
A recent federal court ruling striking down project labor agreements on a handful of federal projects contained clear-eyed observations about the real, negative impacts of PLAs. Government officials imposed project labor agreements they knew were inefficient and costly because of the Biden administration executive order.
"A U.S. Federal Claims judge has ruled in favor of a group of construction companies that filed protests against the implementation of former President Joe Biden’s December 2023 executive order that mandated project labor agreements on federal contracts over $35 million," reported Construction Dive.
The ruling cites the transcript of the court hearing with quotes from the attorney representing federal agencies (GOVERNMENT) and Judge Ryan T. Holt (THE COURT). Here are some notable quotables from the ruling:
GOVERNMENT: [R]emoving the PLA requirement would result in more contractor interest and, thus [a] more competitive bid environment . . .”
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THE COURT: [W]hat would the difference be between having a PLA requirement and not having a PLA requirement as to GSA’s market study conclusion?
GOVERNMENT: I mean, the expectation was that there might be less competition and potentially a higher price . . . .”
(Regarding the Government Services Administration's $550M land bridge between in Texas on the border with Mexico, page 10-11)
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THE COURT: [T]he GSA’s conclusion, based on the market research report, was that the PLA requirement would ‘affect both competition and price’ . . . .
GOVERNMENT: GSA determined that in doing its independent government estimate, [it would] increase the price . . . based on the PLA requirement . . . .”
THE COURT: So you agree that the agency concluded [the PLA mandate] would reduce competition and increase cost?
GOVERNMENT: It would be likely to is what GSA concluded, I believe.”
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In August 2023, in accordance with the FAR PLA regulations under the Obama EO, USACE determined it would not mandate a PLA for this project as a “PLA would not contribute to the economy or efficiency for the project under consideration.
In February 2024, after the FAR was amended to implement the Biden EO, USACE issued another PLA survey. See HPCC USACE AR at 253 (Second PLA Market Survey). In analyzing the responses, USACE concluded a “majority of respondents indicated that a PLA mandate would reduce competition, increase costs, and create inefficiencies for contractors and procurement officials.
(Regarding the U.S. Army Corps of Engineers' Consolidated Communications Facility at Patrick Space Force Base in Florida, page 12)
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GOVERNMENT: GSA went and . . . basically contracted with someone to . . . take a look at the market, they interviewed various . . . construction firms . . . [to] help determine how to proceed with the procurement . . . .
THE COURT: So GSA paid money for the survey?
GOVERNMENT: That’s my understanding.
THE COURT: And what did the outside specialists conclude related to PLAs? . . . .
GOVERNMENT: [T]hey made a recommendation that . . . removing the PLA requirement would result in more contractor interest and thus a more competitive bid environment.”
(page 36)
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“[D]espite the government’s efforts to show that it would be meaningful for [a non-PLA] offeror . . . to submit a proposal,” the Court is not persuaded. Under the PLA mandate, the Court finds “a responsible offeror that [declines to enter a PLA] is not given the same opportunity to win an award as other offerors that submitted awardable proposals.”
(page 36-37)
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