Amendment 0004 W912P824B0003.pdf

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER (Type or print)

30-105-04EXCEPTION TO SF 30

APPROVED BY OIRM 11-84

STANDARD FORM 30 (Rev. 10-83) Prescribed by GSA

FAR (48 CFR) 53.243

The above numbered solicitation for West Shore Lake Pontchartrain, Louisiana and Storm Damage Risk Reduction Project, WSLP-103 Levee, Floodw all and Gate, Sta. 770+00 B/L to Sta. 827+95 B/L, St. John the Baptist Parish, Louisiana is hereby amended as follow s: See Continuation Page

.Bid opening date 25 April 2024 at 11:00 A.M. CST. via Audio Webex Teleconference remains unchanged.

1. CONTRACT ID CODE PAGE OF PAGES

1 113

16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)

16C. DATE SIGNED

BY

16B. UNITED STATES OF AMERICA15C. DATE SIGNED15B. CONTRACTOR/OFFEROR

(Signature of Contracting Officer)(Signature of person authorized to sign)

8. NAME AND ADDRESS OF CONTRACTOR (No., Street , County, State and Zip Code) X W912P824B0003

X 9B. DATED (SEE ITEM 11)

13-Mar-2024

10B. DATED (SEE ITEM 13)

9A. AMENDMENT OF SOLICITATION NO.

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

X The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offer is extended, X is not extended.

Offer must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended by one of the following methods:

(a) By completing Items 8 and 15, and returning copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted;

or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN

REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

12. ACCOUNTING AND APPROPRIATION DATA (If required)

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE

CONTRACT ORDER NO. IN ITEM 10A.

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(B).

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER (Specify type of modification and authority)

E. IMPORTANT: Contractor is not, is required to sign this document and return copies to the issuing office.

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

10A. MOD. OF CONTRACT/ORDER NO.

2. AMENDMENT/MODIFICATION NO.

5. PROJECT NO.(If applicable)

6. ISSUED BY

3. EFFECTIVE DATE

23-Apr-2024

CODE

USACE, CONTRACTING DIVISION

ATTN: CEMVN-CT, ROOM 172

7400 LEAKE AVE.

NEW ORLEANS LA 70118-3651

W912P8 7. ADMINISTERED BY (If other than item 6)

4. REQUISITION/PURCHASE REQ. NO.

CODE

See Item 6

FACILITY CODECODE

EMAIL:TEL:

W912P824B0003

SECTION SF 30 BLOCK 14 CONTINUATION PAGE

The following items are applicable to this modification:

CONTINUATION PAGE

1. Provided Answers to Bidders' Questions.

2. Confirm Bids are to be sent via Email or Physical Submission.

3. The quantity for Class II Base Course (8 ½” Thick) (Crushed Stone) should be 3949.2 SY instead of 3949.2

LF.

4. Attachment 1 EO 14063 PLA Final Rule

5. Attachment 2 Executive Orders PLA

6. Attachment 3 Fact Sheet

7. Attachment 4 Use of PLA on Federal Construction

8. Attachment 5 OMB

BIDDER INSTRUCTIONS

SECTION 00100 - INSTRUCTIONS TO BIDDERS

INSTRUCTIONS TO BIDDERS

SOLICITATION NUMBER: W912P824B0003

NOTE: BIDDERS MAY SUBMIT BIDS BY ONLY ONE METHOD: A) ELECTRONIC COMMERCE (EMAIL) OR BY 2) PHYSICAL SUBMISSION. BIDDERS SHALL LIMIT THE BID SUBMITTAL TO ONE OPTION OR THE OTHER, NOT BOTH.

Electronic Submission of Bids/Proposals (Email):

The New Orleans District utilizes electronic commerce (Email) for receipt of electronic bids under this IFB solicitation.

To submit an electronic commerce (Email) bid please follow these steps:

1. Send an email containing your name, email address and bid/proposal to the following emails associated with the IFB (MUST include all emails):

Melissa.A.Vaughn@USACE.ARMY.MIL Christa.l.proctor@usace.army.mil

2. ALL BIDS SUBMITTED BY EMAIL MUST CONTAIN THE SOLICITATION NUMBER IN THE SUBJECT LINE.

3. Once the agency receives your bid/proposal at the above email addresses, you will then receive a confirmation email stating your bid/proposal was received. If a bidder does not receive a reply acknowledging receipt electronically from the New Orleans District, it is incumbent upon the bidder to seek confirmation from the issuing Contracting office by phone.

