New Mandate will Make it Even Harder for Construction Firms to Build Projects, will Undermine Efforts to Diversify the Construction Industry and will Punish Taxpayers, Association Warns
The Chief Executive Officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release today of a new Biden administration rule imposing government-mandated project labor agreements on federal construction projects valued at $35 million or more:
“The president’s new and unlawful mandate to impose government-mandated project labor agreements for the vast majority of federal construction projects is another example of this administration doing everything in its power to undermine its infrastructure goals, including helping workers.
“Government-mandated project labor agreements undermine the collective bargaining process by imposing a separate agreement in a specific region that applies only to a limited number of construction firms and unions. These imposed PLAs undercut the benefits of the collective bargaining agreements that were negotiated in good faith between employers and labor union and will likely prompt many firms to think twice about participating in the bargaining process in the future.
The new measure also discriminates against contractors and workers by essentially only allowing firms that employ union workers to compete for federal projects. In addition, surveys have found that government-mandated project labor agreements make it harder for firms to hire minority and women owned subcontractors.
“By excluding most firms from competing for federal construction projects, the measure will needlessly inflate the cost of federal construction projects by limiting competition. It will also undermine the collective bargaining agreements of the union construction firms the measure seeks to favor. And it will force taxpayers to pay more and wait longer to see new federal projects built.
Career civil servants also do not see the benefits of imposing these kinds of agreements. A recent analysis of federal construction procurement decisions by the Department of Defense during the Obama administration that we obtained via a Freedom of Information Act request – during a time when federal officials were being pressured by a similar executive order – found that in 99.4 percent of construction projects where a PLA could have been imposed, nonpartisan federal officials found no benefit to taxpayers from imposing one.
“The president seems committed to undermining one of his signature accomplishments, investing in federal infrastructure. He is doing this despite the lack of constitutional authority to impose such a discriminatory measure. We plan to challenge this rule in court so our members can continue to build infrastructure, diversify their ranks and give taxpayers the best possible value.”
Click here to view AGC’s PLA resource page for additional information.