays in construction. See Dep't
of Labor, Implementation of Project Labor Agreements in Federal
Construction Projects: An Evaluation (2011). During the period covered
by the PLA, a strike by a trade union resulted ``in a shutdown of
numerous large construction projects across the City and substantial
delay and related costs'' to parties involved--while construction on
the projects covered by NYCASA's PLA continued uninterrupted. An audit
analyzing the results of the PLA found that there was ``no disruption
of work or threat of strike on any of the projects'' covered by the PLA
``at any time'' that the PLA was in effect and that ``there were no
instances of shortages in skilled labor on any of the NYCASA projects''
covered by the PLA--although similar shortages ``occurred regularly''
on other projects in the same city during the same time period. Id.
Another study of school construction projects in San Diego found that
``project delays are considerably lower'' on projects covered by a PLA.
Richard Parker & Louis Rea, San Diego Unified School District, San
Diego Unified School District Project Stabilization Agreement: A Review
of Construction Contractor and Labor Considerations iii (2011).
One study found that union contractors were 14 percent less likely
than non-union contractors to struggle to fill craft positions and 21
percent less likely than non-union contractors to experience delays in
completing projects due to labor shortages. See Frank Manzo IV, Larissa
Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union Advantage
During the Construction Labor Shortage 5 (2022).
Comment: A respondent is concerned that there are no meaningful
criteria to grant exceptions; therefore, agency decisions will be
inherently arbitrary and capricious and will delay construction
projects.
Response: The rule reflects specific criteria provided in section 5
of the E.O, under which an agency may grant an exception. The rule
provides additional details to ensure agency decisions comply with the
E.O.
4. Effects on Workforce
Comment: Many respondents commented on the rule's likely impact on
non-unionized contractors. Some respondents asserted that PLAs don't
discourage or prevent non-union contractors from participating on
projects with PLAs. However, another respondent expressed concerns that
non-union contractors will not bid on projects that mandate a PLA since
it requires that they recognize the union as the representative of
their employees (without their input) on that job, and could require
them to use the union hiring hall to obtain most or all construction
labor, exclusively hire apprentices from union programs, follow union
work rules, and pay into union benefit and multi-employer pension
plans. While not specifically stating that it would prevent bidding on
work, several other respondents expressed similar concerns. Numerous
respondents were concerned that non-union contractors represent the
vast majority of construction contractors in the country and their
unwillingness to compete will potentially limit the Government's access
to the best available contractors for a given construction project.
Response: Neither the E.O. nor the final rule preclude non-union
contractors from bidding on projects requiring a PLA. Non-union
contractors who choose to enter a project-specific PLA may do so
without becoming a union employer for purposes of other projects. The
E.O. expressly states that a PLA shall ``allow all contractors and
subcontractors on the construction project to compete for contracts and
subcontracts without regard to whether they are otherwise parties to
collective bargaining agreements.'' This language is reflected in the
final rule. The DOL website contains useful information about the
operation of PLAs. See <a href="https://www.dol.gov/general/good-jobs/project-labor-agreement-resource-guide">https://www.dol.gov/general/good-jobs/project-labor-agreement-resource-guide</a>.
Studies and court cases have shown that PLAs can have significant
non-union contractor participation. One study noted that on the Boston
Harbor project, the subject of the Supreme Court's decision in Bldg. &
Constr. Trades Council v. Associated Builders & Contractors of Mass./
R.I., Inc. 507 U.S. 230, 231 (1993), 102 of 257 subcontractors were
nonunion, notwithstanding that as much as three quarters of Boston
construction contractors were unionized. See Robert W. Kopp & John
Gaal, The Case for Project Labor Agreements, Constr. Law., (1999); see
also Associated Builders & Contractors, Inc., S. California Chapter v.
Metro. Water Dist. of S. California, 69 Cal. Rptr. 2d 885, 888 (Ct.
App. 1997).
The E.O. and the rule contain an exception for solicitations where
a market analysis suggests that there will not be sufficient bidders so
as to frustrate full and open competition.
Comment: Numerous respondents stated that the proposed rule
discriminates against non-union employees, placing non-union general
contractors and subcontractors at a significant competitive
disadvantage. A respondent explained that the requirement for offerors
to negotiate with labor unions--a party with which the offeror has no
authority to compel negotiations--effectively grants labor unions the
power to prevent certain offerors from submitting an acceptable offer.
Response: PLAs have been used successfully for decades in
construction projects in all parts of the United States, and there is
no data to suggest that parties have been systematically unable to
negotiate PLAs because of bad-faith bargaining by unions. Since the
final rule applies to large-scale Federal
[[Page 88713]]
construction projects, the Government assumes that there is a
significant economic incentive for both the union and the prospective
offeror to reach agreement on a PLA.
Comment: Numerous respondents expressed concerns that mandatory
PLAs will exacerbate nationwide labor shortages in the construction
industry because unions will only hire from union halls/union
apprenticeship programs and the majority of the workforce has opted not
to join unions. Numerous respondents were similarly concerned that PLAs
prevent the use of a contractor's current workforce, requiring the use
of union members hired out of local union halls.
Response: The Government does not expect PLAs to negatively impact
the outcome of the current nationwide labor shortage. Research
indicates that the skilled labor shortage is less severe among union
contractors than non-union contractors. One report revealed that union
contractors are 14 percent less likely to experience difficulty in
filling craft worker positions and 21 percent less likely to experience
delays in project completion times due to labor shortages than non-
union contractors. See Frank Manzo IV, Larissa Petrucci, & Robert
Bruno, Ill. Econ. Policy Inst., The Union Advantage During the
Construction Labor Shortage 5 (2022). Use of PLAs is expected to help
the Government efficiently complete projects in a tight construction
labor market. While many PLAs do require contractors to use the union's
hiring hall for referrals, they do not necessarily prevent the use of a
contractor's workforce. The union hiring halls are legally required to
refer workers to the project without regard to whether the workers are
union members. Ultimately, the contractor retains the right to decide
whom to hire.
Comment: Some respondents expressed concerns that unions negatively
impact local labor markets by bringing in non-local union labor rather
than hiring locally. Numerous respondents were concerned that PLA
mandates will result in more contract awards to union-signatory
contractors whose employees are union members at the expense of
taxpayers, fair and open competition, and local workers and businesses.
Alternately, some respondents indicated that PLAs can benefit local
labor markets by including local recruitment and hiring goals
specifically targeting historically marginalized workers intended to
expand the pool of skilled workers and promote diverse economic
development. Participation in registered apprenticeship programs and
pre-apprenticeship programs will also help to recruit women, people of
color, and other underrepresented individuals into the construction
industry.
Response: While unions have the ability to recruit skilled workers
nationally to address local skilled labor shortages, the intent of the
policy implemented in this rule is not to replace local workers for the
sole purpose of employing union members. PLAs can offer opportunities
to grow and train the local workforce, specifically targeting
underrepresented individuals.
Comment: Numerous respondents expressed concerns that PLAs can
interfere with existing CBAs that contractors have already negotiated
with unions.
Response: Many PLAs include a ``supremacy clause'' that
incorporates the individual CBAs of the trades by reference and
supersedes any other labor agreement that might otherwise apply to the
project. Use of the supremacy clause can be an important benefit of a
PLA on long term projects because individual CBAs may expire and need
to be re-negotiated during the project. The terms of the PLA would take
over to prevent work stoppages and other jobsite delays.
Comment: A respondent asserted PLAs will mitigate increasing
requests for equitable adjustments caused by workers walking off the
job for higher pay.
Response: PLAs prevent work stoppages and other job disruptions. As
a result, projects covered by PLAs can continue without additional
costs or delays.
Comment: A respondent asserted that non-union entities produce
better quality construction, pay employees, and provide benefits that
are as good, or better than union shops. Another respondent asserted
that employees do not want or need a union that will not give them
additional benefits beyond what they have and will require them to pay
dues. Alternatively, a respondent asserted that PLAs establish wages,
benefits, and other terms of employment across an entire project and
have been used in both the public and private sector for the better
part of a century.
Response: Non-union contractors may negotiate with the union that
is party to the PLA to opt out of certain terms, especially when
current benefits are equivalent to those provided by the union. As a
general matter, the U.S. Department of the Treasury report, Labor
Unions and the U.S. Economy (2023) indicates that the costs of union
dues or fair-share fees to workers is typically offset by increased
wages and fringe benefits. In addition, for both contractors and for
unions, the benefits of a PLA go beyond wages and fringe benefits. A
PLA establishes work schedules for all contractors, ensures efficient
utilization of labor, prevents job disruptions, and provides mutually
binding procedures for resolving disputes.
Comment: Several respondents indicated that expanded use of PLAs
will support workforce quality, safety, and stability, and help
guarantee on-target and on-budget completion of projects that employ
thousands of workers across various trades and industries. PLAs promote
safe, timely, cost-effective execution of the most complex and national
security conscious construction projects yet designed. In contrast, a
respondent asserted that in the period from 2001 to 2009 during which
PLA requirements were prohibited for Federal contracts and grants,
there were no reports of widespread cost overruns, delays, strikes, or
poor-quality construction on Federal projects attributable to the lack
of a government-mandated PLA, indicating that PLA mandates are not
needed to ensure economy and efficiency in government contracting.
Another respondent asserted there is no evidence to support claims that
PLAs guarantee better safety, quality, or construction delivery.
Response: Expanded use of PLAs is expected to support safe, on-
time, efficient, and high-quality construction, in part by helping to
secure a skilled workforce for Federal construction projects. Ensuring
compliance with workplace laws on Federal construction projects has
many important benefits to economy and efficiency for covered projects,
including attracting skilled workers, reducing labor conflict and
disruption, reducing turnover, and preventing workplace injuries.
One study found that union contractors (who are more likely to work
on PLA-covered projects) have stronger safety records than non-union
contractors. The study looked at more than 37,000 Occupational Safety
and Health Administration (OSHA) inspections in the construction
industry and estimated that union worksites were 19 percent less likely
to have OSHA violations than non-union worksites. When OSHA inspections
do uncover OSHA violations at unionized worksites, those worksites have
34 percent fewer violations per inspection that non-unionized
worksites. See Frank Manzo IV, Michael Jekot, and Robert Bruno, Ill.
