Trump admin shifts stance, backs union labour pacts for federal construction with exceptions

The US White House in Washington D.C., US (Image: Adobe Stock)

The Office of Management and Budget (OMB) shared a memo on Thursday that noted former US President Joe Biden’s 2022 executive order – requiring PLAs on federal projects above $35 million – remains in effect.

OMB stated the Trump administration “supports the use of PLAs when those agreements are practicable and cost effective,” and barred federal agencies from issuing blanket deviations that prohibit their use.

Earlier this year, the US Department of Defense and Department of Veterans Affairs said it would end use of PLAs on its major construction projects, but that action was declared unlawful by a federal court.

The memo includes a new exception, allowing agencies to forgo PLAs when they are expected to increase project costs by more than 10% above budget or “inhibit competition.”

US Defense waives PLA requirements on large-scale construction projects The US Department of Defense waived the project labor agreement requirement for construction builds

Prior to the announcement, unions had raised concerns that some agencies were circumventing the PLA mandate, including in a lawsuit filed in April by North America’s Building Trades Unions. The group claimed the Department of Defense and the General Services Administration were improperly removing PLA language from contracts.

The move marks a shift from Donald Trump’s past opposition to union-favoured policies and came as a surprise to some in the industry.

The US-based contractor and builder trade organisation the Associated Builders and Contractors (ABC), who have supported Trump’s past policy supporting non-union work, criticized the 12 June memo in a press release titled: “Trump administration fails to rescind Biden’s anti-merit labor mandate”.

Michael Bellaman, ABC president and CEO , called the memo “unfortunate” and added, “This decision cannot be reconciled with the president’s philosophies of merit, fairness, and non-discrimination because it inhibits fair and open competition and prioritizes special interests over taxpayers and workers.”

It is too early to say how the clarification will affect construction bidding and workforce dynamics (both in the short and long terms), but the industry largely expected a rollback of PLA requirements and regulations, not a reinforcement. The reversal could dampen optimism among non-union firms but increase prospects for union shops. It’s estimated about 10-11% of US construction firms are unionised.

US Court finds against PLA requirements on 12 federal construction projects US Court finds in favour of 12 contractors challenging Biden executive order requiring PLAs on major federal projects

AGC sues Biden Administration over PLAs The association and the Louisiana AGC chapter filed the lawsuit in the US District Court for Western Louisiana

Biden’s plan to introduce Project Labor Agreements to federal projects of $35m+ faces legal challenge Two major construction trade associations will challenge a plan by the Biden administration to require Project Labor Agreements (PLAs) on all federal construction projects worth $35 million or above in the courts.