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115th Congress   }                                    {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                    {       115-1068

======================================================================



 
                     FAIR AND OPEN COMPETITION ACT

                                _______
                                

 December 10, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Gowdy, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1552]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 1552) to preserve open competition 
and Federal Government neutrality towards the labor relations 
of Federal Government contractors on Federal and federally 
funded construction projects, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     2
Section-by-Section...............................................     5
Explanation of Amendments........................................     7
Committee Consideration..........................................     7
Roll Call Votes..................................................     7
Application of Law to the Legislative Branch.....................     7
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     7
Statement of General Performance Goals and Objectives............     7
Duplication of Federal Programs..................................     8
Disclosure of Directed Rule Makings..............................     8
Federal Advisory Committee Act...................................     8
Unfunded Mandate Statement.......................................     8
Earmark Identification...........................................     8
Committee Estimate...............................................     8
Budget Authority and Congressional Budget Office Cost Estimate...     9
Minority Views...................................................    11

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 1552, the Fair and Open Competition Act, ensures that 
federal agencies neither mandate nor prohibit project labor 
agreements (PLAs) for federal or federally-funded construction 
contracts. PLAs are collective bargaining agreements with one 
or more labor organizations that establish the terms and 
conditions of employment for construction projects.\1\ The 
purpose of this bill is to ensure fair and open competition 
through equal treatment of union and non-union construction 
contractors.
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    \1\Project Labor Agreements are comprehensive pre-hire collective 
bargaining agreements that establish terms and conditions of employment 
for a specific construction project. U.S. Dep't of Transp., 
Construction Program Guide, available at https://www.fhwa.dot.gov/
construction/cqit/pla.cfm.
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                  BACKGROUND AND NEED FOR LEGISLATION