Econ. Policy Inst., The Impact of Unions on Construction Worksite
Health & Safety (2021). PLAs
[[Page 88714]]
may improve workplace safety by ensuring that construction workplaces
have more apprentice-trained journeyworkers with critical safety
skills. A study conducted in California found that construction
contractors employing more apprentice-trained journeyworkers
experienced significantly lower rates of injuries. See Emma Waitzman &
Peter Philips, UC Berkeley Labor Ctr., Project Labor Agreements and
Bidding Outcomes: The Case of Community College Construction in
California 10, 16 (2017). Improving worker safety is especially urgent
in the construction industry, which has the second-highest number of
occupational deaths of any industry in the United States. See Bureau of
Labor Statistics, National Census of Occupational Injuries in 2021,
USDL-22-2309 (2022).
Comment: A respondent asserted that PLAs are more advantageous than
regular ``pre-hire'' agreements because they can systematize labor
relations across multiple trades, contractors and subcontractors.
Response: While PLAs can cover large, multi-year projects with
multiple unions, PLAs can also cover any construction project,
regardless of size, when only one union is involved.
Comment: A respondent expressed concerns that PLAs can blur the
line between employer and employee, which could result in ``co-
employment issues.'' The respondent also suggested that PLAs will
remove an important differentiating factor between subcontractors and
will deter their engagement when they cannot negotiate the terms and
conditions for their own employees. The respondent asked whether prime
contracts will include terms related to ``co-employment risks'' when
utilizing a mandated PLA.
Response: In Federal contracts, prime contractors are already
responsible for every subcontractor's performance and compliance with
the requirement to pay workers a prevailing wage under the Davis-Bacon
Act (see FAR clause 52.222-11). Contractors can and do select
subcontractors based upon criteria other than wage rates, such as
subcontractor's records of experience, quality, safety, timeliness, or
any other metric deemed critical to the success of the project.
Comment: Numerous respondents expressed concerns that specialists
in the construction field employed by foreign firms would be unwilling
to sign a PLA.
Response: The E.O. and final rule apply equally to foreign firms
participating on a project within the United States that requires a
PLA. The rule assumes that certain conditions that may impact the
Government's interests in achieving economy and efficiency would be
known prior to the performance of market research. Based upon those
conditions and/or results of market research, the agency may determine
that an exception would apply.
Comment: Numerous respondents expressed concerns that union
apprenticeship requirements and completion rates would mean that it
would take more than 14 years for all government-registered
construction industry apprenticeship program completers to fill the
estimated 650,000 vacant construction jobs needed just in 2022. These
respondents argue that excluding the non-union workforce development
practices and systems already in place exacerbates the skilled labor
shortage by steering work to participants in union-affiliated,
Government-registered apprenticeship programs at the expense of
contractors that engage in alternative workforce development efforts.
Alternatively, several respondents asserted that PLAs promote equitable
development of a skilled workforce by supporting privately funded union
training programs. Another respondent asserted higher skilled trades
require the workforce development and skill training of the union-
sector joint apprenticeship system to build and maintain the skill base
of the industry.
Response: E.O. 14063 does not impose a requirement for union-
affiliated apprenticeship programs, as both union and non-union
contractors can participate on projects with a PLA. Neither the E.O.
nor the rule require employers to use apprentices from union-affiliated
and/or Government-registered apprenticeship programs. Non-union
contractors may negotiate with the union that is party to the PLA to
use their own apprenticeship programs during the project.
The number of apprenticeships programs and the number of
apprentices graduating from those programs has been steadily
increasing. In the ten-year period from 2013 to 2023, the number of
workers enrolled in an apprenticeship program nearly doubled from
286,069 to 581,110. The number of women in these programs nearly
quadrupled from 24,594 to 83,254. See Data and Statistics, <a href="http://ETA.gov">ETA.gov</a>
(2023).
5. Compliance With Law
Comment: Several respondents asserted that PLAs are a deterrent to
violations of various worker protection laws and protect against common
workplace abuses to include worker misclassification, employment
status, and wage theft. They asserted that PLAs ensure workers receive
fair wages and benefits, which includes participation in federally-
mandated programs such as Social Security and Medicare.
Response: Use of PLAs may help reduce the risk of noncompliance
with labor laws in the construction industry under Federal construction
projects. The presence of unions on construction work sites is expected
to result in increased oversight, protection against retaliation, and
grievance procedures that promote compliance with such laws and protect
workers who raise concerns about an employer's conduct. Empirical
research shows that union coverage generally is associated with fewer
violations of employment law and suggests that unionization fosters
reporting violations of law to enforcement agencies. See Ioana
Marinescu, Yue Qiu, & Aaron Sojourner, Wage Inequality & Labor Rights
Violations (National Bureau of Economic Research., Working Paper No.
28475, February, 2021).
Comment: A respondent urged the Council to amend the proposal to
explicitly confirm that parties involved in PLA negotiations shall
never be required to reach an agreement with unions but should be
required only to engage in good faith bargaining to impasse, consistent
with the requirements of the NLRA.
Response: Unless an exception is authorized, section 3 of the E.O.
requires every contractor or subcontractor engaged in construction on
the project to agree, for that project, to negotiate or become a party
to a PLA with one or more appropriate labor organizations. Agencies
will consider all relevant circumstances in determining whether an
exception is authorized.
Comment: A respondent expressed concern that the rule interferes
and discriminates against the rights of construction contractors and
employees under NLRA. That respondent also argued that the E.O. is
preempted by the NLRA ``because it is not limited in its scope to a
single project.'' Similarly, another respondent is concerned that the
PLA rule is subject to challenge under labor law conflict preemption
principles because it conflicts with policies in the NLRA which
protects the rights of employees to refrain from union representation.
By contrast, other respondents noted that PLAs are expressly authorized
by section 8(f) of the NLRA and were unanimously upheld by the Supreme
Court in Building & Constr. Trades Council v. Associated Builders &
Contractors of
[[Page 88715]]
Mass. (Boston Harbor), 507 U.S. 218, 227-30 (1990).
Response: The E.O. and final rule are not preempted by the NLRA,
nor do they unlawfully interfere with or discriminate against the
rights of contractors or employees. PLAs are expressly authorized in
section 8(f) of the NLRA. Section 4(f) of the E.O. expressly requires
any PLA reached under it to allow contractors and subcontractors to
compete for work on the project without regard for their union status.
The E.O. also requires that PLAs reached under its authority fully
conform to all statutes, including the NLRA which prohibits the use of
union hiring halls in a manner that discriminates against non-union
workers.
The E.O. as implemented in this final rule is not preempted by the
NLRA because it reflects the Government's interests in efficient
procurement of goods and services. The NLRA does not preempt Government
agencies from reaching PLAs where the Government is acting as a
``market participant'' protecting its proprietary interests, rather
than as a regulator. Boston Harbor, 507 U.S. at 227-30. The Government
is acting in its role as a market participant by establishing a
presumption in favor of PLAs to advance the economical and efficient
use of Government funds--including, by promoting quality assurance,
efficient and on-time completion, and stability. Courts have repeatedly
found that uses of similar agreements in Government-funded projects are
not preempted under the NLRA. For example, in Airline Service Providers
Association v. Los Angeles World Airports, 873 F.3d 1074 (9th Cir.
2017), an appellate court held that a requirement that contractors
enter labor peace agreements was not preempted by the NLRA. In another
case, an appellate court held that a city requirement that parties
receiving certain tax benefits use a neutrality agreement and no-strike
agreement was not preempted by the NLRA because the conditions were
tailored to protect the city's proprietary interest. See Hotel
Employees & Restaurant Employees Union v. Sage Hospitality, 390 F.3d
206 (3rd Cir. 2004). In addition, the Government may also prohibit
Federal agencies from requiring the use of PLAs because the Government
acts in its proprietary capacity when it does so. See Bldg. and Constr.
Trades Dep't, AFL-CIO v. Allbaugh, 295 F.3d 28, 34-36) (D.C. Cir.
2002).
While the NLRA does not provide a right to refrain from union
``representation,'' the NLRA does allow employees to choose not to
become union members. Non-members may opt not to pay union dues and
instead pay agency fees covering only the share of dues used directly
for representation, such as for collective bargaining or grievance
procedures. However, under Section 9(a) of the NLRA, a union is the
``exclusive'' representative for all employees in that unit. Similarly,
under the NLRA, a union has a duty of fair representation to all
employees, regardless of whether they are union members or not. As a
result, the NLRA provides workers a right to opt out of union
membership, but not union representation.
Although the E.O. and final rule addresses more than one project,
the rule is not preempted by the NLRA. Section 5 of the E.O.
establishes a presumption in favor of PLAs, but also contemplates a
case-by-case analysis in which agencies may grant exceptions to that
presumption where a PLA would not advance the Government's proprietary
interests.
Comment: A respondent expressed concern that the rule interferes
and discriminates against the rights of construction contractors and
employees under the Employee Retirement Income Security Act of 1974
(ERISA) by ``taking nonunion workers pay for the benefit of union
pension plans without just compensation.'' The respondent also
suggested that the rule conflicted with the National Apprenticeship
Act, which the respondent wrote prohibits ``union versus non-union
discrimination.''
Response: The final rule does not interfere with employees' or
contractors' rights under ERISA or the National Apprenticeships Act.
PLAs reached under the E.O. and the final rule must conform to all
applicable statutes, including ERISA and the National Apprenticeships
Act. The possibility that non-union workers may contribute to benefit
plans for which they may or may not ultimately vest does not violate
ERISA, which permits and regulates defined benefit plans that do not
vest immediately (29 U.S.C. 1053). In addition, ERISA does not bar
government entities from establishing bidding conditions, e.g.,
requiring a PLA, related to benefit programs when those entities act as
market participants.
The National Apprenticeship Act does not prohibit PLAs or prohibit
contractors from entering into CBAs that require the use of a
particular apprenticeship program, as long as that program is
appropriately registered where required. Neither the E.O. or final rule
specify or limit PLA provisions regarding apprenticeship programs,
which may be the subject of bargaining between the parties to the
agreement within the bounds of applicable law.
Comment: A respondent suggested that this final rule is unnecessary
because existing Federal law and enforcement by agencies like the
Occupational Health and Safety Administration is sufficient to
guarantee workers' rights, fair pay, and safety.
