Project Labor Agreements on Public Projects: What Virginia Contractors Need to Know Before Bidding

Project Labor Agreements (PLAs) are showing up more often in public construction procurement across the country — and increasingly here in Virginia. Many contractors, especially those not steeped in union labor relations, may be unsure what PLAs are, where they are required, and how they can affect competitive bidding and project performance. This primer breaks down current trends, what PLAs actually are, and practical steps contractors should take before bidding on PLA-covered work.

What Is a Project Labor Agreement?

At its core, a Project Labor Agreement is a pre-hire collective bargaining agreement negotiated for a specific construction project before any workers are hired. It sets labor terms — wages, benefits, work rules, hiring hall procedures, dispute resolution processes, and no-strike/no-lockout guarantees — for all contractors and subcontractors on that project, regardless of whether they would otherwise be unionized.

PLAs are sometimes called Community Workforce Agreements or project-specific CBAs. They are widely used in northern states with strong building trades traditions, but they are also not confined to those regions; PLA use is expanding geographically and into new sectors.

Why PLAs Are on the Rise (Even Here in Virginia)

PLAs have gained renewed momentum in recent years in large part because they give organized labor greater control over how major public projects are staffed and performed – even in areas where unions have been unable to organize workers. From the unions’ perspective, PLAs lock in hiring hall access, wage and benefit standards, jurisdictional rules, and grievance procedures across an entire project, while limiting the ability of contractors to deviate from established union practices. They also reduce competitive pressure from non-union firms by requiring all bidders to operate under union-negotiated terms. Combined with political support for workforce standardization, apprenticeship programs, and “labor harmony” initiatives, these features have made PLAs an increasingly attractive tool for unions advocating their expanded use on public construction projects.

Federal Activity

In the federal sphere, federal agencies issued regulations implementing Executive Order 14063 (2022), which directs the use of PLAs on large-scale federal construction projects — generally defined as those with total costs of $35 million or more. Under current regulatory guidance, agencies are expected to require PLAs unless specific exceptions are documented.

This federal PLA requirement has faced legal pushback from industry groups and contractors on competition grounds, and there have been court rulings questioning its legality. Federal PLA requirements under Executive Order 14063 and related FAR rules have faced significant legal challenges. In early 2025, the U.S. Court of Federal Claims ruled that mandatory PLAs violate competition laws in certain cases, leading to ongoing uncertainty. Agencies have issued guidance scaling back enforcement, but some solicitations may still include PLA provisions. Contractors should review each solicitation carefully and consult legal counsel, as the landscape could shift further.

Local and State Uptick in Virginia

Across Virginia, local governments are experimenting with PLAs as well, pursuant to Virginia Code § 2.2-4321.2, which authorizes public bodies to require PLAs.

• In 2024, Fairfax County adopted a PLA for the rehabilitation of its largest wastewater pump station — the first major local government project in Virginia to formally implement a PLA.
• Prince William County recently approved a PLA pilot for construction of its 14th high school, signaling local interest in using PLAs for major public education facilities.
• Renewable energy and large infrastructure projects — such as the ongoing Coastal Virginia Offshore Wind initiative — are more likely to involve labor agreements that resemble PLAs as part of broader workforce commitments and community benefit strategies.

PLA policy has also become a topic in statewide political debate. During her campaign, Governor Abigail Spanberger publicly supported the use of project labor agreements on large state-funded projects, drawing both praise from labor groups and criticism from opponents who argue PLAs can increase construction costs. Spanberger’s stance — part of a broader emphasis on workforce development and labor issues during the campaign — signals that PLA expectations could continue to influence procurement policy at the state level.

How PLAs Affect Contractors

1. PLA Terms Can Supersede Your Normal Agreements

Even if your home company has negotiated collective bargaining agreements or normally operates in a merit-shop environment, a PLA will typically supersede those arrangements for the duration of that project (but do not affect home agreements outside the project). You must comply with its terms — including wage scales, hiring rules, benefit contributions, and dispute procedures — to remain eligible to perform the work.

This is important because the PLA’s labor requirements can materially change your labor cost assumptions and scheduling models.

