Feds Could Be Barred from Requiring (or Banning) Union Agreements on Construction Projects Under FOCA Act of 2025

The Fair and Open Competition Act of 2025, or FOCA, aims to change the rules for federal construction contracts. Its main goal, outlined in Section 2, is to ensure the government stays neutral regarding contractors' labor agreements. Specifically, Section 3 prohibits federal agencies from requiring contractors to sign agreements with unions (often called Project Labor Agreements or PLAs) as a condition of winning a bid. It also prevents agencies from banning such agreements, aiming for neutrality.

Leveling the Playing Field or Tilting It?

The core of this bill is the ban on mandating or prohibiting union agreements for federal construction gigs awarded after the Act passes. Think building a new VA hospital or repairing a federal highway. Currently, agencies sometimes require PLAs, which typically set wages, work rules, and require union labor for the project. Under FOCA, agencies couldn't make that demand. They also couldn't give preference to a contractor because they have a union agreement, or discriminate against one because they don't. This applies not just to direct federal contracts but also to projects funded through federal grants or assistance. The Federal Acquisition Regulation (FAR), the big rulebook for government contracting, would need updates within 60 days to reflect these changes, according to Section 3.

More Bids, Lower Costs? That's the Pitch

Why the change? Section 2 lists the official reasons: promoting open competition, potentially lowering construction costs for taxpayers by getting more bids, expanding job opportunities (especially for small and non-union shops), and preventing discrimination based on whether a company or its workers are union-affiliated. The idea is that if non-union contractors, who might have lower labor costs, can bid without needing to sign a PLA, competition increases and prices might drop. For instance, a smaller, non-union electrical company might feel more confident bidding on a federal courthouse renovation if they don't have to adopt union work rules and pay scales for that specific job. However, it also raises questions about whether this could impact wages or established training standards often associated with union agreements.

The Fine Print: Exceptions and Unknowns

Like most laws, this one has exceptions. Section 3 allows the government to bypass these rules under "special circumstances," specifically to deal with imminent threats to public health or safety, or for national security needs. Importantly, a labor dispute cannot be cited as a special circumstance. There's also an out for projects where bid specifications requiring or prohibiting labor agreements were already in place before the Act was enacted. A potential gray area is the definition of "special circumstances" – it's not explicitly detailed, leaving room for interpretation down the line. If a contractor doesn't comply with the rules (on projects receiving federal funds), the agency head can take "appropriate action," though what that entails isn't specified.