[Federal Register: April 13, 2010 (Volume 75, Number 70)]
[Rules and Regulations]
[Page 19168-19179]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap10-13]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 7, 17, 22, and 52
[FAC 2005-41; FAR Case 2009-005; Item I; Docket 2009-0024, Sequence 1]
RIN 9000-AL31
Federal Acquisition Regulation; FAR Case 2009-005, Use of Project
Labor Agreements for Federal Construction Projects
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: GSA, DOD, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement Executive Order
(E.O.) 13502, Use of Project Labor Agreements for Federal Construction
Projects. The E.O. encourages the use of project labor agreements for
large-scale Federal construction projects in order to promote economy
and efficiency in Federal procurement.
DATES: Effective Date: May 13, 2010.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Ernest Woodson, Procurement Analyst, at (202) 501-3775. For
information pertaining to status or publication schedules, contact the
Regulatory
[[Page 19169]]
Secretariat at (202) 501-4755. Please cite FAC 2005-41, FAR case 2009-
005.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends the Federal Acquisition Regulation to
implement Executive Order (E.O.) 13502, signed by President Obama on
February 6, 2009, and published in the Federal Register at 74 FR 6985,
February 11, 2009. The E.O. encourages Federal agencies to consider the
use of a project labor agreement, as they may decide appropriate, on
large-scale construction projects, where the total cost to the
Government is $25 million or more, in order to promote economy and
efficiency in Federal procurement. A project labor agreement is 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.
The E.O. establishes requirements and standards that must be met by
Federal agencies when using project labor agreements. Specifically,
such agreements must--
a) Bind all contractors and subcontractors on the construction
project through the inclusion of appropriate specifications in all
relevant solicitation provisions and contract documents;
b) Allow all contractors and subcontractors to compete for
contracts and subcontracts without regard to whether they are otherwise
parties to collective bargaining agreements;
c) Contain guarantees against strikes, lockouts, and similar job
disruptions;
d) Set forth effective, prompt, and mutually binding procedures for
resolving labor disputes arising during the project labor agreement;
e) Provide other mechanisms for labor-management cooperation on
matters of mutual interest and concern, including productivity, quality
of work, safety, and health; and
f) Fully conform to all statutes, regulations, and Executive
orders.
E.O. 13502 is an exercise of the President's authority under the
Federal Property and Administrative Services Act to prescribe policies
and directives governing procurement policy ``that the President
considers necessary to carry out'' that Act and that are ``consistent''
with the Act's purpose of ``provid[ing] the Federal Government with an
economical and efficient'' procurement system. 40 U.S.C. 101, 121.
Section 3(a) of the E.O. states that executive agencies may, on a
project-by-project basis, require the use of a project labor agreement
by a contractor where use of such an agreement will ``(i) advance the
Federal Government's interest in achieving economy and efficiency in
Federal procurement, producing labor-management stability, and ensuring
compliance with laws and regulations governing safety and health, equal
employment opportunity, labor and employment standards, and other
matters, and (ii) be consistent with law.''
Section 1 of the E.O. explains the rationale underlying the policy
for encouraging the use of project labor agreements on large-scale
Federal construction projects:
a) Large-scale construction projects pose special challenges to
efficient and timely procurement by the Federal Government.
Construction employers typically do not have a permanent workforce,
which makes it difficult for them to predict labor costs when bidding
on contracts and to ensure a steady supply of labor on contracts being
performed. Challenges also arise due to the fact that construction
projects typically involve multiple employers at a single location. A
labor dispute involving one employer can delay the entire project. A
lack of coordination among various employers, or uncertainty about the
terms and conditions of employment of various groups of workers, can
create frictions and disputes in the absence of an agreed-upon
resolution mechanism. These problems threaten the efficient and timely
completion of construction projects undertaken by Federal contractors.
On larger projects, which are generally more complex and of longer
duration, these problems tend to be more pronounced.
b) The use of a project labor agreement may prevent these problems
from developing by providing structure and stability to large-scale
construction projects, thereby promoting the efficient and expeditious
completion of Federal construction contracts. . . .
While the E.O.'s explicit policy focuses on large-scale
construction contracts, section 5 states that the E.O. does not
preclude use of a project labor agreement in circumstances not covered
by the order, including leasehold arrangements and projects receiving
Federal financial assistance.
The Supreme Court has recognized that project labor agreements are
valid pre-hire agreements under sections 8(e) and (f) of the National
Labor Relations Act, which authorizes the use of these agreements in
the construction industry. See Building and Construction Trades Council
v. Associated Builders, 507 U.S. 218 (1993) (``Boston Harbor''). The
Supreme Court has rejected arguments that project labor agreements are
inappropriate for use by a public entity:
There is no reason to expect these defining features of the
construction industry to depend upon the public or private nature of
the entity purchasing contracting services. To the extent that a
private purchaser may choose a contractor based upon that
contractor's willingness to enter into a prehire agreement, a public
entity as purchaser should be permitted to do the same. Confronted
with such a purchaser, those contractors who do not normally enter
such agreements are faced with a choice. They may alter their usual
mode of operation to secure the business opportunity at hand, or
seek business from purchasers whose perceived needs do not include a
project labor agreement.
Boston Harbor, 507 U.S. at 231 (emphasis in original).
Use of project labor agreements by public entities has been
sanctioned repeatedly where agencies ensure that their actions are
tailored to reflect their proprietary interests and do not prescribe
how Government contractors and subcontractors handle their labor
relations beyond performance of the specific Government construction
project involved. See id.; Associated General Contractors of America v.
Metropolitan Water Dist. of So. Cal., 159 F.3d 1178, 1182-84 (9th Cir.
1998); Sheet Metal Workers Intern. Ass'n Local Union No. 27, AFL-CIO v.
E.P. Donnelly, ----F.Supp.2d ----, 2009 WL 4667101 (D.N.J. 2009). The
use of project labor agreements on Federal and other publicly funded
projects, such as dams, defense installations, and atomic energy
facilities, can be traced back many decades. The Government
Accountability Office (GAO), in a 1998 study, described use of project
labor agreements in connection with the construction of the Grand
Coulee Dam in Washington State in 1938, the Shasta Dam in California in
1940, atomic energy and defense construction projects during and after
the Second World War, and construction at Cape Canaveral by NASA during
the 1960s. U.S. Gen. Accounting Office Project Labor Agreements: The
Extent of Their Use and Related Information (GAO Report), GAO/GGD-98-82
(May 1998), at page 4. At the time GAO reviewed Federal use of project
labor agreements in 1998, four agencies--the Department of Energy
(DoE), DoD, the Tennessee Valley Authority (TVA), and NASA--had a total
of 26 projects covered by project labor agreements. GAO Report at 2.
DoE has invoked the authority of Pub. L. 85-804 to require the use
of project labor agreements by contractors and subcontractors at
certain of the Department's facilities. Project labor agreements have
been, and continue to be, used at a majority of DoE's key sites,
[[Page 19170]]
including the Hanford Site in Washington State, the Savannah River Site
in South Carolina, the Oak Ridge Reservation in Tennessee, the Nevada
Test Site (NTS), and the Idaho National Laboratory. The project labor
agreement at the NTS dates back to 1964.
As of the summer of 2009, 21 of 25 DoE construction projects were,
or were slated to be, covered by project labor agreements. Challenges
to the use of project labor agreements at DOE sites have been
successfully defended. See, e.g., Phoenix Engineering, Inc. v. MK-
Ferguson of Oak Ridge Co., 966 F.2d 1513, 1518-22 (6th Cir. 1992).
