59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–471 

GOVERNMENT NEUTRALITY IN CONTRACTING ACT 

MARCH 23, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. CHAFFETZ, from the Committee on Oversight and Government 

Reform, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 1671] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Oversight and Government Reform, to whom 

was referred the bill (H.R. 1671) to preserve open competition and 

Federal Government neutrality towards the labor relations of Federal Government contractors on Federal and federally funded construction projects, having considered the same, report favorably 

thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Committee Statement and Views ........................................................................... 2 

Section-by-Section .................................................................................................... 4 

Explanation of Amendments ................................................................................... 5 

Committee Consideration ........................................................................................ 5 

Roll Call Votes ......................................................................................................... 5 

Application of Law to the Legislative Branch ....................................................... 5 

Statement of Oversight Findings and Recommendations of the Committee ...... 5 

Statement of General Performance Goals and Objectives .................................... 6 

Duplication of Federal Programs ............................................................................ 6 

Disclosure of Directed Rule Makings ..................................................................... 6 

Federal Advisory Committee Act ............................................................................ 6 

Unfunded Mandate Statement ............................................................................... 6 

Earmark Identification ............................................................................................ 6 

Committee Estimate ................................................................................................ 6 

Budget Authority and Congressional Budget Office Cost Estimate .................... 7 

Minority Views ......................................................................................................... 8 


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1Project Labor agreements are comprehensive pre-hire collective bargaining agreements that 

establish terms and conditions of employment for a specific construction project. U.S. Dept. of 

Transportation, Construction Program Guide, https://www.fhwa.dot.gov/construction/cqit/ 

pla.cfm. 2See Letter from Stephen E. Sandherr, Chief Executive Officer, Associated General Contractors of America to Marta Anerton, Contract Specialist, U.S. Army Corps of Engineers (July 30, 

2014) (discussing the Army Corps intent to require the use of PLAs on a construction project); 

Federal Highway Administration, Interim Guidance on the use of Project Labor Agreements 

(May 7, 2010), http://www.fhwa.dot.gov/construction/contracts/100507.cfm; Memorandum from 

Department of the Army on Procurement Instruction Letter (PIL) 2011–01–R1, USACE Policy 

Relating to the Use of Project Labor Agreements (PLAs) for Federal onstruction Projects (Dec. 

16, 2011), http://www.acq.osd.mil/dpap/cpic/cp/docs/PIL_2011-01- 

R1_Project_Labor_Agreements_Policy.pdf. 3Letter from American Council of Engineering Companies, et. al. to Rep. Jason Chaffetz, 

Chairman, Comm. on Oversight and Gov’t Reform, and, Elijah Cummings, Ranking Member, 

Comm. on Oversight and Gov’t Reform (Jan. 11, 2016) on file with Comm. 4 Vince Vasquez, et. Al., Measuring the Cost of Project Labor Agreements on School Construction in California, National University System Institute for Public Research (2011). 5 Id. 

COMMITTEE STATEMENT AND VIEWS

PURPOSE AND SUMMARY

H.R. 1671, the Government Neutrality in Contracting Act, will 

ensure that federal agencies neither prohibit nor promote project 

labor agreements (PLAs) in federally-funded or federal government 

construction contracts.1 In 2009, Executive Order 13502 established a preference for PLAs in federal or federally-assisted construction contracts. H.R. 1671 would prevent agencies from referencing PLAs when evaluating construction contract bids by ensuring that no preference is given either in favor or against PLAs. 

The purpose of this bill is to promote efficient and nondiscriminatory administration and completion of construction projects. The 

bill will also help to ensure that the federal government, and therefore American taxpayers, receive the best possible value in construction contracts. H.R. 1671 accomplishes this by ensuring robust 

competition through equal treatment of union and non-union contractors. 

BACKGROUND AND NEED FOR LEGISLATION

In 2009, President Barack Obama signed Executive Order (E.O.) 

