On Thursday, the White House Office of Management and Budget (OMB) issued a memo to federal agencies on the “Use of Project Labor Agreements on Federal Construction Projects—Amendments to OMB Memorandum M-24-06.”
Noting that some agencies have issued overly broad Federal Acquisition Regulation (FAR) deviations related to the use of project labor agreements (PLAs), the memo seeks to clarify that the “Trump Administration supports the use of PLAs when those agreements are practicable and cost effective, and blanket deviations prohibiting the use of PLAs are precluded.” This prohibition on agency-wide class deviations is something SWACCA has been fighting for since the Veterans Administration (VA) issued its class deviation for all VA projects on February 20, 2025 that SWACCA helped to get rescinded.
In particular, the memo explains that since the issuance of the final FAR rule and OMB guidance implementing President Biden’s PLA Executive Order 14063, agencies awarding large-scale construction projects ($35 million or more) have expressed concerns regarding their ability to generate sufficient competition to achieve fair and reasonable pricing and further expressed concerns based on their market research of large potential future cost increases if PLAs are required. Accordingly, the amendments to the Biden-era OMB’s Memorandum M-24-06 include new language amending the exception to the PLA rule where a PLA would inhibit competition to clarify that when, based on market research for a given project, two or more bidders express interest (or three bids for sealed bidding) but prices are expected to be higher than the government’s budget by more than 10% due to the PLA requirement, the agency may use this finding to support a determination that fair and reasonable pricing cannot be achieved.
The memo is also amended to remove references to the Biden-era Labor Department’s Good Jobs Initiative, Community Workforce Agreements, and Biden-era executive orders and actions that were rescinded.