Current and past DoE representatives have stated that project labor
agreements have contributed to economy and efficiency of DoE
construction projects, including completion of projects on time and
within budget, by, among other things--
Providing a mechanism for coordinating wages, hours, work
rules, and other terms of employment across the project;
Creating structure and stability through the use of broad
provisions for grievance and arbitration of any disputes that may arise
on site, including procedures for resolving disputes among the
construction crafts;
Prohibiting work stoppages, slowdowns, or strikes for the
duration of a project and obligating senior union management to use
their best efforts to prevent any threats of disruptions of work that
might arise; and
Ensuring expeditious access to a well trained, assured
supply of skilled labor, even in remote areas where skilled labor would
have otherwise been extremely difficult to find in a timely fashion.
TVA has used project labor agreements on its construction projects
for nearly 19 years. In the nearly 200 million man hours of work on TVA
construction projects using project labor agreements, there have been
no formal strikes or any organized work stoppages. The rate of injury
on TVA projects has also been significantly reduced, especially over
the last approximately 5 years.
Federal use of project labor agreements has been curtailed twice
since 1992, including most of the past decade. E.O. 12818 of October
23, 1992 prohibited agencies from requiring the use of project labor
agreements by any parties to Federal construction projects, although
this bar was removed in 1993, by E.O. 12836, and a Presidential
Memorandum was issued in 1997 to encourage the use of project labor
agreements (see ``Use of Project Labor Agreements for Federal
Construction Projects,'' June 5, 1997). E.O. 13202 of February 17, 2001
and E.O. 13208 of April 6, 2001 again prevented agencies from requiring
the use of project labor agreements. This restriction remained in
effect from early 2001 until early 2009 when section 8 of E.O. 13502
revoked E.O. 13202 and E.O. 13208.
Use of project labor agreements has not been limited to Federal
construction projects. Project labor agreements have been used at the
State and municipal levels as well. Project labor agreements have been
used in all 50 States and the District of Columbia. Use of project
labor agreements at the State and local level has been connected to an
array of construction projects covering an expanding range and size of
projects--from schools, hospitals, roads, bridges, and police
buildings, to convention centers, courthouses, manufacturing
facilities, airports, power plants, transit systems, stadiums, and a
prison. Project labor agreements have been used in connection not only
with new construction, but also with demolition, restoration, and
reconstruction.
Project labor agreements have also been used by the private sector
for a variety of construction projects that are similar in nature to
those undertaken in the public sector, including for manufacturing
plants, power plants, parking structures, and stadiums. For example,
project labor agreements have been used in connection with building
such high profile facilities as the trans-Alaska pipeline and Disney
World. GAO Report at 4. According to one study on private sector
experiences in California, companies wanted ``project labor agreements
in order to meet their speed-to-market demands, and ensure against
delays that can be caused by worker shortages, work stoppages or
collective bargaining negotiations.'' See Kimberly Johnston-Dodds, CA
State Library, Constructing California: A Review of Project Labor
Agreements 59 (2001).
B. FAR Rulemaking
Section 7 of E.O. 13502 directed GSA, DoD, and NASA to amend the
FAR to implement the provisions of the E.O. Accordingly, GSA, DoD, and
NASA issued a final rule in the Federal Register at 74 FR 34206, on
July 14, 2009, rescinding FAR 36.202(d), a FAR provision that had
prohibited agencies from requiring project labor agreements. This
prohibition had implemented E.O. 13202 and E.O. 13208--E.O.s that were
revoked by section 8 of E.O. 13502.
On the same date, GSA, DoD, and NASA also published for public
comment a proposed rule in the Federal Register at 74 FR 33953, to
provide a new FAR subpart 22.5, Use of Project Labor Agreements for
Federal Construction Projects, to implement the provisions of E.O.
13502. The proposed rule--
Stated that agencies are encouraged to consider requiring
the use of project labor agreements in connection with large-scale
construction projects;
Described the general requirements for use of project
labor agreements, including the standards that must be met by project
labor agreements, as specified in section 4 of the E.O., which includes
allowing any contractors and subcontracts to compete for contracts and
subcontracts without regard to whether they are otherwise parties to
collective bargaining agreements; and
Created new solicitation provisions and contract clauses
that (i) would be used in large-scale construction projects where the
agency makes a determination that a project labor agreement will be
required, and (ii) would give agencies the flexibility to require that
project labor agreements be executed either prior to award from the
apparent successful offeror or after award from the awardee.
Based on the comments received on the proposed rule (which are
discussed in greater detail below) and additional deliberations, GSA,
DoD, and NASA have adopted a final rule that--
1) Encourages agency planners to consider use of project labor
agreements early in the acquisition process--i.e., during acquisition
planning (FAR 7.103);
2) Clarifies the policy for using project labor agreements to more
closely track the terms of the E.O. (FAR 22.503(b));
3) Identifies a number of factors that agencies may consider to
help them decide, on a case-by-case basis, whether the use of a project
labor agreement is likely to promote economy and efficiency in the
performance of a specific construction project, such as whether the
project will require multiple construction contractors and/or
subcontractors employing workers in multiple crafts or trades or
whether there is a shortage of skilled labor in the region in which the
construction project will be sited (FAR 22.503(c));
4) Makes clear that a solicitation may include project labor
agreement requirements that are in addition to those specified in
section 4 of the E.O., as the agency deems necessary to satisfy its
needs (FAR 22.504(b)(6));
5) States that an agency may specify in the solicitation, as
appropriate to advance economy and efficiency in a given procurement,
the terms and conditions of the project labor agreement and require the
successful offeror to become a party to a project
[[Page 19171]]
labor agreement containing these terms and conditions as a condition of
receiving a contract award (FAR 22.504(c)); and
6) Modifies the proposed solicitation provisions and contract
clauses to give agency contracting officers the additional option of
requiring offerors to submit a copy of the project labor agreement with
their offers (FAR 52.222-33 and 52.222-34).
The final rule is structured to maximize an agency's ability to
identify and successfully use project labor agreements when doing so
promotes economy and efficiency.
The rule encourages agency managers and members of the
acquisition team to work together in evaluating whether to use a
project labor agreement and to start the evaluation early in the
planning process, so that all relevant circumstances and the needs of
stakeholders can be fully considered in deciding what is best for the
agency in meeting its mission.
Consistent with the express terms of the E.O., the final
rule preserves the flexibility agencies need to evaluate whether a
project labor agreement is appropriate for a given construction
project. This discretion helps to ensure that agencies will have the
opportunity to bring their relevant experiences to bear on
circumstances particular to a project, such as whether similar projects
previously undertaken by the agency have experienced substantial delays
or inefficiencies due to labor disputes or labor shortages in a
particular locale or job classification.
The rule helps agencies to analyze whether a project labor
agreement may be beneficial. The factors set forth in the rule reflect
the experience of Federal agencies, such as DOE and TVA, and other
governmental and private sector entities, to analyze planned
construction projects for the purpose of identifying if a project labor
agreement is likely to promote smooth, successful, and timely
performance of a construction project.
The rule includes various approaches regarding when to
submit an executed project labor agreement on a particular project
(e.g., submission with the initial offer, after offers are submitted
but before award, or after award), and options for specifying the
specific terms and conditions of the project labor agreement in the
solicitation--a practice that has been used successfully by entities
experienced with project labor agreements. These alternatives will
allow agencies to choose the approach that makes the most sense for
their project and best fits with their mission.