Note: The size limit for incoming emails is 35MB. Any bid/proposal over this size may not be accepted by the server and will constitute the bid not being received timely. Please note that embedded links, URLs, and other html language included may interfere with the USACE server security, which may cause emails to be removed prior to being received by the contracting office. Bidders are advised to refrain from including external links, embedded links, URLs, and other html language not germane to the proposal/bid. Please note it is a bidder’s responsibility, when transmitting its bid electronically, to ensure the receipt of its bid to the proper designee at the proper time. See FAR 14.304(b)(1)(i) regarding untimely electronic bids. Please note, MVN’s computer system firewall may cause a delay in receipt of emails, so be sure to allow ample time for possible delay. If your email would exceed 35MB you can use one of the following methods as a work-around:

Use .zip files as attachments. Combine multiple files into a .zip file to compress file size prior to adding as an email attachment.

Send multiple emails. Label each email with same subject line and indicate number of emails. For example:

Smith Construction W912P823BXXXX (1 of 2) Smith Construction W912P823BXXXX (2 of 2).

Physical Submission of Bids:

Bidders may submit their bids by hand carrying or express mail to the New Orleans District Contracting Office in Room 172. Bidders are advised to allow adequate time to ensure timely submission of its bid. Traffic onto the New Orleans District campus may be delayed by trains blocking the entrance or security either at the gate and/or inside of the building. Express delivery may be utilized but it is incumbent upon the bidder to ensure bid delivery time and date is before the receipt of bid cutoff time. See FAR 14.304(b)(1)(ii) and (c).

Bid Opening:

The Bid Opening is currently scheduled for Thursday, 25 April 2024, at 11:00 am CST. The Contracting Officer and Contract Specialist will begin downloading bids at 10:00 AM CST, which is the bid submission receipt cutoff time. All bids received after 10:00 AM CST on Thursday, April 25, 2024, will be considered late.

Audio Teleconference Bid Opening Information:

Instructions as well as any subsequent audio teleconference Bid Opening Information will be provided on SAM.GOV prior to the final closing date of this solicitation. In the event of changes to the solicitation that require a change to the closing date/time, the bid opening Audio Teleconference information will be provided via amendment.

Bid opening will be held on Thursday, 25 April 2024 at 11:00 AM. Please use the following Webex information to attend the meeting:

https://usace1.webex.com/meet/jeffrey.j.waguespack

Join by meeting number.

1-844-800-2712 Attendee Code: 43382870 Following the conclusion of the bid opening, in accordance with FAR 14.403(b), abstracts of offers for unclassified acquisitions shall be available for public inspection via SAM.GOV.

QUESTIONS AND ANSWER

Bidder Questions & Answers:

1) Question: Addendum 2 requires that a PLA be signed with the union; please confirm that this does not pertain to work that will be performed off site as in a fabrication shop or paint yard.

Response: Per FAR 22.504(b)(1), the PLA must bind all contractors and subcontractors engaged in construction on the construction project. Contractors and subcontractors not involved in construction on the construction project are not required to be bound by a PLA.

2) Question: Please confirm requirements highlighted in yellow in the paint specification attached is only required for onsite painting and is not required on the private property of a paint contractor.

Response: The highlighted requirements only apply to work performed at a construction site or facility set up by the Contractor solely for work to be performed for this project. Vendor or private facilities are not part of the contract.

3) Question: Amendment 2, page 7 of 41, 36. PAYMENT FOR MATERIALS STORED OFF SITE – this clause states “payment for materials delivered off site is limited to the following items: H piles and sheet piles.” Will steel pipe piles be paid for when delivered and stored off site?

Response: Yes.

4) Question: Amendment one, page 6 of 7 states that TRS sheet pile shall remain in place, cut off 3’ below grade or structure, whichever is lower, but section 01 53 00.02 12 – 3.2.1 mentions pulling the sheet piling. Which is correct?

Response: Specification section 01 53 00.02 12, paragraph 3.2.1 is correct. Disregard the response to the question on page 6 of 7 in Amendment 0001.

5) Question: Please organize and provide to the contractors interested in submitting bids on this project an in-person conference or at the very minimum a zoom type meeting prior to the bid date with personnel who are involved with PLA’s and who can inform the small business community on using PLA’s in Government contracts. This project is a 100% small business set aside and the small business community is unfamiliar with PLA’s and unsure where to begin this process under such short notice.

Response: Unfortunately, we will be unable to host a meeting regarding PLA’s please see attached policies and link for further information.

https://www.dol.gov/general/good- jobs/project-labor-agreement-resource-guide

6) Question: Specific to PLA’s, what will be required by and expected of the prime contractor and subcontractors?

Response: Please refer to FAR Subpart 22.5, “ Use of Project Labor Agreements for Federal Construction Projects.” To the extent that an interested bidder is seeking a legal interpretation of the requirements for compliance with this regulation and the corresponding terms of the solicitation, it is strongly recommended that each interested bidder consult with its legal counsel for advice

7) Question: Please advise if a certified apprenticeship program is acceptable in lieu of PLA’s?

Response: No. The only acceptable document prior to award, is a signed, conforming PLA in accordance with the invitation for bid

8) Question: Please advise if PLA’s will be required if the original contract award amount does not exceed the stipulated $35,000,000.00 threshold? Per the solicitation, the Optional Work 1 and Optional Work 2 may be exercised by the Government at later dates.