Response: Ensuring compliance with workplace laws on Federal
construction projects has many important benefits to economy and
efficiency for covered projects, including attracting skilled workers,
reducing labor conflict and disruption, reducing turnover, and
preventing workplace injuries. Despite Federal and local protections
for construction workers and ongoing enforcement efforts by the
Department of Labor and others, construction remains one of the
country's most high-violation industries. See U.S. Department of Labor,
Wage & Hour Division, Low-Wage, High-Violation Industries (2022) at
<a href="https://www.dol.gov/agencies/whd/data/charts/low-wage-high-violation-industries">https://www.dol.gov/agencies/whd/data/charts/low-wage-high-violation-industries</a>. For example, a study (``An Empirical Methodology to
Estimate the Incidence and Costs of Payroll Fraud in the Construction
Industry,'' dated January 2020, <a href="http://www.nasrcc.org/wp-content/uploads/2021/03/Wage-and-Tax-Fraud-Report.pdf">http://www.nasrcc.org/wp-content/uploads/2021/03/Wage-and-Tax-Fraud-Report.pdf</a>) conducted on this topic
estimates that up to one in five construction employees are
misclassified as independent contractors, costing those workers at
least $811 million in unpaid overtime and premium pay in 2017 alone.
Additionally, the U.S. Department of Labor, Bureau of Labor Statistics
News Release USDL-22-2309 (<a href="https://www.bls.gov/news.release/pdf/cfoi.pdf">https://www.bls.gov/news.release/pdf/cfoi.pdf</a>) revealed that Construction workers are also particularly
vulnerable to health and safety violations: the industry has the
second-highest number of occupational deaths of any industry in the
United States.
6. Impact on Small Business
Comment: A respondent encouraged the Council to re-evaluate the
excessive cost of compliance on small entities and explore alternatives
to this rulemaking as it relates to small entities under the Regulatory
Flexibility Act. Numerous respondents expressed concerns that the rule
does not adequately calculate the disparate negative economic impact
and expensive compliance costs shouldered by Federal small business
general contractors and subcontractors, noting that the number of small
businesses awarded Federal construction contracts declined 60 percent
from 2010 to 2020.
[[Page 88716]]
Response: Unless an exception in section 5 of the E.O. applies,
there are no alternatives that would reduce the impact on or exempt
small entities from its requirements. The impact of the rule is updated
to take into consideration the numerous public comments regarding the
burden calculations. OMB and DOL will work with the Small Business
Administration (SBA) to determine the best way to help small entities
in understanding how to negotiate or participate in a construction
project with a PLA.
Comment: Numerous respondents expressed concerns about the
complexity and cost burdens associated with the rule. The respondents
were concerned that PLAs will create a barrier to entry for many small,
minority, and women-owned businesses, which will also negatively impact
agency achievement of socio-economic and small business contracting
goals. Some were concerned that these entities will choose to work on
commercial projects rather than those that require PLAs.
Response: OMB and DOL intend to work with SBA to determine the best
way to help small entities in understanding how to negotiate or
participate in a construction project with a PLA.
Comment: A respondent recommended consideration of a requirement
relieving a small business from having to join a union if it agrees to
pay the prevailing wages and other benefits established in union
negotiation. The respondent suggested that removal of this mandatory
requirement would allow the Federal Government to achieve its objective
with the PLA but at less cost to the small business.
Response: Neither the E.O. nor the final rule require any entity,
regardless of size, to join a union. Contractors and subcontractors may
negotiate with the union that is party to the PLA to opt out of certain
terms, to include when current benefits are equivalent to those
provided by the union.
Comment: A respondent recommended modifying the rule to reflect the
diminishing cost-benefit to small firms by providing for a threshold
contract value for covered subcontractors. The respondent stated that a
proper cost-benefit analysis would show that a small firm that has only
a few contracts per year will absorb a higher cost of compliance than a
firm with multiple yearly contracts. Thus, this rule will have a
negative economic impact on a substantial number of smaller firms,
demonstrating why the mandatory flow down cutoff has merit. The
respondent expressed concerns that the rule requires small business
subcontractors to comply with the mandatory flow down but does not
allow the small business to utilize the contracting agency resources to
resolve disputes that may occur during contract performance.
Response: The E.O. does not provide a threshold for subcontractor
participation. The E.O. requires that all subcontractors agree to
become a party to the PLA negotiated by the prospective offeror or
prime contractor in order to participate on the project unless an
exception applies. Providing relief above a certain threshold for
smaller dollar subcontracts could unintentionally frustrate the
benefits of a PLA, which depend on the participation of all contractors
and subcontractors working on the contract being part of the PLA. The
final rule assumes that subcontractors will work with prospective
offerors or the prime contractor to ensure terms and conditions are
negotiated into a PLA prior to deciding to participate on a project
that requires a PLA. PLAs are intended to prevent disputes and provide
an avenue for quick resolution.
Comment: A respondent was concerned that small entity annual
receipts would increase due to increased labor costs, which will result
in the small entity outgrowing the size standard for the North American
Industry Classification System (NAICS) to qualify for small business
set-asides and recommends that such set-asides be exempt from PLAs.
Response: While construction costs do fluctuate over time, there is
no evidence to support that PLAs specifically will increase costs and
cause a small entity to outgrow the size standard for the associated
NAICS code. See section II. B. 2 of the Preamble for the discussion of
Costs related to the use of PLAs.
Comment: A respondent asserted that unions require a bond and other
types of requirements that eliminate small companies.
Response: This rule does not amend or impose new bond requirements.
40 U.S.C. chapter 31, subchapter III, Bonds (formerly known as the
Miller Act) requires performance and payment bonds, or an alternative
payment protection, for any Federal construction contract exceeding
$150,000 unless an exception applies. The bonds protect the
Government's interests but also contain payment protections that are
beneficial for subcontractors.
Comment: A respondent was concerned that the rule will discourage
small business from bidding on covered Federal construction contracts
and thereby impose obstacles on the use of small business preferences
required by Federal agencies in violation of the Small Business Act (15
U.S.C. 637(d)).
Response: The final rule does not change the use of small business
preferences in procurements subject to the Small Business Act.
Implementation of the rule is not expected to impact the Government's
ability to achieve its small business goals. For fiscal year 2022, the
Federal Government reached 104.05 percent of its small business
contracting goals. PLAs can be helpful to small businesses by providing
them with a level playing field and access to expanded skilled labor
pools, while streamlining project administration and the negotiation of
workplace terms and conditions.
7. Alternative Approaches
Comment: A respondent recommended agencies include a provision to
establish a Community Workforce Agreement (CWA) approach in 22.504(c)
to promote diversity and inclusion, and local resident business
opportunities.
Response: A CWA is an agreement that may be negotiated and
incorporated as part of a PLA. A CWA may help agencies and prime
contractors meet small business subcontracting goals and other
objectives. The final rule permits, but does not require, CWAs. This is
consistent with the language of the E.O. and provides appropriate
flexibility for the parties to take unique local needs into
consideration when negotiating PLAs on a project-by-project basis.
Comment: A respondent recommended requiring PLAs to include a
``core employee'' provision, which would allow non-union contractors to
use their own employees without those employees registering with a
union's hiring hall.
Response: Non-union contractors are currently able to negotiate
core employee provisions in PLAs. Even when a PLA does not include a
``core employee'' provision, the PLA will not prevent using the
contractor's workforce. If the union that is a party to a PLA operates
an exclusive hiring hall, a non-union contractor's workers may register
with that hiring hall for referrals to the project. If there is a non-
exclusive hiring hall, contractors may hire their prior workers without
those workers registering for a referral.
Comment: Some respondents requested that this final rule require
that agencies use PLAs on projects that fall under the $35M threshold
in certain circumstances. Alternatively, another respondent requested
the rule eliminate
[[Page 88717]]
the option to use PLAs on small projects because of the respondent's
concern about potential impacts on small and diverse businesses.
Response: The rule implements section 7 of the E.O., which allows
an agency to require the use of a PLA in circumstances where the total
cost to the Federal Government is less than that for a large-scale
construction project if appropriate.
Comment: A respondent recommended that the rule consider exceptions
for contractors regarding health and welfare plans if (1) a non-union
contractor provides those benefits already and if less than the union
benefits, the contractor should pay the employee the difference; (2) if
the pension plan or healthcare fund is less than 70 percent funded
based upon the most recent 5500 filings, the non-union contractor may
pay the difference directly to employees; or (3) if a contractor would
incur a pension withdrawal liability that exceeds the payments they are
to make during the contract, exclude them from becoming a party to it
and pay the employees instead.
Response: Non-union contractors may negotiate the recommended
alternatives with the union that is party to the PLA.
Comment: Some respondents suggested there were other methods to
ensure projects are completed on time and that there is no evidence
that PLAs improve performance. Another respondent suggested that a
series of alternative requirements would achieve the Government's goals
such as: requiring contractors to reach agreements with private sector
hiring agencies to meet workforce needs; requiring contractors to reach
``labor compensation agreements'' for the project; requiring contracts
to use all non-union labor; or requiring contracts to have ``dispute
resolution agreements.''
Response: The respondent's proposed alternatives would be
inconsistent with the E.O., which reflects the President's judgment
that PLAs are often effective in preventing special challenges to
efficient and timely procurement related to large-scale construction
contracts. This judgment is consistent with published research showing
the benefits of PLAs and the long history of PLA use in the private and
public sector. Federal agencies have used PLAs on large-scale Federal
construction projects, dating back to the use of PLAs on Tennessee
Valley Authority projects in the 1930s. PLAs can provide many
advantages, including: eliminating risks of labor disruptions during
the construction period; access to reliable skilled labor through union
hiring halls and additional procedures to meet workforce needs in a
timely fashion; and uniform work rules promoting efficiency. Dep't of
Labor, Implementation of Project Labor Agreements in Federal
Construction Projects: An Evaluation (2011). Research has shown that
there are advantages and potential drawbacks of PLAs, but supports the
conclusion that PLAs can advance the Government's interest in efficient
Federal contracting.
Many of the alternatives proposed by the respondent (such as a
Federal Government requirement that contractors use non-union labor,
requiring agreements with staffing agencies rather than union hiring
halls to fill time-sensitive needs for limited skilled craft labor, or
requiring contractors to reach ``labor compensation agreements'') are
relatively untested and unstudied. Without additional research, there
is no way to determine whether the respondent's proposed alternatives
would provide benefits that exceed the benefits provided by this final
rule. PLAs provide many demonstrated, mutually-reinforcing benefits to
the Federal Government's ability to achieve its goals in large
construction projects. The final rule is preferable to alternatives
that, whether individually or together, only seek to achieve a subset
of the goals provided by PLAs.