    In 2009, President Barack Obama signed Executive Order 
(E.O.) 13502 on the use of PLAs. E.O. 13502 strongly encourages 
the use of project labor agreements (PLAs) for federal or 
federally-assisted construction projects valued over $25 
million. Although the E.O. does not explicitly mandate the use 
of PLAs for federal or federally-assisted contracts, agencies 
have used it to openly encourage PLA mandates or preferences. 
For example, the General Services Administration (GSA) released 
guidance stating contractor proposals that include a PLA would 
receive a 10 percent increase in their technical evaluation 
score relative to contractors that did not include a PLA.\2\ 
Other federal agencies have also issued guidance stating 
contractors participating in PLAs may receive a preference 
during the evaluation process or allow projects to mandate PLAs 
in contracts.\3\
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    \2\Project Labor Agreements and the Cost of Doing Business in the 
Construction Industry: Hearing Before the H. Comm. On Oversight & Gov't 
Reform, Subcomm. on Regulatory Affairs, 112th Cong. (Mar. 16, 2011) 
(statement of Robert A. Peck, Comr., Public Building Service, U.S. 
General Services Admin.).
    \3\See Letter from Stephen E. Sandherr, Chief Executive Officer, 
Associated General Contractors of America, to Marta Anerton, Contract 
Specialist, U.S. Army Corps of Engineers (July 30, 2014) (discussing 
the Army Corps intent to require the use of PLAs on a construction 
project); Federal Highway Administration, Interim Guidance on the use 
of Project Labor Agreements (May 7, 2010), available at http://
www.fhwa.dot.gov/construction/contracts/100507.cfm; Memorandum from 
Dep't of the Army on Procurement Instruction Letter (PIL) 2011-01-R1, 
USACE Policy Relating to the Use of Project Labor Agreements (PLAs) for 
Federal Construction Projects (Dec. 16, 2011), available at http://
www.acq.osd.mil/dpap/cpic/cp/docs/PIL_2011-01-R1_Project_ 
Labor_Agreements_Policy.pdf.
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    Shortly after President Obama issued E.O. 13502, the impact 
of this preference for PLAs for federal construction contracts 
was apparent. In one $105 million project to renovate the 70-
year-old Lafayette building in Washington, D.C., GSA initially 
required contractors to submit one proposal with a PLA and one 
without. GSA later changed this requirement after it was 
challenged in litigation. In the second solicitation, GSA gave 
a 10 percent preference for contractors that voluntarily 
submitted bids with PLAs for the Lafayette project.\4\ In 2011, 
GSA officials reported 7 of 10 GSA projects with budgets of 
more than $100 million and funded under the American Recovery 
and Reinvestment Act of 2009 had signed PLAs in place.\5\
---------------------------------------------------------------------------
    \4\Michael Neibauer, GSA to not require unions on Lafayette 
building work, Wash. Bus. J. (May 3, 2010), http://www.bizjournals.com/
washington/stories/2010/05/03/story12.html.
    \5\H.R. 735 and Project Labor Agreements: Hearing Before the H. 
Comm. On Oversight and Gov't Reform, Subcommittee on Technology, 112th 
Cong. (2011) (statement of Susan Brita, Deputy Administrator, U.S. 
General Services Admin.).
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    The Fair and Open Competition Act addresses this policy 
preference by promoting efficient and cost-effective 
administration and completion of federal and federally-assisted 
construction projects.
    In terms of costs, mandated PLAs can drive up the cost of 
federal or federally-assisted construction projects between 12 
and 18 percent.\6\ In one example, a U.S. Department of Labor 
Job Corps Center project in New Hampshire initially had a PLA 
mandate. Later, after three years of delays and litigation, the 
project was rebid without a PLA mandate with the result of 
nine--instead of three--bidders and lower bids (16.5 percent 
less than the lowest bid when there was a PLA mandate).\7\ In 
another example, a study of 551 California school construction 
projects, where 65 were built using PLAs, showed PLA contracts 
increased the construction costs from $29 to $32 per square 
foot.\8\ This same study concluded that PLAs are not a 
``costless policy tool,'' but instead a cost increasing policy 
initiative.\9\
---------------------------------------------------------------------------
    \6\Letter from American Council of Engineering Companies, et. al. 
to Jason Chaffetz, Chair, Comm. on Oversight & Gov't Reform, and Elijah 
Cummings, Ranking Member, Comm. on Oversight & Gov't Reform (Mar. 27, 
2017) on file with Comm.
    \7\PLA/NoPLA Bid Results, TheTruthAboutPLAs.com (Apr. 23, 2013), 
http://thetruthaboutplas.com/wp-content/uploads/2013/04/Bid-Results-of-
Manchester-NH-DOL-Job-Corps-Center-bid-with-and-without-a-PLA-
042313.pdf; U.S. Dep't of Labor Job Corps Center Opening Demonstrates 
Value of Open Competition, TheTruthAboutPLAs.com (Oct. 26, 2015), 
http://thetruthaboutplas.com/2015/10/26/u-s-department-of-labor-job-
corps-center-opening-demonstrates-value-of-open-competition/.
    \8\Vince Vasquez, et. al., Measuring the Cost of Project Labor 
Agreements on School Construction in California, National University 
System Institute for Public Research at 10 (2011).
    \9\Id. at 15.
---------------------------------------------------------------------------
    While PLAs are often portrayed as a way to avoid delays in 
construction projects by ensuring labor peace, this is often 
not the case. For example, the GSA headquarters renovation 
project at 1800 F Street, NW in Washington, D.C. was delayed by 
over 100 days because the contractor was unable to obtain an 
agreement from all the parties to a PLA for the project.\10\ 
Multiple state level projects with government-mandated PLAs 
have also experienced delays.\11\ For example, a review by the 
New Jersey Department of Labor found that PLA projects 
experienced an average duration of 100 weeks compared to the 
78-week average duration of non-PLA projects.\12\ In fact, 
avoiding PLA mandates appears to result in less delay. A review 
