On July 10, the Office of Management and Budget (OMB) sent a memorandum (pdf) to the heads of executive departments and agencies encouraging the use of Project Labor Agreements (PLAs) until a final rule implementing President Obama’s Executive Order on this subject is implemented. On February 6 of this year, Obama issued Executive Order (EO) 13502: Use of Project Labor Agreements for Federal Construction Projects (pdf), which declared it the policy of the federal government “to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects . . .” Specifically, the EO stated, in pertinent part:

In awarding any contract in connection with a large-scale construction project, or obligating funds pursuant to such a contract, 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.

In addition to promoting the use of PLAs, this EO revoked the prior executive order and its implementing regulation issued during the Bush Administration that prohibited the government from requiring PLAs for construction projects. Pursuant to this end, Obama’s EO directs the Federal Acquisition Regulatory (FAR) Council to “take whatever action is required” to rescind the Bush-era PLA regulation and implement the provisions of new EO.

The OMB memorandum notes that the FAR has already submitted notices for publication in the Federal Register which repeal the rule implementing the Bush Administration EO, and requests public comment on a new rule to implement EO 13502. Until a final rule is in place, the OMB memorandum states that “agencies are encouraged, during this interim period prior to the FAR Council's issuance of its final rule, to consider the value of PLAs on a project-by-project basis, and to require the use of PLAs in appropriate circumstances and to the extent permitted by law.” In addition, the memorandum directs agencies to submit quarterly reports identifying all contracts awarded in connection with large-scale construction projects, and for each indicate whether a PLA was required, and what were the considerations used in deciding whether a PLA was appropriate.