ABC: Victory for Taxpayers and Construction Industry as Court Rules Biden’s Project Labor Agreement Policy Is Illegal

WASHINGTON, Jan. 20-Associated Builders and Contractors today celebrated a decision from the U.S. Court of Federal Claims that rules in favor of ABC members that filed bid protests challenging former President Joe Biden's controversial policy requiring anti-competitive, inflationary, union-favoring project labor agreements on federal construction projects of $35 million or more.

Judge Ryan T. Holte's Jan. 19 ruling responds to 12 bid protests filed by experienced ABC member federal contractors against three federal agencies that mandated PLAs in solicitations for construction services as a result of a Federal Acquisition Regulatory Council rule effective Jan. 22, 2024, implementing Biden's Executive Order 14063.

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

"ABC and its federal contractor members are ecstatic that the judicial system has delivered justice for American taxpayers and the 90% of the U.S. construction industry workforce that is nonunion," said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. "ABC members were harmed by former President Biden's costly executive overreach, which violates federal laws and rewards special interests at the expense of fair and open competition.

"Damning evidence procured through market research conducted by several federal agencies was raised in the case's Jan. 16 oral argument and corroborated plaintiffs' complaints and ABC's long-standing concerns," said Brubeck. "The findings of federal agencies illustrate how Biden's controversial policy mandating union-favoring project labor agreements stifles competition and raises costs on federal construction contracts nationwide.

"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 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.

"ABC will continue to advocate for inclusive solutions that result in cost savings, more jobs and more opportunities for all qualified small, minority- and women-owned businesses and all American workers in the construction industry," said Brubeck. "This lawsuit did not address additional Biden policies pushing PLAs on federally assisted infrastructure projects procured by local and state governments and private developers, so the fight will go on."

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 restore fair and open competition on federal and federally assisted construction projects that would save taxpayers an estimated $10 billion annually.

On March 28, 2024, ABC and its Florida First Coast chapter filed suit in federal court to block Biden's PLA final rule on construction contracts procured by federal agencies, asserting it is beyond the scope of executive authority and violates the U.S. Constitution, the First Amendment and the Administrative Procedure Act, among others. 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.

ABC 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.

Learn more at abc.org/bidenplafaqs and BuildAmericaLocal.com.

Dirk Haire with Fox Rothschild LLP and Jake Scott with Smith Currie Oles LLP represented federal contractor bid protestor plaintiffs in the U.S. Court of Federal Claims case, MVL USA Inc., et al., v. United States, Case No. 24-1057. An unsealed decision is expected to be released this week to the public.