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Cleaner Materials & Project Labor Agreements: Recent Construction Law Developments From The Federal Government

Article by Gerard Hornby, Esq.

In the first few months of 2022, the Biden Administration has made several decisions impacting contractors pursuing federal construction projects. These decisions affect the materials involved in federal construction projects, as well as the mandatory use of collective bargaining agreements on certain federal projects. Contractors who have questions regarding these changes should not hesitate to contact the Burns White Construction Law Practice Group for assistance.

Buy Clean Task Force

The White House is planning to launch pilot programs across the Federal Government in an effort to promote the purchasing, manufacturing, and sourcing of construction materials with lower embodied carbon emissions and pollutants. The Buy Clean Task Force is made up of members from the Departments of Defense, Energy and Transportation, Environmental Protection Agency, General Services Administration, and White House Office of Management and Budget. These initiatives intend to reduce carbon emissions in manufacturing.

The General Services Administration has since released two requests for information on environmental product declarations for concrete and asphalt materials in an effort to create low-carbon and sustainable standards. These standards will be used for land port projects funded by the new Infrastructure Investment and Jobs Act.

The Administration’s decision to launch the task force is consistent with the Portland Cement Association announced last year that its members will achieve carbon neutrality by 2050 through targeting emissions across different stages of the material’s lifecycle.

This is not an insignificant move either: the Federal Government is the world’s largest buyer of goods and services with an annual purchasing power of more than $650 billion, according to the General Services Administration.

Executive Order on Project Labor Agreements

On February 4, 2022, President Biden signed an Executive Order on Use of Project Labor Agreements for Federal Construction Projects, which requires, with certain exceptions, the Federal Government to have a Project Labor Agreement (PLA) in place with both contractors and subcontractors before awarding any “large-scale construction contract,” that is, a contract with an estimated cost of at least $35 million. The Order is expected to impact up to $262 billion in federal contracts and approximately 200,000 workers.

According to the White House, Executive Order No. 14063 intends to “provide structure and stability to large-scale construction projects” by avoiding “labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes” and by “prohibiting work stoppages, including strikes and lockouts.” To achieve this goal, the Order mandates that contracting agencies must “require every contractor or subcontractor engaged in construction on the project to agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.”

There are some significant exceptions to the Order. For instance, it does not apply to projects funded by grants to non-federal agencies, including federal grants for projects overseen by state and local governments as part of the recent Infrastructure Investment and Jobs Act (2021). And the Order also permits contracting agencies to grant some exceptions, such as on shorter and less complex projects or where the project involves only one craft or trade.

Not surprisingly, the Order has met some resistance from open-shop trade associations in the construction industry. In a letter to President Biden, a coalition of industry trade groups expressed its concerns over the Order’s impact, arguing that it will “discourage competition from quality nonunion contractors and their employees” and “supersede and interfere with existing collective bargaining agreements.” Among the signatories are the Construction Industry Round Table, the Associated Builders and Contractors, and the National Association of Home Builders.

The last time the Executive Branch issued an Order of this kind (President Barack Obama’s Executive Order No. 13502, which only encouraged PLAs on projects worth more than $25 million), it was met by legal challenges. Considering Order No. 14063 goes even further than President Obama’s, we expect to see similar challenges in court over the coming years.