Response: A PLA will be required if the proposed price for the base and option work meets or exceeds the $35,000,000.00 threshold, even if the option work is not exercised

9) Question: Has USACE done market research for this project? What were the results that made the USACE conclude a PLA is necessary?

Response: PLA requirements are now mandated by Federal Acquisition Regulation

22.503 and Executive Order 14063 for all construction projects that have an estimated total cost of construction of $35,000,000.00 or more.

10) Question: Who has the authority to issue and exception on this project?

Response: In accordance with FAR 22.503, the Senior Procurement Executive is the only person authorized to grant an exception for from PLA requirements for a construction project exceeding $35M. An exception is not being sought for this project.

11) Question: How many trades does the Prime Contractor have to sign a PLA with?

Response: Per FAR 22.504(b)(1), the PLA must bind all contractors and subcontractors engaged in construction on the construction project.

12) Question: What does the Prime need to show that they “negotiated” with the unions but could not agree to a PLA?

Response: If the proposed price meets or exceeds the applicable threshold of $35,000,000.00, a satisfactory PLA must be submitted by the proposed awardee prior to contract award. A contract award will not be made to an offeror who does not submit, prior to award, a signed, conforming PLA in accordance with the invitation for bid.

Failure to successfully negotiate a required PLA will render the bidder ineligible for award.

13) Question: Is the Prime considered a non-responsive bidder if they tried to negotiate, but failed to secure a PLA. Will they be deemed non-responsive if they submit a bid with no PLA, but having tried to negotiate one?

Response: If required based upon the applicable $35,000,000.00 threshold of the anticipated contract value at award, the apparent low bidder must submit the signed, conforming PLA prior to contract award. Failure to submit a signed, conforming PLA that is required by the terms of the IFB will render that bidder ineligible for contract award.

14) Question: Per Amendment 0001, "This contract will require a Project Labor Agreement.

Please see 52.222-33 Alt 1 and 52.222-34 for definition and requirements pertaining to the use of a PLA under this contract." Can the government provide confirmation that an awarded contract below $35 million will not trigger the PLA requirement?

Response: A bid that is below a total value of $35,000,000.00 will not be subject to the PLA requirements, because the estimated cost to the government will not meet or exceed the applicable threshold.

15) Question: A Project Labor Agreement (PLA) is required on a large-scale construction project for which the total estimated cost of the construction contract to the Federal Government is $35 million or more. Is this threshold based upon the Government’s estimated cost for the base bid or for the base bid plus optional work items? Or is this threshold based upon the Contractor’s base bid or its base bid plus optional work items?

Response: A PLA will be required if the proposed price for the base and option work meets or exceeds the $35,000,000.00 threshold, even if the option work is not exercised

16) Question: Do truck drivers delivering materials (i.e., limestone, sand, borrow, etc.) to the project site fall under the requirements of the PLA?

Response: Per FAR 22.504(b)(1), the PLA must bind all contractors and subcontractors engaged in construction on the construction project. Contractors and subcontractors not involved in construction on the construction project are not required to be bound by a PLA.

17) Question: Do Apprentices and Trainees (FAR 52.222-9) fall under the requirements of the

PLA?

Response: The PLA requirements do not exempt apprentices and trainees. Per FAR 22.504(b)(1), the PLA must bind all contractors and subcontractors engaged in construction on the construction project. Contractors and subcontractors not involved in construction on the construction project are not required to be bound by a PLA.

18) Question: Does the New Orleans District have any resources (i.e., on-line resources, in-person resources, designated compliance office, etc.) to assist Contractors with understanding compliance with the PLA requirement? If not, can the District set up a meeting focused on PLA compliance and understanding for the Contractors prior to the bid?

Response: No. Please visit https://www.dol.gov/general/good-jobs/project-labor-agreement- resource-guide for future compliance requirements.

19) Question: Plan Sheet C-003, Note 1, states “Access will be from Frenier Road. Access is allowed from Frenier Road even if Option Work Area 2 items are exercised.” Where will access be provided if Option Work Area 2 items are exercised as this work will block the current access from Frenier Road?

Response: Contractor shall access around the preloads to be constructed under Option Work 2.

20) Question: This question is to further clarify the requirement of providing an airboat with operator. Does the Contractor have to supply the airboat during periods of no-work and/or during hold periods?

Response: Yes.

21) Question: Do companies that provide “services” (i.e., testing laboratory technicians, traffic control inspection personnel, etc.) fall under the requirements of the PLA?

Response: Per FAR 22.504(b)(1), the PLA must bind all contractors and subcontractors engaged in construction on the construction project. Contractors and subcontractors not involved in construction on the construction project are not required to be bound by a PLA.

