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Dive Brief:
- A US federal claims judge has ruled in favor of a group of construction companies that presented protests against the implementation of former President Joe Biden’s December 2023 executive order that mandatory project labor contracts in federal contracts of more than $35 million.
- In a briefing earlier this month, U.S. Court of Federal Claims Judge Ryan Holte said the mandate’s implementation of seven contract procedures last year ignored research by federal agencies that indicated the PLAs would be anti-competitive and based on “arbitrariness and capriciousness”. presidential policy.
- The January 21 ruling only affects those specific bid protests filed in 2024, but Associated builders and contractors touted it as a victory for the entire industry. It opens the door to more challenges and calls into question the future of the rule, said Dirk Haire, a Washington, D.C. partner at the Philadelphia-based law firm Fox Rothschild, which represented some of the plaintiffs.
Diving knowledge:
The three agencies in question—the US Army Corps of Engineers, the General Services Administration, and the Naval Installations Engineering Systems Command—had issued PLAs for requests for services from construction following a Federal Acquisition Regulatory Council rule, effective January 2024, to implement Biden’s executive order.
Holte’s ruling indicated that the agencies had inserted the “project labor agreement requirement simply because President Biden and the FAR Council made” the political judgment [that] project labor arrangements are generally good.’”
The protests, involving projects in six states, were filed by defense contractor MVL USA and consolidated plaintiffs Environmental Chemical Corp., JCCBG2 and Harper Construction Co. — who were represented by Fox Rothschild — and Hensel Phelps, represented by Atlanta-based Smith. Currie Oles
Holte ruled that the agencies responsible for each of the protested contracts must modify them by February 3.
The Biden administration issued the executive order as many funds were coming out of the Jobs and Infrastructure Investment Act, which took effect in November 2021. It represented a double-edged sword for builders who ‘were opposed to the rule, but that they would benefit from federal funding. .
Biden’s executive order stated that the PLAs would improve projects by supporting workers, eliminating labor-related project delays and helping to create a better pipeline of well-paid federal contract workers.
Labor groups have traditionally defended PLAs, saying they better protect workers. But many builders and business groups say they hurt contractors who often don’t work with unions.
“As a result of this decision, ABC’s federal contractors should continue to file bid protests against individual federal agency PLA mandates on a case-by-case basis and expect similar results,” Ben Brubeck, ABC’s vice president of Regulatory, Labor and State Affairs, said in a statement. “This is the best solution to defeat the Biden rule on federal contracts until a court issues an injunction against the rule or the Trump administration rescinds it through executive action.”
Although President Donald Trump wrote a series of executive orders when he took office, he has yet to undo Biden’s tenure at the PLA. But Holte’s ruling, which noted that the presidential guidance “ping-ponged” from banning to merely encouraging PLAs until Biden directly ordered them, now opens the door to challenges against any federal agency that issues such PLAN, Haire said.
