Federal agencies planning to sign large construction contracts should use project labor agreements with unions as required when practical, the White House said in a new memo that widens a loophole allowing federal agencies to not use PLAs.

Russell Vought, director of the White House Office of Management and Budget, laid out the Trump administration’s position in a June 12 memo in response to agencies issuing  “overly broad” Federal Acquisition Regulation deviations related to PLAs. The move comes after Defense Secretary Pete Hegseth said in February that he was directing the U.S. Defense Dept. to remove language requiring PLAs from contracts worth $35 million or more, and after the U.S. General Services Administration said in a memo the next day that it was also removing PLA requirements from its land port of entry projects. 

The memo also comes in the wake of a ruling last month in a lawsuit North America’s Building Trades Unions brought against DOD, GSA and other agencies over the removal of PLA requirements for large construction projects. A federal judge in Washington, D.C. district court issued a preliminary injunction blocking the agencies from removing PLA requirements. NABTU declined to comment on the memo. 

“For clarity, the Trump administration supports the use of PLAs when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded,” Vought wrote in the memo. 

Agencies should rescind any deviations related to PLAs and continue to use the agreements “when practicable and cost-effective,” Vought added. 

Some contractors filed bid protests over a PLA mandate issued by the Biden administration and industry groups have challenged it in court. In January, a federal claims court judge ruled in their favor, but left the mandate in place for procurement not related to the bid protests in the case. 

The Associated Builders and Contractors criticized the memo. ABC President and CEO Michael Bellaman said in a statement that it “doubles down on an unfair, wasteful, anti-competitive Biden-era policy that inflates costs and delays critical construction projects, including those important to the defense of this country.”

“This decision cannot be reconciled with the president’s philosophies of merit, fairness and nondiscrimination because it inhibits fair and open competition and prioritizes special interests over taxpayers and workers,” Bellaman said. 

Widened Exception

While the memo instructs federal agencies to maintain PLA requirements, it also points to a FAR provision that provides an exception to the PLA requirement for large construction projects in cases when use of a PLA would substantially reduce the number of firms bidding and impact the price. 

On top of that, Vought’s memo also amended previous guidance issued during the Biden administration to widen that exception to include cases when market research indicates sufficient interest from potential bidders “but prices are expected to be higher than the government’s budget by more than 10% due to the PLA requirement.”

The enlarged exceptions allowing cases of agencies not using PLAs “take the situation far closer to the conditions that were in place prior to President Biden’s unlawful executive order,” said Brian Turmail, vice president of public affairs & workforce at AGC, in an email. 

“To that extent this isn’t what we hoped for, but is definitely better than what was in place with the Biden administration,” Turmail said. “In addition, given the recent court decisions, it is hard to see how the administration will be able to impose a mandated PLA without facing successful bid protests.”