A long-awaited signal of the Trump administration’s position on Pres. Biden’s executive order requiring the use of project labor agreements (PLAs) on large-scale federal construction projects has finally arrived. In a June 12, 2025, memo to the heads of all executive departments and agencies, the executive director of the Office of Management and Budget (OMB) stated, “For clarity, the Trump Administration supports the use of PLAs when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded.” The memo affirms that Pres. Biden’s Executive Order 14063 on PLAs remains in effect, along with the implementing regulations in the Federal Acquisition Regulation (FAR) and a guidance memo issued by OMB on Dec. 18, 2023.
The new memo comes after the Department of Defense and General Services Administration issued a PLA class deviation and a class exception, respectively, and a federal court issued an order temporarily enjoining the agencies’ actions. The memo refers to the deviations as “overly broad” and instructs agencies to rescind any existing deviations on PLAs. “Independent agency interpretation for PLA use should no longer occur,” OMB announced.
Notably, the memo amends the 2023 memo to add a new basis for granting an exception in the section titled Exercising exception where PLA would inhibit competition. That section provides agencies with guidance on granting an exception under the FAR when market research indicates that requiring a PLA would substantially reduce the number of potential offerors to such a degree that adequate competition at a fair and reasonable price cannot be achieved. The memo reiterates the 2023 guidance that, in general, this exception is not appropriate when there are two or more qualified offers for negotiated contracts of three or more qualified bids for sealed bids. However, the new memo adds:
If, based on market research for a given project, two or more offerors express interest (or three bids for sealed bidding) but prices are expected to be higher than the government’s budget by more than 10 percent due to the PLA requirement, the agency may use this finding to support a determination that fair and reasonable pricing cannot be achieved.
The other two exceptions authorized in the executive order and FAR – when requiring a PLA would not advance the government’s interests in achieving economy and efficiency in federal procurement based on an assessment of designated factors and when requiring a PLA would otherwise be inconsistent with federal statutes, regulations, executive orders, or Presidential memoranda – remain intact.
The memo further updates the 2023 memo to remove references to rescinded executive actions on diversity, equity, and inclusion matters and to align with the present Administration’s priorities.
AGC expects these developments to trigger agencies to issue more project-specific exceptions and contractors to file more bid protests.
For more information, contact Denise Gold at denise.gold@agc.org or Jordan Howard at jordan.howard@agc.org.