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Canceled contract delays PLA resolution

By Sean Ryan

A federal decision to delay bidding out a New Hampshire project sidesteps a legal challenge over whether such contracts can include project labor agreements.

The U.S. Department of Labor this week reported it canceled bidding for the estimated $10 million Job Corps Center project so the agency can have more time to study the implications of PLAs.

The decision to cancel the contract also terminates the opportunity PLA opponents had to challenge the legality and merits of using the agreement on federal contracts.

The Job Corps contract faced a challenge filed with the Government Accountability Office by New Hampshire-based contractor North Branch Construction Inc.

The Labor Department canceled the bidding Thursday.

“It’s no coincidence that they canceled the project the day before they’re required to file a brief with the GAO,” said Ben Brubeck, labor and state affairs director, government affairs for the Associated Builders and Contractors Inc., which joined the contractor in the case.

North Branch and ABC argued PLAs cannot apply to federal contracts because PLAs limit competition and increase the cost of projects. But the challenge is now dead without a ruling.

“It indicates that they had a pretty weak case,” Brubeck said. “That case could have probably defined how PLAs can be used on government projects.”

President Barack Obama in February signed an executive order allowing PLAs on federal contracts. The agreements prohibit strikes and lockouts, dictate procedures to resolve labor disputes and create other forms of labor-management cooperation.

Tom Owens, director of communications for the U.S. Building and Construction Trades Department, said even though it has been nine months since Obama issued the PLA executive order, it is good that federal agencies are taking their time with the rules. He said the trades department is sending representatives to meet with federal contracting agencies to teach them more about PLAs.

“We want them to do it right,” he said, “and that’s what they’re doing. They’re doing their due diligence.”

The Associated General Contractors of America also targeted the Job Corps project with an open-records request. According to the PLA executive order, agencies only can use the agreements on projects if a department proves it is cost-effective and efficient.

The AGC asked the department for proof the PLA would make the project more cost-effective, but AGC never received a response, said AGC spokesman Brian Turmail.

“If they had a case to make,” he said, “they would have made it here.”

Owens said PLAs lower costs and improve efficiency on projects, and it is just a matter of time before PLAs start showing up on federal contracts. The final rules telling departments how and when to use PLAs are still being reviewed by the Federal Acquisition Regulatory Council.

“The indication that we have is that the projects will go forward eventually,” he said. “We prefer that they do it, get the process down right.”

Turmail and Brubeck said their associations will be watching for PLAs on future federal contracts and will be ready to make similar challenges.

“All of our options are on the table,” Brubeck said. “We’re looking at different projects as they come out on a case-by-case basis.”

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