Federal Acquisition Regulation: Use of Project Labor Agreements..., 88 FR 88708-02

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 1

88 FR 88708-02, 2023 WL 8829137(F.R.)

RULES and REGULATIONS

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 7, 22, 36, and 52 [FAC 2024-02; FAR Case 2022-003; Docket No. 2022-0003, Sequence No. 1]

RIN 9000-AO40

Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects

Friday, December 22, 2023

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

*88708 ACTION: Final rule.

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement an Executive Order pertaining to project labor agreements in Federal construction projects.

DATES: Effective January 22, 2024.

FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at dana.bowman@gsa.gov, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755 or GSARegSec@gsa.gov. Please cite FAC 2024-02, FAR Case 2022-003.

SUPPLEMENTARY INFORMATION:

*88709 I. Background DoD, GSA, and NASA published a proposed rule in the Federal Register at 87 FR 51044 on August 19, 2022, to amend the FAR to implement Executive Order (E.O.) 14063, Use of Project Labor Agreements for Federal Construction Projects, issued

February 4, 2022 (87 FR 7363, February 9, 2022). E.O. 14063 mandates that Federal Government agencies require the use of project labor agreements (PLAs) for large-scale Federal construction projects, where the total estimated cost to the Government is $35 million or more, unless an exception applies. Agencies still have the discretion to require PLAs for Federal construction projects that do not meet the $35 million threshold. The E.O. also directs the Office of Management and Budget (OMB) to issue implementation guidance to agencies on exceptions and reporting. The preamble to the proposed rule contained detailed information on the use of PLAs.

DoD, GSA, and NASA received comments on the proposed rule from 8,334 respondents.

II. Discussion and Analysis The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 2

A. Summary of Significant Changes The final rule removes proposed text that was intended to clarify direction that prevented agencies from requiring a contractor or subcontractor to enter into a PLA with any particular labor organization when there were multiple signatory labor organizations representing the same trade. While an agency still cannot require a contractor or subcontractor to enter into a

PLA with any particular labor organization, the clarifying language added to the proposed rule did not reflect how PLAs are established. When a PLA is established by one or more labor organizations for a project, all entities are required to enter into that PLA as there are not multiple PLAs on a project. As a result, the text was removed at 22.504(c), Labor organizations.

The final rule also removes similar text that prevented contractors from requiring subcontractors to enter into a PLA with any particular labor organization at FAR provision 52.222-33, Notice of Requirement for Project Labor Agreement, and Alternates

I, II, and III, and FAR clause 52.222-34, Project Labor Agreement, and Alternates I and II. The final rule text requires all subcontractors to become a party to the PLA negotiated by the prime contractor.

B. Analysis of Public Comments

1. Effects on Competition and Marketplace Diversity Comment: Numerous respondents raised concerns that the policy shift reflected in E.O. 14063, from discretionary use of PLAs to a mandate, will have a negative impact on agencies' ability to use competition to achieve best value for the taxpayer. A respondent raised concerns that even if a solicitation is open to all contractors, a Government mandate for use of a PLA will limit the number of competitors able or willing to compete on a project, especially with respect to non-unionized contractors and small businesses. Based upon the results of a survey conducted of the construction industry, a respondent indicated that reduced participation would increase costs to the Government and, ultimately, the taxpayers. Another respondent requested the

Government remain competitively neutral to open competition and to reduce barriers to marketplace entrants. Similarly, another respondent requested that the market dictate whether businesses will be successful. Numerous others support ”open competition.”

Response: Section 5 of the E.O. provides agencies with the authority to grant an exception, and specifically section 5(b) of the

E.O. provides an exception to the requirement for a PLA if the requirement would substantially reduce the number of potential bidders so as to frustrate full and open competition. Agencies may consider criteria in FAR 22.504(d) to determine if the use of a PLA is appropriate for the construction project. In determining whether fair and reasonable pricing may be achieved, FAR 36.104(c)(2) directs contracting officers to undertake a current and proactive examination of the market conditions in the project area to determine national, regional, and local entity interest in participating on a project that requires a PLA, and to understand the availability of unions, and unionized and non-unionized contractors.

While many respondents expressed concerns about competition, several other respondents argued that the E.O. and rule are consistent with competitive bidding. Several respondents cited a study of education construction spending indicating no statistically significant difference in bids between surveyed projects requiring PLAs and those that did not. See Emma Waitzman & Peter Philips, UC Berkeley Labor Ctr., Project Labor Agreements and Bidding Outcomes: The Case of Community

College Construction in California 3, 48 (2017)).

Comment: Some respondents were concerned that the rule limits non-union contractors bidding on Federal projects and requested justification for only allowing union contractors to bid on Federal contracts over $35M.

Response: Under the E.O., both union and non-union prime contractors and subcontractors may compete for contracts and subcontracts without regard to prior participation in collective bargaining agreements (CBAs).

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 3

Comment: Numerous respondents asserted that the rule violates the requirement for full and open competition in the Competition in Contracting Act of 1984 (CICA) because PLAs discriminate and injure competition among potential bidders who are not signatories to CBAs. Another respondent added that the rule is arbitrary and capricious because it requires Federal agencies to impose PLAs on bidders or contractors without knowing the PLAs' terms.

