Project Labor Agreements: Contractor's Proposal Rejected Because it Failed to Submit a Binding PLA
If you scroll through our now seven-year-old catalog of blog posts, you’ll see many posts that emphasize the often devastating effects of failing to cross T’s and dot I’s when submitting a proposal for a contract. The Government Accountability Office recently denied the protest of an offeror that had failed so satisfy a key element of the solicitation. See 4K Global-ACC JV, LLC, B-423092 (Jan 15, 2025). Specifically, the prospective construction contractor lost out when its offer to do building repair work was rejected due to the absence of a Project Labor Agreement (“PLA”) that complied with the solicitation requirements. Although the offeror submitted a PLA, the PLA was not an agreement between the offeror, its subcontractors, and a labor organization. In fact, the agreement was not signed by anyone else other than the contractor and the listed parties were the offeror and the Government, but no one else.
When a PLA will be used for a particular contract, the contracting agency must include the PLA contract clause (FAR 52.222-34) and the solicitation provision (FAR 52.222-33) that furnishes notice to offerors that they will be required to enter into a PLA with a labor organization. When the agency choose the default versions of these clauses, an offeror must enter into a PLA with a union up front and submit a copy of it with its offer. FAR 52.222-33(b), (e).
Alternatively, the PLA requirement can be deferred until the agency selects an apparent successful offeror that will then be required to enter into a PLA before the award is finalized. FAR 52.222-33, Alternate I. Or, the PLA may be entered into after award. FAR 52.222-33, Alternate II. Or, if the contract is a task order contract, the duty to enter into a PLA may arise after award in connection with an order under that contract. FAR 52.222-33, Alternate III. Regardless of when the PLA requirement is triggered, a PLA must, among other requirements, “[b]ind the Offeror and subcontractors engaged in construction on the construction project to comply with the project labor agreement.” See FAR 52.222-33(c)(1).
As I mentioned above, the offeror submitted a PLA executed by it; however, there was no labor organization, nor any subcontractors that had signed on. For this reason, the contracting agency determined that the proposed PLA didn’t pass muster. The protester raised a number of arguments as to why the agency’s evaluation was flawed, but I will focus here on its contention that the agency should have found its PLA acceptable because it demonstrated what it would enter into if it received the award.
As GAO saw their argument, the protester questioned the reasonableness of the solicitation. Under long-standing GAO authorities, challenges to the reasonableness of solicitation requirements must be raised before offers are due. Not having done so, GAO denied the protest because the PLA didn’t comply with the solicitation’s requirements.
Recognizing there may have been circumstances that weren’t discussed in GAO’s decision, I can’t discern why the offeror may have believed its PLA would be acceptable. It simply didn’t comply with the fundamental requirement that the PLA be an actual, binding agreement with the offeror, its proposed subcontractors (if any), and a labor organization. Proffering an agreement that the contractor would enter into after award is facially insufficient unless the contracting agency chooses one of the alternate approaches don’t require a binding PLA to be submitted with the offer.
As I see it—if an offeror believes a solicitation should not require an advance PLA, then it should address questions to the contracting agency before offers are due in an effort to either change the solicitation requirements or, at a minimum, to get the agency to clarify the requirement. Otherwise, offerors should review PLA requirements carefully and follow them. A mere promise to follow them after award simply wasn’t sufficient here.