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Construction Program Guide

Project Labor Agreement

A project labor agreement (PLA) 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. For highway projects, PLAs are typically negotiated between a State department of transportation, or another relevant contracting agency, and an appropriate labor organization (such as an area or state building and construction trades councils and relevant local unions). As a condition of being awarded a contract, the contractor must sign the negotiated PLA with the relevant union organizations.

On February 6, 2009 President Obama signed an Executive Order 13502 titled "Use of Project Labor Agreement for Federal Construction Projects." This Executive Order encourages executive agencies to consider requiring the use of PLAs on large-scale direct Federal construction projects (defined as a project with a total cost of $25 million or more). Specifically, section 3 allows agencies to require the use of a PLA in Federal contracts where such use 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." By its terms, section 3 applies only to Federal procurement, not contracts awarded under Federal financial assistance programs. With respect to projects receiving Federal financial assistance, section 5 provides, "This order does not require an agency to use a project labor agreement on any construction project, nor does it preclude the use of a project labor agreement in circumstances not covered by the order, including leasehold arrangements and projects receiving Federal financial assistance."

Executive Order 13502 revokes Executive Order 13202 of February 17, 2001, and Executive Order 13208 of April 6, 2001, and directs agencies, to the extent permitted by law to revoke any orders, rules or regulations implementing the two Executive Orders.

On February 4, 2022, President Biden issued a new Executive Order on Use of Project Labor Agreements (PLAs) for Federal Construction Projects. The 2010 Interim Guidance on the use of PLAs remains valid.

On February 11, 2022, the FHWA published a notice in the Federal Register announcing that the Enhancing Workforce Development Opportunities (EHWDO) contracting initiative concerning the use of local or other geographic or economic hiring preferences is being transitioned to Section 25019(a) of the Bipartisan Infrastructure Law (BIL). This applies to all Federal-aid highway projects, including those where such preferences are included as part of a PLA.  BIL Section 25019(a) authorizes state and local agencies to implement a local or other geographical or economic hiring preference for labor on construction projects funded with funds under Title 23 or 49 USC.  For more information, please see the Federal Register notice.

Authority/Legal Basis

  • None
  • Interim Guidance on the use of Project Labor Agreements (05/07/2010) (Note: FHWA Division Offices should forward a copy of the State's justification and the PLA to Patrick C. Smith (HCC-30) and Jim DeSanto (HICP-20) for review. A final determination regarding the use of a PLA on a specific project will be provided to the FHWA Division Office.)


General Information
  • None
Updated: 02/10/2022
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