DOD No Longer Requires Project Labor Agreements for Large-Scale Federal Construction Projects: A Trend to Come?

Authors:  Jonathan S. Forester and Olivia Maynard

Contractors are no longer required to use Project Labor Agreements (“PLA”) for any Department of Defense (“DOD”) sourced federal construction projects valued at $35 million or more. This change happened in two ways:

1. Court Ruling (Jan. 19, 2025): The U.S. Court of Federal Claims ruled that mandatory PLAs were unlawful.

2. DOD Memo (Feb. 7, 2025): The DOD issued a memo stating that PLAs will no longer be required for any DOD construction projects, large or small. The memo also required agencies revise solicitations to remove the PLA requirement

I. Background

Requiring PLAs in federal construction projects is not a novel requirement, but what is novel are the conditions and requirements that change with every administration. The PLA requirement at issue here, stems from former President Biden’s Executive Order 14063 which mandated the use of PLAs for any federal construction project valued at or over $35 million dollars. For any project valued less than that, the agency was given discretion to use or not use a PLA. This was then implemented through Federal Acquisition Regulations (FAR) 22.505, 52.222-33, and 52.222-34.

Recently, in MVL USA, Inc. v. United States, the Court of Federal Claims found that requiring PLAs in all large scale federal construction projects is unlawful and contradicts existing law and statutes relative to procurement. In this case, multiple federal contractors challenged the PLA mandate for their proposal, arguing it unfairly restricted competition. The court agreed, ruling that:

  • The PLA mandate was arbitrary and capricious.
  • It violated competition laws under the Competition in Contracting Act (“CICA”) by restricting non-PLA contractors from bidding.

II. What This Means for Contractors

Even though the court found the PLA requirement to be unlawful, it does not have the authority to revoke Biden’s E.O. 14063. That power rests squarely within the executive branch. Until President Trump revokes E.O. 14063, the PLA requirement will remain in place for any federal construction project valued at $35 million or more, with the exception of any project with the DOD and its agencies.

To that end, on February 7, 2025, the DOD issued a memorandum mandating that its agencies are barred from using PLAs in any large-scale construction project and to update and revise all existing contracts accordingly. At this point, what we can definitively say is this: any contractor responding to a solicitation from a DOD agency will not be required to enter into a PLA for a federal construction project, large or small. However, contractors moving forward with a non-DOD agency should check whether the solicitation requires the use of a PLA prior to submitting their proposal.