Response: The E.O. and final rule do not violate CICA, which generally requires full and open competition through competitive procedures that are best suited under the circumstances of the procurement, 41 U.S.C. 3301(a). CICA defines full and open competition as meaning “that all responsible sources are permitted to submit sealed bids or competitive proposals on the procurement.” See 41 U.S.C. 107. Neither the E.O. nor final rule bar any responsible sources from submitting sealed bids or competitive proposals, nor do they provide a preference for contractors already a party to a CBA. Section 4 of the E.O. requires a PLA to allow all contractors and subcontractors to compete without regard to whether they are otherwise parties to CBAs.

The E.O. and the final rule require PLAs to contain various terms that guarantee against strikes, lockouts, and similar job disruptions. In addition, under the final rule, an agency maintains the authority to ensure that the PLA includes any additional terms that the agency deems necessary to satisfy its needs. As a result, an agency will know the material terms of any resulting PLA when it issues a solicitation that requires a PLA.

2. Cost Comment: Numerous respondents expressed concerns that mandatory *88710 PLAs and compliance would increase the cost of construction projects and undermine taxpayer investments in infrastructure projects, resulting in fewer infrastructure improvements, less job creation, and higher state and local taxes. Several respondents cited studies that indicate the increase in cost is estimated at 12-20 percent. These respondents relied on two reports from the Beacon Hill Institute, which found that

PLAs raised construction costs on Massachusetts construction contracts by 12 percent or raised construction costs on Connecticut contracts by about 20 percent. Other respondents expressed concerns about costs and cited a report from the New

Jersey Department of Labor & Workforce Development, Annual Report to the Governor and Legislature: use of Project Labor

Agreements in Public Works Building Projects in Fiscal Year 2008, which estimated that average costs per square foot were higher for PLA projects than for non-PLA projects.

Alternatively, some respondents cited analyses that compared projects built with PLAs to those built without and found that there was no statistically significant difference in project costs after controlling for factors such as the size and complexity of the project. See, e.g., Dale Belman et al., Project Labor Agreements' Effect on School Construction Costs in Massachusetts, 49 Indus. Rels. 44, 60 (2010)). Some respondents asserted that PLAs are effective mechanisms for providing structure and stability to construction contracts, controlling construction costs, ensuring efficient completion of quality projects, and establishing fair wages and benefits for all workers. Another respondent asserted that there is no reason to assume union workers lead to higher costs because they are typically more productive. Higher wage rates also may induce contractors to substitute capital and other inputs for labor, which would mitigate the effects of higher labor costs.

Response: As expressed in the E.O., PLAs may help mitigate challenges to the efficient completion of quality construction projects, such as a shortage in the supply of labor or labor dispute delays. PLAs may provide structure and stability to construction projects by securing the commitment of all stakeholders on a construction project. There have been numerous studies which found that there is no definitive and compelling evidence to support the assertion that PLAs increase costs on

Federal construction projects. In 2012, the Congressional Research Service report, R41310 Project Labor Agreements, studied the effects of PLAs on costs and found that the evidence was “inconclusive.” A study commissioned by the Department of Labor, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation, was conducted in 2011 and concluded that the research supporting the New Jersey Department of Labor and Workforce Development report may be misleading, because it relied on bid costs without taking into consideration other key variables, like geographic location, project

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 4 type, or work site environment. Subsequent research revisited the Massachusetts school construction contracts discussed in the Beacon Hill studies and concluded that, once additional variables were taken into account, the effects were not statistically significant. Dale Belman et al., The Effect of Project Labor Agreements on the Cost of School Construction (2005) and Dale Belman et al., Project Labor Agreements' Effect on School Construction Costs in Massachusetts (2010). Other research, that found no statistically significant difference in cost between projects that utilized PLAs and those that did not, includes Emma

Waitzman & Peter Philips, UC Berkeley Labor Ctr., Project Labor Agreements and Bidding Outcomes: The Case of Community College Construction in California (2017) and an analysis of 130 affordable housing projects in Los Angeles, California, “Did

PLAs on LA Affordable Housing Projects Raise Construction Costs?” conducted by Peter Philips & Scott Littlehale, (Univ. of Utah Dep't of Econ., Working Paper No. 2015-03, 2015).

If it appears that a PLA will significantly raise costs on a particular Federal construction project and the Government could not obtain and determine a fair and reasonable price, the FAR would prohibit the award of the contract. The final rule provides an exception at FAR 22.504(d)(ii) in the event that market research indicates that requiring a PLA on a project would substantially reduce the number of potential offerors to such a degree that the Government could not meet its requirements at a fair and reasonable price.

Comment: Numerous respondents expressed concerns that employers and employees will incur additional costs for fringe benefits and union dues that are unnecessary and duplicative. The respondents were concerned that non-union employees paying union dues will never realize the benefits provided by the unions due to union vesting standards.

