Analysis of 2001 Bush Executive Order Allowing Federal Funds for Project Labor Agreements
In early 2001, President George W. Bush issued two executive orders related to a prohibition on federal funding for construction contracts that included a requirement for contractors to sign a Project Labor Agreement with trade unions. The first executive order – Presidential Executive Order 13202, signed on February 17, 2001 – received national news coverage and Congressional attention.
The second executive order – Presidential Executive Order 13208, signed on April 6, 2001 – was obscure and technical. However, it affected public policy for federally-funded projects in California, New York, Massachusetts, Washington, and Alaska.
This second executive order becomes relevant again as President-Elect Trump considers an executive order to return federal contracting policy to “Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects,” as it was previously established during the Bush Administration. (See Will Mandated Project Labor Agreements Again Trigger Ineligibility for Federal Funds? – UnionWatch.org – January 3, 2017.)
Here is the first publicly-available comprehensive analysis of Presidential Executive Order 13208.
Executive Order 13208 Allowed Federal Funding to a Few Contracts Mandating Project Labor Agreements
In the beginning of 2001, state and local governments were mandating Project Labor Agreements in bid specifications for federally-funded contracts in several states where construction unions had significant political power. A 3-2 vote of the Board of Supervisors in traditionally Republican Orange County, California to impose Project Labor Agreements on almost all county projects received some national attention. Project Labor Agreements had also been imposed during the Clinton Administration on several federal projects, including the U.S. Department of Energy’s Lawrence Livermore National Laboratory National Ignition Facility.
But one example was particularly noticed in Washington, D.C. The states of Maryland and Viriginia were fighting over whether and how a Project Labor Agreement should be imposed on the construction of a new Woodrow Wilson Memorial Bridge for Interstate 95 over the Potomac River between Maryland and Virginia.
What happens on the Beltway is very important to people inside the Beltway. Not surprisingly, President George W. Bush signed Executive Order 13202, which prohibited federal funding for a project if a government or its partners or agents imposed a mandate for construction contractors to sign a Project Labor Agreement with one or more labor organizations.
Seven weeks later, President Bush signed Executive Order 13208, which amended the earlier Executive Order 13202. It added a new procedure that allowed heads of executive agencies to grant exemptions from the ban on federal funding for a “particular project” that included a Project Labor Agreement in contract documents.
To qualify for the exemption, the government or its partners or agents had to execute the Project Labor Agreement for that “particular project” before February 17, 2001 and award at least one contract containing that Project Labor Agreement before February 17, 2001. They would be “grandfathered” and allowed to continue their ongoing contracting practice of government-mandated Project Labor Agreements.
Heads of executive agencies had the ultimate authority to decide whether or not to grant an exemption and to determine how narrow or broad the exemption would be. In practice, requests were submitted by the state or local governments to the relevant agencies. All but one of the exemption requests were submitted to the U.S. Department of Transportation, where the Secretary – Norm Mineta – was a Democrat and previously a union-backed member of Congress from San Jose. This agency ended up producing a memorandum for guidance on how to make decisions on exemption requests.
Why the Bush Administration Implemented Executive Order 13208
It is likely that the Bush Administration wanted to appease union-backed Republican governors and Congressional Republicans who were under pressure to prove their commitment to the construction union agenda. A 2001 study from Parsons sympathetic to Project Labor Agreements alleged that the Bush Administration was “confronted” with a letter signed by 33 Republican members of Congress objecting to the executive order and ended up “realizing” that labor relations on projects such as Boston’s “Big Dig” Central Artery/Tunnel would be disrupted by Executive Order 13202.
The U.S. Department of Transportation had identified ten projects that could be eligible for exemptions under Executive Order 13208, and a few state and local governments immediately sought exemptions. Here’s the final list of exemption requests and the results:
Although news reports (for example, Maryland Dispute With U.S. Stalls Bridge Contract) claimed that the State of Maryland had asked the U.S. Department of Transportation for an exemption under Executive Order 13028 for the Woodrow Wilson Bridge replacement project, there is no evidence that a formal written request was ever submitted.
