Using the strongest language yet by any federal agency related to use of project labor agreements on their construction projects, the U.S. Dept. of Veterans Affairs now is the latest to announced an agency-wide ban on the pacts on its large projects—citing a January federal court ruling against the Biden-era rule that required them, even though VA was not a party to the triggering lawsuit.

“Due to the Court of Federal Claims decision, effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects,” said the Feb. 20 guidance issued to all department procurement officers. It further instructed contracting officers to  “amend solicitations to remove project labor agreement requirements.”

The agreement between craft workers and contractors sets wage rates and work rules that non-union firms generally do not support on projects which could also require apprenticeship and hiring done through a local union hall. 

The U.S. Defense Dept. also banned such mandates for all projects and the U.S. General Services Administration instructed staff to remove them for land port entry projects, both this month, but neither cited the Jan. 21 federal Court of Claims ruling against GSA, and DOD agencies—the U.S. Army Corps of Engineers and Naval Facilities Engineering Systems Command. 

This is the first time a Trump administration agency cited the ruling as a precedent for an agency wide ban for mandated agreements in future contracts. The VA is a large agency that builds everything from veterans hospitals, office buildings and smaller outpatient ambulatory care centers. Agency officials had no comment beyond the updated guidance to contracting officers. 

The Biden executive order and Federal Acquisition Regulation requiring them was challenged by bid protests from members of the Associated General Contractors of America and Associated Builders and Contractors. Both have majority non-union membership. AGC attorneys say they developed the legal strategy to challenge the rule via bid protests. “We see this as a direct result of the … approach we crafted,” said Brian Turmail, AGC vice president. “We fully expect this to be one of many similar announcements from federal procurement officials.” The Jan. 21 ruling in MVL USA, Inc. et al. v. The United States found that the agreements violate the Competition in Contracting Act of 1984. 

The court’s ruling is seen by the groups as a major victory for contractors who have long argued that the agreements are anti-competitive. “Inviting all federal contractors to bid on and build critical hospitals and infrastructure for our veterans is the right move. It’s good to see the department follow the lead of [other agencies] by eliminating inflationary PLA mandate schemes,” said Ben Brubeck, ABC vice president, in a statement.
“ABC will continue to push to make this policy a reality government-wide.”