The U.S. General Services Administration (GSA) has made sweeping changes to how it will implement the federal government’s controversial project labor agreement (PLA) policy, marking a significant development in the ongoing debate over government-mandated PLAs in the era following the Biden administration’s 2022 issuance of Executive Order 14063 requiring PLAs on federal construction projects of $35 million or more.
During a July 7, 2026, webinar explaining GSA’s new Acquisition Letter MV-2026-03 and accompanying PLA Playbook, senior GSA procurement officials offered an unusually candid assessment of the GSA’s “sub-optimal” experience implementing the federal government’s PLA mandate policy. Throughout the presentation, GSA acknowledged that its previous PLA implementation process increased procurement costs, reduced competition, delayed project delivery, generated extensive litigation, and created challenges for nearly every stakeholder involved in federal construction.
Many of these observations echo concerns that federal contractors, IEC, Associated Builders and Contractors, and a coalition of construction industry trade associations and business organizations have raised for decades in public comments, congressional testimony, federal agency communications, and litigation challenging project-specific PLA mandates by federal agencies.
GSA: The Current PLA Policy Implementation Is Not Working
Jeff Koses, GSA’s Senior Procurement Executive––and one of the principal architects of the Federal Acquisition Regulatory (FAR) Council’s final rule implementing President Joe Biden’s Executive Order 14063––explained that GSA concluded its previous PLA implementation process was producing unacceptable results.
“The implementation is creating challenges for GSA,” Koses said. “Challenges for the construction industry, for the unions, and for the federal agencies that we support.”
He continued:
“When we’re not satisfied with the results that a policy is producing, we need to step back and try a different approach.”
“Over the last two and a half years, we’ve struggled with PLAs. Our approach, I guess a good word is sub-optimal. We found our acquisitions are being slowed down, and that slowness means we’re not really meeting mission requirements for federal agencies in the ways that we should. It also means we’re not creating good jobs as quickly as we would like. It means costs for industry are increasing. It means we’ve seen some contractors declining to compete. And driving down competition is not good for us.”
Perhaps the webinar’s most striking statement came later, when Koses summarized GSA’s assessment of the current process:
“No one is really satisfied with the results. Not GSA. Not our customers. Not the unions. Not the contractors.”
These comments represent one of the clearest public acknowledgements to date that the federal government’s implementation of Executive Order 14063 has encountered significant practical and operational challenges.
GSA’s remarks raise significant questions about whether the implementation of Executive Order 14063 has achieved the economy and efficiency objectives cited by the Biden administration in support of the policy. They also provide important context for the Trump administration’s decision to retain the Biden PLA policy in OMB Memorandum M-25-29 while modifying and clarifying certain implementation procedures.
GSA Confirms Concerns Long Raised by Merit Shop Contractors
Throughout the webinar, GSA repeatedly identified the same issues that merit shop organizations have consistently cited in opposing government-mandated PLAs.
Higher Costs
Koses acknowledged that the current implementation has increased costs for both industry and the government.
“It means costs for industry are increasing,” he stated.
He explained that GSA’s extensive PLA-specific market research and approval process typically delayed solicitations by approximately 13 weeks, resulting in an estimated $1.25 million loss in purchasing power on a hypothetical $125 million construction project due to inflation. In addition, GSA estimated purchasing power losses approaching $6 million when procurement and litigation delays were combined on this hypothetical project.
Of note, this estimate does not account for reduced competition and increased costs as a result of a PLA mandate, which research suggests is 12% to 21% compared to similar non-PLA projects.
According to an IEC-signed coalition letter sent to President Trump in January 2025, eliminating PLA mandates and preferences on federal and federally assisted construction projects would save the federal government $10 billion per year. The coalition’s analysis said it would produce an estimated $1.92 to $3.2 billion in savings on direct federal contracts and $4.094 billion to $6.823 billion in savings on federally assisted state and local government projects annually.
Reduced Competition
GSA also acknowledged that it has observed some contractors declining to compete under its current PLA implementation process.
“We’ve seen some contractors declining to compete,” Koses said. “And driving down competition is not good for us.”
For years, IEC and other merit shop organizations and contractors have argued that government-mandated PLAs discourage otherwise qualified large and small general contractors and subcontractors from competing for federal work by requiring firms to operate under unfamiliar labor agreements, modify long-standing workforce and apprenticeship hiring, labor productivity, and compensation practices, and incur additional administrative and legal costs and risk.
Procurement Delays
The webinar repeatedly emphasized that the previous implementation process slowed federal construction procurements.
