It should surprise no one that the Obama administration is implementing federal policies strongly supported by organized labor.
Case in point are three executive orders (13495, 13496 and 13494) signed Jan. 30—just 10 days into the Obama Presidency—that overturn Bush administration executive orders and establish new labor requirements for federal contractors.
A fourth order, signed by President Obama Feb. 6, may give union contractors an advantage over open shop contractors when competing for federal construction contracts. Executive Order 13502 encourages federal agencies to require the use of project labor agreements (PLAs) on a project-by-project basis for federally funded “large-scale construction projects” in excess of $25 million.
The Obama order repeals Bush administration Executive Orders 13202 and 13208, which maintained government neutrality in federal contracting and prohibited the government from requiring contractors to adhere to a PLA as a condition of winning federal construction contracts. Between 2001 and 2007, these orders ensured open competition on at least $123.1 billion in federal construction put-in-place spending.
Unfortunately, the protection offered to hundreds of billions of dollars worth of federal and federally funded construction projects from government mandated PLAs since 2001 will not be extended to similar projects in the near future.
Although Executive Order 13502 goes into effect immediately, it requires the federal government to issue regulations implementing the order within 120 days, or by June 1.
While the Obama order appears to be the first move in a political and regulatory strategy that will end in more federal construction contracts with PLA requirements, the first real test of the reach and scope of this order will be its impact on the $150 billion in construction projects and $50 billion in infrastructure bonds funded by the $787 billion federal stimulus bill signed into law Feb. 17.
Section 7 of Executive Order 13502 indicates open shop contractors should prepare for more bad news related to the federal government’s support of PLAs. It directs the Office of Management and Budget, in consultation with the secretary of labor and with other officials as appropriate, to provide President Obama with recommendations about whether broader use of PLAs, with respect to both construction projects under federal contracts and construction projects receiving federal financial assistance, would help “promote the economical, efficient and timely completion of such projects.” These recommendations must be provided by August.
Despite the current political reality, Associated Builders and Contractors (ABC) and several business groups strongly support the Government Neutrality in Contracting Act (S. 90/H.R. 983), introduced Jan. 6 by Sen. David Vitter (R-La.) and Feb. 11 by Rep. John Sullivan (R-Okla.). The legislation would codify into law language from Executive Order 13202 and protect federal and federally funded construction contracts from government mandated PLA requirements.
In the two days following Obama’s Executive Order 13502, the president received more than 2,300 letters from individual ABC members expressing their disappointment and anger over his endorsement of this discriminatory and inequitable policy.
Moving forward, the regulatory process will provide the industry with an opportunity to influence the federal government’s use of PLAs and develop appropriate legal strategies to maintain free and open competition for federal construction contracts.
For talking points, studies and more information on union-only PLAs and analysis on Obama’s Executive Order 13502, visit www.abc.org/pla.
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Friday, September 3, 2010