Project Labor Agreements – Twists and Turns and Remaining Uncertainty

By Jackson Moore and Sidney Wiswell

Background

As we discussed in our June 2024 alert, Project Labor Agreements – What Was Optional Is Now Mandatory, former President Biden’s Executive Order 14063 requires contractors to sign Project Labor Agreements (“PLAs”) for federal construction projects valued at $35 million or more.  The Federal Acquisition Regulation (“FAR”) requires agencies to insert certain FAR clauses into applicable prime contracts, including FAR 52.222-33 (“Notice of Requirement of Project Labor Agreement”) and FAR 52-222-34 (“Project Labor Agreement”).[1]

Several construction groups sued, seeking to overturn the PLA mandate and arguing that Executive Order 14063 conflicted with Congressional statutes, including the Competition in Contracting Act, 41 U.S.C. § 3301 (“CICA”).

However, the PLA mandate currently remains in effect, and its survival depends on the results of pending lawsuits described below.

Federal PLAs Have Survived Lawsuits and Administrative Actions 

This has been a busy year for litigation involving PLAs, as courts and agencies have issued competing rulings and memoranda. The following timeline highlights key developments.

• Jan. 21, 2025 – The Court of Federal Claims issues MVL decision.
  In MVL USA, Inc. v. United States, the Court of Federal Claims held that agencies violated CICA by including the PLA mandate in solicitations without first assessing its impact on competition. The Court blocked enforcement of the PLA requirement for the specific projects before it. However, the Court declined to issue a nationwide injunction.

• Feb. 7 & 12, 2025 – The DoD and GSA halt the use of PLAs.
  Following MVL, the Department of Defense and the General Services Administration issued memoranda halting the use of PLAs in federal construction projects and directing contracting officers to remove PLA language from solicitations and contracts. 

• May 16, 2025 – A Federal Court blocks the DoD/GSA memoranda.
  The North American Building Trades Union (“NABTU”) successfully challenged the DoD and GSA actions. The U.S. District Court for the District of Columbia issued a preliminary injunction preventing agencies from relying on the DoD and GSA memoranda. 

• June 12, 2025 – OMB reinstates the use of PLAs under revised guidance.
  The Office of Management and Budget (“OMB”) released guidance reaffirming the use of PLAs “when practicable and cost effective” and prohibiting blanket prohibitions against their use in large federal construction contracts. The OMB also clarified that PLAs should be excluded when competitive pricing cannot be achieved, such as when bids exceed the government’s estimate by 10% or more.

After the OMB’s action, both the DoD and GSA rescinded their prior memoranda, and the NABTU lawsuit was dismissed as moot. As of this writing, PLAs remain required for large federal construction projects when agencies determine their use is practicable and cost effective.

Current Court Cases Continue Challenging the PLA Mandate

Multiple lawsuits are pending that challenge the use of the PLA mandate for large federal construction projects. The Eleventh Circuit is considering the appeal of Associated Builders and Contractors Florida First v. General Services Administration, brought by a trade group that unsuccessfully sought a nationwide injunction to bar enforcement of Executive Order 14063.

Since the NABTU decision, the Trump Administration has defended the PLA mandate it earlier attempted to overturn through the GSA and DoD memoranda. In the Associated Builders appeal pending before the Eleventh Circuit, the government has defended the PLA mandate, arguing that the President has “inherent constitutional authority” to direct agencies regarding their contracting procedures and “broad and flexible authority to issue directives he regards as advancing economy and efficiency in federal procurement,” including the PLA mandate.[3]

Meanwhile, multiple federal contractors have filed bid protests in the Court of Federal Claims, citing the MVL decision and arguing that the PLA mandate violates CICA when applied to specific construction projects.[4]

On September 17, 2025, a federal construction contractor, Garney Federal-Obayashi JV, sought a permanent injunction to rescind the PLA requirement, not only for its own project under protest but nationwide. Without nationwide relief, the contractor claims that otherwise qualified contractors will be forced to comply with the PLA mandate or protest each solicitation separately. This case, and several similar pending cases, are stayed until the Court of Federal Claims decides another pre-award bid protest, styled Brasfield & Gorrie LLC v. United States, filed on July 7, 2025, and that is expected to be decided by December 15, 2025. [5]

Takeaways for Clients

In light of NABTU and the OMB’s June memorandum, construction contractors and subcontractors should expect to see PLA requirements for large federal construction projects if the contracting agency finds them to be “practicable and cost effective.” The PLA mandate in Executive Order 14063 will continue facing challenges in project-specific bid protests, given the MVL decision. Contractors and agencies should monitor the Eleventh Circuit for its decision in Associated Builders and the Court of Federal Claims for its decision in Brasfield, as each case seeks a nationwide ban on the PLA mandate for all federal construction contracts.

Government contracting clients should contact their Smith Anderson attorney for further clarifications on this issue, and the PLA mandate’s application to their project.

---

[1] See 88 FR 88708, “Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects,” Dec. 12, 2023.

[2] Associated Builders and Contractors Florida First v. General Services Administration, 11th Cir., Case No. 25-11375 (2025).

[3] Associated Builders and Contractors Florida First v. General Services Administration, 11th Cir., No. 25-11375 (2025) (Brief for Appellees at 16).

[4] Garney Federal- Obayashi JV v. United States, No. 1:25-cv-01538-RTH (Fed. Cl. filed Sept. 17, 2025); EVCON-CWC JV, LLC v. United States, No. 1:25-cv-1101 (lead case).

[5] Brasfield & Gorrie, LLC v. United States, Case. No. 1:25-cv-01140 (Fed. Cl. filed July 7, 2025).