“Our acquisitions are being slowed down,” Koses explained.
GSA attributed those delays to project-by-project market research, internal approval requirements, litigation, and the administrative complexity of determining whether each project qualified for a PLA exception.
Litigation
Perhaps most notably, GSA discussed the extensive litigation surrounding implementation of the federal PLA mandate policy and PLA mandates on individual GSA federal construction contracts.
Agency officials cited multiple bid protests before the U.S. Court of Federal Claims, federal district court litigation, appellate proceedings, congressional oversight, and challenges from organized labor over agency decisions granting PLA exceptions.
“All that litigation,” Koses observed, “it’s slowing down the procurement process. It’s delaying mission.”
These remarks are particularly noteworthy because they recognize that the current implementation has imposed significant operational burdens on federal agencies in addition to contractors.
GSA’s New Approach
Rather than requiring contracting officers to conduct extensive pre-solicitation market research to determine whether a PLA should apply to a particular project, GSA’s new paired proposal process may let the marketplace generate the pricing information that contracting officers will use during source selection.
Under the new procedures, the procurement appears to follow these steps:
Step 1: Solicitation
For covered construction projects valued at $35 million or more, GSA will issue a solicitation requiring each offeror to submit a proposal that includes a PLA meeting applicable FAR requirements. Offerors may—but are not required to—also submit a second proposal for the identical scope of work without a PLA. The only differences between the two proposals should be those directly attributable to the PLA, such as cost, schedule, or technical impacts. Contractors that fail to submit the required PLA proposal are ineligible for award.
Step 2: Price Evaluation
GSA will first evaluate each contractor’s paired proposals against one another—not against competing firms.
The agency reduces the proposed PLA price by the lesser of 10 percent or $15 million to create an “evaluated” PLA price. That evaluated PLA price is then compared to the contractor’s own non-PLA price.
If the evaluated PLA price is equal to or lower than the contractor’s non-PLA price, the PLA proposal advances.
If the evaluated PLA price remains higher, the contracting officer may determine that the PLA premium is unreasonable and instead advance the contractor’s non-PLA proposal.
Step 3: Best Value Tradeoff
After each offeror has one proposal advanced (either its PLA proposal or its non-PLA proposal), GSA conducts a traditional best-value tradeoff among all competing offerors using the evaluated prices and technical proposals. At this stage, PLA status is no longer evaluated separately because it has already been addressed during the price evaluation.
Of note, GSA made it clear during the webinar that contractors would need to submit only one technical proposal.
Step 4: Contract Award
If a PLA proposal represents the best value, GSA awards the contract at the contractor’s actual proposed PLA price, not the reduced evaluated price used during source selection.
If the contractor’s non-PLA proposal is selected, the contract is awarded without the FAR PLA clauses and without requiring execution of a PLA.
If the offeror’s PLA proposal is selected for award, the contractor must negotiate and execute a qualifying PLA before receiving the Notice to Proceed, consistent with the solicitation requirements.
Additional Burdens for Contractors
“Let’s recognize what I just said [an explanation of the GSA’s Paired Pricing Procedures] adds some burden on the construction contractors,” Koses said. “But I also believe it’s the least burdensome means that we have to comply with the executive order––with the OMB memos––and I believe it’s less burdensome than what we’ve been doing until now.”
According to GSA, the objective is to replace predictions about PLA costs with actual pricing information submitted by contractors.
“We’re not gonna hypothesize. We’re not gonna project. We’re not gonna forecast. We’re not gonna guess,” Koses said. “We’re going to get and use real data.”
Important Questions Remain
While GSA asserted its paired proposal process will produce better information about the actual costs associated with PLAs, significant questions remain about whether the agency’s new market research methodology will produce a representative picture of capable bidders in the federal construction marketplace.
During the webinar, audience participants asked how contractors are expected to prepare accurate PLA pricing when many PLAs cannot realistically be negotiated with certain construction unions before price proposals are submitted to the GSA.
GSA responded that the PLA itself does not need to be finalized before bid submission and instead would generally be completed after contract award but before an offeror received a GSA notice to proceed.
That answer highlights one of the central challenges facing federal PLA mandates. Contractors are asked by the government to submit a price proposal dependent on PLAs that often have not yet been negotiated––and cannot be executed with unions unwilling to negotiate with certain contractors––and whose ultimate terms may remain uncertain at the time price proposals are submitted. If contractors estimate labor and compliance costs before key terms of a PLA have been negotiated, it increases risk, uncertainty, and potentially affects contract pursuit and pricing decisions.