13502 on the use of project labor agreements. E.O. 13502 strongly 

encourages the use of PLAs in federal or federally-assisted construction projects. Although the E.O. does not explicitly mandate 

the use of PLAs in federal or federally-assisted contracts, agencies 

have used it to openly encourage funding recipients to mandate 

PLAs. For example, federal agencies have issued guidance stating 

that contractors who participate in PLAs may receive preference 

during the evaluation process or allow projects to mandate PLAs 

in contracts.2

Mandated PLAs are particularly concerning given that PLAs can 

drive up the cost of federal or federally-assisted construction 

projects by as much as 18 percent.3 For example, a study of 551 

California school construction projects, 65 of which were built using 

PLAs, showed that PLA contracts increased the construction costs 

by $29 to $32 per square foot.4 This same study concluded that 

PLAs are not a ‘‘costless policy tool’’, but instead a cost increasing 

policy initiative.5

The Government Neutrality in Contracting Act will promote efficient administration and completion of federal and federally-asVerDate Sep 11 2014 00:48 Mar 25, 2016 Jkt 059006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR471.XXX HR471

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6Maury Baskin, Government-Mandated Project Labor Agreements: The Public Record of Poor 

Performance (2011). 7 Id. 

8 41 U.S.C. 3301(a)(1). 

9 National Right to Work Legal Defense Foundation, http://www.nrtw.org/neutrality/ na_6.htm. 

10Paul Carr, Investigation of Bid Price Competition Measured through Prebid Project Estimates, Actual Bid Prices, and Number of Bidders, J. of Construction, Engineering and Management (Nov. 2005). 11Letter from Ben Brubeck, Director of Labor and Federal Procurement, Associated Builders 

and Contractors, Inc. to Tom Dickert, USACE (Mar. 22, 2011) (additional surveys cited in the 

letter show between 70–86 percent of nonunionized contractors surveyed would be unlikely to 

bid on projects requiring PLAs). 12Office of Advocacy, The Small Business Economy: A Report To The President, U.S. Small 

Business Administration, (2009). 13 Ben Brubeck, Government Project Labor Agreement Mandates Harm Small Businesses, The 

Truth About PLAs (June 2, 2010), http://thetruthaboutplas.com/2010/06/02/governmentproject-labor-agreement-mandates-harm-small-businesses/. 

sisted construction projects. A review of federal construction 

projects during from 2001–2009, during which President George W. 

Bush’s E.O. prohibiting mandated PLAs was in place, found no 

delays caused by significant labor disputes.6 In comparison, a review of state construction projects with mandated PLAs found numerous instances of delay as a result of labor disputes. Further, 

evidence of delays caused by PLAs are also evident at the state 

level. For example, a review by the New Jersey Department of 

Labor found that PLA projects experienced an average duration of 

100 weeks compared to non-PLA projects duration of 78 weeks.7 By 

eliminating the potential for delays that result from mandated 

PLAs, this bill will ensure that the federal government, and by extension the taxpayer, receives the best value in construction contracts. 

Under the Competition in Contracting Act, P.L. 98–494, agencies 

are required to ‘‘obtain full and open competition through the use 

of competitive procedures’’ in all procurements.8 PLAs, however, 

can effectively reduce competition by excluding certain contractors 

and their employees from competing for construction projects—because not all contractors participate in PLAs. Currently, more than 

80 percent of the private construction workforce in the United 

States is non-union.9 In addition, because PLAs increase the cost 

of the project, fewer individuals will bid on the construction 

projects, thereby reducing competition.10 A poll conducted by the 

Associated Builders and Contractors, Inc. of its members found 

that 98 percent of all respondents would be less likely to bid on a 

contract where a PLA was mandated.11 The requirement of a PLA, 

or even providing preference to such agreements, would therefore 

effectively hamper the ability of that 80 percent of contractors to 

effectively compete for construction contracts. 

Additionally, the idea that PLAs in federal and federally-assisted 

construction contracts does not impact small business because of 

the large size of these contracts is a misconception. The Small 

Business Administration notes that the construction industry in 

particular is made up of a large number of small businesses; with 

a more than an 86 percent of construction firms considered small 

businesses.12 However, these small businesses are mostly nonunion and are disadvantaged when PLAs are involved. As a result, 

the use of PLAs can negatively impact the small business setasides put in place by Congress to promote small businesses.13 The 

Government Neutrality in Contracting Act will help ensure that 


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14Kevin Dayton, Community College Board in California Will Be Accountable to Voters, 

UnionWatch.org (Oct. 17, 2015), http://unionwatch.org/community-college-board-in-californiawill-be-accountable-to-voters/. 15 Carl Horowitz, New Bill Would Ban Mandatory Project Labor Agreements, National Legal 

and Policy Center (April 30, 2015), http://nlpc.org/stories/2015/04/30/new-bill-would-banmandatory-project-labor-agreements. (Although the article states only 19 states enacted bans following the 2009 executive order, the article was printed before Nevada had passed its ban). See 

Joanna Masterson, Nevada Bans PLA Mandates, Construction Executive (July 28, 2015), 

http://www.constructionexec.com/Articles/tabid/3837/entryid/4140/nevada-bans-pla-mandates.aspx. 

policies designed to promote and support small business in government contracting are unencumbered by the use of PLA preferences. 

