As Congress negotiates billions of dollars in potential federal funds for construction through the economic stimulus bill, President Barack Obama moved to bring project labor agreements back as an option on federally funded projects. The president issued an executive order Feb. 6 overturning a Bush administration ban on federal PLAs and opened the door to such pacts on projects of $25 million or more.

Photo: Obama Campaign
President Barack Obama
Photo: New York State
Huge infrastructure projects, such as the planned replacement of New York’s Tappan Zee Bridge, may now be built under project labor agreements.

The executive order re-instates much of the guidance on PLAs that was in place during the Clinton administration�and could potentially expand their use. The order also keeps a promise to organized labor to advocate for their interests.

Obama’s order also provided a basis for expanded use of PLAs. The order calls on the director of the Office of Management and Budget to recommend in six months whether broader use of PLAs on federal and federally funded contracts would help “promote the economical, efficient and timely completion of such projects.”

Mark Ayers, president of the Building & Construction Trades Department of the AFL-CIO, praises Obama’s action, saying it would benefit both union and non-union workers. Getting the PLA ban reversed was cited by union officials during the election season as a high priority on its wish list for the new administration. “We acknowledge and praise this executive order as being one of the first steps in ushering in a new, more pragmatic and value-conscious approach to governing,” he said in a statement.

But the Associated General Contractors warns that the executive order had the “unfortunate potential to limit contractors’ ability to compete for projects” at a time when millions of construction workers have lost jobs. “Given that federal agencies have no demonstrated expertise in writing contracts that cover contractors and their employees, we strongly encourage officials to exercise the discretion this order provides and avoid government-mandated labor agreements,” says Stephen Sandherr, chief executive officer of the Associated General Contractors of America, in a statement. AGCs members include both union and nonunion employers.

The order �opens the door to waste and discrimination in federal and federally-funded construction contracts,� says Kirk Pickerel, president of the Associated Builders and Contractors, which advocates on behalf of nonunion contractors. �This action removes the safeguards that prohibited discrimination based upon union affiliation in the awarding of federal contracts. Pickerel claims that such agreements could increase construction costs between 10% and 20% and would discriminate against 84% of U.S. construction workers, including �minorities, women and qualified construction workers who have traditionally been excluded from union membership.�

Among the provisions of the order, any agency using a PLA would need to show that such an agreement would advance the federal government's interest in achieving economy and efficiency in procurement; producing labor-management stability; and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards.

“We anticipate any project over $25 million through the stimulus package would justify project labor agreements,” says Tom Owens, spokesperson for the Building Trades. “That’s got us very excited.”