of federal construction projects from 2001-2009, during which 
President Bush's E.O. 13202 prohibiting mandated PLAs was in 
place, found no significant labor disputes that caused 
delays.\13\
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    \10\Delays and Increased Costs: The Truth about the Failed PLA on 
the GSA's headquarters at 1800 F Street, TheTruthAboutPLAs.com (Mar. 5, 
2013), http://thetruthaboutplas.com/2013/03/05/delays-and-increased-
costs-the-truth-about-the-failed-pla-on-the-gsas-1800-f-street-federal-
building/.
    \11\Maurice Baskin, Government-Mandated Project Labor Agreements: 
The Public Record of Poor Performance at 22-25 (2011), available at 
http://thetruthaboutplas.com/wp-content/uploads/2012/12/Baskin-Report-
on-Government-Mandated-PLAs-The-Public-Record-of-Poor-Performance-2011-
Edition-032311.pdf.
    \12\Id. at 24.
    \13\Id. at 25.
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    The Fair and Open Competition Act will ensure robust 
competition. Under the Competition in Contracting Act, P.L. 98-
494, agencies are required to ``obtain full and open 
competition through the use of competitive procedures'' in all 
procurements.\14\ PLAs, however, can effectively reduce 
competition by excluding certain contractors and their 
employees from competing for construction projects-because not 
all contractors participate in PLAs. Currently, more than 80 
percent of the private construction workforce in the United 
States is non-union.\15\ In addition, because PLAs increase the 
cost of the project, fewer individuals will bid on the 
construction projects, thereby reducing competition.\16\ The 
Associated Builders and Contractors, Inc. conducted a poll of 
its members that found that 98 percent of all respondents would 
be less likely to bid on a contract where a PLA was 
mandated.\17\ Requiring a PLA, or even giving preference to 
such agreements, essentially limits opportunities for more than 
80 percent of the private construction workforce to compete for 
federal construction contracts.
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    \14\41 U.S.C. Sec. 3301(a)(1).
    \15\U.S. Dep't of Labor, Bureau of Labor Statistics, Union Members 
Summary, (Jan. 26, 2017) (stating only 13.9 percent of construction 
workers in the private sector are union members).
    \16\Paul Carr, Investigation of Bid Price Competition Measured 
through Prebid Project Estimates, Actual Bid Prices, and Number of 
Bidders, J. of Construction, Engineering and Management (Nov. 2005).
    \17\Letter from Ben Brubeck, Dir. of Labor and Fed. Procurement, 
Associated Builders and Contractors, Inc., to Tom Dickert, USACE (Mar. 
22, 2011) (additional surveys cited in the letter show between 70-86 
percent of nonunionized contractors surveyed would be unlikely to bid 
on projects requiring PLAs).
---------------------------------------------------------------------------
    The Fair and Open Competition Act will codify the 
principles of neutrality and competition for federal and 
federally-assisted construction projects; thereby, ending the 
regular shift in federal construction policy on PLAs with each 
new administration. In 1997, President Clinton issued a 
memorandum on ``Use of Project Labor Agreements for Federal 
Construction Projects'' encouraging the use of PLAs.\18\ Then 
in 2001, President Bush signed E.O. 13202 entitled, 
``Preservation of Open Competition and Government Neutrality 
Towards Government Contractors' Labor Relations on Federal and 
Federally Funded Construction Projects,'' which essentially 
revoked the Clinton era memorandum.\19\ In 2009, President 
Obama signed E.O. 13502 entitled, ``Use of Project Labor 
Agreements for Federal Construction Projects,'' which revoked 
the Bush era E.O.\20\ This bill will end shifting federal 
policy and harmonize federal policy with many states' policies 
on PLAs. In fact, 22 states have measures in place restricting 
the use of PLAs, and several more states are considering 
similar measures.\21\
---------------------------------------------------------------------------
    \18\Memorandum on Use of Project Labor Agreements for Federal 
Construction Projects (June 5, 1997) available at https://www.gpo.gov/
fdsys/pkg/PPP-1997-book1/pdf/PPP-1997-book1-doc-pg705.pdf.
    \19\Exec. Order No. 13202, 66 Fed. Reg. 11,225 (Feb. 22, 2001).
    \20\Exec. Order No. 13502, 74 Fed. Reg. 6,985 (Feb. 11, 2009).
    \21\Letter from American Council of Engineering Companies, et. al. 
to Jason Chaffetz, Chair, Comm. on Oversight & Gov't Reform, and Elijah 
Cummings, Ranking Member, Comm. on Oversight & Gov't Reform (Mar. 27, 
2017) on file with Comm.
---------------------------------------------------------------------------
    Finally, the contention that requiring PLAs for federal and 
federally-assisted construction contracts does not impact small 
business because of the large size of these contracts is a 
misconception. The Small Business Administration notes that the 
construction industry in particular is comprised of a large 
number of small businesses--with more than an 86 percent of 
construction firms considered small businesses.\22\ However, 
these small businesses are mostly non-union and are 
disadvantaged when PLAs are involved. As a result, the use of 
PLAs can negatively impact the small business set-asides put in 
place by Congress to promote small businesses.\23\ The Fair and 
Open Competition Act will help ensure policies designed to 
promote and support small business in government contracting 
are not undermined by a preference that would discriminate 
against small businesses.
---------------------------------------------------------------------------
    \22\U.S. Small Business Admin., Office of Advocacy, The Small 
Business Economy: A Report to The President, (2009).
    \23\Ben Brubeck, Government Project Labor Agreement Mandates Harm 
Small Businesses, TheTruthAboutPLAs.com (June 2, 2010), available at 
http://thetruthaboutplas.com/2010/06/02/government-project-labor-
agreement-mandates-harm-small-businesses/.
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                          LEGISLATIVE HISTORY

