Highlights
- A federal court declared President Joe Biden's policy requiring project labor agreements (PLAs) on federal construction projects of $35 million or more to be unlawful.
- On Jan. 19, 2025, Judge Ryan T. Holte of the U.S. Court of Federal Claims ruled in favor of federal contractors who challenged the requirement to enter into a collective bargaining agreement with labor organizations regarding the terms and conditions of employment for all large-scale construction projects. Judge Holte found the policy violated the Competition in Contracting Act (CICA) because it excluded responsible offerors capable of performing the contract.
- Although the court found that the requirement was unlawful, it did not issue an injunction. Thus, for now, contractors with PLA requirements in their contracts (FAR 52.222-33 and 34) should continue to follow the rule.
- As President Donald Trump already revoked numerous acquisition-related executive orders (EOs) put in place under former President Biden, it remains to be seen whether EO 14063 from Feb. 4, 2022 (Use of PLAs For Federal Construction Projects) will be revoked in the coming days.
Judge Ryan T. Holte of the U.S. Court of Federal Claims ruled on Jan. 19, 2025, in favor of federal contractors who challenged a requirement to enter into a collective bargaining agreement with labor organizations regarding the terms and conditions of employment for all large-scale construction projects.1 Judge Holte found the policy violated the Competition in Contracting Act (CICA) because it excluded responsible offerors capable of performing the contract.
Background
The use of project labor agreements (PLAs) - a prospective contractor's collective bargaining agreement with unions to for a specific project - has been the subject of Executive Orders (EO) for decades.2 On Feb. 4, 2022, President Joe Biden issued EO 14063, requiring contractors and subcontractors engaged in construction projects of $35 million or more to execute a project labor agreement, the impact of which was analyzed by Holland & Knight. (See Holland & Knight's previous alert, "Project Labor Agreement Requirement for Large-Scale Construction Becomes Effective Jan. 22," Jan. 12, 2024.)
Pursuant to Section 8 of EO 14063, the Federal Acquisition Regulatory (FAR) Council promulgated a final rule implementing EO 14063 through FAR 22.505, 52.222-33 and 52.222-34 (collectively, the Rule or PLA requirement). A PLA is defined as "a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f)."3
The Court's Decision in MVL USA, Inc. v. United States
Solicitations for seven different federal projects for the U.S. Army Corps of Engineers, Naval Facilities Engineering Systems Command and General Services Administration (GSA) each contained the PLA requirement by incorporating FAR 52.222-33 and 52-222-34. Twelve construction companies challenged the authority of federal agencies to mandate that they enter into PLAs. These seven protests were consolidated before Judge Holte in MVL USA, Inc. v. United States.
In holding that FAR 52.222-33 violated CICA's fair and open competition requirement, Judge Holte made the following findings:
- CICA's "full and open competition" requirement means that all responsible sources must be allowed to compete for contracts.4 The PLA requirement in solicitations hindered responsible...
