New Federal Construction Bill Bars Government from Mandating Union Agreements on Public Projects

The newly proposed Fair and Open Competition Act of 2025 (FOCA Act) is aimed squarely at changing how the federal government handles construction contracts and grants. Think of it as a major policy shift trying to enforce 'neutrality' in federal construction projects. The core of the bill, outlined in Section 3, says that if a construction project gets federal money—either through a direct contract or a grant—the government can’t require the contractor or any subcontractor to sign an agreement with a labor union (often called a Project Labor Agreement, or PLA) as a condition of getting the work. They also can’t penalize or give preference to a company just because they have, or don’t have, a union agreement in place.

The Government Gets Off the Sidelines

For contractors and companies that operate non-union or 'open shop,' this is a big deal. Currently, some federal projects can require PLAs, which effectively mandates that the job be performed by union labor and under union rules. The FOCA Act says the government needs to stay out of that negotiation entirely. For example, if you run a successful mid-sized construction firm that employs both union and non-union workers, you can now bid on any federal project without worrying that the bid specifications will force you into a union-only agreement. The stated goal here is promoting competition, cutting costs for taxpayers, and opening the door for smaller, disadvantaged businesses that might not have the resources to meet mandatory union requirements. The bill is clear: companies can still voluntarily enter into union agreements, but the government can’t make them do it.

Who Feels the Change?

This neutrality push hits two groups directly. First, non-union contractors are the clear winners. They gain access to a larger pool of federal work—think of the companies building roads, military bases, or federal office buildings—without having to change their labor structure just for that one contract. Second, organized labor and unions are the ones losing leverage. Project Labor Agreements are a key tool for unions to ensure prevailing wages and standards on public works, and this bill removes the federal government’s ability to use its funding power to mandate them. If this passes, unions will have to rely solely on private negotiation and organizing efforts, rather than federal policy, to secure these agreements on publicly funded jobs.

The 'Special Circumstances' Escape Clause

While the bill is pretty firm on neutrality, it does include a couple of escape clauses. An executive agency head can grant an exemption if there are “special circumstances” necessary to avoid an immediate danger to public health or safety, or if it’s needed for national security. This is a narrow window, but it does give agency heads some discretionary power. Crucially, the bill explicitly states that a labor dispute involving non-union workers doesn't count as a "special circumstance." There’s also an exemption for projects where the bid specifications were already set, and contracts were awarded under the old rules before the FOCA Act becomes law. This means any project launched right before enactment might still proceed under existing union agreements, providing a short transition period.