The Federal Playbook on Project Labor Agreements: What Contractors Need to Know
Project Labor Agreements (PLAs) are now a central feature of federal construction procurement for large projects, reshaping how agencies plan acquisitions and how industry prepares to compete. In January 2024, the Federal Acquisition Institute summarized the governing regime following Executive Order 14063, OMB Memorandum M-24-06, and the final FAR rule. At its core, a PLA is a pre-hire collective bargaining agreement that sets employment terms for a specific project; under the new rule set, agencies must require PLAs on most “large-scale” federal construction, defined as projects with a total estimated construction cost to the Government of $35 million or more. Exceptions exist but are narrow and require Senior Procurement Executive (SPE) approval before solicitation.
The policy rationale is explicit: reduce delay risks and cost volatility on complex, multi-employer worksites by establishing guaranteed no-strike/no-lockout commitments, dispute-resolution mechanisms, and frameworks for labor-management cooperation. Agencies are instructed to treat labor stability, cost control, workforce quality, and safety as tangible benefits that promote economy and efficiency. At the same time, the rule imposes procedural guardrails: contracting officers must conduct “inclusive” market research—documented, project-specific, and current—to gauge national, regional, and local interest in competing on a PLA-required job and to identify both union and non-unionized contractors. Sources-sought notices on SAM.gov are expressly contemplated, and agencies are reminded that PLAs must allow all contractors and subcontractors to compete, regardless of existing bargaining relationships.
Implementation mechanics matter. Contracting officers have discretion on timing: they may require the PLA with initial offers, from the apparent successful offeror prior to award, or from the awardee after award—paired with the appropriate provision and clause (FAR 52.222-33 and 52.222-34, with alternates). For IDIQs, agencies may decide order-by-order; however, where an IDIQ supports a single project at or above the threshold, a PLA must cover all orders unless an exception applies.
Exceptions track three grounds and require documented justification: (1) a PLA would not advance economy and efficiency—for example, where the work is short-duration, low-complexity, single-trade, highly specialized, or subject to unusual and compelling urgency; (2) inclusive market research shows a PLA would so reduce potential offerors that adequate competition at fair and reasonable prices could not be achieved; or (3) the requirement would be inconsistent with other legal authorities. Notably, a mere reduction in potential offerors is insufficient absent a finding that competition would be inadequate; price analysis and current market conditions must be considered.
Transparency is reinforced through reporting: agencies must report PLA exceptions within three business days of solicitation and PLA-covered awards within three business days of award, using OMB templates, with submissions intended for public posting on the Acquisition Gateway. Agencies may also issue supplemental procedures, so local policy should be consulted. The upshot for industry is clear: anticipate PLAs as the default on $35M+ federal construction, track agency market research cues, and prepare to address PLA compliance, workforce planning, and subcontracting strategies early in the capture cycle.
Credit: Summary based on Federal Acquisition Institute, “Use of Project Labor Agreements (PLAs) on Federal Construction Projects,” January 11, 2024.
Disclaimer: This blog post is for general information only, does not constitute legal advice, and may not reflect the most current policies. Readers should consult the underlying authorities and agency guidance and seek counsel for project-specific decisions.