Contractors doing business with the federal government will have to negotiate pre-hire collective bargaining agreements with unions to work on large-scale federal infrastructure projects under new requirements that will go into effect on Jan. 22, which has been slammed by construction trade groups, including the Associated Builders and Contractors.
Last February, President Joe Biden issued an executive order requiring project labor agreements for federal construction projects with the U.S. government exceeding $35 million or more to be in place before submitting bids for proposed work, amending a rule to Federal Acquisition Regulations first implemented during the Obama administration.
The Obama-era rule made PLAs suggested but not mandated. PLAs are negotiated terms between contractors and workers — often unionized — to set the terms and conditions for all workers on federal projects. After months of rancor from the GOP-led House of Representatives and significant pushback from construction trade groups asserting the new rule will drive up construction costs, the change was published a few days before Christmas.
The order, called the “Use of Project Labor Agreements for Federal Projects,” was hailed by the White House as a way to gain efficiencies, increase transparency and improve the lives of the thousands of construction workers likely to feel its impact.
“This means that projects funded by my Investing in America agenda will move faster and without delays, giving taxpayers better bang for their buck,” Biden said in a statement. “Workers will have the security and peace of mind that collectively bargained wages and benefits bring, better pathways to good-paying jobs, and stronger health and safety protections.”
Project labor agreements are pre-hire collective bargaining agreements designed to provide labor-management stability and ensure compliance with various laws without requiring contractors to unionize.
The agreements must include guarantees against work disruptions, alternative dispute resolution procedures, and mechanisms for labor-management cooperation on productivity, safety, and health. While labor organizations support it, the construction industry has fiercely criticized the change.
Criticism from Trade Groups
The Associated Builders and Contractors trade group criticized the change, saying PLAs steer taxpayer-funded public works contracts to union-signatory contractors, essentially granting unions a monopoly on large-scale public works projects.
“The Biden administration’s burdensome, inflationary, and anti-competitive PLA mandate rule will needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers,” said Ben Brubeck, ABC vice president of regulatory, labor, and state affairs. “When mandated by governments, PLAs increase construction costs to taxpayers by 12% to 20%, reduce opportunities for qualified contractors and their skilled craft professionals and exacerbate the construction industry’s worker shortage of more than half a million people in 2023."
Nonunion contractors can still bid on and win government projects; however, if they receive the winning bid, they must enter into a PLA to get the work. ABC estimates this will add between 15% to 27% to the contract cost.
PLAs are most common on publicly funded projects, which may impact roofing contractors that have developed a niche in that space. However, in union strongholds like New York City and Los Angeles, it's not uncommon for owners of large private projects to use them as well, according to a 2019 article on ConstructionDive.
The collective bargaining agreements are controversial, particularly in an age when union membership is declining and nonunion construction firms are expanding, concluded a report by The Beacon Hill Institute, an economic think tank in Boston. According to the Bureau of Labor Statistics, less than 13% of all U.S. construction workers are unionized, but that number increases slightly within roofing.
The data analytics firm Zippia estimates there are roughly 134,500 roofers currently employed nationwide. The United Union of Roofers, Waterproofers, and Allied Workers, the country’s largest union for roofing trades, claims a membership of 22,000, which represents approximately 16% of the roofing labor force.
“ABC condemns Biden administration policies independent of this rulemaking that push PLAs on competitive grant programs administered by federal agencies affecting nearly $260 billion worth of federally assisted infrastructure projects procured by state and local governments,” Brubeck of ABC said in a news release shortly before the changes were put in place.
Despite these challenges, the Biden-Harris Administration strongly supports PLAs because of their demonstrated success in completing construction projects with a quality, trained workforce on a timely, cost-effective basis.
ABC is gearing up for a fight in court. In its Dec. 18 news release, Brubeck pulled no punches on the group’s next steps.
“ABC plans to challenge this Biden administration scheme in the courts on behalf of taxpayers and the majority of the construction industry,” Brubeck said. “In the interim, ABC will continue to oppose its special interest-favoring policy using all tools in our advocacy and legal toolbox while educating stakeholders about the negative impact of government-mandated PLAs on federal and federally assisted projects.”
Sean McGarvey, president of North America’s Building Trades Unions (NABTU), applauded the Biden administration’s move, emphasizing that “time and again, PLAs have proven to address labor supply issues, prevent work stoppages, protect workers’ classification, strengthen health and safety standards, and achieve substantial, direct cost savings by standardizing contract terms for highly skilled craft workers.”
Brent Booker, general president of the Laborers’ International Union of North America, echoed McGarvey’s sentiments after Biden signed the executive order, saying the change is a boon to the middle class.
“The announcement today … further underscores how an expansion of Project Labor Agreements can advance the interests of government and contractors in partnership with the skilled construction workers who build America,” Booker said. “LIUNA commends the White House on the continued commitment to building a stronger middle class by fostering the creation of good quality jobs, and we look forward to working with the White House on the rollout of the PLA order."
The AFL-CIO estimates the rule will give approximately 200,000 construction workers collectively bargained wages, benefits and safety protections, regardless of union membership status.