Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects, 51044-51052 [2022-17067]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 87, Number 160 (Friday, August 19, 2022)]
[Proposed Rules]
[Pages 51044-51052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17067]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 7, 22, 36, and 52

[FAR Case 2022-003; Docket No. FAR-2022-0003, Sequence No. 1]
RIN 9000-AO40


Federal Acquisition Regulation: Use of Project Labor Agreements 
for Federal Construction Projects

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement an Executive Order pertaining 
to project labor agreements in Federal construction projects.

DATES: Interested parties should submit comments to the Regulatory 
Secretariat Division at the address shown below on or before October 
18, 2022 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments in response to FAR Case 2022-003 to https://www.regulations.gov. Submit comments via the Federal eRulemaking portal 
by searching for ``FAR Case 2022-003''. Select the link ``Comment Now'' 
that corresponds with ``FAR Case 2022-003.'' Follow the instructions 
provided on the screen. Please include your name, company name (if 
any), and ``FAR Case 2022-003'' on your attached document. If your 
comment cannot be submitted using https://www.regulations.gov, call or 
email the points of contact in the FOR FURTHER INFORMATION CONTACT 
section of this document for alternate instructions.
    Instructions: Please submit comments only and cite ``FAR Case 2022-
003'' in all correspondence related to this case. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal and/or business confidential information provided. To 
confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst, 
at 202-803-3188 or by email at [email protected], for clarification

[[Page 51045]]

of content. For information pertaining to status or publication 
schedules, contact the Regulatory Secretariat Division at 202-501-4755 
or [email protected]. Please cite FAR Case 2022-003.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
Executive Order (E.O.) 14063, Use of Project Labor Agreements for 
Federal Construction Projects, issued February 4, 2022 (87 FR 7363, 
February 9, 2022). E.O. 14063 mandates that Federal Government agencies 
require the use of project labor agreements (PLAs) for large-scale 
Federal construction projects, where the total estimated cost to the 
Government is $35 million or more, unless an exception applies. 
Agencies still have the discretion to require PLAs for Federal 
construction projects that do not meet the $35 million threshold. The 
E.O. also directs the Office of Management and Budget (OMB) to issue 
implementation guidance to agencies on exceptions and reporting.
    E.O. 14063 describes large-scale construction projects as often 
posing special challenges to efficient and timely procurement by the 
Federal Government. Large-scale construction projects often have 
multiple employers at a single location and a lack of permanent 
workforce, which makes it difficult for Federal contractors to predict 
labor costs when bidding on contracts and to ensure that a steady 
supply of labor exists on the contracts being performed. Additionally, 
a labor dispute involving one employer can delay the entire project.
    The E.O. explains that the lack of coordination among various 
employers, or uncertainty about the employment terms and conditions of 
various groups of workers, can create friction and disputes in the 
absence of an agreed-upon resolution mechanism. PLAs may provide 
structure and stability needed to reduce uncertainties for all parties 
connected to a large-scale construction project.
    The current FAR is based on the final rule in FAR Case 2009-005, 
Use of Project Labor Agreements for Federal Construction Projects, 
published April 13, 2010 (75 FR 19168). The final rule implemented E.O. 
13502, which encouraged the use of PLAs for large-scale Federal 
construction projects valued at $25 million or more in order to promote 
economy and efficiency in Federal procurement. E.O. 13502 is revoked by 
E.O. 14063 upon the effective date of the final rule in FAR Case 2022-
003.

II. Discussion and Analysis

    DoD, GSA, and NASA are proposing to revise FAR subpart 22.5, Use of 
Project Labor Agreements for Federal Construction Projects, to reflect 
the change in policy pertaining to the use of PLAs. While the reasons 
for using PLAs remain largely unchanged from the previous policy, use 
of a PLA is no longer discretionary for large-scale Federal 
construction projects. Agencies will be required to use a PLA for 
large-scale Federal construction projects unless an exception applies. 
The E.O. also expands the definition of ``construction,'' raises the 
threshold for a large-scale construction project from $25 million to 
$35 million, and establishes a series of exceptions to the PLA 
requirements. A summary of the proposed changes follows.

A. FAR Part 1

    FAR 1.106, OMB approval under the Paperwork Reduction Act, updates 
the OMB control number that covers PLAs. OMB Control Number 9000-0175, 
Use of Project Labor Agreements for Federal Construction Projects, was 
approved in FAR case 2009-005 (see section G of that rule's preamble). 
Effective March 31, 2019, the clause and provision previously included 
in 9000-0175 were consolidated under OMB Control Number 9000-0066, 
which covers a number of labor-related requirements.

B. FAR Part 7

    Agency-head responsibilities at FAR 7.103(x) pertaining to the use 
of PLAs are revised to reflect the change in policy consistent with 
other requirements of agency planners.

