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Exclusive: 16 GOP Governors Oppose Biden’s Executive Order Creating Monopoly On Federal Construction Contracts

Biden’s policy “will undermine taxpayer investment in billions of dollars of forthcoming public works projects,” the governors write.

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More than a dozen GOP governors wrote to President Joe Biden Tuesday signaling opposition to his executive order requiring government-mandated project labor agreements (PLAs) on taxpayer-funded construction contracts exceeding $35 million, according to a newly obtained letter.

Biden signed Executive Order 14063 in February at a Maryland union hall. PLAs are collective bargaining agreements that are project-specific and give union contractors public works contracts. Led by Govs. Bill Lee of Tennessee and Asa Hutchinson of Arkansas, the group of governors say the president is essentially giving unions a monopoly on major federal government projects.

“When mandated by government agencies, PLAs can interfere with existing union collective bargaining agreements and needlessly discourage competition from quality nonunion contractors and their employees who comprise 87.4% of the private U.S. construction industry workforce according to the U.S. Bureau of Labor Statistics,” they write, adding:

Reducing competition from some of the best union and nonunion construction firms and workers will exacerbate the construction industry’s skilled labor shortage, delay projects, and increase construction costs by estimates of 12% to 20% per project, which will result in fewer infrastructure improvements, less construction industry job creation, and higher taxes.

PLAs make contractors change out existing employees with union hiring hall workers. Since 2009, more than half of the federal government’s construction projects have been built by nonunion contractors, The Wall Street Journal reported, while the estimated 12 to 20 percent construction cost increase may result in fewer improvements to utility, affordable housing, roads, and bridges.

The White House did not immediately respond to a request for comment.

The construction industry is grappling with a skilled labor shortage of 430,000 workers, the group Associated Builders and Contracts determined in a 2021 report. The governors think Biden’s order will exacerbate this, as well as delay projects and result in less infrastructure.

“In short, the aforementioned policies will undermine taxpayer investment in billions of dollars of forthcoming public works projects financed by the Infrastructure Investments and Jobs Act of 2021 and additional bipartisan legislation passed by Congress, all of which was signed into law free from language requiring or encouraging the use of PLAs,” the governors write.

Republican governors wrote to Biden in January seeking cooperation from his administration on infrastructure implementation. The governors called on federal agencies to work with states to draft regulations and guidance that allow “maximum regulatory flexibility” to prevent “further federal overreach in order to protect economic growth.”

In 2009, then-President Barack Obama signed an executive order encouraging PLAs. The order stipulated that agencies, on a case-by-case basis, when awarding a contract costing more than $25 million or more, may “require” a PLA when it will:

Advance the Federal Government’s interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters, and be consistent with law.

It is the contention of the governors, roughly three months after their January letter, that the Biden administration must give states flexibility and avoid “costly pro-PLA policies.” A 2021 study by the Rand Corporation, a think tank that is partly funded by the U.S. government, found that a PLA mandate in Los Angeles resulted in fewer projects and spiked construction costs.

Other studies have shown similar results.

An October 2021 study authored by a former Saint Louis University professor found nonunion workers suffer around a 34 percent reduction in wages and benefits under government-enforced PLAs. A 2019 study released by the Beacon Hill Institute for Public Policy Research found that the construction of New Jersey schools built under PLAs cost roughly 16 percent more than schools built free from such restrictions.

In addition to Lee and Hutchinson, the letter sent Tuesday was signed by Ron DeSantis of Florida, Brian Kemp of Georgia, Kim Reynolds of Iowa, Tate Reeves of Mississippi, Mike Parson of Missouri, Pete Ricketts of Nebraska, Chris Sununu of New Hampshire, Doug Burgum of North Dakota, Henry McMaster of South Carolina, Kristi Noem of South Dakota, Greg Abbott of Texas, Spencer Cox of Utah, and Mark Gordon of Wyoming.

View the full letter here.