Comment: A respondent asserted that the Government's interests in
economy and efficiency would be best served by pausing the proposed
rule, gathering and analyzing data to justify a reasonable threshold
for requiring PLAs, and then revising any proposed rule.
Response: The E.O. reflects the judgment that a presumption in
favor of PLAs on projects with an estimated cost of $35 million or more
would promote efficient Federal contracting. The final rule provides
for a case-by-case analysis to determine whether an exception to the
general PLA requirement is authorized, including where application of
the requirement would not promote economy and efficiency. As a result,
it is unnecessary to pause the publication of the final rule.
Comment: Some respondents requested that regulations and guidance
afford states and localities maximum regulatory flexibility, free from
anti-competitive and costly pro-PLA policies, in order to deliver more
value to taxpayers and create opportunities for all, including small
businesses.
Response: The final rule applies to FAR-based contracts awarded by
the Federal Government. The rule does not apply to grants or contracts
awarded by states or localities.
Comment: A respondent urged the Council to implement regulations
that include the best trade workers in the region to participate in
Federal construction projects. Some respondents suggested maintaining
the current policy established by E.O. 13502, which was issued in 2009
and authorized Federal agencies to require PLAs for large-scale
construction projects on a case-by-case basis, considering factors like
geographical location, construction market conditions, and the
availability of skilled labor. One respondent asserted that the
reliance interests of current contractors had not been adequately
considered in adopting the change in policy under E.O. 14063. By
contrast, some respondents argued that the current policy has led to an
underutilization of PLAs and that the proposed rule, if finalized,
would better advance the Federal Government's interests in achieving
economy and efficiency in Federal procurement. Another respondent
argued that E.O. 13502 has not achieved its goals because, under the
current policy, some agencies do not sufficiently consider the benefits
of adopting PLAs.
Response: Neither the E.O. nor the final rule prevent the best
trade workers in the region from participating in any Federal
construction project. Section 10 of the E.O. provides that, upon the
effective date of this final rule, E.O. 13502 is revoked. The final
rule reflects the language in section 1 of the E.O. which states that
large-scale construction projects pose special challenges to the
efficient and timely procurement for the Federal Government.
Additionally, the increased use of PLAs can help address those
challenges. The E.O. provides that expanding the use of PLAs will help
prevent costly labor disputes that delay Federal construction projects,
ensure a reliable stream of skilled labor, and promote coordination
across multiple employers and unions.
While current policy permits agencies to use PLAs on construction
projects, PLAs have only been used on a small number of Federal
projects. According to data collected by OMB, under current policy
approximately 2,000 contracts were eligible for a PLA between 2009 and
2021, but PLAs were only required 12 times. This E.O. now requires the
use of PLAs in connection with large scale construction projects unless
an exception applies to promote economy and efficiency in Federal
procurement. This is expected to expand the use of PLAs by Federal
agencies and help agencies achieve construction goals
[[Page 88718]]
more effectively in the context of the nationwide skilled labor
shortage in the construction industry.
While the respondent asserted that contractors have reliance
interests in ``the principle of government neutrality in procurement,''
they did not explain why the prior policy generated legally cognizable
reliance interests. The respondent did not specify what actions they
may have taken in reliance on the prior policy under E.O. 13502 that
they would not have taken if they had known the policy would change.
E.O. 14063 and the final rule apply prospectively and do not apply
to or affect existing contracts already entered into by contractors.
Both the E.O. and the rule apply only to new solicitations that are
entered into on or after the effective date of this final rule. (See
FAR 1.108(d) Application of FAR changes to solicitations and
contracts.) Contractors will be able to decide whether or not to bid on
contracts covered by the rule and to adjust their bidding strategy if
necessary in response to any PLA requirement in the solicitation.
Accordingly, while the Councils must implement the new requirements of
the E.O. and do not have the discretion to depart from the mandate of
the order, any reliance interests are outweighed by the benefits of
this final rule.
8. Exclusion of Professional Engineering Services/Brooks Act
Comment: Several respondents expressed concern that the rule may be
construed to require employees of professional engineering firms that
perform various architectural and engineering professional services to
become a party to a PLA. The respondents requested the rule exclude
architectural and engineering services because such services are
separate and distinct from construction services as recognized in 40
U.S.C. chapter 11, the Brooks Architect Engineer Act.
Response: Section 3 of the E.O. that applies the PLA requirement to
contractors or subcontractors ``engaged in construction on the
project'' excludes professional architecture and engineering services
that are covered by the Brooks Architect Engineer Act. Given the
distinction in FAR part 36 between construction and architect engineer
contracts, architect engineer contracts issued under FAR subpart 36.6
are not covered by this rule.
9. Laws Associated With Rulemaking
Comment: Some respondents expressed concerns that the proposed rule
fails to estimate the additional costs imposed on the public or the
Government and claims that the lack of more comprehensive cost
estimates violates the Administrative Procedure Act (APA). Some
respondents asserted the proposed rule violates the arbitrary and
capricious standards of the APA.
Response: The procedural rulemaking requirements of the APA do not
apply to matters relating to public property, loans, grants, benefits,
or contracts (see 5 U.S.C. 553(a)). This rulemaking is instead governed
by 41 U.S.C. 1707, the OFPP Act. The proposed rule requested input from
the public in response to the burden estimates, and the recommendations
provided by the public have been considered in developing the final
rule.
Comment: A respondent challenged the sufficiency of the legal
authority used in the preamble for the proposed rule, 40 U.S.C. 121(c),
10 U.S.C. chapter 137, and 51 U.S.C. 20113. The respondent claimed that
as a result, the proposed rule does not comply with 5 U.S.C. 553(b)(2).
The respondent claimed a statutory provision authorizing an agency head
to engage in rulemaking does not give the agency the power to adopt a
particular regulation.
Response: The APA (5 U.S.C. 553) does not apply to this rulemaking.
The legal authority for the Federal Acquisition Regulations System is
40 U.S.C. 121(c), 10 U.S.C. chapter 4, and 10 U.S.C. chapter 137 legacy
provisions (see 10 U.S.C. 3016), and 51 U.S.C. 20113 because Congress
has specified that those are the authorities under which DoD, GSA, and
NASA ``shall jointly issue and maintain'' the FAR (41 U.S.C.
1303(a)(1)).
Comment: A respondent stated that the rule exceeds the authority of
the executive branch under the Federal Property and Administrative
Services Act, Federal procurement and labor laws, and the major
questions doctrine. Another respondent stated that these requirements
should not be extended to other projects without an act of Congress.
Response: While DoD, GSA, and NASA do not believe that this
rulemaking implicates major questions principles, the E.O. and this
final rule are a proper exercise of the executive branch's authority
under the Federal Property and Administrative Services Act of 1949 (the
Act) in any event. The Act authorizes the President ``to prescribe
policies and directives that the President considers necessary to carry
out'' the Act, as long as those policies are ``consistent'' with the
Act (40 U.S.C. 121(a)). The E.O. and this final rule ``carry out'' and
are ``consistent'' with the Act, including, for example, its provisions
directing GSA to ``prescribe policies and methods for executive
agencies regarding the procurement and supply of personal property and
nonpersonal services and related functions'' (40 U.S.C. 501(b)(2)(A));
its requirements to ``implement the [congressional] policy'' that
agencies ``achieve, on average, 90 percent of the cost, performance,
and schedule goals established for major acquisition programs of the
agency'' (41 U.S.C. 3103(a), (c)); its direction that agencies award
contracts promptly to responsible sources whose proposals are most
advantageous to the Federal Government, considering only cost or price
and the other factors including in the solicitation (41 U.S.C. 3703;
see 40 U.S.C. 111); and its stated objective of providing ``the Federal
Government with an economical and efficient system'' for procurement
activities, including ``[p]rocuring and supplying property and
nonpersonal services'' (40 U.S.C. 101). Additionally, support for this
rule is provided under the Act by provisions authorizing GSA to
``prescribe policies and methods for executive agencies regarding the
procurement and supply of personal property and nonpersonal services
and related functions (40 U.S.C. 501(b)(2)(A); see also 40 U.S.C.
121(c); 41 U.S.C. 1303).
The E.O. is also consistent with the longstanding, early, and
consistent interpretation of the Procurement Act by several Presidents.
The E.O. and rule reflect a decades-long tradition of executive orders
across multiple Administrations that have invoked the Act to
``establish[ ] the policy of the Government with regard to the use of
PLAs in Federal and federally funded construction contracts.'' See
Bldg. & Const. Trades Dept., AFL-CIO v. Allbaugh, 295 F.3d 28, 30 (D.C.
Cir. 2002). For example, E.O. 13302 (2001) provided that agencies could
neither require nor prohibit the use of a PLA and was upheld on appeal
by the D.C. Circuit. Presidents have also exercised their authority to
prohibit agencies from using PLAs, see E.O. 12818 (1992), to revoke
that prohibition, see E.O. 12836 (1993), and to encourage the use of
PLAs, see E.O. 13502 (2009). ``[L]ongstanding practice'' is a strong
indication that the E.O. as implemented in this final rule, like
earlier applications of the President's authority, ``falls within the
authorities that Congress has conferred upon him.'' See, e.g., Biden v.
Missouri, 142 S. Ct. 647, 652 (2022).
Comment: A respondent claimed the rule violates the Congressional
Review Act because the rule will cost more than $100 million and
asserted that the proposed rule incorrectly stated that
[[Page 88719]]
this is not a major rule under 5 U.S.C. 804. Another asserted the rule
is subject to the Congressional Review Act, and questions why the rule
is subject to E.O. 12866 but is not a major rule.
Response: The Congressional Review Act requires submission of all
interim and final rules, regardless of dollar value, to each House of
the Congress and to the Comptroller General of the United States, as
provided in section VI of the proposed rule (87 FR 51044). This final
rule will be submitted in accordance with the Congressional Review Act.
The determination of whether a rule is a major rule is made by the
Office of Management and Budget's Office of Information and Regulatory
Affairs (OIRA) (see Section VI of this preamble). OIRA also makes the
determination whether or not a rule meets the threshold at section 3(f)
of E.O. 12866.
Comment: A respondent asserted that the rule violates the
Regulatory Flexibility Act because the FAR Council failed to consider
the proposed rule's deleterious effect on small businesses that are
deprived of business because they refuse to enter, or cannot enter, a
PLA.
