President Obama signed Executive Order 13502 on February 6, 2009, which encourages Executive Branch agencies to consider requiring the use of project labor agreements for construction projects that will cost the federal government $25 million or more.

A project labor agreement is a construction labor agreement reached between contractors and a regional building trade council that represents all construction craft unions in a given geographic area. The agreement establishes uniform employment standards for all participants working on the construction project.

The Executive Order provides that any project labor agreement reached pursuant to the Order shall:

(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.

The Executive Order also directs the Director of OMB, in consultation with the Secretary of Labor and other officials as appropriate, to provide the President within 180 days of the order, recommendations about whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient and timely completion of such projects.

The new requirements will apply to solicitations issued on or after the effective date of the FAR regulations implementing this order, which will be issued by the FAR Council not later than 120 days from February 6, 2009.