Most Federal Construction Contracts Will Use Union Labor Under New FAR Council Rule

January 8, 2024

What's New

Most government construction contracts worth at least $35 million will have to include project labor agreements, under a final rule issued recently by the Federal Acquisition Regulatory Council.

PLAs are pre-hire collective bargaining agreements negotiated between construction unions and construction employers that establish the terms of employment for a construction project.

The FAR Council rule implements Executive Order 14063 from 2022, in which President Biden essentially mandated the use of union labor on major federal construction projects. The final rule will go into effect January 22, 2024.

What It Means

Labor costs are likely to be higher on construction projects that have PLAs.

What You Should Do

Be aware that new government construction contracts worth at least $35 million are likely to include a project labor agreement. Companies should consider the impact on labor costs when calculating their bid for government construction contracts.

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Most Federal Construction Contracts Will Use Union Labor Under New FAR Council Rule

Jan 8, 2024 – A new FAR rule requires most government construction contracts over $35M to include project labor agreements (PLAs), effective January 22, 2024. Contractors should account for higher labor costs when bidding on these projects.

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