Response: Neither the E.O. nor the final rule require non-union employees to pay union dues or join a union. Non-union contractors are free to negotiate provisions in PLAs to accommodate existing fringe benefits. For example, a PLA may allow non-union contractors to opt out of contributing to health and welfare funds designated under the PLA, if the benefits provided by the non-union contractor are equal in value to those provided under the PLA.

Comment: Numerous respondents expressed concerns that inefficient union work rules limit an employer's ability to effectively manage employee skill sets and work assignments. The respondents claim that union rules prohibit productivity practices employed by non-union contractors such as multiskilling on contracts with PLAs. Numerous other respondents asserted that

PLAs prevent disputes and ensure a steady workforce. Those respondents indicate that PLAs provide several important benefits when coordinating work performed by multiple contractors on complex projects, such as uniform work rules and project schedules, expeditious dispute resolution, craft and subcontractor jurisdictional alignment, and project scheduling trade sequencing.

Response: Generally, PLAs govern the work rules for all contractors and subcontractors on a project, regardless of whether the contractor or subcontractor has previously been party to a collective bargaining agreement. Contractors can negotiate PLAs that include flexibility in how work is assigned or to allow exceptions to generally applicable work rules to meet unique needs.

Comment: Numerous respondents expressed concerns that the proposed rule will increase the cost to the taxpayer for public works projects passed by Congress, such as those funded under the Infrastructure Investment and Jobs Act (IIJA) of 2021, which did not include PLA requirements. Another respondent is concerned that the PLA requirement contradicts the

Congressional intent in the IIJA.

Response: The majority of projects funded by the IIJA will be conducted under federally funded grants, rather than FAR-based contracts. This final rule applies to FAR-based contracts; however, nothing in this rule or the IIJA precludes contractors working on grant-funded projects from entering into PLAs.

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Comment: A respondent expressed concerns that the Government has not provided data on the costs or benefits of the PLA mandate. The respondent is concerned that the data does not justify *88711 that the use of PLAs will promote economy and efficiency. Another respondent stated analysis based on information obtained via the Freedom of Information Act disproves the reasoning used in the E.O. that PLAs promote economy and efficiency.

Response: The E.O., as implemented in the final rule, reflects the President's judgment that large-scale construction projects may pose special challenges to efficient and timely procurement and that the increased use of PLAs may help address those challenges. (Section 1 of the E.O.) For example, because construction employers typically lack a permanent workforce, those employers may face difficulties predicting labor costs while bidding on contracts and securing a steady supply of skilled labor to complete those projects on time and on budget. Moreover, because construction projects typically involve multiple employers working on a single location, a labor dispute involving one employer can delay an entire project. A lack of coordination among various employers, or inconsistent or uncertain terms and conditions of employment among various groups of workers, can also create friction and disputes in the absence of an agreed-upon resolution mechanism. These problems tend to be especially pronounced on large-scale projects, which tend to be more complex and of longer duration. For these reasons, expanding the use of PLAs is expected to promote the economy and efficiency of Federal contracting by promoting efficient and timely completion of projects by skilled labor. Given these challenges, use of a PLA can further economy and efficiency in Federal contracting by increasing coordination amongst multiple employers and trade unions, preventing costly labor disputes, promoting labor management stability, improving reliable access to skilled labor (including by promoting equity), and bolstering contractors' compliance with employment law.

Expanding the use of PLAs on a large-scale Federal construction project can be particularly beneficial to the economy and efficiency of Federal contracting amidst a challenging construction labor market. As the Supreme Court explained in Boston

Harbor, Congress expressly authorized PLAs in section 8(f) of the National Labor Relations Act (NLRA) “to accommodate conditions specific to that industry” including “the contractor's need for . . . a steady supply of skilled labor.” Bldg. & Constr.

Trades Council v. Associated Builders & Contractors of Mass./R.I., Inc. (“Boston Harbor”), 507 U.S. 218, 231(1993).

Today, the construction industry faces a significant nationwide labor shortage. See, e.g., Garo Hovnanian, Ryan Luby, and Shannon Peloquin, Bridging the labor mismatch in US construction (2022). Meanwhile, demand for construction workers' skilled labor is only projected to grow. The Department of Labor projects, on average, that there will be 646,100 job openings in the construction and extraction occupations every year over the coming years. See, Bureau of Labor Statistics, Construction and Extraction Occupations, Dep't of Labor (Sept. 6, 2023). Measures that promote a steady supply of skilled labor are expected to improve the economy and efficiency of Federal contracting in the modern labor market.

PLAs can help reduce the effects of the construction labor shortage on Federal contractors' projects in several ways. First, PLAs can attract more high-skilled workers to Federal construction projects by providing higher compensation for craft positions.