C. FAR Part 22

    FAR subpart 22.5 is revised to replace all references to revoked 
E.O. 13502 with references to the new E.O. 14063.
    The definitions of ``construction,'' ``labor organization,'' and 
``large-scale construction project'' are revised to reflect the 
definitions in E.O. 14063. Conforming changes are made in the clause at 
FAR 52.222-34, Project Labor Agreement.
    The threshold for a large-scale construction project is increased 
from $25 million to $35 million. This threshold will be subject to the 
periodic adjustment for inflation of statutory acquisition-related 
dollar thresholds in accordance with FAR 1.109, 41 U.S.C. 1908, and 
section 2(c) of E.O. 14063.
    FAR 22.503 is revised to reflect the change in policy that mandates 
agencies to require the use of PLAs when awarding Federal construction 
contracts that meet the threshold of a large-scale construction project 
unless an exception applies. Agencies may continue to require PLAs for 
projects that do not meet the $35 million threshold at their 
discretion. The proposed rule maintains existing FAR guidance that 
agencies may use when making a decision to require a PLA for such a 
contract.
    Some agencies use indefinite-delivery indefinite-quantity (IDIQ) 
contracts to award orders for large-scale construction projects. IDIQ 
contracts may cover multiple projects of varying values. For an order 
at or above $35 million, an agency shall require a PLA, unless an 
exception applies. An exception may only apply to the entire IDIQ 
contract if the basis for the exception cited would apply to all 
orders. Use of PLAs on orders is also not restricted to those projects 
valued at or above the $35 million threshold. The offerors are alerted 
in the provision at FAR 52.222-33, Notice of Requirement for Project 
Labor Agreement, that a PLA may be required at the order stage. The 
clause at FAR 52.222-34 allows the contracting officer to choose when 
to require the executed PLA, with the order offer, after the offer but 
prior to order award, or after award of the order.
    FAR 22.504(c) is revised to remove direction that allowed agencies 
to specify terms and conditions of the PLAs and to engage in efforts to 
identify the appropriate terms and conditions for a particular 
construction project. DoD, GSA, and NASA believe the language at 
22.504(b)(6), which authorizes agencies to ensure the PLA includes any 
additional requirements as the agency deems necessary to satisfy its 
needs, is sufficient. Further, the E.O. directs that an agency may not 
require contractors or subcontractors to enter into a PLA with any 
particular labor organization. The proposed rule replaces the current 
text at FAR 22.504(c) with this direction. Conforming changes are made 
in the provision at FAR 52.222-33, Notice of Requirement for Project 
Labor Agreement, and the clause at FAR 52.222-34, Project Labor 
Agreement.
    The E.O. provides an exception from the PLA requirements that, with 
a written explanation, may be granted by a senior official. The 
proposed rule interprets the senior official as the senior procurement 
executive. The authority to grant an exception is added at FAR 
22.504(d). The exception may be granted in each of the following 
circumstances, as provided in the E.O.:
    1. Requiring a PLA would not achieve economy and efficiency in 
Federal procurement, as described in 22.504(d);
    2. Requiring a PLA would substantially reduce the number of 
potential bidders so as to frustrate full and open competition, i.e., 
where

[[Page 51046]]

adequate competition at a fair and reasonable price could not be 
achieved; or
    3. Requiring a PLA would be inconsistent with statutes, 
regulations, other E.O.s., or Presidential Memoranda.
    The decision regarding whether to grant an exception for an order 
under an IDIQ contract should be made prior to issuing the notice of 
intent to place an order.

D. FAR Part 52

    The provision at FAR 52.222-33, Notice of Requirement for Project 
Labor Agreement, and the clause at FAR 52.222-34, Project Labor 
Agreement, include changes discussed in section II.C. of this preamble. 
Additional minor changes are proposed for clarity.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), or for Commercial Services

    This rule amends the provision at FAR 52.222-33 and the FAR clause 
at 52.222-34. However, this rule does not impose any new requirements 
on contracts at or below the SAT or for commercial products and 
commercial services, including COTS items. Since the provision and 
clause apply to large-scale Federal construction contracts, neither 
would apply to acquisitions at or below the SAT or to acquisitions for 
commercial products and commercial services, including COTS items.

