If you have ever worked on a government contract or known somebody who has worked as a general contractor for the federal government then you have likely heard of a Project Labor Agreement (PLA) and what you’ve heard probably isn’t all that enticing. These agreements are about as popular among contractors as global warming is to polar bears (sorry polar bears). Basically, they’re not all that popular and with the recent ruling in Sheet Metal Workers Int’l Ass’n Local Union No.27 v. E.P. Donnelly, Inc. they’re not getting any better.
What is a PLA?
PLA’s are a collective bargaining agreement between a general contractor and the federal government over a publicly funded project. Through the PLA the two parties are able to establish the terms and conditions of employment, which the federal government hopes will lead to more projects being completed and better wages for contractors. Fair wages and a never-ending supply of public projects seems like a veritable gold mine for general contractor’s who can get the job done. But, these benefits do not outweigh the cons for many contractors.
How do they affect contractors?
Though the government has insisted that PLA’s will improve the economy and efficiency of a project there is no concrete evidence that supports that claim. There is however, quite a bit of evidence that suggests PLA’s could be damaging your ability to compete for public projects. Project Labor Agreements require unionized contractors. So, if you’re like most contractors (80% to be exact) then you will be unable to compete for that public project effectively locking non-union workers out of the market.
Those contractors that have unionized will have the opportunity to compete and complete public projects. But, the potential headaches such an agreement may result in fewer bids for federal projects. With the recent ruling in Sheet Metal Workers Int’l Ass’n Local Union No. 27 v. E.P. Donnelly, Inc. contractors should be wary of their subcontractors. According to the ruling, general contractors could be found liable for the actions of their subcontractors if those actions in any way violate the conditions of the project labor agreement.
Having your subcontractor sign the PLA will not be enough for you to avoid potential litigation. Try to be pre-emptive (not overbearingly so but enough where you are prepared for the worst) and obtain all of the proper representations and warranties from your subcontractors. By taking these steps you can adequately protect yourself from what can be a litigious nightmare. If you are a non-unionized contractor check out the Association of General Contractor’s page for what you can do to fight this legislation.