US Defense waives PLA requirements on large-scale construction projects
12 February 2025
In a letter dated 7 February from the Office of the Under Secretary of Defense (OUSD), and signed by John Tenaglia, the US armed forces and additional departments have been ordered to remove project labor agreement (PLA) requirements on large-scale construction projects, effectively ending a Biden-era mandate that had irked non-union contractors and builders in the US.
The insignias from five of six US armed forces branches. (Image: Adobe Stock)
Tenaglia is the principal director for US Defense pricing, contracting, and acquisition policy at OUSD.
The brief memorandum was regarding a “class deviation” per the letter’s subject line and read as follows: “Effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects, implemented at Federal Acquisition Regulation (FAR) subpart 22.5 and 36.104(c). Contracting officers shall amend solicitations to remove project labor agreement requirements, including any solicitation provisions and contract clauses prescribed at FAR 22.505. This class deviation remains in effect until rescinded.”
Ultimately, no construction projects undertaken by the US Department of Defense (DOD) will require the use of PLAs going forward.
Digging into the details of US DOD’s PLA decision
Jeff Shoaf, AGC
Specifically, the memo releases companies from meeting PLA requirements (often including prevailing wage demands) on military construction solicitations.
It also frees 12 projects that were ongoing but subject to a bid protest over PLAs in the contracts. The bid protest was organised by US-based contractors’ trade association Associated General Contractors of America (AGC).
AGC CEO Jeffrey Shoaf said, “Our association’s novel bid protest approach was designed to block the unlawful mandating of project labor agreements on all federal construction projects valued at US$35 million or more.”
The movement already gained considerable traction last month when a US Court of Federal Claims judge ruled the Biden-era PLA mandate was unlawful.
“While last month’s ruling… made it clear that former President Biden’s executive order mandating the use of such agreements was unlawful, there was some doubt whether federal officials would come to the same conclusion,” continued Shoaf. “The announcement that the US Department of Defense will drop project labor agreement mandates from its military construction solicitations is a clear sign that our approach is working.
“We expect all federal agencies involved in procuring construction services to follow suit and drop what is clearly an unlawful mandate from their construction solicitations.”
What does this mean for US construction?
The US Pentagon office building, which is the headquarters for the Department of Defense. (Image: Adobe Stock)
The announcement is sure to solicit additional praise from the largely non-union US construction industry; as of 2025, a record-high 89.7% of American construction workers are not union members.
While aggressive trade and immigration policy from the Trump administration has caused some whiplash in the president’s first month in office, the news on PLAs is sure to bolster optimism within a large swathe of the US building workforce.
While PLA mandates have come and gone over the years with incoming and outgoing presidents, unique to the last two decades was a minimum threshold for mandated PLAs in federal construction contracts. President Barack Obama administered a $25 million threshold in 2009, while the Biden-era PLA threshold was set at $35 million.
Critics of the PLA mandate said the thresholds were considerably low and effectively forced smaller projects (like schools or civic construction schemes) into an environment of burdensome regulation that increased costs.
Construction trade organisation the Associated Builders and Contractors said of PLAs, “Anti-competitive and costly PLAs are schemes that end open, fair and competitive bidding on public works projects.
“By preventing more efficient, effective local businesses from bidding on contracts to build roads, bridges, schools and other structures, simply because they are unable to abide by the problematic and inflationary terms of the PLA, that guarantees that taxpayers pay 12% to 20% more and the local community benefits less.”
However, the US Court of Federal Claims decision is not legally binding, nor is the DOD’s memorandum of deviation. As such, critics of mandated PLAs remain in pursuit of ending the Biden-era PLA mandate.
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