IV. Expected Impact of the Rule

    A project labor agreement (PLA) is defined 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). 
PLAs are a tool that can be used to provide labor-management stability, 
and ensure compliance with laws and regulations such as those governing 
safety and health, equal employment opportunity, labor and employment 
standards, and others. Requiring a PLA means that every contractor and 
subcontractor engaged in construction on the project agree, for that 
project, to negotiate or become a party to a project labor agreement 
with one or more labor organizations.
    Currently, the regulations at FAR 22.5 encourage the use of PLAs 
for ``large-scale federal construction projects,'' which is defined as 
projects with a total cost of $25 million or more. According to the 
data collected by OMB, between the years of 2009 and 2021, there were a 
total of approximately 2,000 eligible contracts and the requirement for 
a PLA was used 12 times. Based on the information, on average there are 
approximately 167 eligible awards annually and approximately one award 
that includes the PLA requirement.
    This rule implements E.O. 14063, Use of Project Labor Agreements 
for Federal Construction Projects, which requires the use of PLAs in 
large-scale Federal construction projects unless an exception applies. 
In accordance with the E.O., the definition of ``large-scale federal 
construction projects'' is amended from $25 million or more to $35 
million or more. Based on Federal Procurement Data System (FPDS) data 
from fiscal year (FY) data from FY 2019 through FY 2021, the average 
number of construction awards, including orders against indefinite-
delivery indefinite-quantity contracts valued at $35 million or more, 
were approximately 119 annually. The average cost of each award is 
approximately $114 million.
    In accordance with the E.O., this rule provides exceptions to the 
requirement to use PLAs for large-scale Federal construction projects. 
Exceptions must be based on at least one of the conditions listed at 
FAR 22.504(d). These conditions include when the requirement for a PLA 
would not advance the Federal Government's interests; where market 
research indicates a substantial reduction in competition to such a 
degree that adequate competition at a fair and reasonable price could 
not be achieved; or where the requirement would be inconsistent with 
other statutes, regulations, E.O.s, or Presidential memoranda. There is 
no data on the number of exceptions that may be granted since the 
mandate and associated exceptions are new. It is possible there may be 
a higher usage of exceptions in the initial year as industry and the 
Government work to implement the requirement. Considering the lack of 
available data on the proposed exceptions, it is estimated that 
exceptions may be granted for 10 percent to 50 percent of covered 
contracts; in other words, an estimated 60 to 107 construction contract 
awards may require PLAs.
    The current FAR provision at 52.222-33, Notice of Requirement for 
Project Labor Agreement, provides a basic provision and 2 alternative 
provisions for the contracting officer to select from. The provision 
selected identifies whether all offerors, the apparent successful 
offeror, or the awardee must provide a copy of the PLA. There is no 
historical data on the selection of alternatives. Therefore, it is 
assumed each alternative will apply one third of the time. This implies 
one third of affected solicitations will require all offerors to 
provide a PLA, and two thirds of affected solicitations will only 
require one entity (apparent successful offeror or awardee) to provide 
a PLA. To estimate the number of offerors that would be required to 
provide a PLA, the Government estimates an average of 4 offers would be 
submitted per award; i.e., an estimated 80-144 offerors (20-36 awards * 
4 offers). Therefore, the total number of estimated entities that would 
be required to submit PLAs at the prime contract level is 120-215 
entities (40-71 apparent successful offerors or awardees + 80-144 
offerors). It is estimated that 20 percent of the entities will be 
small entities, therefore approximately 24-43 small entities and 96--
172 large entities may be required to submit PLAs. For the estimated 
120-215 entities that will be required to have a PLA to submit an offer 
or perform a contract, generally the entity will negotiate the terms 
and conditions of the PLA with a union(s). It is assumed an entity will 
require the owner or a senior executive, legal counsel, a project 
manager, and 1-2 labor advisors, depending on the size of the 
workforce, to support the negotiations. DoD, GSA, and NASA estimate 
that 40 to 80 hours of time may be required in total for each party 
involved in negotiating the PLA on behalf of the contractor. According 
to the Bureau of Labor Statistics (BLS) National Occupational 
Employment and Wage Estimates for May 2021, the mean hourly wage for 
General and Operations Managers is $55.41/hour, $71.17 for Lawyers, and 
$102.41 for Chief Executives. To reflect the variety of labor 
categories necessary to estimate the impact, a mean hourly rate of 
$76.33 is used for this calculation. The current BLS factor of 42 
percent is applied to the mean wage to account for fringe benefits and 
an additional 12 percent overhead factor is applied (See Attachment C 
of OMB Circular A-76 Revised issued May 29, 2003), for a total loaded 
wage of $121.40/hour ($76.33 * 142 percent * 112 percent). Also, it is 
estimated that 1 hour is required by one member of the contractor's 
workforce to submit the PLA to the Government on behalf of the 
contractor. Using the BLS wage estimates for Office and Administrative 
Support Occupations, the mean hourly rate for submitting the PLA is 
estimated to be $33.21 (20.88 * 142 percent * 112 percent). The total 
estimated impact for establishing and submitting PLAs in response to a 
Government contract is $2.92-$10.45 million (120-215 entities *((5

[[Page 51047]]

participants * 40-80 hours * $121.40) + (1 person * 1 hour * $33.21)). 
Taking midpoints of each range implies a primary estimate of $6.69 
million.
    The requirement for a PLA flows down to subcontractors through FAR 
clause 52.222-34, paragraph (c). There is no data source that 
identifies the number of subcontractors per contract, however, based 
upon estimates from experts, it is estimated that for each contract 
there is an average of 2 subcontractors. Therefore, the requirement for 
PLAs is estimated to apply to 240--430 subcontractors (120-215 * 2).
    Subcontractors that may be required to participate in a PLA will 
generally review and sign on to the PLA negotiated by the prime 
contractor. The subcontractor does not negotiate the PLA. However, the 
subcontractor must read, understand, and implement the terms and 
conditions included in the PLA. These actions are estimated to take 1 
to 10 hours. Representatives on behalf of a subcontractor may include 
the owner, project manager, or an attorney. Based upon the previously 
provided BLS data, a total loaded wage of $121.40 reflects the variety 
of labor categories necessary to estimate the impact of the proposed 
rule on subcontractors. The total estimated impact for establishing and 
submitting PLAs in response to a Government contract is estimated to be 
$58,272 to $1.04 million (240-430 subcontractors * (2 participants * 1-
10 hours * $121.40)). Taking midpoints of each range implies a primary 
estimate of $549,136.
    For the Government, contracting officers will continue to conduct 
market research and consider factors to support a decision to use, or 
not to use, PLAs in large-scale construction projects. There will 
continue to be instances where the use of PLAs will benefit the 
Government and others where it is not feasible to use PLAs. This rule 
establishes new procedures for the contracting officer to request an 
exception to the requirement to use PLAs. The new procedures require 
the contracting officer to prepare a written explanation to request an 
exception and route the request for approval by the senior procurement 
executive. The act of preparing and routing an exception request is 
typically performed by a contract specialist customarily at the GS-12 
step 5 level and is estimated to take an average of 2 hours. The hourly 
rate of $65.77 is based upon the Office of Personnel Management (OPM) 
Table for the Rest of the United States, effective January 2022, for a 
GS-12 step 5 employee ($43.10 per hour) plus a 36.25 percent factor to 
account for fringe benefits in accordance with current OMB memorandum 
M-08-13 and a 12 percent overhead factor (See Attachment C of OMB 
Circular A-76 Revised issued May 29, 2003). As stated previously, the 
estimated number of exception requests per year is between 12 and 60; 
therefore, the anticipated cost for preparing and routing requests is 
$1,578-$7,892 (12-60 exceptions * 2 hours * $65.77). Taking midpoints 
of each range implies a primary estimate of $4,735.
    The review and approval of the exception request is normally 
performed at the GS-15 or higher level and is estimated to take 
approximately 1 hour. The hourly rate of $108.71 is based upon OPM 
Table for the Rest of the United States, effective January 2022, for a 
GS-15 step 5 employee ($71.24 per hour) plus the 36.25 percent factor 
to account for fringe benefits and a 12 percent factor for overhead. 
The estimated cost for review and approval is between $1,305-6,523 (12-
60 exceptions * 1 hour * $108.71). Taking midpoints of each range 
implies a primary estimate of $3,914.
    Public comments are invited on the use of these factors, including 
whether there are other factors that might be more appropriate for use 
in the construction industry.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is anticipated to be a significant regulatory action and, 
therefore, was subject to review under section 6(b) of E.O. 12866, 
Regulatory Planning and Review, dated September 30, 1993.

VI. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808), 
before an interim or final rule takes effect, DoD, GSA, and NASA will 
send the rule and the ``Submission of Federal Rules Under the 
Congressional Review Act'' form to each House of the Congress and to 
the Comptroller General of the United States. A major rule cannot take 
effect until 60 days after it is published in the Federal Register. 
This rule is not anticipated to be a major rule under 5 U.S.C. 804.

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612, because 
the use of a PLA is required only on large-scale construction projects 
with a total estimated contract value of $35 million or more. However, 
an Initial Regulatory Flexibility Analysis (IRFA) has been performed 
and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement Executive Order (E.O.) 
14063, Use of Project Labor Agreements for Federal Construction 
Projects, dated February 4, 2022, which mandates that Federal 
Government agencies require the use of project labor agreements 
(PLAs) for large-scale Federal construction projects (total 
estimated value of $35 million or more), unless an exception 
applies. Agencies still have the discretion to require PLAs for 
Federal construction projects that do not meet the $35 million 
threshold.
    The objective of the rule is to implement the E.O. 14063 change 
in policy from discretionary use to requiring the use of PLAs for 
Federal construction projects valued at $35 million or more.
    This rule applies the requirement for PLAs to all construction 
projects valued at $35 million or more, unless an exception applies. 
However, it does not change the discretionary use of PLAs for 
projects that do not meet the $35 million threshold. As a result, 
small entities may be required to negotiate and become a party to a 
PLA, as a prime or subcontractor.
    Data generated from the Federal Procurement Data System (FPDS) 
for fiscal years 2019, 2020, and 2021 has been used as the basis for 
estimating the number of unique small entities expected to be 
affected by the change from discretionary to mandatory use of PLAs 
for large-scale construction projects.
    An examination of this data reveals that the Government issued 
an average of 119 large-scale construction awards annually. Of those 
119 awards, an average of 15 percent were awarded to an average of 
16 unique small entities annually.
    It is estimated that 60-107 of the 119 large-scale construction 
awards will require a PLA. An estimated one third of affected 
solicitations will require all offerors to provide a PLA, and two 
thirds of affected solicitations will only require one entity 
(apparent successful offeror or awardee) to provide a PLA. 
Therefore, the total number of estimated entities that would be 
required to submit PLAs at the prime contract level is 120-215 
entities (40-71 apparent successful offerors or awardees + 80-144 
offerors).
    It is estimated that under the new project labor agreement 
requirements, the estimated number of small entities impacted by the 
rule is 20 percent of the 120-215 entities.

[[Page 51048]]

Therefore, it is estimated that approximately 24-43 small entities 
will be required to submit a project labor agreement.
    DoD, GSA, and NASA acknowledge there is no data source that 
identifies the number of subcontractors per contract, however, based 
upon estimates from experts, it is estimated that each of the 
entities required to submit project labor agreements may have 
approximately 2 subcontractors; i.e. 240-430 subcontractors (120 * 
2) (215 * 2). It is estimated that an equivalent percentage of small 
entities are subcontractors as prime contractors. As a result, it is 
estimated that 20 percent or 48-86 of the subcontractors are small 
entities (240 * 0.2) (430 * 0.2).
    Based upon this analysis, the number of small entities that may 
be required to negotiate or become a party to a PLA is approximately 
72 to 129 annually (24 + 48) (43 + 86). These numbers may fluctuate 
based on the use of discretionary PLAs, any exceptions granted to 
the required use of a PLA, or if the PLA is required by all 
offerors, the apparent successful offeror, or the awardee. The 
proposed rule does not duplicate, overlap, or conflict with any 
other Federal rules.
    There are no known significant alternative approaches to the 
proposed rule.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2022-003), 
in correspondence.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501-3521) applies because 
the proposed rule contains information collection requirements. 
Accordingly, the Regulatory Secretariat has submitted a request for 
approval of a revised information collection requirement concerning 
9000-0066, Labor-related Requirements, to the Office of Management and 
Budget.
    This rule affects the certification and information collection 
requirements in the provision at FAR 52.222-33, Notice of Requirement 
for Project Labor Agreement, and the FAR clause at 52.222-34, Project 
Labor Agreements. The information collection requirements were 
originally approved under OMB Control Number 9000-0175, Use of Project 
Labor Agreements for Federal Construction Projects. The estimate used 
in the current information collection was based on PLAs with a total 
estimated contract value of $25 million or more and the discretionary 
authority to use them. The burden hour estimates for the provision at 
FAR 52.222-33 and the clause at FAR 52.222-34 previously included under 
OMB Control Number 9000-0175 are consolidated with and approved under 
OMB Control Number 9000-0066, Labor-related Requirements.

A. Estimated Public Reporting Burden

    Public reporting burden for this collection of information is 
estimated to average 1.0 hour per response, including the time for 
reviewing instructions, searching existing data sources, gathering, and 
maintaining the data needed, and completing and reviewing the 
collection of information. This is not the time to negotiate the PLA, 
which is not an information collection requirement; the time covered is 
only the time to copy and submit the PLA to the contracting officer.
    FAR provision 52.222-33, Notice of Requirement for Project Labor 
Agreement, is prescribed at FAR 22.505(a) for use in solicitations for 
the acquisition of large-scale construction projects. A large-scale 
construction project is defined as one within the United States with a 
total cost to the Federal Government of $35 million or more. According 
to FPDS, the Government awarded an average of 119 large-scale 
construction contracts to approximately 110 unique entities each year, 
to include orders against indefinite-delivery indefinite-quantity 
contracts, valued at $35 million or more, from FY 2019 through 2021. 
The Government also considered that exceptions to the required use of a 
PLA may be granted under certain conditions and estimates that 
approximately 12 to 60 (10 percent to 50 percent of 119) exceptions 
will be granted for the required use of a PLA each year. Due to the 
lack of historical data, the Government is using a range to estimate 
the number of PLAs that will be required from a low of 60 (50 percent) 
to a high of 107 (90 percent).
    Although agencies have the discretion to require a PLA when the 
estimated value of the construction project is less than the $35 
million threshold, the Government estimates that agencies will choose 
to require PLAs for less than 1 percent of construction awards each 
year.
    It is projected that for all contracts requiring a PLA (60-107), 
the contracting officer will identify if all offerors, the apparent 
successful offeror, or the awardee is required to negotiate or become a 
party to a PLA. There is no historical data on when the contracting 
officer requires the PLA. Therefore, it is assumed that the 
alternatives will apply \1/3\ of the time equally (\60/3\ or \107/3\), 
meaning approximately 20 to 36 awards will require all offerors to 
provide a PLA and 40 to 71 awards will require the apparent successful 
offeror or awardee. The Government estimates that an average of 4 
offers will be submitted for each of the estimated awards, resulting in 
an estimated 120 to 215 respondents. The annual reporting burden 
estimates that 120 to 215 of the respondents would be requested to 
submit a PLA. The Government estimates that each respondent will 
require between 40 (low) and 80 (high) hours to implement a PLA for a 
project. This includes time for offerors to consult with advisors, 
negotiate, ensure compliance with terms and conditions of the PLA and 
implement the PLA.
    The annual reporting burden for FAR provision 52.222-33, Notice of 
Requirement for Project Labor Agreement, is estimated based upon the 
ranges described above and illustrated as follows:

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                   Range of burden based upon 40
                                                               hours
                                                   Range of burden based upon 80
                                                               hours
----------------------------------------------------------------------------------------------------------------
Respondents.....................................             120             215             120             215
Responses per respondent........................               1               1               1               1
Total annual responses..........................             120             215             120             215
Preparation hours per responses.................             200             200             400             400
Total response burden hours.....................          24,000          43,000          48,000          86,000
----------------------------------------------------------------------------------------------------------------


[[Page 51049]]

    The application of the provision is expanded to recognize IDIQ 
contracts and the resultant ability to require or not require PLAs on 
an order-by-order basis under the IDIQ. The change in policy that makes 
the use of a PLA mandatory unless an exception applies may also 
increase the estimates while the increased threshold for defining a 
large-scale construction project may have a balancing effect. It is 
expected that the use of discretionary PLAs and agency-issued 
exceptions will further impact public and Government burden. In 
addition, the hourly rates have increased from 2021 to 2022.
    FAR clause 52.222-34, Project Labor Agreement, is prescribed at FAR 
22.505(a) for use in contracts for the acquisition of large-scale 
construction projects. Each of the 60 to 107 awardees is expected to 
have one recordkeeper to maintain the PLA and associated records for 
the participants through the life of the contract.
    The annual recordkeeping burden for FAR clause 52.222-34, Project 
Labor Agreement, is estimated using the range of 60 to 107 awardees as 
follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                 Range of awardees
------------------------------------------------------------------------
Estimated recordkeepers.................              60             107
Estimated records per recordkeeper......               1               1
Total annual records....................              60             107
Estimated hours/record..................               3               3
Total recordkeeping burden hours........             180             321
------------------------------------------------------------------------

    The total estimated annual public burden hours associated with the 
FAR provision and clause is estimated between 24,180 (24,000 reporting 
hours + 180 recordkeeping hours) and 86,321 (86,000 reporting + 321 
recordkeeping hours).

B. Request for Comments Regarding Paperwork Burden.

    Submit comments, including suggestions for reducing this burden, 
not later than October 18, 2022 through https://www.regulations.gov and 
follow the instructions on the site. All items submitted must cite OMB 
Control No. 9000-0066, Labor Related Requirements. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting. If there are difficulties submitting comments, 
contact the GSA Regulatory Secretariat Division at 202-501-4755 or 
[email protected].
    Public comments are particularly invited on:
     The necessity of this collection of information for the 
proper performance of the functions of Federal Government acquisitions, 
including whether the information will have practical utility.
     The accuracy of the estimate of the burden of this 
collection of information.
     Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
     Ways to minimize the burden of the collection of 
information on respondents, including the use of automated collection 
techniques or other forms of information technology.
    Requesters may obtain a copy of the information collection 
documents from the GSA Regulatory Secretariat Division by calling 202-
501-4755 or emailing [email protected]. Please cite OMB Control No. 
9000-0066, Labor-related Requirements, in all correspondence.

List of Subjects in 48 CFR Parts 1, 7, 22, 36, and 52

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 1, 7, 
22, 36, and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 1, 7, 22, 36, and 52 
continues to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

0
2. In section 1.106 amend the table by:
0
a. Removing the entry for FAR segment ``22.5''; and
0
b. Adding in sequence, entries for ``52.222-33'' and ``52.222-34''.
    The additions read as follows:


1.106  OMB approval under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                      FAR segment                        OMB control No.
------------------------------------------------------------------------
 
                                * * * * *
52.222-33.............................................         9000-0066
52.222-34.............................................         9000-0066
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

PART 7--ACQUISITION PLANNING

0
3. Amend section 7.103 by revising paragraph (x) to read as follows:


7.103  Agency-head responsibilities.

* * * * *
    (x) Ensuring that agency planners use project labor agreements when 
required (see subpart 22.5 and 36.104).
* * * * *

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
4. Revise section 22.501 to read as follows:


22.501  Scope of subpart.

    This subpart prescribes policies and procedures to implement 
Executive Order 14063, Use of Project Labor Agreements for Federal 
Construction Projects, dated February 4, 2022 (87 FR 7363).
0
5. Amend section 22.502 by revising the definitions of 
``Construction'', ``Labor organization'' and ``Large-scale construction 
project'' to read as follows:


22.502  Definitions.

* * * * *
    Construction means construction, reconstruction, rehabilitation, 
modernization, alteration, conversion, extension, repair, or 
improvement of buildings, structures, highways, or other real property.
    Labor organization means a labor organization as defined in 29 
U.S.C. 152(5) of which building and construction employees are members.
    Large-scale construction project means a Federal construction 
project within the United States for which the total estimated cost of 
the construction contract(s) to the Federal Government is $35 million 
or more.
* * * * *

[[Page 51050]]

0
6. Revise section 22.503 to read as follows.


22.503  Policy.

    (a) Executive Order (E.O.) 14063, Use of Project Labor Agreements 
for Federal Construction Projects, requires agencies to use project 
labor agreements in large-scale construction projects to promote 
economy and efficiency in the administration and completion of Federal 
construction projects.
    (b) When awarding a contract in connection with a large-scale 
construction project (see 22.502), agencies shall require use of 
project labor agreements for all contractors and subcontractors engaged 
in construction on the project, unless an exception at 22.504(d) 
applies.
    (c) An agency may require the use of a project labor agreement on 
projects where the total cost to the Federal Government is less than 
that for a large-scale construction project, if appropriate.
    (1) An agency may, if appropriate, require that every contractor 
and subcontractor engaged in construction on the project agree, for 
that project, to negotiate or become a party to a project labor 
agreement with one or more labor organizations if the agency decides 
that the use of project labor agreements will--
    (i) 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
    (ii) Be consistent with law.
    (2) Agencies may consider the following factors in deciding whether 
the use of a project labor agreement is appropriate for a construction 
project where the total cost to the Federal Government is less than 
that for a large-scale construction project:
    (i) The project will require multiple construction contractors and/
or subcontractors employing workers in multiple crafts or trades.
    (ii) There is a shortage of skilled labor in the region in which 
the construction project will be sited.
    (iii) Completion of the project will require an extended period of 
time.
    (iv) Project labor agreements have been used on comparable projects 
undertaken by Federal, State, municipal, or private entities in the 
geographic area of the project.
    (v) A project labor agreement 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.
    (vi) Any other factors that the agency decides are appropriate.
    (d) For indefinite-delivery indefinite-quantity (IDIQ) contracts 
the use of a project labor agreement may be required on an order-by-
order basis rather than for the entire contract. For an order at or 
above $35 million, an agency shall require the use of a project labor 
agreement, unless an exception applies. See 22.504(d)(3) and 
22.505(b)(3).
0
7. Amend section 22.504 by--
0
a. In paragraph (b) introductory text removing the words ``The 
project'' and adding the words ``A project'' in their place;
0
b. Revising paragraph (c); and
0
c. Adding paragraph (d).
    The revision and addition read as follows.


22.504   General requirements for project labor agreements.

* * * * *
    (c) Labor organizations. An agency may not require contractors or 
subcontractors to enter into a project labor agreement with any 
particular labor organization when the project labor agreement includes 
multiple signatory labor organizations representing the same trade.
    (d) Exceptions to project labor agreement requirements--(1) 
Exception. The senior procurement executive may grant an exception from 
the requirements at 22.503(b), providing a specific written explanation 
of why at least one of the following conditions exists with respect to 
the particular contract:
    (i) Requiring a project labor agreement on the project would not 
advance the Federal Government's interests in achieving economy and 
efficiency in Federal procurement. The exception shall be based on one 
or more of the following factors:
    (A) The project is of short duration and lacks operational 
complexity.
    (B) The project will involve only one craft or trade.
    (C) The project will involve specialized construction work that is 
available from only a limited number of contractors or subcontractors.
    (D) The agency's need for the project is of such an unusual and 
compelling urgency that a project labor agreement would be 
impracticable.
    (ii) Market research indicates that requiring a project labor 
agreement on the project would substantially reduce the number of 
potential offerors to such a degree that adequate competition at a fair 
and reasonable price could not be achieved. (See 10.002(b)(1) and 
36.104). A likely reduction in the number of potential offerors is not, 
by itself, sufficient to except a contract from coverage under this 
authority unless it is coupled with the finding that the reduction 
would not allow for adequate competition at a fair and reasonable 
price.
    (iii) Requiring a project labor agreement on the project would 
otherwise be inconsistent with statutes, regulations, Executive orders, 
or Presidential memoranda.
    (2) When determining whether the exception in paragraph (d)(1)(ii) 
of this section applies, contracting officers shall consider current 
market conditions and the extent to which price fluctuations may be 
attributable to factors other than the requirement for a project labor 
agreement (e.g., costs of labor or materials, supply chain costs). 
Agencies may rely on price analysis conducted on recent competitive 
proposals for construction projects of a similar size and scope.
    (3) Timing of the exception--(i) Contracts other than IDIQ 
contracts. The exception must be granted for a particular contract by 
the solicitation date.
    (ii) IDIQ contracts. An exception shall be granted prior to the 
solicitation date if the basis for the exception cited would apply to 
all orders. Otherwise, exceptions shall be granted for each order by 
the time of the notice of the intent to place an order (e.g., 
16.505(b)(1)).
0
8. Revise section 22.505 to read as follows.


22.505   Solicitation provision and contract clause.

    When a project labor agreement is used for a construction project, 
the contracting officer shall--
    (a)(1) Insert the provision at 52.222-33, Notice of Requirement for 
Project Labor Agreement, in all solicitations containing the clause 
52.222-34, Project Labor Agreement.
    (2) Use the provision with its Alternate I if the agency will 
require the submission of a project labor agreement from only the 
apparent successful offeror, prior to contract award.
    (3) Use the provision with its Alternate II if an agency allows 
submission of a project labor agreement after contract award except 
when Alternate III is used.
    (4) Use the provision with its Alternate III when Alternate II of 
52.222-34 is used.
    (b)(1) Insert the clause at 52.222-34, Project Labor Agreement, in 
all solicitations and contracts associated with the construction 
project.

[[Page 51051]]

    (2) Use the clause with its Alternate I if an agency allows 
submission of the project labor agreement after contract award except 
when Alternate II is used.
    (3) Use the clause with its Alternate II in IDIQ contracts when the 
agency will have project labor agreements negotiated on an order-by-
order basis and one or more orders will not use a project labor 
agreement.

PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
9. Amend section 36.104 by adding paragraph (c) to read as follows:


36.104   Policy.

* * * * *
    (c)(1) Agencies shall require the use of a project labor agreement 
for Federal construction projects valued at or above $35 million, 
unless an exception applies (see subpart 22.5).
    (2) Contracting officers conducting market research for Federal 
construction contracts shall ensure that the procedures at 10.002(b)(1) 
involve a current and proactive examination of the market conditions in 
the project area to determine national, regional, and local entity 
interest in participating on a project that requires a project labor 
agreement, and to understand the availability of unions, and unionized 
and non-unionized contractors. Contracting officers may coordinate with 
agency labor advisors, as appropriate.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Amend section 52.222-33 by--
0
a. Revising the date of the provision;
0
b. Revising paragraphs (a) and (b);
0
c. Removing from paragraph (c) introductory text ``Consistent with 
applicable law, the project'' and adding ``The project'' in its place;
0
d. Removing from paragraph (c)(1) ``offeror and all'' and adding 
``Offeror and'' in its place;
0
e. Removing from paragraph (c)(2) ``offeror'' and adding ``Offeror'' in 
its place;
0
f. Removing from paragraph (d) ``this contract'' and adding ``the 
resulting contract'' in its place;
0
g. Removing from paragraph (e) ``offeror'' and adding ``Offeror'' in 
its place;
0
h. In Alternate I:
0
i. Revising the date;
0
ii. Removing from the introductory text ``22.505(a)(1)'' and ``clause'' 
and adding ``22.505(a)(2)'' and ``provision'' in their places, 
respectively;
0
iii. Revising paragraph (b);
0
i. In Alternate II:
0
i. Revising the date;
0
ii. Removing from the introductory text ``22.505(a)(2)'' and ``clause'' 
and adding ``22.505(a)(3)'' and ``provision'' in their places, 
respectively;
0
iii. Revising paragraph (b); and
0
j. Adding Alternate III.
    The revisions and addition read as follows:


52.222-33   Notice of Requirement for Project Labor Agreement.

* * * * *

Notice of Requirement for Project Labor Agreement (Date)

* * * * *
    (a) Definitions. As used in this provision, the following terms are 
defined in clause 52.222-34 of this solicitation entitled Project Labor 
Agreement: ``construction,'' ``labor organization,'' ``large-scale 
construction project,'' and ``project labor agreement.''
    (b)(1) Offerors shall negotiate or become a party to a project 
labor agreement with one or more labor organizations for the term of 
the resulting construction contract.
    (2) The Offeror shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
* * * * *
    Alternate I (Date) * * *
    (b)(1) The apparent successful offeror shall negotiate or become a 
party to a project labor agreement with one or more labor organizations 
for the term of the resulting construction contract.
    (2) The Offeror shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
* * * * *
    Alternate II (Date). * * *
    (b)(1) If awarded the contract, the Offeror shall negotiate or 
become a party to a project labor agreement with one or more labor 
organizations for the term of the resulting construction contract.
    (2) The Offeror shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
    Alternate III (Date). As prescribed in 22.505(a)(4), substitute the 
following paragraph (b) in lieu of paragraphs (b) through (e) of the 
basic provision:
    (b)(1) If awarded the contract, the Offeror may be required by the 
agency to negotiate or become a party to a project labor agreement with 
one or more labor organizations for the term of the order. The 
Contracting Officer will require that an executed copy of the project 
labor agreement be submitted to the agency--
    (i) With the order offer;
    (ii) Prior to award of the order; or
    (iii) After award of the order.
    (2) The Offeror shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
0
11. Amend section 52.222-34 by--
0
a. Revising the date of the clause;
0
b. Adding in alphabetical order the definitions ``Construction'' and 
``Large-scale construction project'' in paragraph (a);
0
c. Revising the definition ``Labor organization'' in paragraph (a);
0
d. Removing from paragraph (b) ``this contract in accordance with 
solicitation provision 52.222-33, Notice of Requirement for Project 
Labor Agreement'' and adding ``the contract'' in its place;
0
e. Revising paragraph (c);
0
f. In Alternate I:
0
i. Revising the date;
0
ii. Removing from paragraph (b) ``Consistent with applicable law, the 
Contractor shall negotiate a'' and adding ``The Contractor shall 
negotiate or become party to a'' in its place;
0
iii. Removing from paragraph (c) introductory text ``Consistent with 
applicable law, the project'' and adding ``The project'' in its place;
0
iv. Removing from paragraph (c)(1) ``and all'' and adding ``and'' in 
its place;
0
v. Removing from paragraph (c)(4) ``the project'' and adding ``the term 
of the project'' in its place;
0
vi. Revising paragraph (f); and
0
g. Adding Alternate II.
    The revisions and additions read as follows:


52.222-34   Project Labor Agreement.

* * * * *

Project Labor Agreement (Date)

    (a) * * *
    Construction means construction, reconstruction, rehabilitation, 
modernization, alteration, conversion, extension, repair, or 
improvement of buildings, structures, highways, or other real property.
    Labor organization means a labor organization as defined in 29 
U.S.C. 152(5) of which building and construction employees are members.

[[Page 51052]]

    Large-scale construction project means a Federal construction 
project within the United States for which the total estimated cost of 
the construction contract(s) to the Federal Government is $35 million 
or more.
* * * * *
    (c) Subcontracts. (1) The Contractor shall include the substance of 
this clause, including this paragraph (c), in all subcontracts with 
subcontractors engaged in construction on the construction project.
    (2) The Contractor shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
* * * * *
    Alternate I (Date). * * *
* * * * *
    (f) Subcontracts. (1) The Contractor shall require subcontractors 
engaged in construction on the construction project to agree to any 
project labor agreement negotiated by the prime contractor pursuant to 
this clause, and shall include the substance of paragraphs (d) through 
(f) of this clause in all subcontracts with subcontractors engaged in 
construction on the construction project.
    (2) The Contractor shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.
    Alternate II (Date). As prescribed in 22.505(b)(3), substitute the 
following paragraphs (b) through (f) for paragraphs (b) through (f) of 
the basic clause:
    (b) When notified by the agency (e.g., by the notice of intent to 
place an order under 16.505(b)(1)) that this order will use a project 
labor agreement, the Contractor shall negotiate or become a party to a 
project labor agreement with one or more labor organizations for the 
term of the order. The Contracting Officer shall require that an 
executed copy of the project labor agreement be submitted to the 
agency--
    (1) With the order offer;
    (2) Prior to award of the order; or
    (3) After award of the order.
    (c) The project labor agreement reached pursuant to this clause 
shall--
    (1) Bind the Contractor and subcontractors engaged in construction 
on the construction project to comply with the project labor agreement;
    (2) Allow contractors and subcontractors to compete for contracts 
and subcontracts without regard to whether they are otherwise parties 
to collective bargaining agreements;
    (3) Contain guarantees against strikes, lockouts, and similar job 
disruptions;
    (4) Set forth effective, prompt, and mutually binding procedures 
for resolving labor disputes arising during the term of the project 
labor agreement;
    (5) Provide other mechanisms for labor-management cooperation on 
matters of mutual interest and concern, including productivity, quality 
of work, safety, and health; and
    (6) Fully conform to all statutes, regulations, Executive orders, 
and agency requirements.
    (d) Any project labor agreement reached pursuant to this clause 
does not change the terms of this contract or provide for any price 
adjustment by the Government.
    (e) The Contractor shall maintain in a current status throughout 
the life of the order any project labor agreement entered into pursuant 
to this clause.
    (f) Subcontracts. (1) For each order that uses a project labor 
agreement, the Contractor shall--
    (i) Require subcontractors engaged in construction on the 
construction project to agree to any project labor agreement negotiated 
by the prime contractor pursuant to this clause; and
    (ii) Include the substance of paragraphs (d) through (f) of this 
clause in all subcontracts with subcontractors engaged in construction 
on the construction project.
    (2) The Contractor shall not require subcontractors to enter into a 
project labor agreement with any particular labor organization when the 
project labor agreement includes multiple signatory labor organizations 
representing the same trade.

[FR Doc. 2022-17067 Filed 8-18-22; 8:45 am]
BILLING CODE 6820-EP-P