A project labor agreement (PLA) is a pre-hire collective bargaining agreement with labor organizations that sets forth the terms and conditions of employment for a particular construction project. Government-mandated PLAs are costly special interest arrangements that end open, fair and competitive bidding on contracts to build taxpayer-funded construction projects. PLAs drive up the cost of construction between 12 percent and 18 percent by reducing competition and effectively excluding merit shop contractors and their skilled employees from building projects paid for by their own tax dollars.
In 2009, President Obama issued an executive order encouraging federal agencies to require the use of PLAs on federal and federally assisted contracts exceeding $25 million. ABC supports legislation that would restore fairness and neutrality in government contracting by prohibiting federal agencies from requiring or prohibiting contractors to execute PLAs as a condition of winning a contract to build a federal or federally assisted construction project. The Government Neutrality in Contracting Act (H.R. 1671/S. 71) has been introduced in both chambers of Congress and was recently passed out of the House Oversight and Government Reform Committee. States also have taken action to guarantee a level playing field in government contracting and that more projects get done at the best possible price. Twenty-two states have a statute or executive order ensuring government neutrality in contracting by prohibiting government-mandated PLAs on projects funded by taxpayers.