Project Labor Agreements

Project labor agreements are one form of "prehire" collective bargaining agreements between contractors, or owners on behalf of contractors, and labor unions in the construction industry. Project labor agreements are also known as prehire agreements because they can be negotiated before employees vote on union representation or before the contractor hires any workers. This report provides information on the use of such agreements on federal construction contracts and related matters. The request largely resulted from a June 1997 Presidential Memorandum that encourages federal agencies to use these types of collective bargaining agreements in their construction contracts valued at more than $5 million and requires agencies to establish procedures and criteria for project labor agreement use within 120 days. This report summarizes information on (1) the number of federal construction and other projects for which project labor agreements were used and the extent to which such agreements have been used on projects sponsored by nonfederal organizations, including public projects with some federal funding; (2) the procedures and criteria for using project labor agreements established by federal agencies, as required by the Presidential Memorandum; (3) federal agency procedures established to comply with a congressional letter to federal agencies requesting that they notify Congress of the planned use of project labor agreements; and (4) the feasibility of comparing contractors' performance under federal construction contracts with and without project labor agreements.

GAO noted that: (1) the total number of PLAs in use is unknown because there is no complete or comprehensive database on the use of PLAs in the public or private sectors; (2) union and industry organizations maintain data on certain PLAs that they negotiated at the national level, but there were no comparable data on ad hoc PLAs negotiated between contractors and unions at the local level; (3) four of the 13 federal agencies GAO reviewed have construction projects covered by 26 PLAs that it could identify; (4) the four agencies are the Department of Energy (DOE), the Department of Defense (DOD), the Tennessee Valley Authority (TVA), and the National Aeronautics and Space Administration (NASA); (5) however, officials at 11 of the 13 agencies, including DOD and NASA, said PLAs could be used on agency construction projects without their knowledge because such agreements are generally made between contractors and unions; and collective bargaining matters are not required to be reported to the government; (6) available literature and union data show that PLAs exist on numerous other public and private construction projects and on other public projects with some federal funding; (7) also, labor experts and union officials say that the private sector is the biggest user of PLAs; (8) six of the 13 federal agencies GAO reviewed had issued various levels of guidance for PLA use as required by the Presidential Memorandum; (9) however, none specifically provided for notifying the Subcommittee on Oversight and Investigations of any planned use of PlAs; (10) recently, the Office of Management and Budget (OMB) assumed responsibility for assisting the agencies in developing procedures and criteria for use of PLAs; (11) although OMB's draft procedures and criteria for implementing the Presidential Memorandum do not specifically refer to the Subcommittee's request to be notified by agencies planning to use a PLA, the draft would require the collection of the type of information requested by the Subcommittee; (12) according to OMB, it included this provision so that agencies could comply with the request; (13) PLA proponents and opponents that GAO contacted said they believe contract performance comparisons between federal construction projects with PLAs and those without PLAs would be difficult; (14) this is primarily because they believe it would be difficult to find projects similar enough to compare; and (15) in addition, GAO believes that even if similar PLA and non-PLA projects were found, it would be difficult to demonstrate conclusively that any performance differences were due to the use of the PLA versus other factors.