The Committee notes that 23 states currently bar the use of government-mandated PLAs,14 with 20 of these states having imposed 

the prohibition in the wake of the 2009 E.O.15

LEGISLATIVE HISTORY

H.R. 1671, the Government Neutrality in Contracting Act, was 

introduced by Congressman Mick Mulvaney (R–SC) on March 26, 

2015 and referred to the House Committee on Oversight and Government Reform. At a January 12, 2016 business meeting, the 

Committee ordered H.R. 1671 favorably reported by voice vote. 

Currently, H.R. 1671 has 103 cosponsors. 

The Senate companion, S. 71, was introduced by Senator David 

Vitter (R–LA) and referred to the Committee on Homeland Security 

and Governmental Affairs on January 7, 2015. That bill currently 

has 11 cosponsors. 

SECTION-BY-SECTION

Section 1. Short title 

Designates the short title of the bill as the ‘‘Government Neutrality in Contracting Act’’. 

Section 2. Purposes 

Establishes that the purpose of the bill is to promote economical, 

efficient, and nondiscriminatory administration and completion of 

federal construction projects. The bill accomplishes this by ensuring 

open competition on federal construction projects and those using 

federal funds and reducing construction costs for the government. 

The bill also ensures that the federal government remains neutral 

toward labor relations of contractors. Finally the bill expands job 

opportunities, particularly among small and disadvantaged businesses and prevents discrimination against contractors and employees based on labor affiliation status. 

Section 3. Preservation of open competition and Federal Government 

neutrality 

Section 3(a) establishes that after the date of enactment, the 

head of each executive agency shall ensure that it does not require 

or prohibit a party seeking a construction contract from participating or entering into agreements with labor organizations related 

to the construction project. It also requires that the agency does not 

discriminate or give preference to a party because it signs or adheres to a PLA or refuses to do so. 

Section 3(b) establishes the same general rule in Section 3(a) to 

neither support nor prohibit signing such labor agreements with 


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one or more labor organization—for the purposes of grants, financial assistance, or cooperative agreements. 

Section 3(c) states that if an executive agency, an entity receiving 

funds from an agency, a party to, or construction manager operation on behalf of a cooperative agreement fails to comply with the 

general rule, then the head of the agency ‘‘shall take such action, 

consistent with law, as the head of the agency determines to be appropriate.’’ 

Section 3(d) establishes exemptions for the general rule, including a finding of ‘‘special circumstances’’ to avert an imminent 

threat to public health or safety or to serve the national security. 

‘‘Special circumstances’’ does not include the possibility or existence 

of a labor dispute. Also exempted are those situations where such 

labor agreements were in place prior to enactment of this bill. 

Section 3(e) requires the Federal Acquisition Regulatory Council, 

no later than 60 days after enactment, to amend the Federal Acquisition Regulation to implement the provisions of this bill. 

Section 3(f) provides definitions for: construction contract; Executive Agency with reference to Title 5; and Labor organization with 

reference to section 701(d) of the Civil Rights Act. Construction 

contract is defined as ‘‘any contract for the construction, rehabilitation, alteration, conversion, extension, or repair of buildings, highways, or other improvements to real property.’’ 

EXPLANATION OF AMENDMENTS

No amendments to H.R. 1671 were adopted during Full Committee consideration of the bill. 

COMMITTEE CONSIDERATION

On January 12, 2016 the Committee met in open session and ordered reported favorably the bill, H.R. 1671, by roll call vote, a 

quorum being present. 

ROLL CALL VOTES

No roll call votes were requested or conducted during Full Committee consideration of H.R. 1671. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch where the bill 

relates to the terms and conditions of employment or access to public services and accommodations. This bill preserves open competition and Federal Government neutrality towards the labor relations of Federal Government contractors on Federal and federally 

funded construction projects. As such this bill does not relate to 

employment or access to public services and accommodations. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 


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STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goal or objective of this bill is to preserve open competition and Federal Government neutrality towards the labor relations of Federal Government contractors on Federal and federally funded construction 

projects. 

DUPLICATION OF FEDERAL PROGRAMS

No provision of this bill establishes or reauthorizes a program of 

the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULE MAKINGS

The Committee estimates that enacting this bill does direct the 

completion of specific rule makings within the meaning of 5 U.S.C. 

