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Acquisition Policy Memorandum 2011-3, Project Labor Agreements

July 25, 2011

To: Heads of Contracting Activity
From: Angela Billups, Ph.D. /s/
Associate Deputy Assistant Secretary for Acquisition
Senior Procurement Executive
Subject: Project Labor Agreements
Effective Date: Immediately

The purpose of this Acquisition Policy Memorandum (APM) is to require contracting officers to: complete a decision memorandum regarding the use of project labor agreements (PLAs) for construction projects where the total cost is expected to be $25 million or more; and include a copy of the decision memorandum in the contract file.   

FAR 22.502 defines a project labor agreement as a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).  Construction projects include construction, rehabilitation, alteration, conversion, extension, repair or improvement of buildings, highways, or other real property. To promote economy and efficiency in Federal procurements, Executive Order 13502, Use of Project Labor Agreements for Federal Construction Projects[1], encourages Federal agencies to consider requiring, on a project-by-project basis, the use of PLAs in connection with large-scale construction projects -- which are defined as those where the total cost[2] to the Federal Government is $25 million or more.

Contracting officers shall first consult with the cognizant HHS Program/Project Manager to determine whether or not the overall large-scale construction project should be subject to the use of PLA.  If so, the contracting officer must determine -- in concert with the Program/Project Manager, on a project-by-project basis, and based on the factors in FAR Part 22.5 -- whether or not a PLA should be used.  If a PLA is used, the contracting officer shall insert the appropriate FAR notice, solicitation provision, and contract clause, as prescribed by FAR 22.505. Since HHS is not an employer primarily engaged in the building and construction industry, HHS will neither negotiate the PLA nor will it become a signatory to a PLA.  However, HHS may specify terms and conditions of the PLA in the solicitation and require the successful offeror to become a party to a PLA containing these terms and conditions as a condition of receiving a contract award.  HHS may also request changes to the PLA that reflect HHS proprietary interests, but that do not prescribe how contractors and subcontractors handle labor relations beyond performance of the specific construction project involved.  If a PLA is not used, then the contracting officer shall document that the overall project is not suitable for PLAs. 

To this end, contracting officers shall prepare a PLA Decision Memorandum that documents the above determination(s) prior to issuing a solicitation for any proposed contract(s) associated with a large-scale construction project. The memorandum shall document the determination of whether or not a PLA will be used, and shall be jointly signed by the contracting officer and Program/Project Manager.  At a minimum, the memorandum should include: (1) project description; (2) estimated cost including options; and (3) the basis for your decision after considering applicable factors in FAR 22.503(b) and (c).  For your convenience, we have prepared a suggested decision memorandum template (attached).  

Ms. Alexis Williams would be glad to answer any questions you may have on this matter. She may be reached at Alexis.Williams@hhs.gov.

Attachment

PROJECT LABOR AGREEMENT DECISION MEMORANDUM

SUBJECT: Determination on the Use of a Project Labor Agreement for (SOLICITATION NUMBER, PROJECT NAME, and LOCATION)

  1. Project Description and Estimated Cost (including options):
  2. The contracting officer and cognizant Program/Project Manager have considered the following mandatory factors to determine whether use of a project labor agreement (PLA) will achieve economy and efficiency in the completion of the subject project:
    • Whether the overall large-scale construction project should be subject to the use of a PLA.
    • Whether use of a PLA 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. {FAR 22.503(b)(1)}
    • Whether use of a PLA is consistent with law. {FAR 22.503(b)(2)}
  1. The contracting officer and cognizant Program/Project Manager have considered one or more of the following discretionary factors in deciding whether the use of a project labor agreement is appropriate for the construction project. (Please check all that apply).
    •  Whether the project will require multiple construction contractors and/or subcontractors employing workers in multiple crafts or trades. {FAR 22.503(c)(1)}
    • Whether there is a shortage of skilled labor in the region in which the construction project will be sited. {FAR 22.503(c)(2)}
    •  Whether completion of the project will require an extended period of time. {FAR 22.503(c)(3)}
    • Whether PLAs have been used on comparable projects undertaken by Federal, State, municipal, or private entities in the geographic area of the project. {FAR 22.503(c)(4)}
    • Whether a PLA will promote the agency’s long term program interests, such as facilitating the training of a skilled workforce to meet the agency’s future construction needs. {FAR 22.503(c)(5)}
    •  Whether any other factors were considered (Please provide details). {FAR 22.503(c)(6)}
  1. Please discuss how the factors in #2 and #3 above form the basis for this determination. 
  2. Upon consideration of the above factors, we hereby determine that use of a PLA _____ is or _____ is not suitable for the subject project.
  3. If a determination is made to use a PLA, please address how a proposal subject to PLA requirements will be evaluated.

__________________(signature)_______________         _________________ 

[TYPED NAME], Contracting Officer                                    DATE

__________________(signature)_______________         _________________ 

[TYPED NAME], Program/Project Manager                       DATE


[1] Executive Order 13502, Use of Project Labor Agreements for Federal Construction Contracts, dated February 6, 2009 is available at http://www.gpo.gov/fdsys/pkg/FR-2009-02-11/pdf/E9-3113.pdf.

[2] The total cost refers to the total cost of the project itself, not the contract award amount. For example, a project with total cost of $25 million may be supported by several contract actions necessary to carry out various projects tasks, each with a value of less than $25 million.