Project labor agreement mandates: An ongoing saga

For several decades, federal contractors have monitored the ebbing-and-flowing status of project labor agreements (PLAs). A PLA is a pre-hire collective bargaining agreement, specifically authorized under federal labor law, establishing the terms and conditions of employment for a specific project or group of projects. It serves essentially as a project constitution, establishing uniform work rules among the numerous trades on major construction projects and banning work stoppages.

For over 30 years, numerous executive orders (EO) pertaining to PLAs have been issued. Since PLAs are a vehicle favorable to organized labor, the approach to them has understandably varied with the political orientation of respective presidential administrations from George H. W. Bush through Donald Trump’s first term.

The PLA Mandate of EO 14063

In February 2022, President Biden issued EO 14063, entitled “Use of Project Labor Agreements for Federal Construction Projects.” This order, which avowed purpose of which is to promote “economy and efficiency” in federal procurement, is the first to mandate the use of PLAs for all “large-scale” construction projects, defined as domestic projects costing the Federal Government $35 million or more.

Under EO 14063, every contractor or subcontractor engaged to construct such a project must “agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.” However, each contractor and subcontractor must be allowed to compete for the project “without regard as to whether they are otherwise parties to collective bargaining agreements,” referencing nonunion contractors and subcontractors.

Although EO 14063’s PLA mandate applies comprehensively to large-scale federal projects, it contains several notable exceptions, which are to be evaluated as to any “particular contract” by no later than the solicitation date for that contract. One applies where, based on market analysis, the PLA requirement demonstrably would substantially reduce the number of potential bidders, impeding full and open competition. A further exception applies where a PLA on a project would otherwise be inconsistent with statutes, regulations or presidential memoranda. Yet another exception applies where the PLA requirement would not advance the Government’s interests in achieving economy and efficiency in federal procurement.

The Industry Counterpunch

The Biden mandate drew considerable opposition, spearheaded by the Associated Builders and Contractors (ABC), maintaining that PLAs increase construction costs. This opposition culminated in litigation in the United States Court of Federal Claims by ABC members who had filed bid protests challenging the application of EO 14063 by several federal agencies, including the General Services Administration (GSA) and the United States Army Corps of Engineers. A ruling in that case, entitled MVL USA, Inc., et al. v. The United States, was issued in favor of the protestors in January 2025.

The MVL court ruled that EO 14063 and its implementing federal regulations violate congressional requirements for “full and open competition” under the Competition in Contracting Act as applied to the contracts at issue. Significantly, the GSA had engaged an independent expert to conduct a market survey as to whether a PLA was appropriate for the project at issue; that research confirmed that a PLA was contraindicated because “there was a shortage of labor in the region of the project” and a PLA would “not contribute to the economy or efficiency of the project.”

Instead, omission of a PLA requirement was anticipated to result in more robust contractor interest and a more competitive bidding environment, which would translate into lower cost. Since empirical evidence demonstrated that the PLA would negatively affect both the level of competition and project cost, the contrary agency determinations — based only on the policy underlying EO 10463 — were arbitrary and capricious.

The pertinent contract solicitations were subsequently cancelled or amended to omit the PLA requirement. When the contractor plaintiffs then sought a nationwide injunction against EO 14063, the MVL court denied their motion in May 2025 on several grounds— primarily that they had achieved the victory they sought in their particular dealings as argued by the Government— and dismissed the case as moot.

The court likened itself to a baseball umpire empowered to call specific balls and strikes but without authority to act as a “game rulemaker.” The MVL court also noted the recent denial of an application for a preliminary injunction setting aside EO 14063 in a case brought by ABC in a Florida federal district court despite a finding of likely success on the merits, because the requisite irreparable harm necessitating an injunction could not be established given the adequacy of relief through individual bid protests.

Current Administration Developments

Among a plethora of executive orders early in his second term, President Trump issued EO 14320 in March 2025. That directive revoked Biden’s EO 14126, which had prioritized spending for projects benefiting workers through PLAs. Notably, however, EO 14063 was left undisturbed.

Further, in successfully seeking dismissal of the MVL case as discussed above, the Department of Justice maintained that EO 14063 should not be enjoined because it had not been found unlawful on its face but unlawful solely as applied to the circumstances of the particular projects involved in that case.

Likely bolstered by such developments, North America’s Building Trades Unions, an AFL-CIO department, and an affiliate filed suit against the GSA and the Department of Defense in the United States District Court for the District of Columbia in April 2025, seeking a declaration and injunctive relief to enforce EO 14063 under the Administrative Procedure Act in the face of blanket PLA prohibitions issued by those agencies for entire classes of projects without engaging in case-by-case considerations.

In May 2025, that court issued a preliminary injunction banning the enforcement of those prohibitions, finding both a likelihood of success in establishing their unlawfulness and irreparable harm in the absence of an injunction by the deprivation of the “structured leverage” afforded to the unions by EO 10463. The progress of this litigation in the coming months will add to the PLA saga.

Meanwhile, on the legislative front, the Fair and Open Competition Act (FOCA) was re-introduced in the 119th Congress in March 2025. FOCA would expressly prohibit the Government from mandating PLAs on federal (and federally assisted) construction projects, while still allowing contractors and federal agencies to enter into PLAs voluntarily whether before or after a “fair and open” competitive bidding process.

Should this proposed legislation move forward, Congressional policy may supplant executive directives and administrative rule-making in shaping the future of federal PLAs.

While the drama concerning the Trump administration’s stance on PLAs continues to unfold, EO 14063 remains at center stage. Federal contractors will want to continue to monitor the intertwined legal and political developments in the PLA arena.

James Terry, a partner at construction law firm Zetlin & De Chiara LLP, who has deep experience in the development and execution of PLAs that set labor compensation, work rules, schedules and performance expectations upfront, with the goal of ensuring quality and achieving the economical and efficient completion of a construction project. Terry is also a litigator and negotiator whose work extends into numerous complex design, development and construction management disputes.

He has represented bond sureties in connection with the takeover and completion of several major projects from defaulting contractors, including portions of the Washington D.C. and New York City subway systems. He is also a former Vice President and General Counsel of F.J. Sciame, a leading construction firm. He is a member of the New York Building Congress and the Federal Bar Council. His publications include “Leveraging Labor to Control Costs” in Construction Today.

Terry holds the notable AV rating for ethical standards and legal ability from Martindale Hubbell and has been named a New York Super Lawyer in the practice area of construction/surety law by Super Lawyers magazine.