551 as follows. H.R. 1671 section 3(e) requires the Federal Acquisition Regulatory Council, no later than 60 days, to amend the Federal Acquisition Regulation to implement the provisions of the bill. 

FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., Section 5(b). 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement as to whether 

the provisions of the reported include unfunded mandates. In compliance with this requirement the Committee has received a letter 

from the Congressional Budget Office included herein. 

EARMARK IDENTIFICATION

This bill does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(1) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out this bill. 

However, clause 3(d)(2)(B) of that rule provides that this requirement does not apply when the Committee has included in its report 

a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act of 1974. 


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BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause (3)(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 

1974, the Committee has received the following cost estimate for 

this bill from the Director of Congressional Budget Office: 

H.R. 1671—Government Neutrality in Contracting Act 

H.R. 1671 would prohibit federal agencies working on construction projects from either requiring or prohibiting the use of project 

labor agreements (PLA) except in specific circumstances. On February 9, 2009, Executive Order 13502 encouraged all federal agencies to use PLAs on construction projects exceeding $25 million. A 

PLA is a collective bargaining agreement that applies to a specific 

project and is effective only for the duration of that project. Under 

those agreements, which generally include provisions regarding 

wages and fringe benefits and procedures for resolving labor disputes, workers generally agree not to strike and contractors agree 

not to lock out workers. The bill would allow contractors and 

unions working on construction projects that involve the expenditure of federal funds to voluntarily negotiate and execute a PLA. 

Information from the Army Corps of Engineers, General Services 

Administration, the Congressional Research Service, as well as 

union and non-union contractors, is not sufficient to allow CBO to 

determine whether the use of PLAs under current law results in 

any significant costs or savings to the federal government. However, because CBO expects that H.R. 1671 would not significantly 

change the contracting process or the use of PLAs, CBO estimates 

that implementing the bill would not have a significant effect on 

the federal budget. 

Because enacting the bill could affect direct spending by agencies 

not funded through annual appropriations, pay-as-you-go procedures apply. CBO estimates, however, that any net change in 

spending by those agencies would be negligible. Enacting H.R. 1671 

would not affect revenues. 

CBO estimates that enacting H.R. 1671 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2027. 

H.R. 1671 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Matthew Pickford. 

This estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 


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1 Exec. Order No. 13502, 74 Fed. Reg. 6985, Use of Project Labor Agreements for Federal Construction Projects (Feb. 6, 2009) (online at www.whitehouse.gov/the-press-office/executive-orderuse-project-labor-agreements-federal-construction-projects). 2General Accounting Office, Project Labor Agreements: The Extent of Their Use and Related 

Information (May 29, 1998) (GAO/GGD–98–82) (online at www.gao.gov/assets/230/225719.pdf). 

MINORITY VIEWS 

The sole purpose of H.R. 1671 is to overturn Executive Order 

13502, issued by President Obama on February 6, 2009. 

Executive Order 13502 does not require the use of Project Labor 

Agreements (PLA) on any federal contract. The Executive Order 

states that: 

In awarding any contract in connection with a largescale construction project, or obligating funds pursuant to 

such a contract, an executive agency may, on a project-byproject basis, require the use of a project labor agreement 

where use of such an agreement 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) consistent with law.1

H.R. 1671 would create a permanent statutory prohibition preventing federal agencies from requiring the use of PLAs in any contract, bid specification, project agreement, or other controlling document for any construction contract. The legislation would also prohibit the inclusion of any provisions requiring the use of PLAs in 

the contracts associated with any projects funded by any type of 

federal assistance, including grants and cooperative agreements. 

According to a report by the-then-General Accounting Office 

(GAO) issued in 1998, ‘‘PLAs have been used in all 50 states and 

the District of Columbia on federal, state, local government, or private sector construction projects.’’ GAO also found that PLAs have 

been used extensively by the private sector, including on such 

projects as ‘‘the Trans-Alaska Pipeline and Disney World.’’ 2

Despite the wide use of PLAs in the private sector, under H.R. 

1671, a federal agency would not be able to require the use of a 

PLA even if the agency found that a PLA would be in taxpayers’ 

best interests and would achieve economy and efficiency in procurement. 

It is a disservice to American taxpayers to prevent federal agencies from using a project management process that is widely used 

by the private sector to hire labor for construction projects in those 


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circumstances when a PLA would protect the government’s investment or save the government money. 

ELIJAH E. CUMMINGS, Ranking Member. 

Æ 


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