Order Likely to Lead to More Project-Specific Exceptions and Bid Protests
North America’s Building Trades Unions (NABTU) sought and was recently granted a preliminary injunction reinstating the requirement to use a project labor agreement (PLA) on large-scale government construction projects of the Department of Defense (DOD) and General Services Administration (GSA).
DOD and GSA each issued memos waiving the PLA mandate imposed by President Biden via an executive order (EO) and regulation. Specifically, the DOD memo announced a class deviation from following the mandate on all DOD projects, and the GSA memo announced a class exception from following the mandate on land port of entry projects. The agencies issued the memos soon after the U.S. Court of Federal Claims ruled in the AGC-supported case MVL USA, Inc. et al. v. United States, 74 Fed. Cl. 437 (2025). In that case, the court held that the government’s blanket PLA mandate violated the Competition in Contracting Act (CICA) as applied in the protested cases. The decision provided a new legal path for contractors to protest PLA mandates.
NABTU challenged the memos in the U.S. District Court of the District of Columbia. The court found that “the memoranda are contrary to the law set forth in the EO because they flatly contradict the unambiguous requirements of the EO and its implementing regulations” in direct violation of the Administrative Procedure Act (APA). The court also found that the blanket class deviation and exception are unauthorized by the Federal Acquisition Regulation and that the agencies misread the MVL decision as applying beyond the projects involved in that case.
“Agencies are bound by executive orders until they are rescinded or overridden through lawful procedures,” the court noted. “Here, the EO was neither rescinded nor overridden. As such, the Court finds that Plaintiffs have demonstrated a substantial likelihood of establishing that the memoranda are contrary to law and violate the APA.” The ruling preserves the status quo as defined by the EO until the legality of the memos is fully adjudicated.
This decision is likely to lead agencies to conduct case-by-case market research to determine whether a PLA should be required for each large-scale direct federal construction project. Unless the contracting officer determines that an exception applies, which may be granted by a “senior procurement executive” and only in accordance with the rule’s procedures, future solicitations will likely include a requirement to use a PLA. However, in light of the MVL decision, the market research conducted as part of the exception process is likely to be more robust. It may result in a higher number of exceptions being granted. Notably, AGC members and the industry at large now have a successful roadmap to challenge the requirement to use a PLA in the U.S. Court of Federal Claims through bid protests.
Questions? Feel free to contact Brian Perlberg, Senior Counsel for Construction Law, at brian.perlberg@agc.org or AGC’s General Counsel, Leah Pilconis, at leah.pilconis@agc.org.