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Executive Order Restricts Project Labor Agreements On Federal Construction

Mar 05, 2001

03-05-01 -- As expected, President George W. Bush has issued an Executive Order restricting the use of project labor agreements on federally funded construction. Order 13202 was signed February 17 to take effect 60 days later.

The order is worded the same as a draft circulated among federal agency heads last month with one important exception. While it forbids federal agencies and their contracting officers from requiring or en- tering into project labor agreements, new language stipulates that nothing in the order “shall prohibit contractors and subcontractors from voluntarily entering into [such] agreements.”

An agency head has the authority to exempt a particular project from the Executive Order “if the agency finds that special circumstances require an exemption in order to avert an imminent threat to public health or safety or national security.”

Contracts awarded before February 17 -- and the subcontracts awarded pursuant to them -- are not affected by this order. However, EO 13202 does appear to nullify labor pacts negotiated for a multitude of large federally funded projects around the country, leaving federal contractors, project owners, and federal agencies unsure how to proceed. How the order affects projects that are federally assisted (rather than funded in full by the federal gov- ernment) is another unclear issue.

(Example: “We desperately need guidelines” from the Federal Aviation Administration to implement the executive order, according to the manager of a major airport project. “We’re in a cloud of ambiguities about what the order means,” he said. “We don’t want to risk losing significant federal funding” by failing to comply with the executive order, he said. At the same time, he said, the order “does not give enough direction for an owner to know what to do with the contractual obligation we have with organized labor” under the project agreement negotiated for the project.)

Not surprisingly, EO 13202 has been derided by labor, with the AFL-CIO threatening a lawsuit. However, the order has also been critized by members of the president’s own party. For example, a letter drafted by Rep. Jack Quinn (R-NY) and signed by about 20 other Republican congressmen notes that project labor agreements have been used successfully since the 1930s “to control costs, guarantee a steady stream of skilled labor and prevent work stoppages” on various huge federal projects.”

Rep. Quinn attacked the “misconception” that such pacts are union-only agreements, adding that discrimination by the federal government against union or nonunion contractors and their employees is already illegal. “While PLAs are not called for or useful in every situation, a blanket ban on such agreements would unfairly hamper decision makers who are closer to the particular needs of a given project,” he said.