Final Rule on Mandatory Project Labor Agreements Issued

The White House has officially released the final rule implementing a 2022 executive order from President Biden, making project labor agreements (PLAs) mandatory for specific direct federal construction projects. Although the rule is yet to be published in the Federal Register, a pre-publication version is already available, and ARTBA has provided an initial review. The final rule closely resembles the proposed version from last year, as presented for public comment.

Key points highlighted in ARTBA's initial review of the final rule include:

• Mandatory PLAs for Projects: PLAs will be obligatory for all direct federal construction projects with a cost of $35 million or more. However, federal agencies can mandate PLAs for projects below this threshold. This rule applies to projects led by the Office of Federal Lands at the Federal Highway Administration and other federal agencies. 
• Exceptions Permitted: The federal agency's contracting officer may exempt a project from the PLA requirement under specific conditions outlined in the 2022 Executive Order. Potential exceptions include projects of short duration, projects lacking complexity, those involving only one craft or trade, requiring specialized construction work available from a limited number of contractors, projects of unusual need or urgency, and cases where market research indicates a PLA would significantly reduce the number of offerors, preventing fair price competition. The exceptions must also be consistent with federal statutes or regulations.
• Documentation of Exceptions: The contracting officer must provide a written narrative for any exceptions granted. However, the rule does not specify additional information or criteria regarding these exceptions.
• Timing of Exceptions: Exceptions must be granted by the solicitation date for the project.
• Effective Date: The rule is expected to be published in the Federal Register around December 22, with an effective date approximately 30 days later, on or around January 22.

ARTBA and VTCA continue to oppose the use of mandated PLAs, having submitted comments at both the Federal and State levels. While the PLA mandate pertains to direct federal projects rather than federal-aid projects administered by Virginia or Virginia localities, it is important to note that Virginia’s code does not preclude the use of PLA’s and is the only state that fails to offer guidelines on the proper use and application of PLAs on construction projects.