Ensuring Compliance Was a Challenge
It was essentially left to the public to ensure that federal, state, and local governments complied with Executive Order 13202 and 13208. For example, in 2004 the Golden Gate Chapter of Associated Builders and Contractors discovered that the San Mateo County Board of Supervisors was planning to vote to impose a Project Labor Agreement for a federally-funded jail project. The organization immediately contacted the Bush Administration, San Mateo County, and the news media. The item was removed from the agenda and never returned to the Board of Supervisors.
As noted in the chart above, the U.S. Department of Transportation granted an exemption to the Worcester Regional Transit Agency for its Union Station Intermodal Transportation Center. An organization opposed to Project Labor Agreements had identified federal funding for this 2007 project and discovered that the agency had never requested or received an exemption. The Project Labor Agreement had been executed in 1997, so the agency ultimately granted the exemption. However, the failure to comply with the law highlighted how unions obtained a monopoly on the work, and local news media reported it as an agency embarrassment.
Another loophole to be exploited was the provision of Executive Order 13202 that permitted construction contractors to “voluntarily” sign Project Labor Agreements (a right authorized in the National Labor Relations Act). Although the U.S. Department of Transportation denied an exemption for the Central Puget Sound Transit Light Rail Project, a 2011 report produced by Sound Transit alleged that the “majority of contractors” continued to sign Project Labor Agreements voluntarily, and thus the federal funding continued. The definition of “voluntarily” is open to interpretation, and it would be interesting to know what warnings were made behind the scenes to get contractors to sign the Project Labor Agreement. And what happened to the “minority” that did not sign the Project Labor Agreement?
There also appear to be cases in which some governments “misintepreted” or outright ignored the law. Although it never issued any exemptions, the U.S. Department of Energy apparently continued to fund projects with requirements in bid specifications for contractors to sign Project Labor Agreements. Email correspondence in 2006 regarding one of these projects (Yucca Mountain) indicates that as least one agency official assumed that Executive Order 13028 automatically exempted any projects for which Project Labor Agreements were already executed before Executive Order 13202. (Actually, the head of the executive agency was required to proactively issue an exemption. Beyond projects that might be eligible for an exemption, it also appears that the U.S. Department of Energy provided federal funding for projects even in cases for which Project Labor Agreements were executed after Executive Order 13202 was signed.
Yet, an Acquisition Letter published by the U.S. Department of Energy in December 2002 reported the status of the Project Labor Agreements implemented at agency projects and outlined a procedure to obtain an exemption under Executive Order 13208. Perhaps the U.S. Department of Energy was involved in a deliberate decision to ignore the executive order and see if anyone in the public would have the gumption to sue the agency for non-compliance. No one ever did.
Whenever a law is passed, there are immediately lawyers and other clever people seeking ways to circumvent it. Executive Order 13208 helped unions to keep a few of their Project Labor Agreements and monopolize federally-funded work during the Bush Administration.
Presidential Executive Order 13202 – Project Labor Agreement Prohibition on Federally-Funded Projects (Formal Title: “Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects”)
Presidential Executive Order 13208 – Amendment to Presidential Executive Order 13202 – Exemptions to Project Labor Agreement Prohibition on Federally-Funded Projects (Formal Title: “Amendment to Executive Order 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects”)
U.S. Department of Transportation Denies Executive Order 13208 Exemption – Central Puget Sound Regional Transit Authority (Sound Transit, based in Seattle): Sound Transit Light Rail Project (Denied January 9, 2004)
U.S. Department of Transportation Denies Executive Order 13208 Exemption – Native Village of Venetie Tribal Government (Alaska): Arctic Village Airport Reconstruction (Only evidence obtained is reference in U.S. Department of Transportation Action Memorandum.)
Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.