Response: The rule complies with the Regulatory Flexibility Act.
The proposed rule examined the impact of the proposed rule on small
businesses, small governmental jurisdictions, and small organizations.
The rule solicited comments from the public pertaining to the estimated
burden which was used to inform the final rule. The rule allows all
contractors and subcontractors to compete for contracts and
subcontracts without regard to whether they are otherwise parties to a
CBA.
10. Exceptions
Comment: Some respondents recommended that the final rule should
insert ``Federal'' before statute and law to ensure state laws are not
used to bypass PLA requirements.
Response: The final rule adopts this change because state and local
statutes and regulations cannot regulate Federal procurement. See
United States v. Georgia Pub. Serv. Comm'n, 371 U.S. 285, 292 (1963).
Comment: A respondent asserted that PLAs make several of the
exceptions provided in the E.O. unnecessary. For example, the
respondent recommended deleting the exception for a PLA not achieving
economy and efficiency because economy and efficiency has been improved
with PLAs on large industrial projects with many contractors and
subcontractors. The respondent also asserted that the exception for
reduction in competition is also unnecessary.
Response: The final rule implements the exceptions provided in
Section 5 of the E.O.
Comment: Some respondents recommended that the rule require
agencies to post approved exemptions to public websites before the
solicitation date and allow a limited time to request reconsideration
of the exemption decision before the solicitation is issued.
Response: The final rule implements section 6 of the E.O., which
requires agencies to publish data and descriptions of the waivers
granted on a centralized public website by the solicitation date to the
extent permitted by law and consistent with national security and
executive branch confidentiality interests.
Comment: A respondent was concerned that the one-trade exception
will be misapplied.
Response: The contracting workforce will be provided training to
ensure accurate application of the regulations in accordance with
section 9 of the E.O, including 22.504(d)(1)(i)(B).
Comment: Some respondents recommended that the exceptions be very
narrow and only utilized after a transparent decision-making process. A
respondent was concerned that senior procurement executives will simply
check a box to avoid a PLA.
Response: Exceptions will only be authorized in accordance with the
direction in section 5 of the executive order.
Comment: A respondent stated that the proposed rule does not
contain an exception for when inclusion of a PLA demand would impede
economy and efficiency; a PLA could well have such an effect without
triggering any of the clauses of the proposed exceptions. For example,
agencies could choose a PLA bid that is twice as expensive as an
otherwise similar bid that does not include a PLA. An exception from
the PLA mandate should apply if it can be demonstrated that the mandate
would increase construction costs by a substantial amount, for example
by 15 percent or more. The respondent recommended additional
exceptions: (1) if one or more contractors cannot obtain a stable
workforce, (2) if contractors show that a PLA would increase their
price by 5 percent or more and that not using a PLA would not
negatively impact quality, timeliness, and safety, (3) if all
contractors can sign the agreement that meet 2 terms of the PLA
mandate, including the non-strike and procedures for disputes, and (4)
if requiring a PLA reduces the number of qualifying bids below a
certain threshold that would signal a lack of competition.
Response: The E.O. and final rule include several exceptions at FAR
22.504(d) that could be used to address the respondent's concerns. In
addition to the exception specifically for economy and efficiency,
market research will be used to determine whether a PLA would reduce
competition to such a degree that it would not allow for a fair and
reasonable price.
Comment: Some respondents requested the urgent and compelling
limitation reflect that requiring a PLA on the project would result in
serious injury, financial or other, to the Government.
Response: Agencies may grant an exception based upon a specific
written explanation as provided under Section 5 of the E.O., including
any exception based on unusual and compelling urgency.
Comment: A respondent requested that agencies find it inappropriate
to characterize a project as short-term if data concerning the
completion rates of similar Federal projects in terms of construction
type (e.g., work on GSA-managed buildings) and competing activities in
the vicinity demonstrate that such projects are not generally completed
in the calendar year in which the project commences.
Response: Each project is evaluated on a case-by-case basis to
determine if the project duration or lack of operational complexity
would qualify for an exception under section 5 of the E.O.
Comment: A respondent was concerned that the language omits key
details of the E.O. with regard to potential exceptions, rendering them
so broad that contracting officers can continue to disregard this
guideline.
Response: The rule implements the exceptions provided in the E.O.
The rule provides additional explanations to ensure agencies apply an
exception appropriately.
Comment: A respondent requested the senior official referenced in
section 5 of the E.O. to be the agency head and not the senior
procurement executive.
Response: FAR 2.101 identifies the senior procurement executive as
the responsible official for management direction of the acquisition
system in an executive agency (41 U.S.C. 1702(c)).
Comment: A respondent expressed concerns that the lack of agency
experience with PLAs will cause contractors to price additional risk
into projects with PLAs.
[[Page 88720]]
Response: Agencies will receive training on the use of PLAs in
accordance with section 9 of the E.O.
Comment: A respondent supported the requirement that exceptions
must be granted by the solicitation date as opposed to after a
solicitation has been issued with a PLA requirement. The respondent
also wanted the FAR to expressly state that a PLA cannot be required
after a solicitation has been issued.
Response: The rule requires agencies to grant an exception prior to
the issuance of the solicitation (see 22.504(d)(3)) in accordance with
section 5 of the E.O.
11. Definitions
Comment: A respondent recommended that the rule add a geographical
definition of market because construction workers are mobile.
Response: Contracting officers will determine the applicable market
based upon the project requirements.
Comment: A respondent recommended that the FAR clearly provide that
whether the union with which a PLA has a membership or affiliation in a
building trade construction council cannot be considered in bidding or
the acceptance of bids on a PLA covered by E.O. 14063 or the proposed
FAR rule.
Response: A union does not need to have membership or affiliation
in a building trade construction council to become a party to a PLA
when required for a construction project. Regardless of whether a PLA
is required at the time of proposal submittal, award or postaward, all
contractors working on the project are required to become a party to
the PLA. However, the E.O. does require that the PLA be with a ``labor
organization,'' which is defined as one in which ``building and
construction employees are members, as described in 29 U.S.C. 158(f).''
Comment: A respondent requested removal of proposed text at FAR
22.504(c), which prevented agencies from requiring contractors and
subcontractors to enter into a PLA with a particular labor organization
when there were multiple labor organizations representing the same
trade, because it is redundant, and the respondent recommended using
the E.O. language. Another respondent stated that by its very nature, a
PLA is an agreement through which the contractor requires
subcontractors to enter into an agreement with a particular labor
organization. By signing the PLA, the subcontractors enter into an
agreement with all the signatories to the agreement, not with any
particular labor organization.
Response: The final rule text has been revised to adopt this
recommendation at FAR 22.504(c) with conforming changes in FAR
solicitation provision 52.222-33, Notice of Requirement for Project
Labor Agreement and FAR contract clause 52.222-34, Project Labor
Agreement. See section II, paragraph A of the preamble.
Comment: A respondent supported the final rule's alignment of the
definition of the term ``labor organization'' in the rule with the
discussion of PLAs in section 8(f) of the NLRA, which defines PLAs
(pre-hire agreements) as agreements with ``a labor organization of
which building and construction employees are members.'' See 29 U.S.C.
158(f). The respondent, however, suggested that the final rule
definition of ``labor organization'' should also require that the labor
organization ``itself, its parent, or parent's affiliates establish,
maintain, or participate in a registered apprenticeship program in the
construction industry.'' The respondent stated that this language
reinforces the registered apprenticeship programs that are regulated by
DOL or a state apprenticeship program. Another respondent recommended
that the rule revise the definition of labor organization to delete the
word ``building'' so that it reads a labor organization ``of which
construction employees are members'' instead of ``of which building and
construction employees are members.''
Response: The rule implements the definition provided in the E.O.,
which is consistent with the description of PLAs in section 8(f) of the
NLRA.
Comment: A respondent expressed support for the proposed rule's
inclusion of the term ``structures'' in the rule's definition of
``construction,'' as consistent with the language of the E.O. and the
FAR generally. Another respondent recommended replacing the E.O.
definition of construction with language from the coverage provisions
of the Davis-Bacon Act (40 U.S.C. 3142(a)) because the scope of those
coverage provisions is widely accepted and understood. The respondent
stated that the new definition in the E.O. increases opportunities for
ambiguity.
Response: The final rule implements the definition provided in the
E.O. The scope of coverage of Federal construction projects under the
E.O. and the Davis-Bacon Act are not identical, and there may be work
that is not covered under the Davis-Bacon Act that is covered under the
E.O. Agencies ultimately must make independent determinations under the
E.O. of whether a contract is for ``construction'' or whether a
subcontractor is ``engaged in construction'' such that they are
required to be a party to a PLA.
12. Market Research
Comment: A respondent recommended that labor organizations be
consulted when applying the market exception because they can provide
information on available contractors, workers, etc. The respondent also
suggested adding ``Construction labor organizations that have
geographical jurisdiction where the project is to be located shall be
consulted on current market conditions, including, but not limited to,
the availability of contractors and labor, potential bidders and the
degree of unlawful employment practices.'' Additional respondents
recommended that agencies confer with union and non-union contractor
associations and labor unions during market research to determine
whether certain exceptions apply.
Response: The E.O. requires contracting officers to perform an
inclusive market analysis. The FAR currently requires agencies to
conduct market research in FAR part 10 and, specific to construction,
in part 36.
Agencies may use various tools to examine market conditions
described in FAR part 10. Agencies generally confer with interested
parties using sources sought notices and advance notices for
construction contracts (see FAR 36.211 and 36.213-2). These notices are
primarily published on the Government-wide point of entry (GPE) at
<a href="http://www.sam.gov">www.sam.gov</a>, which is accessible from a computer or mobile device
connected to the internet. Also, agencies may be required by statute to
publicize contract opportunities to increase competition, broaden
industry participation in meeting Government requirements, and to
assist small business concerns in obtaining contracts and subcontracts
(see 5.002 and FAR subparts 5.1 and 5.2).
The GPE is available to the public, including union and non-union
contractor associations and labor unions, through the internet without
having to register as a potential offeror. It is also used to reach as
many interested parties as practicable and offers extensive search
functionality which allows the user to identify Governmentwide business
opportunities at all phases. Those interested in participating in
market research for construction projects can simply select ``sources
sought'' under notice type and proceed to filter on additional factors
such as organization or place of
[[Page 88721]]
performance. The user may then respond directly to the contracting
officer conducting market research.
Comment: A respondent did not support language requiring a
contracting officer to ascertain interest and availability of union and
non-union contractors during market research surveys. The respondent
suggested that it would be inappropriate to analyze whether contractors
are union or non-union given that the E.O. allows contractors and
subcontractors to compete for contracts and subcontracts without regard
to whether they are otherwise parties to collective bargaining
agreements. The respondent stated that surveys taken as part of market
research have been used to undermine the process of fairly ascertaining
overall contractor interest. As a result, the respondent urged that
contractor interest include all contractors with no requirement for a
certain segment of the industry to be included in the responses. Some
respondents asserted agency efforts for market research on PLAs have
been flawed because standard methods of publicizing contract
opportunities, such as Fedbizopps, only reach contractors seeking work
opportunities and the contracting community and not unions. Further,
historically, many of the market survey questions about PLAs were not
aimed at the particular market but asked generic questions about
general attributes of PLAs. Documentation regarding the consideration
of a PLA was nothing more than checking a box. Another respondent
expressed concern that an examination of contractors' ``interest'' in
working under a PLA will not yield reliable information about whether
there will be sufficient competition. The respondent claimed that non-
union contractors consistently assert in responses to market research
that they have no ``interest'' in participating in projects conducted
under PLAs and that they will not bid for such work; however, when
actually presented with the opportunity to work on a large public works
project, non-union contractors step forward.
Response: The language in FAR 36.104(c)(2) referencing the
availability of both union and non-union contractors is not intended to
suggest that only union contractors can or will bid on projects where a
PLA is required. Rather, it is intended to assist with implementing the
E.O.'s requirement that an exception be based on an ``inclusive''
market analysis. Contractors may bid on projects subject to this final
rule regardless of whether they are otherwise party to CBAs, and
available evidence suggests that non-union contractors do bid on
projects with PLAs.
The goal of market research in the context of the E.O. and this
final rule is to determine whether requiring a PLA would substantially
reduce the number of potential offerors to such a degree that the
Government could not meet its requirements at a fair and reasonable
price. While the language of FAR 36.104(c)(2) seeks information about
contractor ``interest,'' a potential bidder's claim that they are
disinterested in bidding on projects with PLAs, alone, would not
necessarily justify the exercise of an exception, in particular where
other information suggests that a sufficient number of offers would be
received.
Agencies conduct market research using the various tools and
techniques in FAR 10.002, inclusive of direct communication with
industry via online communication, interchange meetings, or pre-
solicitation conferences, as needed and applicable. The final rule
provides additional direction at FAR 36.104(c)(2) for projects that may
require a PLA.
Use of the GPE at <a href="http://www.sam.gov">www.sam.gov</a> to publish a sources sought notice is
the primary method used and allows all interested parties equal access
to the Government's market research efforts. All entities interested in
contracting with the Government understand that the GPE is the
statutory source for dissemination of contracting opportunities, to
include notifications or announcements of future opportunities. Union
and labor organizations are not precluded from searching and monitoring
<a href="http://www.sam.gov">www.sam.gov</a> as all other interested parties do, nor are unions
prevented from responding to market research or sources sought notices.
Union and labor organization utilization of the GPE at <a href="http://www.sam.gov">www.sam.gov</a> to
respond to market research or sources sought notices will help to
inform contracting officer's determinations.
Comment: Some respondents recommended that the market research text
under 36.104(c)(2) be revised to state that ``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 the availability of local, regional and national unions and
contractors to participate in a project that requires a PLA. The
contracting officer may use market research conducted within 18 months
before the award of the construction contract only if the current and
proactive examination of market conditions demonstrates that the
information is still current, accurate and relevant. Contracting
officers may coordinate with agency labor advisors, as appropriate.''
Response: Market research is conducted during acquisition planning
to establish the most suitable approach to meeting an agency's needs.
The direction at 10.001 and 10.002 currently provide sufficient
guidance to contracting officers on the conduct and use of market
research to inform a particular procurement. The final rule, at FAR
36.104(c)(2), adds specific direction for contracting officers for use
in conjunction with FAR part 10 guidance, when a large-scale
construction contract is contemplated.
Comment: A respondent recommended market research and requests for
information use a standard set of questions with consistent formatting
for contractors to use and to give contractors at least 2 weeks to
respond. Another respondent recommended that the rule standardize PLA
surveys for interested parties to comment and an automated system to
process the inputs.
Response: While the Government understands and appreciates the
interest in consistency when conducting market research, it is not
possible to create a standard set of questions that will result in
sufficient information for every size and type of construction project.
Also, while there may be some elements of PLA surveys that can be
standardized, the Government believes the uniqueness of each project
and other elements like locality does not lend itself to a standardized
document.
13. Application to Indefinite Delivery Indefinite Quantity (IDIQ)
Contracts
Comment: A respondent asserted that IDIQ contracts are unusual but
agrees that the PLA requirement should be associated with the award of
a particular order.
Response: Data indicates that IDIQ contracts for multiple projects,
regions, and types of construction are more frequently used than
definitive contracts Governmentwide. The rule acknowledges that orders
are primarily project- and location-specific, making the application of
a PLA requirement appropriate at the order level.
Comment: Some respondents requested that the $35 million value
should be applied at the IDIQ base contract level, not to individual
orders.
Response: IDIQ contracts are often used for multiple, distinct
construction projects in varied markets. As a result, there may be
differing markets within the scope of the IDIQ, which could make one
overarching PLA
[[Page 88722]]
inappropriate. Agencies are not precluded from requiring one PLA, but
they should do so based upon market research.
14. Burden Estimates
Comment: A respondent asserted that the rule overestimates the
costs of negotiating PLAs under the rule because PLAs are standardized
in many markets, so they may not need to be negotiated from scratch.
Response: The rule assumes that most PLAs will be negotiated from
scratch because PLAs have not been mandated prior to this E.O.
Historical data does not support any other assumption.
Comment: A respondent stated the statistical process followed by
the Government is generally reasonable but stated that assumptions and
outcomes cannot be effectively evaluated. The respondent stated that it
would be surprising if the actual totals were an order of magnitude
larger than provided in the proposed rule. The respondent supported the
Government's assumption that there are 4 bidders. The respondent also
believed that the focus on total costs versus additional costs is
appropriate. The respondent questioned the 20 percent assumption for
small businesses because the Government has historically awarded 15
percent of its contracts to small businesses, which would drop the
estimate to 18 to 32 small businesses. The respondent offered that
according to <a href="http://USAspending.gov">USAspending.gov</a>, since 2008 9.7 percent of prime
construction projects of $35 million or more went to small businesses.
The respondent also stated that if the Government had used wage data
from the construction industry, it would have reduced estimates.
Response: The rule uses the fiscal years 2019, 2020, and 2021 data
from the Federal Procurement Data System (FPDS) to establish the
estimates. The impact of the rule has been adjusted to reduce the
percentage of large scale construction contracts awarded to small
entities to 15 percent.
Comment: Several respondents questioned the number of
subcontractors used in the estimated impact of the rule. Respondents
recommended using ranges of 8 to 10 or 15 to 20 based upon the size of
the project. The increase will likely reflect a greater negative impact
on subcontractors and small businesses.
Response: The impact of the rule is revised to account for an
increased number of subcontractors for each project subject to the PLA
requirements.
Comment: A respondent stated that the cost review should have taken
into account that some exceptions may be denied, or it should be
clarified that it only considers approved requests.
Response: The rule does not differentiate between the number of
exceptions submitted, approved, or denied because the preparation,
submittal, and review of an exception would occur regardless of whether
an exception was approved or denied.
Comment: A respondent recommended the total estimated costs be
defined as ``all estimated costs incurred for completion of the
construction project, including, but not be limited to site
acquisition, preconstruction environmental work, site preparation,
design (including architectural, engineering, and other professional
costs), labor costs, construction equipment, construction management,
inspection, relocation, and refurbishing.'' The respondent asserted a
standard definition would be beneficial to contracting agencies.
Response: Total estimated costs for purposes of this rule are only
those associated with the PLA rule definition for construction at
22.502 and 52.222-3. While a construction estimate may include the cost
of design for a project for which a design-build contract is
contemplated, professional services provided by architecture and
engineering firms are not subject to PLA requirements.
Comment: A respondent believed the estimate of the percentage of
contracts that will be exempt appears to be a misconception of the
mandate. Exemption of up to half the covered projects is clearly
inconsistent with a requirement that contracting agencies use PLAs.
Response: The rule takes into account the potential exceptions that
are provided in the E.O. DoD, GSA, and NASA have estimated the
potential use of the exceptions with the knowledge that the market will
influence whether a PLA is in the best interest of the Government.
Comment: Some respondents asserted the rule vastly underestimates
the economic impact. Another respondent asserted the cost impact of the
rule needs to be adjusted upwards. The respondent asserts that on
average an experienced company takes 400 hours to negotiate a PLA, but
that estimate does not include the hours needed to draft and revise the
PLA, negotiate economic terms, factor economic terms into proposal
pricing, obtain legal review, coordinate with prospective
subcontractors, or factor in hours spent by other parties to the PLA.
The respondent recommended the total hour estimates to negotiate a PLA
be increased to at least 500 hours to provide a more reflective cost
estimate.
Response: The final rule contains updated burden estimates in
response to public comments.
Comment: A respondent expressed concern that the attorney hourly
rate is underestimated.
Response: The rule uses Bureau of Labor Statistics (BLS) National
Occupational Employment and Wage Estimates for May 2021 as the basis
for the legal participants' hourly rates.
15. PLA Submittal
Comment: Several respondents recommended that the final rule
require PLAs to be submitted before contract award, eliminating the
third option which allows submittal after award. Another respondent
recommended that PLAs be submitted before a final contract award so
that contracting agencies can confirm bidder eligibility and influence
PLA content. Another respondent was concerned that postaward submittals
will not ensure that a project will be covered by a PLA.
Response: The final rule permits the submittal of PLAs with an
offer, prior to award, or after award. Contracting officers have the
discretion to select the most appropriate option for the particular
procurement.
Comment: A respondent recommended that paragraph (e) be removed
from 52.222-33 and the Alternate 1, and substitute para (b) of
Alternate II. Because PLA negotiations take on average 90 days, an
offeror would not be able to submit a PLA with its offer. This would
favor affiliated companies and disincentivize non-affiliated ones from
participation. This would reduce efficiency and Government selection in
a fair bidding process. The respondent asserted postaward alternatives
in 52.222-33 would better suit and satisfy the reality of the days
taken to negotiate PLAs.
