Biden to Sign Executive Order Requiring Project Labor Agreements in Federal Construction Projects Over $35M

WASHINGTON (Feb. 4, 2022) — According to Reuters, U.S. President Joe Biden is set to sign an executive order today requiring project labor agreements (PLA) in federal construction projects over $35 million — a shift the administration says will speed up building times.

The order will apply to $262 billion in federal construction contracting and impact nearly 200,000 workers, the White House said late yesterday.

Project labor agreements are collective bargaining agreements between building trade unions and contractors, which set wages, employment conditions, and dispute resolution on specific projects. Democratic presidents in the past have typically supported applying such agreements to the massive U.S. federal contracting budget, while Republican presidents have rescinded them.

The order, which will go into effect immediately, comes on the heels of a $1 trillion infrastructure bill signed into law by Biden that invests in the country’s roads, ports and bridges.

Much of that money will flow through federal agencies to states and local governments. The new executive order excludes projects funded by grants to non-federal agencies, a senior administration official said, adding that will make up for a bulk of the projects under the bill. But it will apply to billions of other federal spending on waterways, military bases and other areas.

The White House said Biden would visit Ironworkers Local 5 in Upper Marlboro, Maryland, today to sign the new executive order, joined by Vice President Kamala Harris and Labor Secretary Marty Walsh.

The U.S. construction industry — including workers, owners, developers, contractors — has been one of the hardest hit during the COVID-19 pandemic, due to a slowdown of available goods and labor and the termination of entire projects.

Biden has vowed to strengthen unions and increase membership in the U.S. after years of steady decline, and to increase salaries for hourly workers in construction, health care and other jobs.

“Contractors who offer lower wages or hire less qualified workers will need to raise their standards to compete with other high-wage, high-quality companies,” the order says. Executive action issued by Biden in April 2021 required federal contractors in new or extended contracts to pay a $15 per hour minimum wage.

Biden’s move won praise from some contractors, while others oppose the move. 

“This streamlines the negotiation process and gives employers access to a highly skilled pool of craftworkers,” Daniel Hogan, chief executive of the Association of Union Constructors, that represents 1,800 contractor companies, told Reuters.

In a release from the Associated Builders and Contractors of America (ABC), the association — representing more than 21,000 members — expressed opposition. “President Biden’s new policy will not help America ‘Build Back Better;’ instead, it will exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs and reduce opportunities for local contractors and skilled tradespeople,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects.