Use of Project Labor Agreements for Federal Construction Projects, 44284-44285 [E9-20831]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 74, Number 166 (Friday, August 28, 2009)]
[Rules and Regulations]
[Pages 44284-44285]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20831]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-5331-F-01]
RIN 2501-AD47


Use of Project Labor Agreements for Federal Construction Projects

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule removes a HUD regulation that prohibits the 
use of project labor agreements in HUD-assisted construction contracts. 
Executive Order 13502, entitled ``Use of Project Labor Agreements for 
Federal Construction Projects,'' and signed by President Obama on 
February 6, 2009, revoked Executive Order 13202, which had prohibited 
federal agencies from requiring or prohibiting project labor agreements 
as a condition for award of any federally funded contract or 
subcontract for construction. Executive Order 13502, which applies to 
direct federal procurement of construction, encourages federal agencies 
to consider requiring the use of project labor agreements in connection 
with federally procured large-scale construction projects. The 
Executive Order also allows the use of project labor agreements in 
circumstances not covered by the Order, including projects receiving 
federal financial assistance.
    In a previously published Federal Register notice pertaining to 
HUD's Fiscal Year 2009 (FY 2009) funding, participants in HUD programs 
and prospective recipients of HUD funds were notified of the issuance 
of Executive Order 13502, of its removal of the restrictions on the use 
of project labor agreements, and of the invalidity of the HUD 
regulation promulgated to enforce the earlier Executive Order. With the 
revocation of Executive Order 13202, there is no longer a legal basis 
for HUD's regulation that implemented that executive order with respect 
to HUD-assisted projects. Therefore, this rule removes the regulation 
from the Code of Federal Regulations.

DATES: Effective Date: September 28, 2009.

FOR FURTHER INFORMATION CONTACT: Camille E. Acevedo, Associate General 
Counsel for Legislation and Regulations, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street, SW., Room 
10282, Washington, DC 20410; telephone number 202-402-5132 (this is not 
a toll-free number). Persons with hearing or speech impairments may 
access this number through TTY by calling the toll-free Federal 
Information Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background--Executive Order 13502, ``Use of Project Labor Agreements 
for Federal Construction Projects''

    Executive Order 13502, entitled ``Use of Project Labor Agreements 
for Federal Construction Projects,'' and signed by President Barack 
Obama on February 6, 2009, while directed to federal agency procurement 
of construction, also allows federal agencies to consider requiring the 
use of project labor agreements in connection with large-scale 
federally assisted construction projects. (Executive Order 13502 was 
subsequently published in the Federal Register on February 11, 2009 (74 
FR 6985).) The Executive Order revokes Executive Order 13202, 
``Preservation of Open Competition and Government Neutrality towards 
Government Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects,'' which prohibited federal agencies from 
requiring or prohibiting project labor agreements as a condition for 
award of any federally funded contract or subcontract for 
construction.\1\ In order to bind participants in HUD programs to the 
provisions of Executive Order 13202, HUD established regulations at 24 
CFR 5.108 that barred recipients of HUD funds from requiring or 
prohibiting project labor agreements in their procurements using HUD 
funds. The HUD regulations applied to HUD-assisted construction 
contracts. Construction contracts awarded directly by HUD were covered 
separately by provisions in the government-wide Federal Acquisition 
Regulation (FAR).
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    \1\ (Executive Order 13202 was signed by President George W. 
Bush on February 17, 2001 (published in the Federal Register on 
February 22, 2001 (66 FR 11225)) and later amended by Executive 
Order 13208, signed by President Bush on April 6, 2001 (published in 
the Federal Register on April 11, 2001 (66 FR 18717)).
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    Executive Order 13502 restores to federal agencies the discretion 
to determine when project labor agreements may be appropriate and 
beneficial in federally assisted construction projects, through the 
revocation of Executive Order 13202. As a result of the revocation, 
Executive Order 13502 also removes the prohibition on recipients of HUD 
funds from requiring the use of project labor agreements in their 
procurements. Because the foundation for HUD's regulation in 24 CFR 
5.108 was the prior Executive Order, which has been revoked, the rule 
no longer has effect. Accordingly, in an update of requirements 
applicable to HUD funding for FY 2009, published in the Federal 
Register on April 16, 2009 (74 FR 17685), HUD notified prospective 
recipients and participants in HUD programs that the new Executive 
Order revoked Executive Order 13202 and that the regulation in 24 CFR 
5.108 was no longer in effect.
    Executive Order 13502 was issued to address the challenges to 
efficient and timely procurement presented to the federal government by 
large-scale construction projects. Because construction employers often 
do not have a permanent workforce, it can be difficult for them to 
predict labor costs when bidding on contracts and to ensure a steady 
stream of labor on contracts being performed. Often, multiple employers 
are involved at a single location, and a labor dispute concerning even 
one employer can delay an entire project. A lack of coordination 
between employers or uncertainties about the terms and conditions of 
employment of various groups of workers can create friction and 
disputes in the absence of an agreed-upon resolution mechanism. Project 
labor agreements can present a means for addressing these problems by 
providing structure and stability to large-scale construction projects, 
thereby promoting the efficient and expeditious completion of federal 
construction contracts.
    Executive Order 13502 declares that it is the policy of the federal 
government to encourage the executive agencies to consider requiring 
the use of project labor agreements in connection with large-scale 
construction projects in order to promote economy and efficiency in 
federal procurement. The Executive Order, however, does not require an 
executive agency to use a project labor agreement on any construction 
project, nor does it preclude the use of a project labor agreement in 
circumstances not covered by the Order, including leasehold 
arrangements and projects receiving federal financial assistance. The 
Executive Order also does not require contractors or subcontractors to 
enter into a project labor agreement with any particular labor 
organization.

[[Page 44285]]

II. This Final Rule

    In addition to removing the prohibition on the use of project labor 
agreements in federal and federally assisted construction contracts, 
Executive Order 13502 directs agencies to revoke any regulations based 
on the prior Executive Order 13202. Consistent with those directions 
and the lack of a legal foundation for HUD's regulation in 24 CFR 
5.108, this rule removes that regulatory section from the Code of 
Federal Regulations.
    Executive Order 13502 further directs the Director of the Office of 
Management and Budget (OMB), in consultation with the Secretary of 
Labor and with other officials, as appropriate, to provide 
recommendations to the President, within 180 days of the signing of 
Executive Order 13502, on whether broader use of project labor 
agreements with respect to both construction projects undertaken under 
federal contracts and construction projects receiving federal financial 
assistance would help to promote the economical, efficient, and timely 
completion of such projects. HUD is therefore deferring any rulemaking 
to implement Executive Order 13502 in HUD-assisted construction 
contracts, pending OMB's recommendations on this issue.

III. Justification for Final Rulemaking

    Generally, HUD publishes a rule for public comment before 
publishing a rule for effect, in accordance with HUD's regulations on 
rulemaking at 24 CFR part 10. Part 10, however, allows in Sec.  10.1 
for exceptions from that general rule where the Department finds good 
cause to omit advance notice and public participation. The good cause 
requirement is satisfied when the prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest.'' In 
this case, HUD has determined that prior public comment is unnecessary. 
Because this final rule removes a rule for which the legal basis has 
been revoked, HUD is left with no discretion on which public comment 
could be considered on the subject of removal of the regulation.

 IV. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866 (entitled, ``Regulatory Planning and Review''). 
This rule was determined to be a ``significant regulatory action'' as 
defined in section 3(f) of the Order (although not an economically 
significant regulatory action, as provided under section 3(f)(1) of the 
Order). The docket file is available for public inspection between the 
hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office 
of General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 7th Street, SW., Washington, DC 20410-0500. Due to 
security measures at the HUD Headquarters building, please schedule an 
appointment to review the docket file by calling the Regulations 
Division at (202) 708-3055 (this is not a toll-free number). Persons 
with hearing or speech impairments may access the above telephone 
number via TTY by calling the toll-free Federal Information Relay 
Service at 800-877-8339.

Environmental Impact

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, nor does it establish, revise, or 
provide for standards for construction or construction materials, 
manufactured housing, or occupancy. Accordingly, under 24 CFR 
50.19(c)(1), this final rule is categorically excluded from 
environmental review under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.).

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications, if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This final rule does not have 
federalism implications and does not impose substantial direct 
compliance costs on state and local governments nor preempt state law 
within the meaning of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This final rule does not 
impose any federal mandates on any state, local, or tribal governments 
or the private sector within the meaning of UMRA.

List of Subjects in 24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with disabilities, Intergovernmental 
relations, Loan programs--housing and community development, Low and 
moderate income housing, Mortgage insurance, Penalties, Pets, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Social Security, Unemployment compensation, Wages.

0
Accordingly, for the reasons described in the preamble, 24 CFR part 5 
is amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for part 5 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 3535(d).


Sec.  5.108  [Removed]

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2. Remove Sec.  5.108.

    Dated: August 24, 2009.
Shaun Donovan,
Secretary.
[FR Doc. E9-20831 Filed 8-27-09; 8:45 am]
BILLING CODE 4210-67-P