2. Uniform Rules for All Bidders — BUT With Implementation Risk

Owners usually intend for PLAs to create a uniform labor regime for all contractors and subcontractors on a project. That is part of the value proposition from the owner’s perspective: standardized work rules, predictable dispute resolution, and minimized labor disruption.

But this also means:

• You cannot unilaterally negotiate a “better deal” for yourself relative to competitors.
• You must understand and price based on the entire PLA labor package, not just the wage rate for your specific craft.

This uniformity is especially true on public projects, where giving one bidder a materially different PLA footing than another could create procurement challenges.

3. PLA Requirements Can Affect Competition and Pricing

PLAs can influence competition in several ways:

• Reduced bidder pool: Some non-union firms may choose not to bid because of prescriptive union labor terms, reducing competition and potentially increasing project labor costs.
• Cost variability: Even union contractors often see PLA terms that differ from their home agreements — for example, in hiring hall rules, fringe benefit contributions, or jurisdictional assignments — which affects pricing.
• Subcontractor participation: If a subcontractor refuses to perform under the PLA’s terms (e.g., wage scales or benefit requirements), the GC must notify the owner and seek direction rather than simply replace the sub, because the owner’s PLA framework is a material condition of the contract.

These dynamics are why industry associations — including associations of merit-shop and general contractors — have historically opposed mandatory PLAs on large public construction, arguing they can reduce competition and increase costs.

Practical Advice for Contractors Before Bidding

Here’s what construction firms should do when facing a PLA requirement:

1. Understand the PLA Before You Bid

• Don’t assume the PLA will be negotiated after contract award or that you can somehow “bid around” the use of a PLA.
• Ask the owner or contracting agency for any existing draft PLA terms as part of bid due diligence.
• If PLA terms are not in the solicitation, submit a formal question or RFI asking who negotiates the PLA, on what timeline, and whether there are draft provisions you can price against.

This helps avoid pricing surprises and positions you to assess risk.

2. Identify Who Negotiates the PLA

On many public projects, PLAs are negotiated by the owner with a building and construction trades council representing multiple craft unions. When multiple trades are involved, expecting one union to speak for all is usually unrealistic — the PLA must be structured through a multi-union or council framework to have workforce buy-in and operational credibility.

Meaningful negotiation often involves the trades council, and your compliance obligations will flow from that agreement.

3. Engage Early with Subs and Workforce Planning

• Confirm whether your existing workforce and subcontractors can comply with the PLA’s terms.
• If a key subcontractor refuses to work at the PLA rates or under PLA terms, document that refusal and notify the owner promptly with a request for direction — proceeding without resolution risks non-compliance.
• Budget for potential travel, referral, or hiring hall procedures that might differ from your usual hiring practices.

4. Document Your Assumptions and Bid Position

Before submitting a bid:

• Write down your labor cost assumptions — including any known PLA-specific costs — and how those differ from your usual models.
• Include a reservation of rights or assumption disclosure where appropriate, stating explicitly that your pricing assumes the PLA as described in the solicitation and any deviation may justify an equitable adjustment.

This protects you if the PLA terms change post-award or are clarified in a way that materially alters your cost base.

Bottom Line for Virginia Contractors

PLAs are not hypothetical. They are being used more frequently in federal projects, and Virginia local governments are increasingly adopting or piloting PLA requirements even on non-traditional public work such as school buildings and energy infrastructure. Awareness, early inquiry, and PLA-specific bid planning are no longer optional for contractors bidding on large public contracts.

Understanding how PLAs work — and preparing your bid and workforce strategies accordingly — can mean the difference between a profitable award and unexpected cost or compliance risk.

The preceding is general information, not legal advice; consult an attorney for project-specific guidance.

Jeff Wilson is a Pender & Coward labor and employment attorney, who has advised public and private employers for more than twenty years, helping them navigate the legal, operational, and reputational risks that arise in managing today’s workforce.

Tom Berkley is a Pender & Coward attorney focusing his practice on representing maritime and waterfront centric clients. He serves as outside general counsel for some of his clients.