In a May 16, 2025, order, the U.S. District Court for the District of Columbia enjoined the Department of Defense (“DOD”) and the General Services Administration (“GSA”) from enforcing the memoranda issued by each agency directing that project labor agreements (“PLA”) not be required in large-scale federal construction projects. N. Am. Bldg. Trades Unions (NABUTU), et al. v. Dept. of Defense, et al., No. 25-1070 (RC) (May 16, 2025 D.D.C.). Accordingly, the PLA requirement once again should appear in new solicitations for large-scale federal construction projects.
2025 COFC Decision held Biden EO violated CICA; DOD and GSA FAR Deviation Memoranda Issued in Response
In February 2022, President Biden issued Executive Order 14063 directing federal agencies that every contractor on any federal construction project exceeding $35 million must enter into a PLA with one or more labor organizations. The requirement took effect in January 2024, with the issuance of new FAR clauses implementing EO 14063.
On January 19, 2025, in a decision on consolidated bid protests challenging the application of the PLA requirement in seven procurements, the Court of Federal Claims held that the mandatory use of PLAs violated the full and open competition requirement of the Competition in Contracting Act. MVL USA, Inc. v. United States, 174 Fed. Cl. 437 (2025). Shortly thereafter, the DOD issued a Federal Acquisition Regulation (“FAR”) class deviation stating:
Effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects, implemented at Federal Acquisition Regulation (FAR) subpart 22.5 and 36.104(c). Contracting officers shall amend solicitations to remove project labor agreement requirements, including any solicitation provisions and contract clauses prescribed at FAR 22.505.
One week later, GSA issued what it characterized as a class exception issued under the FAR clauses implementing the PLA requirement, finding that use of PLAs on land port of entry (“LPOE”) projects would be inefficient and lead to reduced competition. At the time we noted, “GSA issued the class exception for all LPOEs, but used the mechanism for PLA exceptions that, by regulation, are required to be project-specific. The likelihood that a potential offeror will challenge that procedural glitch seems low.”
NABTU Labor Organizations Argue DOD and GSA Memos Remove a Bargaining Chip
In NABTU, the challengers are not potential offerors but a collection of labor organizations. NABTU alleged that the DOD and GSA memos strip its members of the “bargaining chip” of requiring negotiated PLAs on large-scale federal construction projects. NABTU argued that without the mandatory PLAs, it loses negotiating leverage against contractors. According to NABTU, the DOD and GSA memos directly violate the PLA requirement of EO 14063 and therefore must be overturned.
The government countered that the memos are not a violation of the PLA requirement because they do not preclude the agencies from accepting proposals with PLAs. The government also asserted that any decision not to include a voluntary PLA in a proposal is a decision of the individual contractor and not a product of the DOD and GSA memos.
The District Court for the District of Columbia Decides in Favor of NABTU
The NABTU court sided with the plaintiff labor organizations. The court concluded “that the memoranda are contrary to the law set forth in the EO because they flatly contradict the unambiguous requirements of the EO and its implementing regulations ….” On that basis the court opined, “These memoranda instead purport to establish blanket class deviations and class exceptions—a legal maneuver explicitly foreclosed by the language of the EO as reinforced by the FAR.”
The court went on to analyze whether the memos are allowed under the FAR. Under FAR 1.402, an agency may issue a deviation “[u]nless precluded by law, executive order, or regulation ….” But “the EO plainly precludes class deviations by requiring that any exceptions to the PLA mandate be made ‘for a particular contract’ and only by ‘no later than the solicitation date,’ accompanied by a ‘specific written explanation.’”
Finally, the court took the agencies to task for relying on the MVL USA decision as the basis for their memos, finding that reliance “misplaced.” “The MVL USA holding was limited to the specific procurements before the Court of Federal Claims, and it expressly stated that its conclusions did not apply to unrelated solicitations. … Thus, Defendants cannot rely on MVL USA as justification for wholesale noncompliance with the EO.”
After finding that the remaining injunctive relief factors of irreparable harm, balancing of the harms, and public interest favored NABTU, the court granted a preliminary injunction prohibiting DOD and GSA from enforcing their respective memoranda until the case is decided on its merits.
Key Takeaway: PLA requirement should once again appear in new solicitations for large-scale federal construction
This means that effective immediately, the PLA requirement should once again appear in new solicitations for large-scale federal construction projects. The order does not address how the agencies should handle open solicitations without a PLA requirement, but FAR 22.503(b) requires the use of a PLA for the award of any large-scale construction project and does not prohibit the amendment of a solicitation to come into compliance.
Watch this space for updates. In the meantime, contact your Smith Currie Oles attorney with any questions.
Smith Currie Oles provides comprehensive legal services to all parts of the construction industry across the nation. Smith Currie lawyers have decades of demonstrated success representing construction and federal government contracting clients “From the Ground Up,” including procurement matters, contract formation and negotiation, project administration, claims prosecution and, when necessary, in litigation and other forms of dispute resolution.
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