An association of builders has asked Associated Builders and Contractors (ABC) — joined by others — to persuade the United States Court of Appeals for the Eleventh Circuit (11th Circuit) to block a sweeping labor-agreement mandate tied to federal construction contracts. The mandate, issued as Executive Order 14063 by Joe Biden, requires that every federal construction contract worth $35 million or more come with a pre-hire collective bargaining agreement (a “project labor agreement,” or PLA) binding the contractor and subcontractors to labor-organization terms. Builders argue the rule will raise costs and choke off competition.
What the Mandate Requires — And Who Is Objecting
- Executive Order 14063 was signed in February 2022. Under its terms, for any “large-scale” federal construction project — defined as one costing $35 million or more — the contracting agency must require every prime contractor and subcontractor to negotiate or become party to a project labor agreement with a labor organization.
- The purpose, according to the Order, is to promote “economy and efficiency” on big federal projects by ensuring labor-management stability, standard wages and benefits, and reduced risk of work stoppages.
- The mandate was implemented via the Federal Acquisition Regulation (FAR) in late 2023, becoming effective January 22, 2024.
- The builder groups — including ABC — have mounted coordinated litigation, arguing the PLA mandate exceeds the president’s authority under procurement law, violates statutory requirements for open competition, and disadvantages non-union (“merit-shop”) contractors.
Why Builders Say the Mandate Hurts More Than It Helps
- Reduced competition — Requiring a PLA disqualifies many non-union or “merit-shop” firms from bidding unless they agree to union-style collective bargaining terms. That could cut the pool of bidders dramatically.
- Higher costs — PLA critics argue that union-derived wage and benefit rates often exceed what non-union bidders would offer, potentially inflating project costs by 12–20%.
- Barrier to merit-shop contractors — With estimates that up to 90% of U.S. construction workers are non-union, mandating PLAs could exclude a large portion of the workforce from federal projects.
- Questionable efficiency gains — Industry groups note that under prior administrations, PLAs were rarely used: between 2009 and 2022, agencies imposed PLAs on just a tiny fraction of eligible federal projects.
Key Takeaways
The PLA mandate reflects a major shift in federal procurement policy: from optional PLAs (as under prior administrations) to a near-default requirement on large projects, but opposition is strong — and not purely ideological. Legal challenges argue the mandate violates statutory procurement law and undermines competition. For non-union contractors and merit-shop firms, the coming weeks may be decisive. A win in the 11th Circuit could reopen access to federal contracts that PLA-only rules currently block. For the government and taxpayers, the eventual ruling could influence project costs, speed of delivery, workforce composition, and the broader structure of public-works contracting.
For further details, please contact the lawyers at Tobia & Lovelace Esq., LLC at 201-638-0990.