WASHINGTON -- The Department of Defense has rolled back the Project Labor Agreement Mandate Policy executive order put into effect by President Biden.

"Effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects Federal Acquisition Regulation (FAR) subpart 22.5 and 36.104(c)," according to a Feb. 7 DoD memorandum. "Contracting officers shall amend solicitations to remove project labor agreement requirements, including any solicitation provisions and contract clauses prescribed at FAR 22.505."

According to Biden's Executive Order, the policy required agencies to use project labor agreements in large-scale construction projects to promote economy and efficiency in the administration and completion of Federal construction projects. In addition, when awarding a contract in connection with a large-scale construction project, agencies shall require use of project labor agreements for contractors and subcontractors engaged in construction on the project, unless an exception ... applies.

The Associated Builders and Contractors (ABC) group, which has fought against the policy since its inception, celebrated the DoD's decision. “The DoD’s new policy effectively eliminates President Joe Biden’s controversial rule requiring anti-competitive, inflationary, union-favoring project labor agreements on federal construction projects of $35 million or more––but only for DoD construction solicitations,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The DoD’s policy remains in effect until it is rescinded. Other federal civilian agencies are still subject to Biden’s harmful pro-PLA rule."

“ABC has testified before Congress that, when mandated by government, PLAs increase construction costs by an estimated 12% to 20%, reduce competition from qualified contractors and their employees, steal money from the paychecks of token nonunion workers permitted on PLA projects and exacerbate the construction industry’s worker shortage,” said Brubeck. “Typical PLA mandates discourage competition from some of the best bidders and 9 out of 10 U.S. construction industry workers by forcing contractors to sign special union collective bargaining agreements, hire workers from union halls and apprenticeship programs and accept compulsory union representation on behalf of any members of their existing workforces. This exposes those workers to union wage theft of up to 34% of their compensation unless they join a union and vest in union benefits plans.”

According to the ABC statement, the group along with 24 other construction and business groups, aligned in a Build America Local coalition, sent a letter to President Donald Trump requesting an executive order that would restore "fair and open competition on federal and federally assisted construction projects, which would save taxpayers an estimated $10 billion annually."

The policy also faced backlash from the courts. In January, the U.S. Court of Federal Claims ruled in favor of federal contractors who challenged the requirement to enter into a collective bargaining agreement with labor organizations regarding the terms and conditions of employment for all large-scale construction projects. According to an analysis by the law firm of Holland & Knight, Judge Ryan T. Holte of the U.S. Court of Federal Claims found the policy violated the Competition in Contracting Act (CICA) because it excluded responsible offerors capable of performing the contract.

Judge Holte declared President Joe Biden's policy requiring project labor agreements (PLAs) on federal construction projects of $35 million or more to be unlawful.

According to the ABC, its members won 54% of the $205.56 billion in federal contracts worth $35 million or more during fiscal years 2009-2023 and built award-winning projects safely, on time and on budget, without unnecessary government-mandated PLAs. Prior to the Biden final rule, when given the option, the federal government decided to mandate PLAs just 12 times out of 3,222 federal construction contracts of $25 million or more.

Woodworking Network has reached out to unions for comment, but has not yet received a response.