Trump Encourages Federal Agencies to Use Union Labor Pacts (1)

The White House budget office is pushing federal agencies to use union project labor agreements, an unexpected move that will be a major win for organized labor and continue a Biden-era policy.

In a memo to be sent to executive branch agencies Thursday, Office of Management and Budget Director Russell Vought said the Trump administration “supports the use of PLAs when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded.”

Unions have alleged that some federal agencies haven’t been enforcing the PLA requirement.

“Over the last several months, some agencies have issued overly broad Federal Acquisition Regulation (FAR) deviations related to Project Labor Agreements (PLAs) and the use of those agreements,” the memo obtained by Bloomberg Law said. “The deviations have signaled an inconsistent Administration position relating to the use of PLAs.”

The endorsement of project labor agreements—or collective bargaining agreements negotiated with unions to set the terms and working conditions for a specific project—is a shift from President Donald Trump’s traditional pro-business agenda and signals organized labor groups have influence in his second administration. Trump has elevated other union-backed policies, like exempting tips and overtime pay from certain taxes, and tapped a union-endorsed Labor Secretary, Lori Chavez-DeRemer.

Members of the construction industry and some Republicans had expected Trump to abandon the policy, and have criticized the mandate for raising costs on federal contracts and favoring union bidders. Trump has scrapped other union-friendly policies left over from the last administration, including an executive order directing agencies to prioritize grant applicants that have project labor agreements, or promote “voluntary union recognition, and neutrality with respect to union organizing.”

Unions have been fighting in court to ensure compliance with the PLA requirement and have argued the project labor mandate ensures taxpayer dollars are spent “responsibly” and to prevent labor unrest on federal projects. A lawsuit brought by the North America’s Building Trades Unions in April alleged the Defense Department and the General Services Administration were instructing contracting officers not to use PLAs for large-scale projects and deleted the requirement from solicitations.

The new Trump directive also reminds agencies that the Biden-era executive order mandating pre-hire collective bargaining agreements on federal construction projects above $35 million in value remains in effect. But, the Trump administration did include a new exception to the PLA requirement in instances where the agency determines that a PLA would “inhibit competition.” That includes when prices are expected to be higher than the government’s budget by more than 10% due to the PLA requirement.