Judge Ryan T. Holte's January 19 ruling came in response to 12 bid protests filed against three federal agencies by contractors challenging the policy, which was implemented through a Federal Acquisition Regulatory Council rule that took effect January 22, 2024. The ruling only impacts these 12 bids, for now. But contractors are flooding more bid protests into the claims court.

"The judge limited the effect of the ruling to the projects that were subject to bid protests," said Ben Brubeck, ABC's vice president of regulatory, labor and state affairs. "He didn't strike down the entire rule. Contractors are going to have to file bid protests on all these PLA projects going forward until there's an injunction issued by this judge, or the judge in our tax bill case, or if there's a change in the administration's policy through the Trump administration."

The decision marks a significant victory for construction industry groups, including both the Associated General Contractors of America (AGC) and Associated Builders and Contractors (ABC), who had strongly opposed the mandate. According to industry estimates, government-mandated PLAs can increase construction costs by 12% to 20% and reduce competition for federal projects.

"This ruling vindicates our novel approach to challenge the Biden administration's unlawful project labor agreement mandate," said Jeffrey Shoaf, AGC's chief executive officer. The association had argued that the PLA requirement effectively created an unauthorized federal set-aside program.

Brubeck highlighted the ruling's significance for the construction workforce. 

"This decision delivers justice for American taxpayers and the 90% of the U.S. construction industry workforce that is nonunion," he said. "Damning evidence procured through market research conducted by several federal agencies corroborated plaintiffs' complaints and ABC's long-standing concerns."

Project labor agreements are pre-hire collective bargaining agreements between contractors and labor unions that establish employment terms for construction projects. Critics argued that mandating PLAs would force contractors to accept union collective bargaining agreements and hire workers from union halls, potentially reducing competition and increasing costs.

The impact of the ruling could be substantial. ABC members have historically won 54% of federal contracts worth $35 million or more between 2009–2023, totaling over $205.56 billion in projects. Prior to the Biden administration's rule, the federal government had mandated PLAs on just 12 out of 3,222 federal construction contracts of $25 million or more.

While the federal mandate has been struck down, the ruling does not affect the growing trend of PLA requirements at the local and state level. Several major cities have implemented their own PLA mandates for public construction projects. Cleveland, Ohio, for example, established a requirement in September 2024 for PLAs on all infrastructure projects exceeding $500,000 as the city prepares for billions in waterfront developments. Similar requirements have been adopted in San Diego for projects over $1 million and in San Francisco for citywide projects. On the state level, Illinois and Maryland are moving to require PLAs on some state-funded projects.

"When the city builds big projects, we want to make sure that we're doing it right," Cleveland Mayor Justin Bibb said when implementing the policy. Local labor leaders, including Dave Wondolowski of the Cleveland Building and Construction Trades Council, have argued that PLAs at the municipal level help establish "a pathway to family-sustaining careers in construction" through local hiring and training programs.

Industry groups are now looking ahead to potential policy changes at the federal level. A coalition of 25 construction and business groups, including ABC and AGC, recently petitioned incoming President Trump to issue an executive order ensuring fair and open competition on federal construction projects, estimating such action could save taxpayers approximately $10 billion annually. However, this would not affect PLA requirements implemented by state and local governments.

The PLA ruling comes amid broader shifts in federal construction labor policy. Just weeks earlier, in late November 2024, the Biden administration withdrew a significant proposed overhaul of government-registered apprenticeship programs (GRAPs) that had drawn intense industry debate. That proposal would have mandated more stringent requirements for apprenticeship programs, including diversity initiatives and administrative changes that ABC had strongly opposed.

Brubeck, who led ABC's opposition to both the PLA mandate and the apprenticeship reforms, has consistently advocated for more flexible approaches to workforce development. John Mielke, ABC senior director of apprenticeship, elaborated on these approaches.

"ABC and its chapters are educating craft, safety, and management professionals in construction using innovative and flexible learning models like just-in-time task training, competency-based progression, and work-based learning," Mielke said, noting there are more than 450 federal and state GRAPs in over 20 occupations across America.

The dual victories for ABC – both the PLA ruling and the withdrawal of the apprenticeship reforms – reflect the organization's broader push against what it sees as overly restrictive federal labor regulations. However, with PLA requirements continuing to expand at the local level and ongoing challenges in meeting the construction industry's workforce needs – including a shortage of more than half a million workers in 2024 alone – the debate over how best to develop and regulate construction labor is far from over.

The case (MVL USA, Inc., et al.. v. United States, Case No. 24-1057) was argued by attorneys from Fox Rothschild LLP and Smith Currie Oles LLP, with an unsealed decision expected to be released to the public this week. A separate legal challenge to the PLA rule, filed by ABC and its Florida First Coast chapter in March 2024, remains pending in federal court.