Friday, February 4, 2022: Biden issued an executive order syndicating all major construction contracts
President Biden has announced a new Executive Order (EO) on the “Using Project Work Agreements for Federal Construction Projects.” Staying on protocol, the White House followed its traditional advertising and marketing playbook to (a) issue an executive order on a Friday to dominate the weekend news channels, and (b) force the “report of ‘echo’ on the story from trade industry reporters later on next week when the White House provokes the Federal Register to publish the OE which will then assign it a number.
If the federal courts do not prohibit it as an outright violation of the State Labor Relations Act (which allows employees to decide whether or not they wish to join a union), this EO will require that federal government contractors and subcontractors on large-scale federal construction projects (i.e. $35 million and above) to negotiate a “project work agreement” (“PLA”) with one or more appropriate trade unions, or to become a party to an existing PLA. The EO outlines requirements for prescribed PLAs (section 4) but allows three exceptions (see section 5, described below). A senior official can grant an exception by explaining in writing why at least one of the following is true:
- Requiring a project working agreement would not serve the federal government’s interests in achieving economy and efficiency in federal procurement. Such a conclusion should be based on the following factors:
- The project is short-lived and lacks operational complexity;
- The project will involve only one trade or craft;
- The project will involve specialized construction work which is only available from a limited number of contractors or sub-contractors;
- The Agency’s need for the project is of such unusual and compelling urgency that a working agreement for the project would be impractical; Where
- The project involves other similar factors deemed appropriate in the regulations or directives issued under section 8 of this order.
- Based on an inclusive market analysis, the requirement for a project labor agreement would significantly reduce the pool of potential bidders in a way that thwarts full and open competition.
- Requiring a project work agreement on the project would otherwise be inconsistent with statutes, regulations, executive orders, or presidential memoranda.
The EO also requires quarterly reports on project labor utilization to the Office of Management and Budget (Section 6).
Within 120 days (by June 4, 2022), the FAR Council will publicly propose Rules in the Federal Register necessary for the application of the provisions of the decree. The FAR Board will then review and evaluate public comments on the proposed rules before issuing a final rule.
Prior to the issuance of the executive order, the Biden administration issued a Fact sheet describing how the EO “will benefit taxpayers, contractors and workers”.
How we got here
As union membership continues to fall to rock bottom levels and the White House is tied to unions, the Biden administration and the labor movement have tied their fortunes to the PRO Act. Realizing that the first year the Biden administration had failed to pass the PRO Act, the strategy changed to bury it in the Reconciliation Act (the budget bill). With this bill harassed over the past 7 months in internal debate on the Democratic side of the aisle, with union membership continuing to decline under the Biden administration and Democrats eyeing an almost certain loss of the House of Commons. US Representatives and a likely US Senate loss in the midterm elections just 10 months away, the unions decided to hedge their bets and get something…anything. Hence the as-yet-unnumbered executive order mandating unionization by executive decision on all major federal construction projects, regardless of employees’ protected statutory rights to vote democratically on union matters.
This executive order, based (again) on the president’s authority to administer federal procurement, is another test of the scope of the president’s powers under the Federal Public Procurement Act (“FPA”). With the President unable to control Congress, or even work with it for bipartisan action, he turns more frequently than any other President to accomplish his political agenda, alone, crafting orders for federal contractors with his powers asserted in under the FPA. .
The federal courts have rejected this approach taken in the Executive Order on the Vaccination Mandate for Federal Government Contractors/Subcontractors. The judicial view was that the FPA was a tight delegation of authority from Congress to the President to manage procurement by federal executive branch agencies. However, the courts have not viewed the FPA as a mandate to avoid Congress on universally applicable policy issues.
And when it comes to major construction projects, the president is operating at the lowest of his power to order unionization to avoid strikes (which would interfere with the completion of federal government construction projects) at a time when the Strike interference in draft federal contracts is almost unheard of. As the other two branches of government line up to limit President Biden’s efforts to dictate the public policies they believe belong in Congress, we watch a beleaguered president try to coerce his will nonetheless by issuing executive orders coming out so quickly. that the White House press office can’t even follow press releases to announce EOs.
The beatings to the head will continue as a cornered president is now locked up, “going it alone” and going after the tools his team is manufacturing at high speed in the closed walls of the White House basement.
It will be a difficult year for all three branches of the federal government as we approach the midterm elections.