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Feds Shelve Illegal Project Labor Agreement-Bound Bid Solicitation

The U.S. Department of Labor cancelled a letting for its $11 million Job Corps Center in Manchester, N.H., following a protest ABC member North Branch Construction filed with the Government Accountability Office over a stipulation that work fall under a project labor agreement (PLA)

Sources: Associated Builders & Contractors, Washington, D.C.; CP staff

The U.S. Department of Labor cancelled a letting for its $11 million Job Corps Center in Manchester, N.H., following a protest ABC member North Branch Construction filed with the Government Accountability Office over a stipulation that work falls under a project labor agreement (PLA). The Concord, N.H., contractor challenged the legality of the PLA requirement, which essentially sets union-level wages and benefits for site workers and construction material delivery drivers.

This is a real win for the principle of fair and open competition in government procurement, said North Branch Construction attorney Maurice Baskin of Venable LLP, ABC's General Counsel. It is no coincidence the Department of Labor cancelled its unlawful PLA mandate the day before the agency was required to file a response to our bid protest. We demonstrated that the PLA mandate violated longstanding federal procurement requirements.

There is no justification for playing favorites in the government procurement process, added ABC President Kirk Pickerel. We hope other federal agencies will heed this example and recognize that PLAs only result in delayed construction and harm to taxpayers. ABC will continue to protest any attempt to impose PLAs on federal construction projects in violation of competitive bidding laws.

The Department of Labor can still move this project forward [early next year] by abandoning this illegal PLA, said North Branch President Ken Holmes. Our company and other New Hampshire businesses deserve a fair opportunity to provide the public with the best construction product at the best price.

PLAs, ABC contends, discourage competition from nonunion entities by requiring construction work to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey restrictive union apprenticeship and work rules; and, contribute to union pension plans and other funds in which their employees will never benefit unless they join the local.

North Branch's protest challenged the legality of a recent shift in federal procurement policy concerning the use of discriminatory and costly PLAs. In February, President Obama's Executive Order 13502 repealed a 2001-2008 prohibition on federal PLAs and encouraged agencies to require such agreements on federal construction projects exceeding $25 million. The Federal Acquisition Regulatory (FAR) Council is reviewing public comments from ABC and others on its controversial proposed rule that would implement Executive Order 13502 into federal procurement code. The New Hampshire Job Corps Center was believed to have the first government-mandated PLA on a federal construction project since the order was issued.