C. Response to Comments Received on the Notice of Proposed Rulemaking
GSA, DoD, and NASA received comments from more than 700 respondents
on the proposed rule, which was published in the Federal Register at 74
FR 33953 on July 14, 2009 for a comment period that originally closed
on August 13, 2009. At the request of a respondent, the comment period
was re-opened and extended through September 23, 2009 (74 FR 42639,
August 24, 2009). Copies of the comments received by GSA, DoD, and NASA
are available for review at www.regulations.gov. Approximately 650 of
the comments were submitted in the format of one of several form
letters, or short email that expressed opposition to the use of project
labor agreements but did not directly address the proposed rule.
Approximately 50 responses that were not form letters or short emails
included roughly equal numbers supporting and opposing the use of
project labor agreements. (In addition, about eight responses were
neutral in their overall tone toward the use of project labor
agreements.) Comments largely focused on (1) the exercise of agency
discretion in deciding whether to require a project labor agreement,
(2) the content of project labor agreements generally and the role of
Federal agencies in developing the terms of the project labor
agreements, and (3) the timing of entering the project labor agreement.
As discussed above, GSA, DoD, and NASA made a number of changes to the
rule based on public comments and additional deliberations. A summary
description of the comments and GSA, DoD, and NASA responses and
changes adopted in the final rule are set forth below.
1. The Use of Discretion
Summary of comments: Many of the respondents, including Federal
agencies, Government contractors, labor organizations, trade
associations, and individuals, commented on the level of discretion an
agency should be afforded in deciding whether to require a project
labor agreement on a particular construction project and the manner in
which such discretion is exercised. Comments on this subject generally
fell into one of three groups. One group of comments focused on the
need to retain agency discretion. These comments, which were offered
principally by Federal agencies, sought to ensure that Government
organizations are able to bring their relevant experiences to bear on
the circumstances particular to a project.
A second group of comments focused on reducing discretion in favor
of a more defined procedure that would drive agencies to particular
outcomes. In particular, some respondents in this group wanted the rule
to identify factors that, if met, would create a presumption in favor
of a project labor agreement. For example, some of these respondents
suggested that the use of a project labor agreement should be presumed
appropriate if the project: (i) was over a certain dollar amount, such
as $25 million, (ii) would involve two or more contractors at a single
site, (iii) would be performed over an extended timeframe, or (iv) was
for a certain type of requirement, such as a public work. Some of these
respondents were particularly troubled by a statement in the proposed
rule that the agency has ``complete discretion'' to require or not
require a project labor agreement. Other respondents wanted the rule to
more expressly place the burden on the agency to justify the use of
project labor agreements. These respondents requested that the rule
identify factors that, unless met, would prohibit use of a project
labor agreement. For example, a project labor agreement would not be
permitted unless the agency demonstrates that there have been labor-
related disruptions causing delays or cost overruns on similar Federal
projects undertaken by the agency in the geographic area of the
project.
A third group of comments focused on identifying factors or
standards that agencies could use to aid in their project-by-project
consideration of whether to require a project labor agreement. Many of
these comments were offered in response to an invitation by GSA, DoD,
and NASA in the Federal Register notice for input on the types of
factors that might assist agencies in giving meaningful consideration
to the use of project labor agreements. Some comments expressed the
concern that without meaningful factors, agency decision-making could
become arbitrary. Many of the suggested factors focus on helping
agencies identify circumstances where project labor agreements may be
beneficial. Some examples include--
Whether the project will require the services of two or
more construction contractors or subcontractors that together employ
workers in two or more crafts or trades;
Whether labor disputes threaten timely completion of the
project;
Whether completion of the project will require an extended
period of time (e.g., extending beyond one construction season or
beyond the expiration date of one or more collective bargaining
[[Page 19172]]
agreements covering trades likely to be involved in the project); and
Whether there is a need for a substantial number of
experienced, skilled building trades and craft workers and the ability
to obtain specialized skills through the use of hiring halls.
Several respondents emphasized that agencies should initiate their
consideration of project labor agreements early in the acquisition
process, and with the input of all affected agency stakeholders, as
this would improve the agency's ability to evaluate whether it is
appropriate to require the use of a project labor agreement.
Other respondents wanted to ensure that agencies document the
decision to use, or not to use, a project labor agreement.
Some factors offered by respondents sought to ensure that proper
consideration would be given to the potential impact, such as impact on
small businesses, of using a project labor agreement before the agency
requires its use in a given construction project. At least one
respondent recommended that agencies evaluate the legal impact of using
a project labor agreement, including compliance with the National Labor
Relations Act, the Employee Retirement Income Security Act, the Small
Business Act, and the Competition in Contracting Act.
Response: GSA, DoD, and NASA strongly support affording agencies
discretion in the use of project labor agreements. As explained in the
FAR Rulemaking section above, discussing the development of the
regulation, GSA, DoD, and NASA believe this discretion is central to
agencies' ability to improve the economy and efficiency of a Federal
construction project. However, GSA, DoD, and NASA agree with the
concern that the ``complete discretion'' language in the proposed rule
is not appropriately tailored to the policies of E.O. 13502 and, for
this reason, have deleted this language from the final rule in favor of
language that more closely tracks the wording and structure of E.O.
13502 in its discussion of general policy.
GSA, DoD, and NASA disagree with the recommendations to reduce
discretion and create inflexible presumptions favoring or disfavoring
the use of project labor agreements. Such presumptions would be
inconsistent with the E.O.'s emphasis, as stated in section 3(a), on
allowing agencies to evaluate each construction effort independently
and to decide ``on a project-by-project basis'' where use of a project
labor agreement will ``advance the Federal Government's interest in
achieving economy and efficiency in Federal procurement.''
GSA, DoD, and NASA agree with the general recommendation to provide
additional factors in the final rule that can help agencies evaluate
whether use of a project labor agreement would be beneficial for a
particular construction project. GSA, DoD, and NASA believe that
flexible factors would support the E.O.'s policy of encouraging the
consideration of project labor agreements. GSA, DoD, and NASA carefully
reviewed the many suggestions respondents made for specific factors,
looking for those factors, in particular, that agencies might
reasonably apply to the facts of a given project to help determine
whether using a project labor agreement would promote economy and
efficiency. GSA, DoD, and NASA agreed to the following non-exhaustive
list of factors that agencies may consider, in their discretion, in
deciding whether a project labor agreement is appropriate for use in a
given construction project:
(1) The project will require multiple construction contractors and/
or subcontractors employing workers in multiple crafts or trades.
(2) There is a shortage of skilled labor in the region in which the
construction project will be sited.
(3) Completion of the project will require an extended period of
time.
(4) Project labor agreements have been used on comparable projects
undertaken by Federal, State, municipal, or private entities in the
geographic area of the project.
(5) A project labor agreement will promote the agency's long term
program interests, facilitating the training of a skilled workforce to
meet the agency's future construction needs.
(6) Any other factors that the agency decides are appropriate.
In order to preserve agency discretion, GSA, DoD, and NASA believe
that the rule should not mandate consideration of these factors. For
this reason, the final rule leaves an agency free to decide whether it
will adopt some or all of the factors (or any other factor that the
agency considers to be appropriate) as part of its own procedures.
Similarly, how an organization structures its review team, draws upon
agency or external resources, documents any decisions relating to the
use of a project labor agreement, and addresses similar management
matters is left to the discretion of each agency.
