Press Releases

Rep. John Kline (R-MN), the U.S. House Education and Labor Committee’s senior Republican member, today warned new Obama Administration rules for federal construction projects will reduce competition and drive up costs for taxpayers. The federal procurement agencies announced the final rule – slated for publication in the Federal Register tomorrow – implementing President Obama’s Executive Order calling for the use of Project Labor Agreements (PLAs) in federal construction projects.

“Project Labor Agreements reduce competition, increase costs for taxpayers, and add layers of bureaucracy and red tape to federal construction projects,” said Kline. “Creating a formal federal process for imposing these Depression-era mandates on construction projects may be a win for special interests, but it’s a loss for workers, taxpayers, and small businesses hoping to compete for federal jobs.”

Kline pointed to the U.S. Department of Labor’s decision last year to cancel a Job Corps Center construction project in New Hampshire as evidence of the dangers PLAs pose to federal job creation and project efficiency. The New Hampshire project was canceled after a local contractor raised a legal challenge to the project's PLA requirement, arguing it was discriminatory and would disqualify most contractors in the state.

PLAs generally require federal contract bids to adhere to union work rules and wage scales and to pay benefits into union pension funds even when non-union workers – who will never benefit from these funds – participate in the project.

“PLAs are an antiquated approach to federal contracting designed to favor large, unionized contractors at the expense of smaller employers,” said Kline. “The likely consequence of this new federal regulation will be higher costs for taxpayers and far less competition among job creators trying to get the American economy back on track.”

 

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