Project Labor Agreements (PLAs) have been controversial in the construction industry. On January 21, 2025, the United States Court of Federal Claims issued a ruling in MVL USA, Inc. et al. v. The United States that found that PLAs violate the Competition in Contracting Act (CICA). The court’s ruling is a major victory for construction contractors who have long argued that PLAs are anti-competitive. The ruling resulted from multiple consolidated bid protests that challenged the legality of mandatory PLAs in federal construction contracts, specifically as mandated by Executive Order 14063 and implemented through Federal Acquisition Regulation (FAR) provisions.
Although the decision only applies to the solicitations that were the subject of the bid protest, it is also possible that the Trump Administration will repeal the executive order that gave rise to the protest. In the meantime, it is likely that a bid protest on any pending or future solicitation that contains a PLA requirement will be sustained.
Opponents of PLAs argue that they stifle competition and discriminate against non-union contractors. In MVL, the court agreed with opponents and found that PLAs violate CICA because they “stifle competition.” The court noted that PLAs “disqualify otherwise responsible offerors who do not enter into a PLA with a labor union.” The court also found that PLAs are “not evaluation criteria, but an exclusionary policy unlawfully restricting full and open competition.”
The court found that the agencies acted arbitrarily by including a PLA mandate, disregarding their market research, which showed that a PLA would increase costs and decrease competition. The decision to disregard prior market surveys “runs counter to the evidence before the agency.” In addition, the court found that the exceptions in the regulations are rendered meaningless by the agency’s inaction. The court noted that agencies look only to “studies supporting the use of PLAs” cited by Biden’s executive order and the FAR Council, rather than tailoring their decisions to the market data evidence for each specific project specification.
This ruling is a major victory for construction contractors who have long argued that PLAs are anti-competitive. The ruling is likely to significantly impact the construction industry and is expected to lead to an increase in competition for federal construction projects.
It is also expected to lead to lower costs for federal construction projects. The court acknowledged that because the procurements are still ongoing, the agencies should be allowed to reassess their PLA decisions individually.