In addition, GSA, DoD, and NASA agree with respondents who
recommended that consideration of project labor agreements should begin
early in the acquisition process. Early consideration will help ensure
that relevant circumstances and the needs of stakeholders can be fully
considered in identifying actions that would assist the agency in
performing its mission effectively and efficiently. Accordingly, the
final rule has been amended to encourage agency planners to consider
the use of a project labor agreement during acquisition planning.
The recommended additions regarding impact were not necessary,
because the agencies are permitted to consider any factor that the
agency considers appropriate. With respect to small business
contracting, in particular, the policies in this rule should be read in
conjunction with those in FAR part 19 speaking to small business
participation.
Finally, both proposed and final rules make clear that project
labor agreements established pursuant to the rule ``must fully conform
to all statutes, regulations, and Executive orders.'' Agencies
requiring project labor agreements must therefore undertake appropriate
legal review in implementing the rule. GSA, DoD, and NASA do not,
however, agree with the commenter who claimed a need for an additional
legal review process to implement the rule, apart from the process
otherwise utilized by agencies in the course of making procurement
determinations.
2. Content of project labor agreement
A number of respondents addressed the contents of project labor
agreements. Some offered views about the requirements and issues
addressed in a project labor agreement. Others commented on the
Government's role in specifying the terms of a project labor agreement.
a. Comments related to issues covered in project labor
agreements. Some respondents requested that guidance clarify how
project labor agreement requirements and terms handle contractors who
are not otherwise parties to a collective bargaining agreement with
respect to their use of existing employees, at least their core
workers, and the extent to which such employees must contribute to
union benefits trust funds. A number of these comments were raised in
connection with fears that use of project labor agreements could unduly
restrict the participation of open shop contractors in competition for
Federal construction projects. One respondent suggested that the
content of project labor agreements be limited to (i) a prohibition
against union strikes, and (ii) a dispute resolution procedure for
union contractors. Another recommended that project labor agreements
include a targeted hiring provision. Yet another commenter
[[Page 19173]]
recommended that the proposed language requiring project labor
agreements to ``fully conform to all statutes, regulations, and
Executive orders'' be changed to say that project labor agreements
shall ensure that items such as existing targeting policies, contract
compliance requirements, outreach policies, logistical requirements for
contractors, and other project administration elements would be
addressed. Finally, one commenter suggested seeking amendments to the
American Recovery and Reinvestment Act of 2009 (ARRA) and changing the
existing FAR clause 52.222-9, Apprentices and Trainees, to provide a
model project labor agreement for ARRA-funded projects.
Response: With respect to the general concern raised regarding the
participation of nonunion contractors, GSA, DoD, and NASA note that
E.O. 13502 expressly states that all project labor agreements must
allow all contractors and subcontractors to compete for contracts and
subcontracts without regard to whether they are otherwise parties to
collective bargaining agreements and this requirement is repeated in
the final rule. Any contractor may compete for--and win--a Federal
contract requiring a project labor agreement, whether or not the
contractor's employees are represented by a labor union. The same
principle of open competition would protect subcontractors as well.
GSA, DoD, and NASA will work with the Office of Management and Budget
(OMB), the Middle Class Task Force, the Small Business Administration
(as many of these concerns were posed by small businesses), and others
to assist with the development of appropriate training on these issues.
With respect to the impact of a project labor agreement on particular
contractors and subcontractors, GSA, DoD, and NASA have amended the
final rule to permit agencies to fashion requirements as appropriate to
meet their procurement needs. As explained in greater detail in the
response to the next set of comments on the Government's role, GSA,
DoD, and NASA have also clarified that an agency may specify the terms
and conditions of the project labor agreement, as appropriate to
advance economy and efficiency in procurement.
As for the other recommendations described above, GSA, DoD, and
NASA do not agree that the rule should be modified to address them.
Section 4 of the E.O. specifies the minimum requirements for project
labor agreements. The final rule reflects these considerations.
Additional references, such as to ARRA, are not required. Further,
specific elements such as targeted hiring and outreach policies are not
addressed in the E.O. These matters, as appropriate, may be addressed
in the project labor agreement, in the context of a particular project.
As noted, language has been added to the final rule that allows
agencies to include any additional requirements as the agency deems
necessary to satisfy its needs.
b. Comments regarding the Government's role in establishing the
terms of a project labor agreement. Several respondents stated that the
final rule should allow an agency to negotiate a project labor
agreement, either directly or through an agent, before the solicitation
is issued. Other respondents expressed the opposite view--i.e., that
the Government should not participate in the negotiations of a project
labor agreement--since the terms of the project labor agreement
essentially address the relationship between the contractor and the
unions.
Response: Experiences of entities that have successfully used
project labor agreements suggest that, in some cases, an agency may be
able to more effectively achieve economy and efficiency in procurement
by specifying some or all of the terms and conditions of the project
labor agreement in the solicitation. Their experiences also suggest
that, if the agency specifies some or all of the terms and conditions
of the project labor agreement in the solicitation, contractors not
familiar with project labor agreements may be better able to compete.
For this reason, GSA, DoD, and NASA have amended the final rule to
clarify that, as appropriate to advance the economy and efficiency in
procurement, an agency may specify the terms and conditions of the
project labor agreement in the solicitation and require the successful
offeror to become a party to a project labor agreement containing these
terms and conditions as a condition of receiving a contract award.
Consistent with the FAR and applicable law, an agency may seek the
views of, confer with, and exchange information with prospective
bidders and union representatives as part of the agency's effort to
identify appropriate terms and conditions of a project labor agreement
for a particular construction project and facilitate agreement on those
terms and conditions. However, agency actions must not prescribe how
Government contractors and subcontractors handle their labor relations
beyond performance of the specific Government contract project
involved.
3. Timing for submission of project labor agreement
Summary of comments. Many respondents submitted comments regarding
the timing of a project labor agreement's execution. (In the notice of
proposed rulemaking, GSA, DoD, and NASA expressly sought input from the
public on this issue.) The comments focused on three options: (i)
require submission of project labor agreement with offer, (ii) require
submission of project labor agreement from apparent awardee, or (iii)
require project labor agreement before construction begins. Proponents
of requiring submission of an executed project labor agreement (or at
least a binding letter of understanding) with bids stated that this
timing best ensures compliance with the requirement for project labor
agreements (i.e., the contracting officer has documented proof before
he or she begins evaluating offers) as well as better planning and more
accurate pricing in offers, because the offerors will be able to
accurately predict their labor costs. They noted that early negotiation
and execution of the project labor agreement can best ensure that labor
issues will not become a distraction or lead to unanticipated problems
at the beginning of the project. Opponents raised concerns that
requiring every offeror to negotiate a project labor agreement would
impose a significant burden on offerors and could cause significant
delay in contract awards.
The pros and cons offered for requiring submission of the project
labor agreement from only the apparent awardee were essentially the
opposite from those offered for requiring submission with offers. Those
who favored post-award submission felt this timing posed the smallest
likelihood of pre-award delay and gave the contractor the greatest
amount of time to negotiate the best project labor agreement possible.
Critics cautioned that post-award execution of project labor agreements
potentially undercuts key purposes of the agreement, such as addressing
potential labor differences before they occur and receiving offers with
more accurate pricing. Several respondents were particularly concerned
that the language of the proposed rule, which would require the offeror
to ``negotiate in good faith,'' does not assure that a project labor
agreement will be reached, despite the Government having concluded that
it should be utilized.