    On March 15, 2017, Representative Dennis Ross (R-FL) 
introduced H.R. 1552, the Fair and Open Competition Act, or 
FOCA Act. The following Representatives are cosponsors of the 
bill: Thomas Massie (R-KY), Mark Walker (R-NC), Jody Hice (R-
GA), Ralph Lee Abraham (R-LA), Gregg Harper (R-MS), Trent 
Franks (R-AZ), Mo Brooks (R-AL), Glenn Grothman (R-WI), Ken 
Calvert (R-CA), Blake Farenthold (R-TX), Steve Chabot (R-OH), 
John Carter (R-TX), Dana Rohrabacher (R-CA), Jodey Arrington 
(R-TX), Trey Hollingsworth (R-IN), Rick Allen (R-GA), Paul 
Gosar (R-AZ), Trent Kelly (R-MS), Mimi Walters (R-CA), Darrell 
Issa (R-CA), Luke Messer (R-IN), Tom Cole (R-OK), Francis 
Rooney (R-FL), Ann Wagner (R-MO), Duncan Hunter (R-CA), Billy 
Long (R-MO), Jason Smith (R-MO), Blaine Luetkemeyer (R-MO), 
John Moolenaar (R-MI), Lloyd Smucker (R-PA), Vicky Hartzler (R-
MO), David Rouzer (R-NC), and Richard Hudson (R-NC), Edward 
Royce (R-CA), Joe Wilson (R-SC), Scott Perry (R-PA), Kevin 
Yoder (R-KS), Stephen Knight (R-CA), Paul Mitchell (R-MI), and 
Jim Jordan (R-OH). H.R. 1552 was referred to the House 
Committee on Oversight and Government Reform. The Committee 
considered the bill at a business meeting on March 28, 2017 and 
ordered the bill reported favorably to the House, without 
amendment, by voice vote.
    On March 14, 2017, Senator Jeff Flake (R-AZ) introduced S. 
622, the Fair and Open Competition Act. Senators James Risch 
(R-ID) and David Perdue (R-GA) cosponsored the bill. S. 622 was 
referred to the Senate Committee on Homeland Security and 
Governmental Affairs.
    A similar bill was introduced in the 114th Congress. On 
March 26, 2015, Representative Mick Mulvaney (R-SC) introduced 
H.R. 1671, the Government Neutrality in Contracting Act. H.R. 
1671 was referred to the House Committee on Oversight and 
Government Reform. The Committee considered H.R. 1671 at a 
business meeting on January 12, 2016 and ordered the bill 
reported favorably, without amendment, by voice vote.
    The Senate companion to H.R. 1671 was S. 71. On January 7, 
2015, Senator David Vitter (R-LA) introduced S. 71, which was 
referred to Senate Committee on Homeland Security and 
Governmental Affairs.

