President Biden Signs an Executive Order Regarding Federal Construction Projects

Under the terms of the order, all federal construction projects must have a PLA in place that will govern the terms of employment during any such effort.

President Biden signed an Executive Order requiring project labor agreements (PLA) for all federal construction projects valued above $35 million. Project labor agreements are collective bargaining agreements between contractors and trade unions. PLA's are used to set project wages, employment conditions, and create a dispute resolution framework if required. 

The executive order will apply to $262 billion in federal construction contracting and impact nearly 200,000 workers. The executive order goes into effect after final regulations are issued by the Federal Acquisition Regulatory Council (FAR). FAR is required to issue "proposed regulations" within 120 days, so final regulations will likely take longer than three months. In the interim, federal agencies are "strongly encouraged" to use PLAs.

PLAs work because they provide a set of standardized terms and conditions agreed to by labor and management before work begins. Once the job is underway, everyone is on the same page and knows what to expect because it's all spelled out in the PLA. This allows for a clear roadmap that lets even the most complex and lengthy projects run smoothly.

Biden signed the order during a gathering with union representatives in Upper Marlboro, Maryland. The administration believes that PLAs will assist the federal government control construction costs in future projects through streamlining specific processes and promoting the largest possible employee pool. 

Click here to read a fact sheet from the White House on the Executive Order.