Executive order raises ire from some construction groups, praise from unions
President Joe Biden signs an executive order on project labor agreements at the Ironworkers Local 5 in Upper Marlboro, Md., Friday, Feb. 4, 2022. Labor Secretary Marty Walsh, left, and Vice President Kamala Harris, second from left, look on. (AP Photo/Carolyn Kaster)
February 4, 2022
President Joe Biden has signed an executive order that requires project labor agreements on federal construction projects valued at more than $35 million. The order, which potentially represents a boon for union contractors and a hurdle for non-union contractors, was signed during a February 4 ceremony at Ironworkers Local 5 in Upper Marlboro, Md.
In his remarks, Biden said the PLA mandate will help ensure “that we build a better America, we build it right, we build it on-time and we build it cheaper than it would have been otherwise.” He said the order will ensure that federal construction projects get completed on time, save taxpayers money, and ensure that “that everything the federal government contracts… is built to last.”
Based on fiscal 2021 figures, the order could affect about $262 billion in federal government construction and the nearly 200,000 workers on those contracts, the White House says. The Biden Administration says PLAs could help with coordination of multiple contractors and subcontractors on projects, minimizing work disruptions and getting projects completed on time.
In a statement, the White House also said that quality standards would be raised under PLAs, as “contractors who offer lower wages or do not train their workers will need to raise their standards to compete with other higher-wage, high-quality companies.” Additionally, PLAs would standardize work rules, compensation costs and the dispute settlement process, the White House said. Under the order, the Dept. of Defense, Dept. of Labor and Office of Management and Budget will lead an effort for more training of the federal contracting workforce.
The executive order comes less than three months after Biden signed the $1-trillion Infrastructure Investment and Jobs Act and while the administration continues to push for passage of the stalled Build Back Better plan in the Senate.
News of the order, which would have a significant impact on a wide swath of contractors, drew a mix of praise from unions and pushback from other construction industry groups.
David Long, chief executive officer of the National Electrical Contractors Association, thanked President Biden in a statement, adding that the order “prioritizes safety, value, quality, and on-time delivery of our federal projects, built with a highly skilled and trained workforce.”
Stephen Sandherr, chief executive officer of the Associated General Contractors of America, said the Biden administration was trying “to solve a problem that doesn’t exist,” through use of government-mandated PLAs. “Construction workers are among some of the highest paid workers in the economy, earning ten percent more than the average worker in the U.S,” he said in a statement. “Their pay rates have continued to climb 5.1 percent as labor shortages have made this a workers’ market.”
“President Biden’s new policy will not help America ‘Build Back Better;’ instead, it will exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs and reduce opportunities for local contractors and skilled tradespeople,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. In its own analysis, ABC suggested that government-mandated PLAs increase construction costs by 12% to 20%.
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