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FAC Encourages Use of Project Labor Agreements

The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have issued Federal Acquisition Circular 2005-41, which contains one final rule (FAR Case 2009-005) amending the Federal Acquisition Regulation. The rule, which goes into effect May 13, 2010, addresses the use of project labor agreements for federal construction projects. The FAC also contains a Small Entity Compliance Guide. For the text of FAC 2005-41, see 70,002.120.

Executive Order

The final rule amends the FAR to implement Executive Order 13502, Use of Project Labor Agreements for Federal Construction Projects. The order encourages the use of project labor agreements for large-scale construction projects where the total cost to the government is $25 million or more, to promote economy and procurement efficiency. According to the order, the use of a project labor agreement may prevent problems in predicting labor costs and helps ensure a steady supply of labor by providing structure and stability to large-scale construction projects. E.O. 13502 also established requirements and standards that agencies must meet when using project labor agreements. In particular, the agreements must:

l bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents;

l allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

l contain guarantees against strikes, lockouts, and similar job disruptions;

l set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the project labor agreement;

l provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

l fully conform to all statutes, regulations, and executive orders.

FAR Changes

Based on comments to the proposed rule (70,006.229) and additional deliberations, the final rule is structured to maximize an agency's ability to identify and successfully use project labor agreements when doing so promotes economy and efficiency. Specifically, the rule amends: the definition of "construction" in FAR 2.101 to refer to the definition provision in FAR Subpart 22.5; FAR 7.103 to add a new paragraph encouraging agency planners to consider the use of a project labor agreement early in the acquisition process; FAR 17.603 to state use of project labor agreements is not authorized for management and operating contracts; and FAR 22.101-1 to require agencies to remain impartial concerning any dispute between labor and contractor management. The rule also creates a new FAR Subpart 22.5, consisting of: a scope section (FAR 22.501); a definition provision that includes the definitions of "construction," "labor organization," "large-scale construction project," and "project labor agreement" (FAR 22.502); a policy statement that closely tracks the terms of E.O. 13502 (FAR 22.503); general requirements for project labor agreements, including the factors agencies should use to help them decide whether the use of a project labor agreement is appropriate (FAR 22.504); and a prescription section (FAR 22.505) for the new solicitation provision (FAR 52.222-33) and contract clause (FAR 52.222-34).




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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