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Pres. Obama Lifts Ban on Government-Mandated Project Labor Agreements
February 12, 2009
On February 6, Pres. Obama issued an executive order revoking an executive order issued by Pres. George W. Bush that largely prohibited federal agencies from imposing a project labor agreement on federal and federally assisted construction projects. The new order encourages agencies to consider imposing a project labor agreement but fall short of requiring agencies to do so.
The order establishes that "it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects." A "large-scale construction project" is defined as one with a total cost to the federal government of $25 million or more.
The order provides that, in awarding a contract for a large-scale construction project, or obligating funds pursuant to such a contract, "executive agencies may, on a project-by-project basis, require the use of a project labor agreement." The order expressly states that is "does not require an executive agency to use a project labor agreement on any construction project."
The order also (a) directs the Federal Acquisition Regulations (FAR) Council to amend the FAR as needed and (b) directs the Office of Management and Budget, in consultation with the Secretary of Labor and other officials, to provide the President with recommendations about "whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects."
AGC opposes government-mandated labor agreements and is concerned about the impact of the order. "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," said AGC CEO Stephen Sandherr. "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."
AGC will closely monitor developments, such as the FAR rulemaking process, and report to members as they occur.
Click here to view Pres. Obama's executive order. Click here to learn more about AGC's position on government-mandated labor agreements and related advocacy activities.
The Associated General Contractors of America (AGC) is the leading association for the construction industry. AGC represents more than 26,000 firms, including over 6,500 of America’s leading general contractors, and over 9,000 specialty-contracting firms. More than 10,500 service providers and suppliers are also associated with AGC, all through a nationwide network of chapters.