Twelve Construction companies challenged the project labor agreements (PLA) mandate for federal construction products over $35M. They claimed it violated CICA’s “full and open competition” by disqualifying otherwise qualified offerors. Based on precedent, COFC agreed, and found no statute from Congress authorized the PLA mandate’s contravention of CICA. The court granted judgment to the construction companies.
MVL USA, Inc., et al. v. United States, COFC Nos. 24-1057, 24-1077, 24-1144, 24-1219, 24-1398, 24-1433, 24-1461
- Background – Twelve large construction companies (Plaintiffs) challenged the legal authority of federal agencies to mandate prospective contractors to enter project labor agreements (PLA) with unions for consideration in federal construction products exceeding $35M.
- 2022 PLA Executive Order – In 2022, President Biden issued Executive Order (EO) 14063 which mandated agencies to include PLAs with “one or more appropriate labor organizations” in “large-scale” government construction projects exceeding $35M. The stated rationale was to “avoid labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes and by prohibiting work stoppages, including strikes and lockouts.” The EO required the FAR Council to propose regulations implementing the order within 120 days.
- CICA Violation – The plaintiffs argued the PLA requirements violated the Competition in Contracting Act’s (CICA) “full and open competition” requirements by disqualifying otherwise responsible offerors who do not enter into a PLA with a labor union. They claimed the PLA requirements must be expressly authorized by statute and cannot rely on the Biden EO as a statutory authorization. COFC noted that offerors had been excluded on the PLA basis alone. The court found that the PLA mandate had “no substantive performance relation to the substance of the solicitations at issue” and violated CICA’s full and open competition requirement
- Precedent – The court found the analysis of National Government Services, Inc. v. United States, 923 F.3d 977 (Fed. Cir. 2019) instructive. In that case, the Federal Circuit reviewed whether limitations for the administration of Medicare claims and benefits violated CICA’s full and open competition requirement. In the instant case, COFC echoed NGS, 923 F.3d 977 when it stated that “a responsible offeror that [declines to enter a PLA] is not given the same opportunity to win an award.”
- Exceptions to CICA – The court then considered whether the PLA qualified for any exceptions to the full and open competition requirement. The government already conceded during oral argument that if the court found the PLA requirements violated CICA, it did not invoke any statutory exceptions. However, the government argued it would rely on U.S.C. § 3306, which authorizes agencies to specify their needs. The court was unconvinced and found that the PLA mandate fell short of the express statutory authorization mandated by Congress by §3301(a) of CICA. There were no provisions that expressly authorized the PLA mandate.
- Conclusion – The court already decided the plaintiffs succeeded on the merits of their case without analyzing multiple other factors the parties raised. The court recognized some unique features of each protest remained. As such, it afforded the agencies a short period of time to reassess their PLA decision on an individual basis considering each of the plaintiffs’ cases. The parties were to file a joint status report explaining the plains for each solicitation moving forward. The plaintiffs’ motions for judgment were granted.
The plaintiffs were represented by Dirk D. Haire, Joseph L. Cohen, Payum Sean Milani-nia, David Timm, Jane Jung Hyoun Han, and Michael J. Brewer of Fox Rothschild, LLP; and Jacob W. Scott, Allison G. Geewax, and Mark S. Abrajano of Smith Currie Oles LLP. The government was represented by William P. Rayel, Natalee A. Allenbaugh, Brian M. Boynton, Patricia M. McCarthy, and Douglas K. Mickle of DOJ; and Tarrah M. Beavin of USACE, J. Alexandra Fitzmaurice of NAVFAC Southeast, Angelina Calloway of GSA Region 7.
— Case summary by Joshua Lim, Assistant Editor
