On February 6 President Obama issued an Executive Order that repeals a previously enacted Executive Order that bans Project Labor Agreements (PLAs) on federal projects (Executive Order 13202 of February 17, 2001), even going so far as to encourage (but not mandate) agencies to use PLAs in federal construction projects with a total cost of $25 million or more.
While the Order is effective immediately, the FAR Council has been given 120 days (until June 6, 2009) to take "whatever action is required" to implement this order. President Obama also instructs the Director of the Office of Management and Budget, in consultation with the Secretary of Labor and other appropriate officials, to evaluate whether broader use of such PLAs would help promote the economical, efficient and timely completion of such projects.
"Today's executive order has the unfortunate potential to limit contractors' ability to compete for projects at a time when the government is reporting that over one million construction workers have lost their 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, " said Stephen Sandherr, chief executive officer of the Associated General Contractors of America.
AGC will communicate its concerns over this Executive Order with our partners in the federal agencies and urge them to avoid PLAs.