Response: GSA, DoD, and NASA believe that the Government's
procurement interests are best served by allowing agencies broad
discretion in formulating the process and timing for the submission of
a project labor
[[Page 19174]]
agreement. Accordingly, under the final rule, agencies may choose from
among three options. Submission may be required: (1) when offers are
due; (2) prior to award (by the apparent successful offeror); or (3)
after award.
Providing these three options allows agencies with project labor
agreement experience to continue with the model they have found most
effective; it also allows other agencies to craft an approach unique to
each project, and, as experience is gained, follow best demonstrated
practices. If an agency decides that permitting execution of the
project labor agreement after award is the best approach, the
contractor will be required to submit an executed copy of the agreement
to the contracting officer. This is a change from the proposed rule,
which only required the contractor to ``bargain in good faith.'' In the
view of GSA, DoD, and NASA, the language of the proposed rule could
result in a situation where the Government concluded that execution of
a project labor agreement was in its best interest, but has no recourse
should the project labor agreement never be executed as long as the
contractor bargained in good faith.
4. Other issues
a. Comments regarding retroactive imposition of project labor
agreements on contracts already awarded. One commenter recommended that
the rule be clarified to prohibit agencies from pursuing a project
labor agreement after a contract has been awarded. The commenter's
concern relates to a scenario where the contracting agency has not
previously informed parties that a project labor agreement was being
considered.
Response: GSA, DoD, and NASA agree with this concern. Any such
action, without any prior indication that a project labor agreement was
contemplated, could disrupt the project's schedule and impact contract
price. FAR 1.108(d) requires that any application of a new procedure to
existing contracts must be bilaterally negotiated and involve adequate
consideration. Consistent with section 11 of the E.O., the final rule
will apply to solicitations for large-scale construction projects
issued on or after the effective date of this rule.
b. Comments addressing the applicability of project labor
agreements to certain contractors. Some respondents questioned the
application of a project labor agreement to particular activities
related to, or occupations involved with, construction projects. One
commenter stated that the proposed rule was ``overly comprehensive'' by
not distinguishing between contractors engaged in the construction and
subcontractors who are not part of the construction project. Another
commenter stated that the proposed rule failed to exclude designers,
site engineers, surveyors and other engineering related personnel from
its requirements. The commenter stated that the quality assurance/
quality control functions performed by such personnel would give rise
to certain conflicts of interest if they were subject to a project
labor agreement.
Two respondents stated that any determination relating to the use
of a project labor agreement under Federal contracts for projects on
Indian reservations should take cognizance of tribal sovereignty and
self-determination as contemplated by Pub. L. 93-638 and various
Executive orders. Both respondents stated that the determination
whether to use a project labor agreement should be vested in the
affected tribe rather than the Federal agency. One commenter stated
that a tribal-specific project labor agreement has been developed and
that it is generally referred to as a ``Tribal Labor Agreement.'' This
commenter recommended that the final rule reflect the unique aspects of
Federal projects located on Indian reservations.
Response: GSA, DoD, and NASA have clarified in the final rule that
project labor agreements cover subcontractors engaged in construction.
This change makes clear that employers who do not perform construction
work need not sign the project labor agreement.
With respect to the handling of engineering-related personnel, GSA,
DoD, and NASA note that no other trades or crafts are referenced in
either the E.O. or the proposed rule and believe these concerns are
best addressed by the agency or the parties on a project-by-project
basis.
Regarding issues related to tribal self-determination, GSA, DoD,
and NASA concluded that no change is required to the FAR rule. Each of
the affected funding agencies may develop internal guidance, as
necessary, to accommodate its unique authorities.
c. Guidance to employers that have no relationship to labor
organizations. One commenter stated that the proposed rule failed to
provide guidance to employers that have no relationship with any labor
organization. The commenter stated that the terms and conditions of
employment common in union-represented workforces differ from the terms
and conditions of employment common for individuals not represented by
unions.
Response: This issue is outside the scope of this FAR case. Such
general guidance may be provided by individual agencies as they believe
appropriate. However, the rule reiterates that, as provided in E.O.
13502, contractors and subcontractors must be permitted to compete for
contracts and subcontracts without regard to whether they are otherwise
parties to collective bargaining agreements.
d. Comments regarding the use of project labor agreements for
initiatives other than large-scale Federal construction projects. A
number of respondents recommended that the E.O.'s policy for
encouraging the use of project labor agreements be broadened. Some
respondents recommended that the threshold for applicable projects be
lower than $25 million. They stated that it is common for project labor
agreements to be used on construction projects under $25 million and
that the total cost of a project is less significant than the factors
referenced in the E.O. in determining whether a project labor agreement
serves the Government's interest. Some suggested this be accomplished
by lowering the threshold to $5 million. Others recommended that the
definitions of ``large-scale construction project'' and ``Project labor
agreement,'' be revised to include a construction program comprised of
multiple projects when calculating the $25 million threshold. A few
recommended no threshold and suggested that the rule be revised to
require that agencies analyze all construction projects, regardless of
value or form, to determine whether the use of a project labor
agreement results in a more efficient procurement. Finally, a number of
respondents addressed use of project labor agreements in connection
with Federally-assisted projects. Most who discussed the issue favored
the use of project labor agreements for construction contracts funded
by Federal grants. A few respondents opposed the use of project labor
agreements on such projects, and two questioned the legality of such
use.
Response: Modifying the coverage of the final rule to address
expanded consideration of project labor agreements is outside the scope
of this rulemaking. This rulemaking is intended to support the
implementation of the policy set forth in section 1(b) of E.O. 13502,
which is expressly directed at Federal acquisitions involving large-
scale construction projects. Under section 5 of the E.O., agencies are
not precluded from using project labor agreements on projects not
covered by the order. GSA, DoD, and NASA note that this final rule does
not limit agencies' exercise of their authorities to require project
labor agreements in appropriate circumstances and to the
[[Page 19175]]
extent permitted by law. Finally, with respect to recommendations
addressing construction projects funded by Federal grants, GSA, DoD,
and NASA note that such transactions are outside their policy
jurisdiction and the purview of the FAR.
D. Significant rule.
This is a significant regulatory action and, therefore, was subject
to review under section 6(b) of Executive Order 12866, Regulatory
Planning and Review, dated September 30, 1993. This rule is not a major
rule under 5 U.S.C. 804.
GSA, DoD, and NASA received a number of comments that made
arguments in favor of declaring this rule as major. A summary of these
comments and GSA, DoD, and NASA' response is below.
Comment: One respondent stated that the proposed rule improperly
declares that this rule is not a major rule under 5 U.S.C. 804, and
thereby violates the Congressional Review Act codified therein.
5 U.S.C. 804 defines a major rule as including any rule likely to
result in--
(A) An annual effect on the economy of $100,000,000 or more;
(B) A major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies, or geographic
regions; or
(C) A significant adverse effect on competition, employment,
investment, productivity, innovation, or on the ability of the United
States-based enterprises to compete with foreign-based enterprises in
domestic export markets. Respondents made the following arguments:
Project labor agreements will have significant adverse
effect on competition.
Project labor agreements will create major increases in
construction costs for Federal agencies.
Project labor agreements may have an annual impact on the
economy of $100,000,000 or more.
Without the benefit of a cost/benefit analysis, it is
difficult to determine if the NPRM would satisfy the criteria of a
major rule under paragraph A or calculate if increases are major under
paragraph B.
Response: OMB determines whether a rule is a major rule. OMB has
not determined this rule to be a major rule.
