With the $1.2 trillion federal Investment and Jobs Act now on the books, a fight is brewing over the Biden Administration’s push to have the workers — including HVACR technicians — who are employed on the infrastructure plan’s biggest projects represented by labor unions.
President Joe Biden in early February issued an executive order that strongly encourages federal agencies to use project labor agreements, which are project-specific collective bargaining agreements with one or more unions, on federal projects estimated at $35 million or more. Project labor agreements, or PLAs, bring structure and stability to large construction projects, secure commitments from all stakeholders, establish dispute-resolution processes, and prohibit work stoppages such as strikes and lockouts, Biden’s Executive Order 14063 states.
But several construction groups have united in speaking out against Biden’s order, saying that while they support the infrastructure plan, PLAs discourage competition and increase the price of public works projects. They also argue that PLAs will exacerbate what is already a nationwide shortage of nearly 500,000 construction workers by essentially discriminating against nonunion contractors.
“They’re not going to be able to deliver on infrastructure” if PLAs are imposed, said Ben Brubeck, vice president of regulatory, labor and state affairs at Associated Builders and Contractors (ABC), a construction trade organization. “There’s not enough skilled labor.”
Brubeck also criticized that the push for PLAs is occurring outside the legislative process that brought about the infrastructure plan.
ABC was among more than a dozen construction industry organizations that sent a letter opposing mandated PLAs to the White House within days of the president’s executive order. Brubeck said ABC will fight the order, including by supporting legislation, currently in both the Senate and the House of Representatives, that would restrict mandated PLAs.
“It’s a top priority for ABC, and we’re certainly going to do all we can to fight back,” he said.
PLAs typically call for workers to be paid according to the prevailing wage — the average hourly rate paid to workers in the same or similar occupation — in the region where a project is built. They don’t necessarily call for all construction workers on a project to be union members, but typically require them to pay union dues and have union representation for the duration of the project.
Biden’s executive order gives the FAR Council — the Federal Acquisition Regulatory Council — 120 days to come up with proposed regulations for implementing the order, and says the council will implement final rules after considering public comment on its proposal.
Proponents of PLAs say they bring efficiency to complex projects by getting the various trades and subcontractors involved to communicate, coordinate work plans, and adopt uniform work rules, and that they can save money by ensuring efficiencies.
“It is a hedge, a way of foreseeing work-force problems on a job and anticipating them and finding a work-around,” said John McNerney, general counsel at the Mechanical Contractors Association of America (MCAA).
PLAs also ensure better training, a higher level of on-the-job safety, and typically a finished product of greater quality, proponents say.
“I think it’s a big assumption that the union labor and contractors do a better job than nonunion contractors,” countered Brubeck. “It is just not true.”
McNerney said Biden is on sound legal footing with the executive order.
He said PLA signatories can ensure a project isn’t affected by a labor shortage by anticipating the number of workers in each trade that are needed for that project and, if necessary, accessing labor unions’ networks of traveling workers to fill vacant positions.
“There’s no such thing in the open shop,” he said.
Brubeck pointed out that the vast majority of construction workers are not unionized (only 13.6% of more than 8.1 million were represented in 2021, according to the Bureau of Labor Statistics), but McNerney said that statistic is too broad to have relevance, as union membership tends to be higher among skilled trades workers and also varies by region. (The BLS could not provide levels for union membership among those who work in HVACR-related construction.)
While Brubeck called the executive order a mandate, the order’s language gives senior officials at federal agencies the ability to opt out of PLAs for large projects under certain circumstances, such as if it’s determined a PLA would not help achieve economy and efficiency, or if a project involves only one trade or lacks complexity.
“We think (federal) contracting officers should have all the decision-making authority that contracting officials have in the private sector, and this is certainly one of them,” said McNerney. “We think this is good government. It doesn’t mandate any particular result.”
The Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) is in favor of Biden’s order. According to SMACNA CEO Aaron Hilger, it’s estimated that between $230 billion and $270 billion in federal projects, out of the entire package of more than $1 trillion, will fall under Biden’s executive order. Pass-through grants to state and local governments are not subject to it, though the order broadly encourages PLAs for federally assisted projects.
The infrastructure plan, which was passed with bipartisan support, aims to improve roads and bridges, invest in public transportation, upgrade airports and seaports, and improve the power grid, among other projects.