Why It Matters
Executive Order 14063, which mandates project labor agreements on large federal construction projects, has survived multiple legal challenges and policy disputes to remain in effect as of August 2026. The Congressional Research Service (CRS) examined the legal and policy stakes in a report published on Wednesday, August 12, documenting how former President Biden administration's approach to labor agreements on federal construction has weathered litigation and been ultimately affirmed by the Trump administration.
Executive Order 14063, issued on February 4, 2022, requires project labor agreements (PLAs) on federal construction projects with a total estimated cost of $35 million or more. The order and subsequent judicial decisions represent a significant shift in federal policy after decades of oscillation between presidential administrations favoring and opposing the agreements.
The Big Picture
A project labor agreement is a prehire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. The legal foundation for PLAs rests in Section 8(f) of the National Labor Relations Act, which permits employers in the construction industry to enter into such agreements. Congress intended them to accommodate employment conditions unique to the construction industry, including the short-term nature of building projects and challenges associated with post-hire collective bargaining.
Presidential guidance on PLAs has swung dramatically over three decades. President George H.W. Bush prohibited federal agencies from requiring them in 1992 through Executive Order 12818. President Clinton reversed course in February 1993 with Executive Order 12836, rescinding the prohibition. Clinton later issued a memorandum in 1997 encouraging PLAs on projects exceeding $5 million.
President George W. Bush revoked that guidance in 2001 with Executive Order 13202, promoting government neutrality instead. President Obama reversed again in 2009 with Executive Order 13502, encouraging but not requiring PLAs on projects exceeding $25 million.
President Biden fundamentally shifted the approach in February 2022, when he issued executive order: "Use of Project Labor Agreements for Federal Construction Projects" (Executive Order 14063), requiring PLAs on federal construction projects with a total estimated cost of $35 million or more. Unlike prior directives, that order mandated rather than encouraged, requiring contractors and subcontractors to agree to negotiate or become party to a PLA. It mandates that PLAs guarantee against strikes, lockouts, and similar job disruptions while establishing binding dispute resolution procedures.
The order permits exceptions: senior agency officials may grant relief when a PLA would not advance economy and efficiency, when it would substantially reduce bidders and frustrate full and open competition, or when it would conflict with statutes, regulations, or other executive directives. Agencies must then provide written justification for any waiver granted.
Executive Order 14063 requires many federal construction contractors to sign project labor agreements with unions on large federal projects. In 2023, the Associated Builders and Contractors sued to block the order, the implementing Federal Acquisition Regulation rule, and related Office of Management and Budget guidance. The group argued the requirement violates six federal laws: the Competition in Contracting Act, the Federal Property and Administrative Services Act, the National Labor Relations Act, the Administrative Procedure Act, the Office of Federal Procurement Policy Act, and the First Amendment.
Legal Challenges and Outcomes
The legal landscape surrounding Executive Order 14063 has shifted significantly since 2023. On January 19, 2025, the U.S. Court of Federal Claims ruled in MVL USA, Inc. et al. v. United States that the PLA requirement violates the Competition in Contracting Act by excluding non-union contractors and limiting full and open competition. However, on May 6, 2025, the same court denied the motion for a permanent injunction after the government took corrective action on the specific protested procurements, rendering the case moot.
In April 2026, the U.S. Court of Appeals for the Eleventh Circuit upheld the order in Associated Builders and Contractors Florida First Coast Chapter v. GSA. The three-judge panel rejected arguments that the PLA requirement violated the Competition in Contracting Act, finding that the order's built-in exceptions preserve full and open competition by reference. The court also held that any President has broad authority to prescribe policies and directives considered necessary under the Federal Property and Administrative Services Act and rejected the plaintiffs' First Amendment and Administrative Procedure Act claims. No Supreme Court petition has been filed challenging this decision.
Trump Administration's Policy Evolution
The Trump administration initially attempted to circumvent Executive Order 14063 through policy action. In February 2025, the Department of Defense and General Services Administration issued memoranda attempting to exempt their projects from the PLA requirement. However, on May 16, 2025, the U.S. District Court for the District of Columbia granted a preliminary injunction requested by North America's Building Trades Unions in NABTU v. Department of Defense et al., blocking the administration's attempt to exempt DOD and GSA projects. The court found the administration likely violated the Administrative Procedure Act in issuing the memos without proper notice and comment procedures.
Following the preliminary injunction, the Trump administration reversed course. On June 12, 2025, White House Office of Management and Budget Director Russell Vought issued a memo directing continued agency use of project labor agreements on large federal construction projects, stating that Executive Order 14063 remains in effect. The memo indicated the administration supports PLAs "where those are practicable and cost-effective," while pointing to existing FAR provisions that allow exceptions for price-based concerns. Both the DOD and GSA subsequently rescinded their earlier memoranda, and the NABTU lawsuit was dismissed as moot.
The Bottom Line
Executive Order 14063 remains in effect and is being actively implemented across federal agencies as of August 2026. The order has survived legal challenges from business groups and policy resistance from the Trump administration. While the Court of Federal Claims initially struck down the mandate on the merits in January 2025, that ruling became moot after the government took corrective action. The Eleventh Circuit's April 2026 decision upholding the order stands unopposed, with no pending Supreme Court challenge.
The Trump administration, after initially attempting to circumvent the order, has affirmed through OMB guidance that Executive Order 14063 remains binding. Federal construction spending will continue to be subject to the PLA requirement on projects exceeding $35 million, providing labor advocates with a significant policy victory while business groups continue to navigate the mandate's implementation.
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