The purpose of the E.O. is to further economy and efficiency in
Federal procurement--in particular large-scale construction contracts.
Specifically, agencies are encouraged to consider requiring the use of
a project labor agreement in large-scale construction projects, if use
of such an agreement will advance the interest of the Federal
Government in achieving economy and efficiency. Consistent with the
express terms of the E.O., including section 5, which states that the
order ``does not require an executive agency to use a project labor
agreement on any construction project,'' the final rule preserves the
flexibility agencies need to evaluate whether a project labor agreement
is appropriate for a given construction project. Simply put, the use of
project labor agreements by Federal agencies is voluntary. As explained
in the preamble to the notice of proposed rulemaking, GSA, DoD, and
NASA estimate about 30 project labor agreements will be formed per year
(Federal Register at 74 FR 33955, July 14, 2009). Based on this
estimate, GSA, DoD, and NASA expect that any increased construction
costs associated with the use of project labor agreements under the
rule will be less than the $100 million threshold for a major rule.
Furthermore, this is not rulemaking (such as is promulgated, for
example, by the Environmental Protection Agency) that will impose
mandatory standards that may result in higher costs on entities,
without any reimbursement. These are acquisition regulations. Applying
for a Government contract is a voluntary act. In addition, as further
explained in the Regulatory Flexibilty Analysis section below, bids on
a project for which a project labor agreement is required may include
anticipated costs associated with a contractor's compliance with
project labor agreement requirements. These costs would be included in
the price of the contract awarded to the successful bidder.
E. Regulatory Flexibility Analysis.
Many respondents commented on the Regulatory Flexibility Act and
the perceived impact on small businesses.
1. Violation of the Regulatory Flexibility Act.
Comments: Many respondents stated that the failure to perform an
Initial Regulatory Flexibility Analysis violated the Regulatory
Flexibility Act. One respondent further objected that the findings lack
the level of quality that would permit their dissemination and use as
the basis of the policy that GSA, DoD, and NASA are proposing to set
through this rulemaking, as required by section 515 of the Data Quality
Act (Pub. L. 106-554). One respondent criticized GSA, DoD, and NASA for
failing to certify that the rule would not have a substantial adverse
economic impact on a significant number of small entities.
Some respondents took issue with the statement in the Federal
Register preamble to the proposed rule that this rule is not expected
to have a significant impact on a substantial number of small entities.
These respondents pointed out that many small entities perform work as
subcontractors on projects whose total cost exceeds $25 million. One
respondent cited comments of individual prime contractors that have
performed contracts in the $25 million plus range as to the percentage
of awards to small business subcontractors, the majority of whom are
non-union. This respondent cited a particular example in which a prime
contractor subcontracted to small businesses more than 50 percent of
the dollar value of prime construction contracts that exceed $25
million. The respondent stated that these numbers are typical of many
other association members.
Many respondents stated that the rule will have a substantial
harmful economic impact. Specifically, they stated that:
The impact on all subcontracts on such projects, no matter
how small, will be harmful due primarily to discrimination against non-
union subcontractors and increased costs.
The project labor agreement will increase the costs of the
small non-union subcontractor by at least 25 percent or more.
The project labor agreement requirement will impact ``even
small employers who will likely have no labor relations staff who can
navigate a project labor agreement.''
Small businesses will be put out of business because they
will not be able to afford the costs associated with this rule.
Use of project labor agreements will make it more
difficult for small non-union businesses to compete.
Response: Consistent with the requirements of the Regulatory
Flexibility Act, GSA, DoD, and NASA are committed to performing
analyses and identifying alternatives, whenever feasible, to mitigate
the impact of acquisition rules on small businesses and regularly work
with the Small Business Administration to this end. As explained below,
GSA, DoD, and NASA believe that amendments made to the final rule allow
agencies to fashion requirements as appropriate to meet their
procurement needs and ameliorate concerns about the impact of a project
labor agreement on particular contractors and subcontractors, including
small businesses.
GSA, DoD, and NASA do not certify that a rule will not have a
significant
[[Page 19176]]
economic impact on a substantial number of small entities until after
receipt and analysis of public comments on a rule.
GSA, DoD, and NASA did not perform an Initial Regulatory
Flexibility Analysis on this rule, because GSA, DoD, and NASA did not
expect that the rule would have a significant economic impact on a
substantial number of small entities for the reasons stated in the
Federal Register preamble to the proposed rule, namely that the rule is
discretionary in nature and the its application is tied to large scale
construction projects over $25 million that are likely to be performed
by large businesses. It is only the prime contractor that negotiates
the project labor agreement and submits the project labor agreement to
the Government.
The Data Quality Act is more commonly applied to significant
information disseminated by Government agencies such as statistical
information (e.g., National Weather Service or Bureau of Labor
Statistics); information about health, safety, and environmental risks
that they collect from regulated entities; or findings of scientific
research or technical information that Government agencies create or
obtain in the course of developing regulations, often involving
scientific, engineering, and economic analysis (for example, an
analysis of the risk to health to support a change to clean air or
water standards). Although neither the law nor the OMB Guidance are
limited to ``important'' information, the OMB guidance states that the
more important the information, the higher the quality standards to
which it should be held. The OMB Guidance also states that agencies
should apply the guidelines in a ``common-sense and workable'' manner.
In this case, the information provided was not the basis for the
proposed rule (which is based on the E.O.), but was only used in the
decision of whether to prepare and submit an Initial Regulatory
Flexibility Analysis.
As stated in the preamble to the proposed rule, according to the
Federal Procurement Data System, in FY 2008 300 large-scale
construction contracts, totaling $31,685,574,596 were awarded. Of
these, 17 were made to small businesses, totaling $591,269,508 (average
of $34,780,558 per contract). The small business size standard for
general building and heavy construction contractors is $33.5 million.
Most prime contractors for such projects are large businesses, but the
majority of the subcontractors under these large-scale contracts will
be small businesses. Since the publication of the proposed rule, GSA,
DoD, and NASA have updated averages, to include FY 2009 information:
The 2 year average is a total of 246 contracts per year, with 14 of the
prime contractors being small businesses. However, GSA, DoD, and NASA
continue to maintain the estimate made in the proposed rule of about 30
project labor agreements per year (that would now be 12.2 percent of
all large-scale construction contracts).
The impact on non-union small businesses is not likely to be as
much as feared by many of the respondents. GSA, DoD, and NASA reviewed
a major project by the Massachusetts Water Resource Authority, which
used a project labor agreement. Of the 257 subcontractors, 102 were
reportedly open shop subcontractors (nearly 40 percent).
The rule clearly states that all contractors and subcontractors
must be allowed to compete for contracts and subcontracts without
regard to whether they are otherwise parties to collective bargaining
agreements. It is not up to the small business subcontractor to
negotiate a project labor agreement; it only needs to sign on to the
project labor agreement negotiated by the prime contractors. When a
prime contractor makes an offer to perform work on a fixed-price
construction contract, the contractor includes amounts to cover the
costs it expects to incur, including anticipated costs of complying
with project labor agreement requirements, plus profit in its offered
price. Subcontractors also include their anticipated costs in their
offered price. The anticipated costs, therefore, would be included in
the payment by the Government of the prime contract fixed price.
