22.504 General requirements for project labor agreements
Source: FAR 22.504 on acquisition.gov
Project labor agreements on federal construction projects must ensure labor peace, open competition, and compliance with all federal requirements, with exceptions allowed only under specific, documented circumstances.
Overview
FAR 22.504 outlines the general requirements for project labor agreements (PLAs) on federal construction projects. It mandates that PLAs must comply with all relevant laws and regulations, bind all contractors and subcontractors, and ensure open competition regardless of union affiliation. The section also requires PLAs to include provisions for labor peace, dispute resolution, and labor-management cooperation. Agencies cannot require contractors to sign with a specific labor organization. Exceptions to PLA requirements can be granted by the senior procurement executive under specific conditions, such as when a PLA would not promote efficiency, would reduce competition below acceptable levels, or would conflict with other federal mandates. The timing for granting exceptions is specified for both standard and IDIQ contracts.
Key Rules
- PLA Compliance
- PLAs must conform to all statutes, regulations, and Executive Orders.
- Binding Nature
- All contractors and subcontractors must comply with the PLA, regardless of union status.
- Open Competition
- Contractors cannot be excluded from bidding based on union affiliation.
- Labor Peace Provisions
- PLAs must guarantee against strikes, lockouts, and similar disruptions.
- Dispute Resolution
- PLAs must include effective, prompt, and binding procedures for resolving labor disputes.
- Labor-Management Cooperation
- PLAs should provide mechanisms for cooperation on productivity, quality, safety, and health.
- No Specific Labor Organization Requirement
- Agencies cannot require agreements with specific labor organizations.
- Exceptions
- Exceptions may be granted with written justification under defined circumstances, such as lack of efficiency, reduced competition, or legal conflicts.
Responsibilities
- Contracting Officers: Ensure PLAs meet all requirements, evaluate and document exceptions, and consider market conditions.
- Contractors: Comply with all PLA provisions and participate in dispute resolution and labor-management cooperation mechanisms.
- Agencies: Oversee PLA implementation, grant exceptions when justified, and ensure compliance with all federal requirements.
Practical Implications
This section ensures that PLAs promote labor peace and efficiency on federal construction projects while maintaining open competition and compliance with federal law. Contractors must be prepared to operate under PLAs and understand the conditions for exceptions. Common pitfalls include failing to meet PLA requirements or improperly documenting exceptions, which can delay contract awards or result in noncompliance findings.
(a) General. Project labor agreements established under this subpart shall fully conform to all statutes, regulations, and Executive orders.
(b) Requirements. A project labor agreement shall-
(1) Bind all contractors and subcontractors engaged in construction on the construction project to comply with the project labor agreement;
(2) Allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;
(3) Contain guarantees against strikes, lockouts, and similar job disruptions;
(4) Set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the term of the project labor agreement;
(5) Provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and
(6) Include any additional requirements as the agency deems necessary to satisfy its needs.
(c) Labor organizations. An agency may not require contractors or subcontractors to enter into a project labor agreement with any particular labor organization.
(d) Exceptions to project labor agreement requirements—
(1) Exception. The senior procurement executive may grant an exception from the requirements at 22.503(b), providing a specific written explanation of why at least one of the following conditions exists with respect to the particular contract:
(i) Requiring a project labor agreement on the project would not advance the Federal Government's interests in achieving economy and efficiency in Federal procurement. The exception shall be based on one or more of the following factors:
(A) The project is of short duration and lacks operational complexity.
(B) The project will involve only one craft or trade.
(C) The project will involve specialized construction work that is available from only a limited number of contractors or subcontractors.
(D) The agency's need for the project is of such an unusual and compelling urgency that a project labor agreement would be impracticable.
(ii) Market research indicates that requiring a project labor agreement on the project would substantially reduce the number of potential offerors to such a degree that adequate competition at a fair and reasonable price could not be achieved. (See 10.002(b)(1) and 36.104). A likely reduction in the number of potential offerors is not, by itself, sufficient to except a contract from coverage under this authority unless it is coupled with the finding that the reduction would not allow for adequate competition at a fair and reasonable price.
(iii) Requiring a project labor agreement on the project would otherwise be inconsistent with Federal statutes, regulations, Executive orders, or Presidential memoranda.
(2) Considerations. When determining whether the exception in paragraph (d)(1)(ii) of this section applies, contracting officers shall consider current market conditions and the extent to which price fluctuations may be attributable to factors other than the requirement for a project labor agreement ( e.g., costs of labor or materials, supply chain costs). Agencies may rely on price analysis conducted on recent competitive proposals for construction projects of a similar size and scope.
(3) Timing of the exception —
(i) Contracts other than IDIQ contracts. The exception must be granted for a particular contract by the solicitation date.
(ii) IDIQ contracts. An exception shall be granted prior to the solicitation date if the basis for the exception cited would apply to all orders. Otherwise, exceptions shall be granted for each order by the time of the notice of the intent to place an order ( e.g., 16.505(b)(1)).