More fundamentally, GSA’s new methodology assumes that contractors are both willing and able to submit meaningful PLA and non-PLA proposals for the same project. For many merit shop contractors, however, the decision whether to pursue a PLA project is not simply a pricing exercise.
Entering into a PLA may require changes to workforce management practices, subcontractor relationships, hiring procedures, labor relations, workforce salary and benefits, apprenticeship investments and utilization, workforce productivity, safety, and project execution. Some contractors may conclude that they cannot responsibly submit a PLA proposal because they are unable to negotiate a PLA before bid submission, cannot obtain commitments from key subcontractors, or determine that the operational and legal risks outweigh the potential opportunity.
If those contractors decline to submit a PLA proposal—or decide not to bid at all—they disappear from the dataset GSA intends to use to evaluate the policy.
In other words, the agency may never observe the prices or participation decisions of contractors most discouraged by PLA requirements. Their absence becomes part of the policy’s effect, yet that effect may not be reflected in the data GSA ultimately analyze.
As a result, the agency may not be measuring the effect of PLAs across the broader federal construction industry. Instead, it may primarily capture pricing information from the subset of contractors willing or able to compete under a PLA framework.
That raises an important question of sample selection bias: can the resulting data accurately measure the policy’s impact on competition if many firms most affected by the requirement are absent from the analysis?
The same concern applies to competition itself. If the paired proposal process discourages otherwise qualified contractors from participating, the number of “missing bidders” becomes just as important as the prices submitted by those who remain. A dataset showing competitive PLA pricing may not reveal how many contractors elected not to compete because of the policy.
For that reason, perhaps a proper evaluation of the effect of PLAs should extend beyond comparing paired bid prices.
Of note, since 2010, following President Barack Obama’s February 2009 Executive Order 13502 encouraging federal agencies to mandate PLAs on federal construction projects of $25 million or more on a case-by-case basis, the GSA has allowed firms to submit a PLA offer, a non-PLA offer, or both. The GSA has yet to publicly disclose the outcome of this dataset that is likely to be more inclusive of a broader population of federal contractors.
If those historical data exist, stakeholders may reasonably ask why they have not been publicly analyzed before GSA adopted an entirely new paired-proposal methodology.
To fully assess the new policy’s impact, GSA or other federal agency watchdogs should also track changes in bidder participation, proposal preparation costs, subcontractor availability, small business participation, procurement timelines, and the number of contractors that decline to compete because of PLA requirements.
Whether GSA ultimately collects and analyzes those broader indicators will play a significant role in determining whether the new paired proposal process produces a complete picture of the policy’s effect on competition and procurement outcomes.
Looking Ahead
GSA’s new acquisition procedures represent a significant shift in how the federal government will implement PLA requirements on GSA construction projects consistent with court rulings and the Trump administration’s OMB memo M-25-29 that made minor changes to the Biden OMB memo M-24-06 implementing EO 14063’s FAR rule.
Just as significant, however, was the agency’s candid assessment of its experience over the past several years. During the webinar, GSA acknowledged many of the practical concerns that merit shop contractors have consistently raised, including higher costs, reduced competition, procurement delays, and significant litigation.
Whether the GSA’s paired proposal process ultimately resolves those challenges remains to be seen. GSA’s new approach is premised on the idea that collecting paired PLA and non-PLA bids will provide “real data” to inform future procurement decisions. As implementation moves forward, contractors and policymakers alike will be watching to see whether that process captures the full effect of PLA requirements on competition—or primarily reflects the experiences of the subset of contractors willing and able to compete under a PLA framework.
Likewise, it’s unclear how the courts, Congress, and other federal agencies will react to the GSA’s new policy.
As articulated in pending litigation, Congress has still yet to pass a law giving procurement preference to labor unions or PLAs, unlike many other procurement practices and policies within the FAR directing federal agency contracting activities.
IEC will continue monitoring implementation of the new policy and advocating for full and open competition that allows all qualified contractors—regardless of labor affiliation—to compete on a level playing field for federal construction work.
Further Reading:
- Acquisition Letter MV-2026-03, New Flexibilities for Project Labor Agreements (PLAs) on Large-Scale Construction
- Project Labor Agreements Playbook provides procedures, sample solicitation language, price evaluation samples
- PLA Paired Procedures [PPTX – 11 MB] GSA Presentation July 2026
- Questions and answers [PDF – 71 KB] from PLA Paired Procedures GSA Presentation July 2026
- Transcript of GSA webinar on PLAs, July 7, 2026