Response: The rule allows the contracting officer to determine,
based upon market research, when to require the submittal of a PLA. The
rule provides options for contracting officers to choose from.
16. Implementation
Comment: A respondent questioned whether the rule would be
immediately implemented into all applicable construction contracts or
only newly awarded applicable construction contracts.
Response: The final rule will be effective 30 days after
publication. OIRA has determined that this rule is not a major rule.
According to FAR 1.108(d), Application of FAR changes to
[[Page 88723]]
solicitations and contracts, FAR changes apply to solicitations on or
after the effective date of the change, unless otherwise specified.
Comment: A respondent questioned how the rule will address
different geographical locations within the United States where the
construction industry does not use PLAs and where organized labor is
less common.
Response: In addition to the market research conducted under FAR
part 10, the final rule requires contracting officers to conduct an
inclusive market analysis to evaluate whether a PLA requirement for any
particular project would advance the Government's interests in
accordance with the E.O. This inclusive market analysis must consider
the market conditions in the project area and the availability of
unions, and unionized and non-unionized contractors.
Comment: A respondent recommended the council evaluate the need for
a PLA on a project-by-project basis, prioritize flexibility, provide
for standardized solicitations, general waivers, and keep the waiver
authority at the current level and NOT raise it to the senior
procurement executive.
Response: The rule requires agencies to evaluate the feasibility of
a PLA based upon market research and other considerations on a project-
by-project basis. Solicitations and contracts for construction are
generally standardized using the procedures authorized in FAR part 36,
however requirements are specific to the particular project. The rule
interprets the senior official referenced in the E.O. to be the Senior
Procurement Executive as the responsible official for management
direction of the acquisition system (see 2.101).
17. Negotiations
Comment: A respondent was concerned that the rule does not clearly
prohibit an agency from engaging in PLA negotiations. The respondent
asserted that the PLA should be negotiated solely and directly by
contractors with employees working on the PLA project and the labor
unions representing workers on the PLA project, as they are the only
parties explicitly authorized to enter into a PLA agreement under the
NLRA. The respondent also requested that the rule clarify that a PLA
may not be unilaterally written by a labor organization or negotiated
by parties who will not be employing workers on the project.
Response: PLAs are pre-hire agreements negotiated solely between
labor unions and contractors working on a specific project. The
Government does not participate nor is it a signatory to the PLA.
18. Out of Scope
Comment: A respondent recommended that the Government invest in
workforce development training for the skilled trades at the high
school level.
Response: This comment is outside the scope of this rule.
Comment: A respondent recommended formalizing the U.S. Army Corps
of Engineer's PLA Survey process for all Federal agencies executing
construction.
Response: This comment is outside of the scope of this rule because
policy guidance will be developed separately by OMB.
Comment: A respondent requested the Council lessen barriers and
increase opportunities for U.S.-owned and-operated construction firms
to build with the Federal Government.
Response: This comment is out of scope of the rule.
Comment: A respondent requested the passage by Congress of the Fair
and Open Competition Act (H.R. 1284) that would prohibit Federal
construction contracts from requiring or prohibiting PLAs.
Response: This comment is out of scope of the rule.
Comment: A respondent assumed that agencies estimated their costs
based on contracts that did not use a PLA because 99.4 percent of their
projects did not use a PLA. The rule does not specify how agencies must
estimate the cost of projects. Consequently, the agencies should either
(1) require estimated project costs to be based on fair market costs or
(2) apply an exception to bids of $35 million or less, regardless of
the agencies initial estimated cost of the project.
Response: The development of independent Government cost estimates
for construction contracts is out of scope of this rule.
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, commercial
services, and 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, commercial services, and COTS items.
IV. Expected Impact of the Rule
A 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 PLA with one or more labor organizations.
Currently, the regulations at FAR subpart 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 was a
total of approximately 2,000 eligible contracts and the requirement for
a PLA was used 12 times. Based on the data, 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 FPDS data from fiscal year 2019 through
fiscal year 2021, the average number of construction awards, including
orders against IDIQ contracts valued at $35 million or more, were
approximately 119 annually. The average value 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
[[Page 88724]]
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 from which the contracting officer can select. 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 to 144 offerors (20 to 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 to 215 entities (40 to 71 apparent successful offerors or awardees
+ 80 to 144 offerors). The final rule reduces the estimated percentage
of entities assumed to be small entities from 20 to 15 percent in
response to public comments and updated analysis of FPDS data. As a
result, approximately 18 to 32 small entities and 102 to 183 large
entities may be required to submit PLAs.
For the estimated 120 to 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 one or more
union(s). It is assumed an entity will require a total of 5
participants, the owner or a senior executive, legal counsel, a project
manager, and 1 to 2 labor advisors, depending on the size of the
workforce, to support the negotiations. In response to public comments,
the final rule revises the scope and estimated hours required for each
party involved in the negotiation of a PLA. Public comments indicated
that, in addition to the negotiation of a PLA discussed in the proposed
rule, entities performed several other requirements necessary to
develop and ultimately implement a PLA. Taking those additional tasks
into consideration, the final rule increases the estimated hours from
40 to 80 hours to 100 to 200 hours for each party involved in the
development, negotiation, and implementation of a PLA between a prime
contractor and a union.
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).
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 the development, negotiation,
submission, and implementation of a PLA in response to a Government
contract is $7.28 to $26.10 million (120 to 215 entities *((5
participants * 100 to 200 hours * $121.40) + (1 person * 1 hour *
$33.21)). Taking midpoints of each range implies a primary estimate of
$16.69 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 public comments, the final rule increases the estimated number of
subcontractors from 2 to an average of 14 for each contract. As a
result, the final rule estimates that the requirements of a PLA will
apply to approximately 1,680 to 3,010 subcontractors (120 to 215 * 14).
Subcontractors may, in certain circumstances, participate in
discussions with a prospective offeror regarding desired PLA-specific
conditions, such as core employee provisions or the opting out of
certain union fees, prior to agreeing to perform as a subcontractor for
a specific project. While subcontractors do not negotiate the PLA
directly with the union, they will ultimately need to review the terms
and sign on to the PLA negotiated by the prospective offeror or prime
contractor in order to participate on the project. Based upon public
comments, the final rule acknowledges that an attorney will most likely
participate in any discussions with the prospective offeror and
ultimately the review of the negotiated PLA. As a result, the number of
participants on behalf of the subcontractor is increased from 2 to 3,
the owner, project manager, and an attorney. In addition, the final
rule increases the estimated number of hours required for the
subcontractor's participants to review and implement the PLA. As a
result, the estimated number of hours is increased to 2.5 to 25 hours.
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 subcontractors participating in discussions with prospective
offerors, reviewing, implementing, and complying with a PLA in response
to a government contract is estimated to be $1.53 to $27.41 million
(1,680 to 3,010 subcontractors *(3 participants * 2.5 to 25 hours *
$121.40)). Taking midpoints of each range implies a primary estimate of
$ 14.47 million. The total annual estimated impact for prime
contractors and subcontractors to develop, review, negotiate, submit,
implement, and comply with a PLA in response to a government contract
is estimated to be $8.81 million to $53.51 million.
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 in which 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
[[Page 88725]]
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 to
$7,892 (12 to 60 exceptions * 2 hours * $65.77). Taking midpoints of
each range implies a primary estimate of $4,735.
The review of the exception request is expected to be performed at
the GS-15 level or higher and may involve more than one level of review
prior to approval or rejection. This process is estimated to take
approximately 4 hours. 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 $5,218 to 26,090
(12 to 60 exceptions * 4 hours * $108.71). Taking the midpoint of the
range implies a primary estimate of $15,654. The total annual estimated
cost to prepare, route, review, and approve requests for exceptions is
estimated to be $6,796 to $33,982.
The annual total estimated impact of PLAs to the public and
Government is estimated to be $8.87 million to $53.54 million.
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 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
Pursuant to the Congressional Review Act, DoD, GSA, and NASA will
send this rule to each House of the Congress and to the Comptroller
General of the United States. The Office of Information and Regulatory
Affairs (OIRA) in the Office of Management and Budget has determined
that this rule does not meet the definition in 5 U.S.C. 804(2).
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601-612. The FRFA is summarized as follows:
DoD, GSA, and NASA are amending 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, unless
an exception applies.
Significant issues raised by the public in response to the IRFA
are as follows:
Comment: Numerous respondents expressed concerns about the
burden on small entities associated with the use of PLAs. Several
respondents indicated that the burden estimates were significantly
understated in terms of the number of subcontractors impacted and
the hours necessary to negotiate and establish a PLA. The
respondents were also concerned that the additional complexity and
costs associated with a PLA would create a barrier to entry for
small entities.
Response: In response to public comments, the burden estimates
are revised for all entities, to include the number of
subcontractors and hours required to implement a PLA at both the
prime contractor and subcontractor level. Additional analysis of
subcontractor data also resulted in an increase in the estimated
number of subcontractors assumed to be small entities.
The Office of Management and Budget (OMB) and the Department of
Labor (DOL) intend to work with the Small Business Administration
(SBA) to determine the best way to help small entities in
understanding how to negotiate or participate in a construction
project with a PLA.
Comment: Several respondents are concerned that PLAs will create
a barrier to entry for many small, minority, and women-owned
businesses. The respondents are also concerned that the rule will
discourage small businesses from bidding on covered Federal
construction contracts and thereby impose obstacles on the use of
small business preferences required by Federal agencies in violation
of the Small Business Act (15 U.S.C. 637(d)).
Response: The final rule does not change the use of small
business preferences in procurements subject to the Small Business
Act. PLAs may help small businesses by providing them with a level
playing field and access to expanded skilled labor pools, while
streamlining project administration and the negotiation of workplace
terms and conditions. The E.O. and final rule provides an exception
if a PLA requirement would be inconsistent with statutes and
regulations. OMB and DOL intend to work with SBA to determine the
best way to help small entities in understanding how to negotiate or
participate in a construction project with a PLA.
DoD, GSA, and NASA considered the public comments in the
development of the final rule; however, no changes were made to the
FAR text in response to the comments.
The Chief Counsel for Advocacy of the Small Business
Administration submitted comments dated October 18, 2022, in
response to the proposed rule published August 19, 2022,
implementing Executive Order 14063, Use of Project Labor Agreements
for Federal Construction Projects.