Although both union and non-union contractors reported difficulty filling job openings for craft workers in 2021, after the pandemic-related disruptions to the construction labor market, union contractors were 14 percent less likely to struggle to fill craft positions. See Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union Advantage During the Construction Labor Shortage (2022). Second, PLAs provide access to union hiring halls, which can help ensure a steady supply of skilled labor. The same study found that union contractors were 21 percent less likely than non-union contractors to experience delays in completing projects due to labor shortages. This recent data is consistent with the Department of Labor

(DOL) 2011 study, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation, which found that a PLA reached by New York City schools on a construction contract helped avert skilled labor shortages over the course of the 5-year construction program. The study found that there were “no instances of shortages in skilled labor on any of the” city schools' projects, “although such shortages occurred regularly elsewhere in the city during this same period.” Non-union contractors are also more likely than union contractors to report struggling to hire qualified craft workers, suggesting that PLAs

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 6 can promote high-quality, as well as on-time, construction of Federal projects. This final rule is expected to help the Federal Government efficiently complete important projects in a challenging construction market.

A study also found that using PLAs on Federal construction projects may reduce turnover and absenteeism. There is less turnover among craft workers working under CBAs than those that are not. See Frank Manzo IV, Larissa Petrucci, & Robert

Bruno, Ill. Econ. Policy Inst., The Union Advantage During the Construction Labor Shortage (2022). Studies suggest that unionized workplaces may be safer than non-union workplaces, meaning that PLAs may promote productivity by preventing absenteeism or job losses due to workplace injuries. See, e.g., Alison D. Morantz, Coal Mine Safety: Do Unions Make a Difference, Indus. & Labor Relations Review (2012).

Because all employers on a PLA are required to enter the same agreement with coordinated work rules, PLAs can streamline administration of large-scale construction projects. On complex projects without a PLA, contractors may work with multiple trade unions and, as a result, may struggle to coordinate multiple collective bargaining agreements providing for different start times, break times, rules governing overtime, holidays, and dispute resolutions procedures. Those differences can create undue costs, delays, and inefficiencies in Federal construction projects which can be effectively addressed through a PLA. As a study commissioned by the Department of Labor explained, uniform work rules on PLAs promote efficiency, productivity, and cost savings. See Dep't of Labor, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation

(2011). Moreover, the study concluded, by standardizing the terms and conditions of employment at the outset of a project, PLAs can promote predictability of project costs. Id. at 3-4. For example, a four-year PLA used by the New York City School

Construction Authority (NYCASA) to rehabilitate and renovate city schools saved $221 million dollars over a five-year PLA by standardizing construction workers' shifts. Id. at 4-5.

The E.O. requires PLAs on Federal construction projects to contain no-strike and no-lockout clauses. As a result, this requirement is expected to prevent costly delays associated with labor disputes. According to the 2011 DOL study, during the period covered by the NYCASA PLA, a strike by a trade union resulted “in a shutdown of numerous large construction projects across the City and substantial delay and related costs” to parties involved—while construction on the projects *88712 covered by NYCASA's PLA continued uninterrupted. An audit analyzing the results of the NYCASA PLA found that there was “no disruption of work or threat of strike on any of the projects” covered by the PLA “at any time” that the PLA was in effect.

For these reasons and others, the final rule reflects the language provided in section 1 of the E.O., which states that the increased use of PLAs on large-scale construction projects can help address special challenges to efficient and timely Federal procurement. Finally, when an agency determines that a PLA requirement would not advance the Government's interests in achieving economy and efficiency, the agency may, on a case-by-case basis, utilize an exception provided in section 5 of the

E.O.

3. Procurement Delays Comment: Some respondents expressed concerns that mandatory PLAs will cause procurement delays, contradicting the rule's stated objective, to “promote economy and efficiency” in the administration and completion of Federal construction projects.

These respondents assert that use of PLAs may result in costly bid protests, litigation, and other delays.

Response: While procurement delays may be caused by numerous other factors, there is no conclusive evidence to support that specifically requiring a PLA will be the sole reason for additional delays or litigation. Rather, the final rule reflects the judgment that the overall effect of PLAs is expected to promote timely construction of Federal projects. Section 1 of the E.O. states that expanding the use of PLAs will help prevent delays by preventing costly labor disputes on Federal construction projects, promote a reliable stream of skilled labor on Federal projects, and promote coordination across multiple employers and unions.

For example, a PLA executed by the New York City School Construction Authority (NYCASA) to rehabilitate and renovate

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 7 city schools helped avert substantial delays in construction. See Dep't of Labor, Implementation of Project Labor Agreements in Federal Construction Projects: An Evaluation (2011). During the period covered by the PLA, a strike by a trade union resulted

“in a shutdown of numerous large construction projects across the City and substantial delay and related costs” to parties involved—while construction on the projects covered by NYCASA's PLA continued uninterrupted. An audit analyzing the results of the PLA found that there was “no disruption of work or threat of strike on any of the projects” covered by the PLA

“at any time” that the PLA was in effect and that “there were no instances of shortages in skilled labor on any of the NYCASA projects” covered by the PLA—although similar shortages “occurred regularly” on other projects in the same city during the same time period. Id. Another study of school construction projects in San Diego found that “project delays are considerably lower” on projects covered by a PLA. Richard Parker & Louis Rea, San Diego Unified School District, San Diego Unified

School District Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations iii (2011).