GSA, DoD, and NASA cannot determine in the abstract what the
effects of a particular project labor agreement will be on all the
affected parties. However, GSA, DoD, and NASA have amended the final
rule to permit agencies to include requirements as the agency deems
necessary to satisfy its procurement needs. GSA, DoD, and NASA have
also clarified that an agency may specify the terms and conditions of
the project labor agreement, as appropriate to advance economy and
efficiency. These flexibilities, which are consistent with the
discretion anticipated in the E.O. ensure that agencies will have the
opportunity to bring their relevant experiences to bear on
circumstances particular to a project and take appropriate steps to
ameliorate impact on contractors and subcontractors, including small
businesses.
2. Suggested remedies.
Comment: One respondent recommended that the final rule establish a
threshold below which any qualified bidder can participate, regardless
of the bidder's agreement, or lack of agreement, to a project labor
agreement. Many respondents requested that the proposed rule should be
rescinded so that a regulatory flexibility analysis can be performed.
Response: The project labor agreement requires all construction
subcontractors to follow the same rules; it would defeat the purpose of
the project labor agreement to exempt subcontractors below a given
threshold.
It is not necessary to rescind the proposed rule, because GSA, DoD,
and NASA do not believe this final rule will have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act based on the responses
provided above.
3. Request for separate submission from small entities.
Comments: One respondent was under the impression that the Federal
Register preamble to the proposed rule required filing of separate
comments with regard to Regulatory Flexibility Analysis. The respondent
stated that there is no basis for the requirement to file such comments
separately and objected to this process.
Another respondent raised the same issues as the other respondent,
and also stated that GSA, DoD, and NASA are obliged to consider
comments from all entities, not just small entities; and assumed that
the reference to section 5 U.S.C. 610 must be in error.
Response: The statement that GSA, DoD, and NASA will consider
comments from small entities on affected subparts in accordance with 5
U.S.C. 610 was not intended to affect the response by entities with
regard to the impact of this particular rule on small entities. 5
U.S.C. 610 addresses the periodic review of existing rules. The intent
of the Federal Register statement was to gather separate information
from small entities with regard to the impact on small businesses of
any existing regulations in parts 2, 17, 22, 36, and 52--i.e., not the
current proposed rule. This request was supposed to be separate from,
and in addition to, the request for comments on the regulatory
flexibility impact of the proposed rule.
F. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant
[[Page 19177]]
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The
rule clearly states that all contractors and subcontractors must be
allowed to compete for contracts and subcontracts without regard to
whether they are otherwise parties to collective bargaining agreements.
It is not up to the small business subcontractor to negotiate a project
labor agreement; it only needs to sign on to the project labor
agreement negotiated by the prime contractor. Also, as explained in the
Regulatory Flexibility Analysis section, above, when a prime contractor
makes an offer to perform work on a fixed-price construction contract,
the contractor includes amounts to cover the costs it expects to incur,
including anticipated costs of complying with project labor agreement
requirements, plus profit in its offered price. Subcontractors also
include their anticipated costs in their offered price. The anticipated
costs, therefore, would be included in the payment by the Government of
the prime contract fixed price.
GSA, DoD, and NASA cannot determine in the abstract what the
effects of a particular project labor agreement will be on all the
affected parties, but have sought to structure the rule to maximize an
agency's ability to use its discretion to identify when using project
labor agreements promotes economy and efficiency. Such circumstances
should typically benefit both the Government and contractors, such as
by providing mechanisms for labor-management cooperation on matters of
mutual interest and concern, including productivity, quality of work,
safety, and health, and setting forth effective, prompt, and mutually
binding procedures for resolving labor disputes arising during the
project labor agreement.
G. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
final rule contains information collection requirements. Accordingly,
the Regulatory Secretariat received the preapproval for a new
information collection, OMB Control No. 9000-0175, concerning use of
project labor agreements for Federal construction projects, to the
Office of Management and Budget under 44 U.S.C. Chapter 35, et seq.
Public comments concerning this request were invited through a
subsequent Federal Register notice that was published in the Federal
Register at 75 FR 13765, March 23, 2010.
Comments on the proposed information collection requirement:
One respondent stated that the data is largely arbitrary and
capricious and should not be relied upon for any presumed target for
expected use of project labor agreements. The respondent expressed the
following concerns:
1. The estimate may be used by the Government or outside
organizations to establish benchmarks or unsupportable goals for the
use of project labor agreements.
2. The estimate appears to be unrealistically low, not based on
valid assumptions and methodology.
However, the respondent acknowledges that the collection of the
project labor agreements is necessary to determine whether the
contractor has achieved the required project labor agreement as stated
in the draft solicitation provisions.
Another respondent questioned the estimate that only 10 percent of
contracts that meet or exceed the $25M threshold will be determined to
be appropriate for a project labor agreement. According to the
respondent, every contract exceeding $25M might in fact be covered.
Response: The initial estimates for a new information collection
requirement are of necessity just that--estimates. They are based on
the best information available, but must rely on the recommendations of
Government experts. These numbers are never used to establish
benchmarks or goals.
More specifically, with regard to the number of hours per response,
not every burden is an information collection requirement. The time
associated with negotiating a project labor agreement is a direct
result of the E.O., but it is not an information collection
requirement. The only information collection requirement imposed by
this rule is the requirement to provide a copy of the project labor
agreement to the contracting officer. The Federal Register preamble to
the proposed rule specifically stated that the estimated response time
of one hour covered only the time that it would take to submit the
information to the Government.
With regard to the number of respondents, we expect that better
information will become available through the information that OMB is
collecting from the agencies on the use of project labor agreements.
Therefore, GSA, DoD, and NASA have changed the estimated burden
hours associated with this information collection requirement, to
account for the addition of the new option allowing agencies to require
submission of the project labor agreement by all bidders with the
offer.
List of Subjects in 48 CFR Parts 2, 7, 17, 22, and 52
Government procurement.
Dated: April 2, 2010.
Al Matera,
Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 7, 17, 22, and 52
as set forth below:
0
1. The authority citation for 48 CFR parts 2, 7, 17, 22, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2.101 [Amended]
0
2. Amend section 2.101 in paragraph (b)(2) in the third sentence of the
definition ``Construction'' by removing the words ``personal property''
and adding ``personal property (except that for use in subpart 22.5,
see the definition at 22.502)'' in its place.
PART 7--ACQUISITION PLANNING
0
3. Amend section 7.103 by redesignating paragraph (v) as paragraph (w),
and adding a new paragraph (v) to read as follows:
7.103 Agency-head responsibilities.
* * * * *
(v) Encouraging agency planners to consider the use of a project
labor agreement (see subpart 22.5).
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
0
4. Amend section 17.603 by adding paragraph (c) to read as follows:
17.603 Limitations.
* * * * *
(c) For use of project labor agreements, see subpart 22.5.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
0
5. Amend section 22.101-1 by revising paragraph (b) to read as follows:
22.101-1 General.
* * * * *
(b)(1) Agencies shall remain impartial concerning any dispute
between labor and contractor management and not undertake the
conciliation, mediation, or arbitration of a labor dispute. To the
extent practicable, agencies should
[[Page 19178]]
ensure that the parties to the dispute use all available methods for
resolving the dispute, including the services of the National Labor
Relations Board, Federal Mediation and Conciliation Service, the
National Mediation Board and other appropriate Federal, State, local,
or private agencies.
(2) For use of project labor agreements, see subpart 22.5.
* * * * *
0
6. Add subpart 22.5, consisting of sections 22.501 through 22.505, to
read as follows:
Subpart 22.5--Use of Project Labor Agreements for Federal
Construction Projects
Sec.
