Federal Construction Projects Must Go Neutral: New Rule Bans Mandating or Banning Union Deals

The Fair and Open Competition Act (FOCA) aims to fundamentally change how the federal government handles construction projects. Simply put, this bill mandates that the government—and anyone receiving federal construction money—must stay completely neutral on the issue of labor unions when awarding contracts. That means no agency can require a contractor to sign a union agreement, like a Project Labor Agreement (PLA), but they also can’t prohibit a contractor from doing so either (SEC. 2).

This policy is designed to promote open competition and, theoretically, lower costs for taxpayers by widening the pool of eligible bidders. Within 60 days of enactment, all federal acquisition rules must be updated to reflect this new neutrality (SEC. 3).

The End of Mandated PLAs

For years, federal agencies have sometimes required contractors on large projects to sign Project Labor Agreements (PLAs), which set terms and conditions for union labor. FOCA cuts this off entirely. If the government is paying for a bridge, a military base expansion, or even a local community center renovation funded by a federal grant, the agency cannot include any language in the bid specifications that favors or disfavors contractors based on their union status (SEC. 3).

Think of a general contractor in a medium-sized city. Under the current system, they might be forced to unionize their workforce for a specific federal project, even if they usually operate non-union. FOCA removes that pressure. This is a win for non-union contractors and could significantly increase the competition for federal dollars, potentially driving down the final price tag for projects like highway repairs or new government buildings. However, this change is a direct hit to organized labor, which relies on PLAs to ensure fair wages, benefits, and training standards across major public works projects.

The 'Special Circumstances' Escape Clause

While the rule is strict, the bill does include a few ways an agency head can grant an exemption. The first is if a project is already underway and had specific union requirements in place before FOCA became law—those projects get grandfathered in (SEC. 3).

The second, and more complicated, exemption is for “special circumstances.” An agency head can waive the neutrality requirement if it’s necessary to protect national security or address an immediate threat to public health or safety. But here’s the catch: they explicitly cannot use a labor dispute involving non-unionized workers as the justification for claiming these special circumstances (SEC. 3).

This “special circumstances” language is the bill’s most vague point. While it’s intended for true emergencies—like needing to quickly rebuild a critical piece of infrastructure after a natural disaster—it gives significant discretionary power to agency heads. This power could be interpreted broadly, potentially creating loopholes that undermine the bill’s goal of universal neutrality. It’s the kind of provision that requires careful watch, as a broad interpretation could allow agencies to bypass the new rules for reasons that aren't truly about immediate public safety.