One study found that union contractors were 14 percent less likely than non-union contractors to struggle to fill craft positions and 21 percent less likely than non-union contractors to experience delays in completing projects due to labor shortages. See Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union Advantage During the Construction

Labor Shortage 5 (2022).

Comment: A respondent is concerned that there are no meaningful criteria to grant exceptions; therefore, agency decisions will be inherently arbitrary and capricious and will delay construction projects.

Response: The rule reflects specific criteria provided in section 5 of the E.O, under which an agency may grant an exception.

The rule provides additional details to ensure agency decisions comply with the E.O.

4. Effects on Workforce Comment: Many respondents commented on the rule's likely impact on non-unionized contractors. Some respondents asserted that PLAs don't discourage or prevent non-union contractors from participating on projects with PLAs. However, another respondent expressed concerns that non-union contractors will not bid on projects that mandate a PLA since it requires that they recognize the union as the representative of their employees (without their input) on that job, and could require them to use the union hiring hall to obtain most or all construction labor, exclusively hire apprentices from union programs, follow union work rules, and pay into union benefit and multi-employer pension plans. While not specifically stating that it would prevent bidding on work, several other respondents expressed similar concerns. Numerous respondents were concerned that non-union contractors represent the vast majority of construction contractors in the country and their unwillingness to compete will potentially limit the Government's access to the best available contractors for a given construction project.

Response: Neither the E.O. nor the final rule preclude non-union contractors from bidding on projects requiring a PLA. Non-union contractors who choose to enter a project-specific PLA may do so without becoming a union employer for purposes of other projects. The E.O. expressly states that a PLA shall “allow all contractors and subcontractors on the construction project to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements.” This language is reflected in the final rule. The DOL website contains useful information about the operation of PLAs. See https://www.dol.gov/general/good-jobs/project-labor-agreement-resource-guide.

Studies and court cases have shown that PLAs can have significant non-union contractor participation. One study noted that on the Boston Harbor project, the subject of the Supreme Court's decision in Bldg. & Constr. Trades Council v. Associated

Builders & Contractors of Mass./R.I., Inc. 507 U.S. 230, 231 (1993), 102 of 257 subcontractors were nonunion, notwithstanding that as much as three quarters of Boston construction contractors were unionized. See Robert W. Kopp & John Gaal, The Case for Project Labor Agreements, Constr. Law., (1999); see also Associated Builders & Contractors, Inc., S. California Chapter v.

Metro. Water Dist. of S. California, 69 Cal. Rptr. 2d 885, 888 (Ct. App. 1997).

© 2024 Thomson Reuters. No claim to original U.S. Government Works. 8

The E.O. and the rule contain an exception for solicitations where a market analysis suggests that there will not be sufficient bidders so as to frustrate full and open competition.

Comment: Numerous respondents stated that the proposed rule discriminates against non-union employees, placing non-union general contractors and subcontractors at a significant competitive disadvantage. A respondent explained that the requirement for offerors to negotiate with labor unions—a party with which the offeror has no authority to compel negotiations—effectively grants labor unions the power to prevent certain offerors from submitting an acceptable offer.

Response: PLAs have been used successfully for decades in construction projects in all parts of the United States, and there is no data to suggest that parties have been systematically unable to negotiate PLAs because of bad-faith bargaining by unions.

Since the final rule applies to large-scale Federal *88713 construction projects, the Government assumes that there is a significant economic incentive for both the union and the prospective offeror to reach agreement on a PLA.

Comment: Numerous respondents expressed concerns that mandatory PLAs will exacerbate nationwide labor shortages in the construction industry because unions will only hire from union halls/union apprenticeship programs and the majority of the workforce has opted not to join unions. Numerous respondents were similarly concerned that PLAs prevent the use of a contractor's current workforce, requiring the use of union members hired out of local union halls.

Response: The Government does not expect PLAs to negatively impact the outcome of the current nationwide labor shortage.

Research indicates that the skilled labor shortage is less severe among union contractors than non-union contractors. One report revealed that union contractors are 14 percent less likely to experience difficulty in filling craft worker positions and 21 percent less likely to experience delays in project completion times due to labor shortages than non-union contractors. See Frank Manzo IV, Larissa Petrucci, & Robert Bruno, Ill. Econ. Policy Inst., The Union Advantage During the Construction Labor Shortage 5

(2022). Use of PLAs is expected to help the Government efficiently complete projects in a tight construction labor market.

While many PLAs do require contractors to use the union's hiring hall for referrals, they do not necessarily prevent the use of a contractor's workforce.