The U.S. Department of Veterans Affairs can’t make its mind up about application of the Biden administration’s controversial policy requiring project labor agreements on solicitations for federal construction contracts of $35 million or more.

Less than two weeks after restoring merit-based competition for taxpayer-funded contracts to build VA hospitals, outpatient facilities, office buildings, national cemeteries and other construction projects, the VA has reversed course again.

The VA’s Feb. 13 FAR Class Deviation Memo—released to the public on Feb. 20—cites the change in policy on account of a January decision by the U.S. Court of Federal Claims that ruled in favor of experienced ABC members and other federal contractors who filed 12 bid protests against three federal agencies that mandated PLAs in solicitations for construction services.

According to the VA’s rescinded memo:

“The Court found that the agencies’ 2024 implementation of E.O. 14063, specifically, the functionality of the mandate as applied to the individual contracts in this case stifles competition and violates the statutory directive that agencies must promote ‘full and open competition’ in federal procurements unless a statutory justification is properly invoked. No injunction relief was included in the order.

“Due to the Court of Federal Claims decision, effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects, implemented at Federal Acquisition Regulation (FAR) subpart 22.5 and 36.104(c). The FAR clauses at FAR 52.222-33, Notice of Requirement for Project Labor Agreement, and FAR 52.222-34, Project Labor Agreement, shall not be enforced in any solicitation.”

However, the VA rescinded this memo within two weeks of its issuance and restored PLA mandates. A VA bid solicitation for design-build services to replace the seismically deficient Animal Research Buildings 47 and 104 at Sepulveda Ambulatory Care Center in North Hills, California, reinstated a previously revoked PLA on March 3. 

“The VA’s latest posture towards PLA mandates makes little sense in the face of recent legal decisions and efforts by other federal agencies to eliminate inflationary and anti-competitive PLA mandate policies,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC will continue to push to make fair and open competition a reality governmentwide and will get to the bottom of the VA’s flip-flop.”

On Feb. 19, ABC celebrated a new policy by the U.S. General Services Administration that will restore merit-based competition for contracts to build land port of entry projects procured by the GSA.

“The GSA’s new policy eliminates former 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 GSA solicitations to build critical land port of entry projects,” said Brubeck in an Engineering News-Record article.

“Requiring a PLA on LPOE projects would not advance the Federal Government’s interests in achieving economy and efficiency in Federal procurement because the need for LPOE modernizations is of an unusual and compelling urgency and requiring a PLA would be impracticable,” wrote GSA Senior Procurement Executive Chair Jeff Koses in the PLA exception memo. “A current administration priority is to remedy the emergency on the United States borders.”

Koses is a member of the Federal Acquisition Regulatory Council that issued a rule effective Jan. 22, 2024, implementing Biden’s Executive Order 14063 mandating PLAs on large-scale federal construction projects of $35 million or more.

The abrupt policy changes from the GSA and the VA follow a Pentagon class deviation memo––celebrated by ABC––announcing that the U.S. Department of Defense has halted PLA mandates on all military construction projects.

Of note, the DOD and the VA issued class deviation memos. In contrast, the GSA issued a PLA exception waiver from its senior procurement executive consistent with the Biden FAR rule, which appears to be the first PLA exception waiver ever granted by a federal agency under the Biden administration’s PLA mandate policy.

All other federal civilian agencies, including the remainder of the GSA’s portfolio, are still subject to Biden’s harmful pro-PLA rule.

Almost 80% of federal construction contracts of $35 million or more were awarded by the DOD, VA and GSA’s LPOE program in FY 2024, according to an ABC analysis of usaspending.gov federal agency contract awards.

“ABC will continue to use successful litigation and advocacy strategies to restore merit-based fair and open competition in federal contracting so all American workers and all qualified construction firms can compete on a level playing field to build and rebuild America,” said Brubeck. “While we are pleased with the recent policy changes at the DOD and GSA, ABC will continue to urge adoption of pro-taxpayer policies governmentwide permanently.”

On Jan. 9, ABC and 24 other construction and business groups in the Build America Local coalition sent a letter to President Donald Trump requesting an executive order that would eliminate the Biden PLA mandate and restore fair and open competition on federal and federally assisted construction projects, which would save taxpayers an estimated $10 billion annually.

Through ABC’s grassroots campaign, ABC members can urge Congress and President Trump to stop harmful government-mandated PLAs on federal and federally assisted construction projects via the Fair and Open Competition Act, which will soon be introduced in the 119th Congress.

Non-ABC stakeholders can help by watching this video and contacting their lawmakers via the BuildAmericaLocal.com coalition website.

The Biden government-mandated PLA policy has been widely criticized by the construction industry, taxpayer watchdogs and lawmakers for needlessly inflating construction costs, delaying projects and effectively steering contracts to unionized firms and union labor at the expense of taxpayers and federal laws requiring fair and open competition.

“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 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.”

On March 28, 2024, ABC and its Florida First Coast chapter filed suit in federal court to block Biden’s PLA final rule. The case is fully briefed and plaintiffs are awaiting a decision on the overall case and a ruling on the motion for preliminary injunction filed in April.