In a recent decision, the Court of Federal Claims (COFC) ruled on bid protests filed by 12 construction companies challenging the implementation of a February 4, 2022, Executive Order 14063 that mandated the use of project labor agreements (PLAs). FAR Council implemented EO 14063 in January 2024, and it was the first executive mandate to use PLAs for all large-scale government contracts (see FAR 22.503 (Jan. 2, 2024) and FAR 22.501 (Jan. 2, 2024)). The purpose of these PLAs is to limit the prime contractor to the use of union labor to perform the subject contract. EO 14063 defines “project labor agreement” as “a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).”
Plaintiffs argued (among other things) that Biden’s EO FAR regulations violated the Competition in Contracting Act’s (CICA) “full and open competition” requirements because it served as a blanket disqualification for offerors who would otherwise be considered responsible. Citing to National Government Services, Inc. v. United States, 923 F.3d 977 (Fed. Cir. 2019), the COFC agreed that Biden’s EO violated CICA’s “full and open competition” requirements and that the PLA mandates “have no substantive performance relation to the substance of the solicitations at issue…”
The COFC further determined that the PLA did not qualify for any exceptions to the full and open competition requirement. In particular, the court looked at § 3301(a), which provides for an exception to the CICA’s “full and open competition” requirements where there are “procurement procedures otherwise expressly authorized by statute…” The COFC rejected the government’s argument that the FAR provisions fall within the “expressly authorized by statute” language of § 3301(a) and therefore no exception applied.
Particularly noteworthy in this decision was the evidence that many of the agencies that were subject to this protest conducted market research that indicated PLAs would not contribute to the economy or efficiency of the subject project, or that a PLA would reduce competition, increase costs, and create inefficiencies for contractors and procurement officials. The agencies’ 2024 implementation of the mandate ignored their own market research that had concluded PLAs would be anticompetitive. Instead, these agencies relied solely on the executive order presidential policy – which the COFC found to be arbitrary and capricious.
By February 3, 2025, the parties are to file a joint status report explaining the agencies’ plans for each solicitation moving forward.