22.501 Scope of subpart.
22.502 Definitions.
22.503 Policy.
22.504 General requirements for project labor agreements.
22.505 Solicitation provision and contract clause.
Subpart 22.5--Use of Project Labor Agreements for Federal
Construction Projects
22.501 Scope of subpart.
This subpart prescribes policies and procedures to implement
Executive Order 13502, February 6, 2009.
22.502 Definitions.
As used in this subpart--
Construction means construction, rehabilitation, alteration,
conversion, extension, repair, or improvement of buildings, highways,
or other real property.
Labor organization means a labor organization as defined in 29
U.S.C. 152(5).
Large-scale construction project means a construction project where
the total cost to the Federal Government is $25 million or more.
Project labor agreement means 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).
22.503 Policy.
(a) Project labor agreements are a tool that agencies may use to
promote economy and efficiency in Federal procurement. Pursuant to
Executive Order 13502, agencies are encouraged to consider requiring
the use of project labor agreements in connection with large-scale
construction projects.
(b) An agency may, if appropriate, require that every contractor
and subcontractor engaged in construction on the project agree, for
that project, to negotiate or become a party to a project labor
agreement with one or more labor organizations if the agency decides
that the use of project labor agreements will--
(1) Advance the Federal Government's interest in achieving economy
and efficiency in Federal procurement, producing labor-management
stability, and ensuring compliance with laws and regulations governing
safety and health, equal employment opportunity, labor and employment
standards, and other matters; and
(2) Be consistent with law.
(c) Agencies may also consider the following factors in deciding
whether the use of a project labor agreement is appropriate for the
construction project:
(1) The project will require multiple construction contractors and/
or subcontractors employing workers in multiple crafts or trades.
(2) There is a shortage of skilled labor in the region in which the
construction project will be sited.
(3) Completion of the project will require an extended period of
time.
(4) Project labor agreements have been used on comparable projects
undertaken by Federal, State, municipal, or private entities in the
geographic area of the project.
(5) A project labor agreement will promote the agency's long term
program interests, such as facilitating the training of a skilled
workforce to meet the agency's future construction needs.
(6) Any other factors that the agency decides are appropriate.
22.504 General requirements for project labor agreements.
(a) General. Project labor agreements established under this
subpart shall fully conform to all statutes, regulations, and Executive
orders.
(b) Requirements. The 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) Terms and conditions. As appropriate to advance economy and
efficiency in the procurement, an agency may specify the terms and
conditions of the project labor agreement in the solicitation and
require the successful offeror to become a party to a project labor
agreement containing these terms and conditions as a condition of
receiving a contract award. An agency may seek the views of, confer
with, and exchange information with prospective bidders and union
representatives as part of the agency's effort to identify appropriate
terms and conditions of a project labor agreement for a particular
construction project and facilitate agreement on those terms and
conditions.
22.505 Solicitation provision and contract clause.
For acquisition of large-scale construction projects, if the agency
decides pursuant to this subpart that a project labor agreement will be
required, the contracting officer shall--
(a) Insert the provision at 52.222-33, Notice of Requirement for
Project Labor Agreement, in all solicitations associated with the
construction project.
(1) Use the provision with its Alternate I if the agency decides to
require the submission of a project labor agreement from only the
apparent successful offeror, prior to contract award.
(2) Use the provision with its Alternate II if an agency allows
submission of a project labor agreement after contract award.
(b)(1) Insert the clause at 52.222-34, Project Labor Agreement, in
all solicitations and contracts associated with the construction
project.
(2) Use the clause with its Alternate I if an agency allows
submission of the project labor agreement after contract award.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
7. Add sections 52.222-33 and 52.222-34 to read as follows:
52.222-33 Notice of Requirement for Project Labor Agreement.
As prescribed in 22.505(a)(1), insert the following provision:
NOTICE OF REQUIREMENT FOR PROJECT LABOR AGREEMENT (May 2010)
(a) Definitions. ``Labor organization'' and ``project labor
agreement,'' as used in this provision, are defined in the
[[Page 19179]]
clause of this solicitation entitled Project Labor Agreement.
(b) Consistent with applicable law, the offeror shall negotiate a
project labor agreement with one or more labor organizations for the
term of the resulting construction contract.
(c) Consistent with applicable law, the project labor agreement
reached pursuant to this provision shall--
1) Bind the offeror and all subcontractors engaged in construction
on the construction project to comply with the project labor agreement;
(2) Allow the offeror and all 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) Fully conform to all statutes, regulations, Executive orders,
and agency requirements.
(d) Any project labor agreement reached pursuant to this provision
does not change the terms of this contract or provide for any price
adjustment by the Government.
(e) The offeror shall submit to the Contracting Officer a copy of
the project labor agreement with its offer.
(End of Provision)
Alternate I (May 2010). As prescribed in 22.505(a)(1), substitute
the following paragraphs (b) and (e) for paragraphs (b) and (e) of the
basic clause.
(b) The apparent successful offeror shall negotiate a project labor
agreement with one or more labor organizations for the term of the
resulting construction contract.
(e) The apparent successful offeror shall submit to the Contracting
Officer a copy of the project labor agreement prior to contract award.
Alternate II (May 2010). As prescribed in 22.505(a)(2), substitute
the following paragraph (b) in lieu of paragraphs (b) through (e) of
the basic clause:
(b) Consistent with applicable law, if awarded the contract, the
offeror shall negotiate a project labor agreement with one or more
labor organizations for the term of the resulting construction
contract.
52.222-34 Project Labor Agreement.
As prescribed in 22.505(b)(1), insert the following clause:
PROJECT LABOR AGREEMENT (May 2010)
(a) Definitions. As used in this clause--
Labor organization means a labor organization as defined in 29
U.S.C. 152(5).
Project labor agreement means 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).
(b) The Contractor shall maintain in a current status throughout
the life of the contract the project labor agreement entered into prior
to the award of this contract in accordance with solicitation provision
52.222-33, Notice of Requirement for Project Labor Agreement.
(c) Subcontracts. The Contractor shall include the substance of
this clause, including this paragraph (c), in all subcontracts with
subcontractors engaged in construction on the construction project.
(End of Clause)
Alternate I (May 2010). As prescribed in 22.505(b)(2), substitute
the following paragraphs (b) through (f) for paragraphs (b) and (c) of
the basic clause:
(b) Consistent with applicable law, the Contractor shall negotiate
a project labor agreement with one or more labor organizations for the
term of this construction contract. The Contractor shall submit an
executed copy of the project labor agreement to the Contracting
Officer.
(c) Consistent with applicable law, the project labor agreement
reached pursuant to this clause shall--
(1) Bind the Contractor and all subcontractors engaged in
construction on the construction project to comply with the project
labor agreement;
(2) Allow the Contractor and all 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 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) Fully conform to all statutes, regulations, Executive orders,
and agency requirements.
(d) Any project labor agreement reached pursuant to this provision
does not change the terms of this contract or provide for any price
adjustment by the Government.
(e) The Contractor shall maintain in a current status throughout
the life of the contract the project labor agreement entered into
pursuant to this clause.
(f) Subcontracts. The Contractor shall require subcontractors
engaged in construction on the construction project to agree to any
project labor agreement negotiated by the prime contractor pursuant to
this clause, and shall include the substance of paragraphs (d) through
(f) of this clause in all subcontracts with subcontractors engaged in
construction on the construction project.
[FR Doc. 2010-8118 Filed 4-12-10; 8:45 am]
BILLING CODE 6820-EP-S