A U.S. Federal Claims judge has ruled in favor of construction companies challenging President Biden’s December 2023 executive order mandating project labor agreements (PLAs) for federal contracts over $35 million. Judge Ryan Holte’s decision criticized the rule, stating it ignored federal research suggesting PLAs would be anti-competitive and relied on “arbitrary and capricious” policy.

This ruling applies only to specific bid protests, but construction industry groups see it as a significant victory, opening the door for more legal challenges. Dirk Haire, an attorney for the plaintiffs, noted the decision could hinder the government’s ability to implement future PLAs.

The ruling concerns projects in six states, including work from the U.S. Army Corps of Engineers, General Services Administration, and Naval Facilities Engineering Systems Command, which had issued PLAs for solicitations in response to Biden’s executive order. Holte’s ruling indicated that the PLAs were inserted solely because of Biden’s policy, not based on substantial evidence.

The plaintiffs — MVL USA, Environmental Chemical Corp., JCCBG2, Harper Construction Co., and Hensel Phelps — filed protests against the mandate. Holte ruled that the agencies involved must amend their contracts by February 3.

The executive order, issued amid the Infrastructure Investment and Jobs Act funding, was meant to support workers and reduce project delays, but it sparked opposition from builders who felt it disadvantaged non-union contractors. The Associated General Contractors of America, which helped facilitate the challenge, argued that the mandate was an unlawful federal set-aside program.

Following the decision, industry leaders like Ben Brubeck from the Associated Builders and Contractors encouraged more protests against the PLA rule, citing the potential for a similar outcome. The ruling could pave the way for further challenges unless a court issues an injunction or future administrations alter the policy.