Project labor agreements put trained union carpenters to work on the projects communities count on.
The Rule. The Exceptions. The Court Record. All in One Place.
Are PLAs required on federal projects? Yes. Under current federal rules, every federal construction contract valued at $35 million or more must include a project labor agreement unless the contracting agency grants a documented exception. The requirement comes from Executive Order 14063 and the Federal Acquisition Regulation that implements it, and it remains in effect after multiple court challenges. Here is how the rule works, where the exceptions are and what it means for the agencies, contractors and workers who build federal projects.
The Rule in Plain Terms
FAR subpart 22.5 directs federal agencies to require a PLA on any large-scale construction project, defined as a federal construction contract with an estimated cost to the government of $35 million or more. Every contractor and subcontractor performing construction on the project must agree to negotiate or become party to the PLA. The regulation took effect for solicitations issued on or after Jan. 22, 2024. Agencies also keep the discretion to use PLAs on smaller projects when they judge it appropriate.
What Executive Order 14063 Says
The rule traces to Executive Order 14063, signed Feb. 4, 2022. The order found that PLAs promote economy and efficiency in federal procurement by preventing labor disputes, standardizing work rules across trades and securing a steady supply of skilled labor on complex projects. It replaced a 2009 order that encouraged but did not require PLAs, and it directed the FAR Council to write binding rules. The order also lists the terms every qualifying PLA must include:
- Bind every contractor and subcontractor on the project through the bid specifications
- Allow all contractors and subcontractors to compete regardless of whether they hold other union agreements
- Guarantee against strikes, lockouts and similar job disruptions
- Set out prompt and mutually binding procedures for resolving labor disputes
- Provide mechanisms for labor-management cooperation on productivity, quality, safety and health
The Exceptions
The mandate is not absolute. A senior agency official may grant an exception for a specific project when requiring a PLA would not advance the government’s interest in economy and efficiency, when market research shows it would substantially reduce the number of potential bidders, or when it would conflict with other law. Exceptions must be documented and reported. In June 2025 the White House Office of Management and Budget reaffirmed that agencies should use PLAs when practicable and cost effective and that blanket agency-wide waivers are not permitted.
What the Courts Have Said
Opponents have challenged the rule in several courts. In January 2025 the Court of Federal Claims held that agencies must assess a PLA’s effect on competition for the specific solicitations before it, a ruling limited to those projects. The broader challenge has not succeeded. In April 2026 the U.S. Court of Appeals for the Eleventh Circuit affirmed the denial of a nationwide injunction, leaving the mandate fully in effect while the underlying case continues. The court noted that the order’s built-in exceptions preserve open competition and that presidents of both parties have used executive authority to set PLA policy on federal work.
What It Means on the Ground
For contractors, a PLA requirement is a bid condition, not a barrier. Union and nonunion firms alike bid on covered projects and agree to the PLA’s terms for that job. For agencies, the rule delivers schedule certainty on the largest and most complex projects in the federal portfolio: military installations, courthouses, laboratories and water infrastructure. For workers, it means collectively bargained wages, benefits and safety standards on every covered site. The Eastern Atlantic States Regional Council of Carpenters and its 42,000 members build federal projects across Delaware, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia under exactly these terms. The peer-reviewed research behind the policy is summarized in this site’s answer to do PLAs increase costs.
Frequently Asked Questions
What is the dollar threshold for a federal PLA requirement?
$35 million or more in estimated construction cost to the federal government.
Does the requirement apply to federally funded state and local projects?
No. FAR subpart 22.5 applies to direct federal construction contracts. Federally assisted state and local projects follow their own rules, though funding agencies may encourage PLAs.
Can an agency skip the PLA requirement?
Yes, through a documented exception granted by a senior agency official for a specific project. Blanket waivers are not permitted.
Can nonunion contractors bid on federal PLA projects?
Yes. The executive order requires every qualifying PLA to let all contractors compete regardless of whether they hold other union agreements.
Is Executive Order 14063 still in effect?
Yes. The Office of Management and Budget reaffirmed it in 2025, and a federal appeals court declined to block it in April 2026.
What must a federal PLA include?
Guarantees against strikes and lockouts, binding dispute resolution, labor-management cooperation on safety and quality, and terms that bind every contractor on the project.
Do PLAs on federal projects raise costs?
No. Peer-reviewed research finds no statistically significant cost increase from PLAs once project size and complexity are taken into account.
Can an agency use a PLA on a project under $35 million?
Yes. The threshold sets the mandate. Agencies keep discretion to use PLAs on smaller projects.
Who negotiates a federal PLA?
The awarded contractor negotiates the agreement with the appropriate building trades unions, or the agency may negotiate one in advance, subject to the executive order’s required terms.
For workers, a PLA means collectively bargained wages, benefits and safety standards on every covered site.