                           Section-by-Section


Section 1. Short title

    The short title of the bill is the ``Fair and Open 
Competition Act'' or ``FOCA Act.''

Section 2. Purposes

    Section 2 establishes the purposes of the legislation.

Section 3. Preservation of open competition and federal government 
        neutrality

    Subsection (a)(1) of this section establishes the general 
prohibition that the head of each executive agency that awards 
any construction contract after the date of enactment, or that 
obligates funds for such a contract, shall ensure that the 
agency, and any construction manager acting on behalf of the 
Federal government with respect to such a contract, does not:
          (A) Require or prohibit a bidder, offeror, 
        contractor, or subcontractor from entering into or 
        adhering to agreements with one or more labor 
        organizations, with respect to that construction 
        project or another related construction project; or
          (B) Otherwise discriminate against or give preference 
        to a bidder, offeror, contractor, or subcontractor 
        because such bidder, offeror, contractor, or 
        subcontractor (i) becomes a signatory, or otherwise 
        adheres to an agreement with one or more labor 
        organizations; or (ii) refuses to become a signatory, 
        or otherwise adhere to, an agreement with one or more 
        labor organizations, with respect to that construction 
        project or another related construction project.
    Paragraph (2) of subsection (a) applies the general 
prohibition to contracts entered into on or after the date of 
enactment and subcontracts of such contracts.
    Paragraph (3) of subsection (a) states that the general 
prohibition in paragraph (1) does not prohibit a contractor or 
subcontractor from voluntarily entering into an agreement with 
one or more labor organizations.
    Paragraph (4) of subsection (a) requires revisions to the 
Federal Acquisition Regulation for federal contracts not later 
than 60 days after enactment.
    Subsection (b) applies the general prohibition in 
Subsections (a)(1)(A) and (B) to agency awards of grants, 
financial assistance, and cooperative agreements.
    Subsection (c) authorizes action by the agency head if the 
entity fails to comply with subsections (a) and (b). Subsection 
(c) states that if an executive agency, a recipient of a grant 
or financial assistance from an executive agency, a party to a 
cooperative agreement with an executive agency, or a 
construction manager acting on behalf of such agency, 
recipient, or party fails to comply, the head of the executive 
agency awarding the contract, grant, or assistance, or entering 
into the agreement involved, shall take such action, consistent 
with law, as the head of such agency determines to be 
appropriate.
    Subsection (d) provides exemptions to Subsections (a) and 
(b).
    Paragraph (1) of subsection (d) authorizes the head of an 
executive agency to exempt a particular project, contract, 
subcontract, grant, or cooperative agreement from the 
requirements of Subsections (a) and (b) if the head of such 
agency determines special circumstances exist that require an 
exemption in order to avert an imminent threat to public health 
or safety or to serve the national security.
    Paragraph (2) of subsection (d) states a finding of special 
circumstances may not be based on the possibility or existence 
of a labor dispute concerning contractors or subcontractors 
that are not signatories to, or that otherwise do not adhere 
to, agreements with one or more labor organizations--or labor 
disputes concerning employees who are not members of, or 
affiliated with, a labor organization.
    Paragraph (3) of subsection (d) provides authority for an 
additional exemption from subsections (a) and (b) for certain 
projects. The agency head may exempt certain projects if, as of 
the date of enactment, the head of the agency finds that the 
awarding authority, recipient of grants or financial 
assistance, party to a cooperative agreement, or construction 
manager acting on behalf of any such entities had issued or was 
a party to specified items that contained the requirements or 
prohibitions in Subsection (a)(1). The specified items are bid 
specifications, project agreements, and agreements with one or 
more labor organizations.
    Subsection (e) defines the terms ``construction contract,'' 
``executive agency,'' and ``labor organization.''

                       Explanation of Amendments

    No amendments to H.R. 1552 were offered or adopted during 
Full Committee consideration of the bill.