The following were the Office of Advocacy's chief concerns:
Comment: The Office of Advocacy encouraged the Council to re-
evaluate the excessive cost of compliance of this mandatory rule on
small entities and encouraged the FAR Council to explore
alternatives to this rulemaking as it relates to small entities.
Response: An analysis of the rule's impact on small entities was
conducted and updated for the final rule, the results are included
in the preamble under section IV, Expected Impact of the Rule. The
E.O. requires the use of PLAs on large scale Federal construction
projects unless an exception applies. The exceptions in section 5 of
the E.O. do not include entity size, therefore there are no
alternatives available that would reduce the impact on or exempt
small entities from its requirements. However, the E.O. and final
rule do provide an exception if a PLA requirement would be
considered inconsistent with statutes and regulations.
OMB and DOL intend to work with SBA to determine the best way to
help small entities in understanding how to negotiate or participate
in a construction project with a PLA.
Comment: The Office of Advocacy encouraged the Council to
consider a requirement relieving a small business from having to
join a union if it agrees to pay the prevailing wages and other
benefits established in union negotiation. The Office of Advocacy
also suggested that removal of this mandatory requirement would
allow the Federal Government to achieve its objective with the PLA
but at less cost to the small business.
Response: Neither the E.O. nor the final rule require any
entity, regardless of size, to join a union. Contractors and
subcontractors
[[Page 88726]]
may negotiate with the union that is party to the PLA to opt out of
certain fees, to include when current benefits are equivalent to
those provided by the union.
Comment: The Office of Advocacy contended that the mandatory
requirement for a PLA means that every contractor on a Federal
construction contract, regardless of size, must agree to negotiate
or become a party to a PLA with one or more labor organizations.
This creates a mandatory flow down requiring all affected small
businesses to join a union, regardless of size or dollar value of
the subcontract. This flow down will have a detrimental cost impact
on those small entities. The rule requires small business
subcontractors to comply with the mandatory flow down but does not
allow the small business to utilize the contracting agency resources
to resolve disputes.
Response: The E.O. requires all contractors and subcontractors
to agree to become a party to a PLA to participate on a large scale
Federal construction project, unless an exception applies. Neither
the E.O. nor the final rule requires any entity, regardless of size,
to join a union. Contractors and subcontractors may negotiate terms
and conditions with the union on a range of topics to include
dispute resolution procedures, fringe benefits, and union dues.
Comment: The Office for Advocacy encouraged modifying the rule
to reflect the diminishing cost-benefit to small firms by providing
for a threshold contract value for covered subcontractors because
additional analysis would show that a small firm that has only a few
contracts per year will absorb a higher cost of compliance than a
firm with multiple yearly contracts.
Response: The E.O. requires the use of PLAs on large scale
Federal construction projects unless an exception applies. The E.O.
does not provide a threshold for subcontractor participation,
therefore there is no legal authority to provide such a threshold.
The E.O. applies the PLA requirements to all contractors and
subcontractors, regardless of size.
An analysis of the rule's impact on all entities was conducted
and updated for the final rule, and the results are included in the
preamble under section IV, Expected Impact of the Rule.
Corresponding updates are made to the burden estimates for small
entities.
Comment: The Office of Advocacy contends that the rule conflicts
with the Administration's goal to reduce economic barriers for small
businesses that wish to enter the Federal marketplace as provided in
its announcement on December 2, 2021, ``Biden-Harris Administration
Announces Reforms to Increase Equity and Level the Playing Field for
Underserved Small Business Owners.'' If this rule is finalized, it
will place a greater burden on Federal agencies to meet their annual
statutorily required small business goals.
Response: To support the administration's goals to increase
small entity participation in the Federal marketplace, and in this
particular market, OMB and DOL intend to work with SBA to determine
the best way to help small entities in understanding how to
negotiate or participate in a construction project with a PLA.
Comment: The Office of Advocacy requests that the rule include
burden estimates for hiring an additional recordkeeper for each
small entity subcontractor, similarly to the additional recordkeeper
for small entity prime contractors.
Response: The burden estimates do not provide for the hiring of
additional recordkeepers at the prime or subcontractor level,
regardless of business size. The rule assumes that each entity will
utilize existing employees.
DoD, GSA, and NASA considered the Office of Advocacy comments
and conducted a thorough analysis of the authorities provided in the
E.O. As a result, no changes were made to the final rule in response
to the comments.
This final 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 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 to 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 PLA requirements, the number
of small entities impacted by the rule is 15 percent of the 120-215
entities. Therefore, it is estimated that approximately 18-32 small
entities will be required to submit a PLA.
DoD, GSA, and NASA acknowledge there is no data source that
identifies the number of subcontractors per contract; however, based
upon public comments, the final rule estimates that each of the
entities required to submit PLAs may have approximately 14
subcontractors; i.e., 1,680 to 3,010 subcontractors (120 * 14) to
(215 * 14). In addition, the final rule increases the percentage of
subcontractors estimated to be small entities to 80 percent. As a
result, it is estimated that 80 percent or 1,344 to 2,408 of the
subcontractors are small entities (1,680 * 0.80) (3,010 * 0.80).
Based upon this updated analysis, the number of small entities
that may be required to negotiate or become a party to a PLA is
approximately 1,362 to 2,440 annually (18 + 1,344) (32 + 2,408).
These numbers may fluctuate based on the use of discretionary PLAs,
any exceptions granted to the required use of a PLA, or whether the
PLA is required for all offerors, the apparent successful offeror,
or the awardee.
When a PLA is required, the successful offerors are required to
maintain the PLA in a current state throughout the life of the
contract. Each of the estimated 18 to 32 small entities awarded
prime contracts may require 1 recordkeeper to maintain a PLA through
the life of the contracts.
There are no alternative approaches that are consistent with the
stated objectives of the executive order.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VIII. Severability
If any provision of this rule, or the application of such provision
to any person or circumstance, is stayed or held to be invalid, the
remainder of this rule and its application to any other person or
circumstance shall not be affected thereby. If this rule or E.O. 14063
is stayed or held invalid in its entirety, DoD, GSA, and NASA intend
that provisions of the FAR implementing E.O. 13502 as those provisions
existed prior to issuance of this final rule (i.e., subpart 22.5, and
sections 52.222-33 and -34) would remain in effect.
IX. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501-3521) applies to the
information collection described in this rule. Changes to the FAR
resulted in an increase to the paperwork burden previously approved
under Office of Management and Budget (OMB) Control Number 9000-0066,
Certain Federal Acquisition Regulation Part 22 Labor Requirements.
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 amend 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 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
[[Page 88727]]
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 numerical order entries for ``52.222-33'' and ``52.222-
34''.
The additions read as follows:
1.106 OMB approval under the Paperwork Reduction Act.
* * * * *
------------------------------------------------------------------------
OMB control
FAR segment 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 (3 CFR, 2023 Comp., pp
335-338).
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 to the Federal Government is $35 million or
more.
* * * * *
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 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. Removing from paragraph (b) introductory text 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.
(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
[[Page 88728]]
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 Federal statutes, regulations, Executive
orders, or Presidential memoranda.
(2) Considerations. 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 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
solicitations and contracts associated with the construction project.
(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 anticipates one or more orders may 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 with a total estimated construction
cost at or above $35 million, unless an exception applies (see subpart
22.5).
(2) Contracting officers conducting market research for Federal
construction contracts, valued at or above the threshold in paragraph
(c)(1) of this section, 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; and
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; and
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 (Jan 2024).
(a) Definitions. As used in this provision, the following terms are
defined in clause 52.222-34, Project Labor Agreement, of this
solicitation ``construction,'' ``labor organization,'' ``large-scale
construction project,'' and ``project labor agreement.''
(b) Offerors shall--
(1) Negotiate or become a party to a project labor agreement with
one or more labor organizations for the term of the resulting
construction contract; and
(2) Require its subcontractors to become a party to the resulting
project labor agreement.
* * * * *
Alternate I (Jan 2024) * * *
(b) The apparent successful offeror shall--
(1) Negotiate or become a party to a project labor agreement with
one or more labor organizations for the term of the resulting
construction contract; and
(2) Require its subcontractors to become a party to the resulting
project labor agreement.
* * * * *
Alternate II (Jan 2024) * * *
(b) If awarded the contract, the Offeror shall--
(1) Negotiate or become a party to a project labor agreement with
one or more labor organizations for the term of the resulting
construction contract; and
(2) Require its subcontractors to become a party to the resulting
project labor agreement.
Alternate III (Jan 2024). 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
[[Page 88729]]
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 require its subcontractors to become a party
to the resulting project labor agreement for the term of the order.
0
11. Amend section 52.222-34 by--
0
a. Revising the date of the clause;
0
b. Adding in alphabetical order definitions for ``Construction'' and
``Large-scale construction project'' and revising the definition
``Labor organization'' in paragraph (a);
0
c. 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
d. Removing from paragraph (c) ``all subcontracts'' and adding
``subcontracts'' in its place;
0
e. In Alternate I:
0
i. Revising the date and paragraph (b);
0
ii. Removing from paragraph (c) introductory text ``Consistent with
applicable law, the project'' and adding ``The project'' in its place;
0
iii. Removing from paragraph (c)(1) ``and all'' and adding ``and'' in
its place;
0
iv. Removing from paragraph (c)(4) ``the project'' and adding ``the
term of the project'' in its place; and
0
v. Removing from paragraph (f) ``clause in all subcontracts'' and
adding ``clause in subcontracts'' in its place; and
0
f. Adding Alternate II.
The revisions and additions read as follows:
52.222-34 Project Labor Agreement.
* * * * *
Project Labor Agreement (Jan 2024)
(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.
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.
* * * * *
Alternate I (Jan 2024) * * *
(b) The Contractor shall--
(1) Negotiate or become a party to a project labor agreement with
one or more labor organizations for the term of this construction
contract; and
(2) Submit an executed copy of the project labor agreement to the
Contracting Officer as required in the solicitation.
* * * * *
Alternate II (Jan 2024). 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 all 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. For each order that uses a project labor
agreement, the Contractor shall--
(1) 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
(2) Include the substance of paragraphs (d) through (f) of this
clause in subcontracts with subcontractors engaged in construction on
the construction project.
[FR Doc. 2023-27736 Filed 12-21-23; 8:45 am]
BILLING CODE 6820-EP-P
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</html>Indexed from Federal Register on December 22, 2023.
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