DOD Directs COs to Remove Language Favoring PLAs

On Friday February 7^th, the U.S. Department of Defense Undersecretary of Acquisition signed an order directing all Pentagon contracting officers (COs) to remove language creating a presumption favoring use of a project labor agreement (PLA) in solicitations for large scale construction projects valued at $35 million or more and to revise all existing solicitations consistent with this Directive. The Undersecretary’s Directive also applies to Army Corps of Engineers Projects. The Directive is available here. 

The Directive follows a January federal court of claims decision affirming several bid protests of solicitations containing this clause pursuant to federal acquisition rules implementing President Biden’s February 4, 2022, Executive Order 14063 on Project Labor Agreements. The Executive Order created a presumption that Project Labor Agreements will be used on federal construction contracts valued at $35 or more unless the contracting officer established that one of three exceptions applied:

1. The requirement “would not advance the Federal Government’s interests in achieving economy and efficiency in Federal procurement;”
2. “Based on an inclusive market analysis, requiring a [PLA agreement] on the project would substantially reduce the number of potential bidders so as to frustrate full and open competition;” or
3. “Requiring a [PLA] on the project would otherwise be inconsistent with statutes, regulations, [EOs], or Presidential Memoranda.”

The Trump Administration has not yet rescinded the MCAA-supported Executive Order or the regulations implementing it. MCAA and its allies are urging the Trump Administration not to rescind the Executive Order, but litigation on its application led by Associated General Contractors of America (AGC) is ongoing. Both AGC and Associated Builders and Contractors (ABC) are vigorously lobbying for rescission of the Executive Order and implementing regulations. It remains to be determined whether the Trump Administration will rescind the Biden Executive Order or be forced to do so by court order.