                        Committee Consideration

    On March 28, 2017, the Committee met in open session and, 
with a quorum being present, ordered the bill favorably 
reported by voice vote.

                            Roll Call Votes

    No roll call votes were requested or conducted during Full 
Committee consideration of H.R. 1552.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill promotes fair and open competition in federal and 
federally assisted construction projects. As such, this bill 
does not relate to employment or access to public services and 
accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goal or objective of this bill is to preserve open competition 
and federal government neutrality towards the labor relations 
of federal government contractors on federal and federally 
funded construction projects.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII no provision 
of this bill establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting this bill does direct 
the completion of specific rule makings within the meaning of 
section 551 or title 5, United States Code. H.R. 1552 section 
3(a)(4) requires the Federal Acquisition Regulation Council, no 
later than 60 days, to amend the Federal Acquisition Regulation 
to implement provisions of this bill.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of Section 5(b) of the appendix to title 5, 
United States Code.

                      Unfunded Mandates Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act of 1995, P.L. 104-4) requires a statement 
as to whether the provisions of the reported include unfunded 
mandates. In compliance with this requirement, the Committee 
has received a letter from the Congressional Budget Office 
included herein.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                           Committee Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
this bill. However, clause 3(d)(2)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for this bill from the Director of 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 7, 2017.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1552, the FOCA 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 1552--FOCA Act

    H.R. 1552 would prohibit federal agencies working on 
construction projects from either requiring or prohibiting the 
use of project labor agreements (PLAs) except in specific 
circumstances. On February 9, 2009, Executive Order 13502 
encouraged all federal agencies to use PLAs on construction 
projects exceeding $25 million. A PLA is a collective 
bargaining agreement that applies to a specific project and is 
effective only for the duration of that project. Under those 
agreements, which generally include provisions regarding wages 
and fringe benefits and procedures for resolving labor 
disputes, workers generally agree not to strike and contractors 
agree not to lock out workers. The bill would allow contractors 
and unions working on construction projects that involve the 
expenditure of federal funds to voluntarily negotiate and 
execute a PLA.
    Information from the Army Corps of Engineers, General 
Services Administration, the Congressional Research Service, as 
well as union and non-union contractors, is not sufficient to 
allow CBO to determine whether the use of PLAs under current 
law results in any significant costs or savings to the federal 
government. However, because CBO expects that implementing H.R. 
1552 would not significantly change the contracting process or 
the use of PLAs, CBO estimates that implementing the bill would 
not have a significant effect on the federal budget.
    Enacting the bill could affect direct spending by agencies 
not funded through annual appropriations; therefore, pay-as-
you-go procedures apply. CBO estimates, however, that any net 
change in spending by those agencies would be negligible. 
Enacting H.R. 1552 would not affect revenues.
    CBO estimates that enacting H.R. 1552 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 1552 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                             MINORITY VIEWS

    Committee Democrats strongly oppose H.R. 1552, the so-
called ``Fair and Open Competition Act.'' The measure would 
create a permanent statutory prohibition preventing federal 
agencies from requiring the use of Project Labor Agreements 
(PLA) in any contract, bid specification, or project agreement, 
even if the use of a PLA would achieve efficiency in the 
construction project or save taxpayers money.
    The legislation would prohibit the inclusion of any 
provisions requiring the use of PLAs in the contracts 
associated with any projects funded by any type of federal 
assistance, including grants and cooperative agreements. The 
legislation would allow the use of PLAs to be required only in 
``special circumstances that require an exemption in order to 
avert an imminent threat to public health or safety or to serve 
the national security.''
    The immediate effect of enacting H.R. 1552 would be to 
overturn Executive Order 13502, issued by President Obama on 
February 6, 2009. Executive Order 13502 does not require the 
use of PLAs on any federal contract, but instead states that 
agencies ``may'' require PLAs to ``advance the Federal 
Government's interest in achieving economy and efficiency in 
Federal procurement, producing labor-management stability, and 
ensuring compliance with laws and regulations governing safety 
and health, equal employment opportunity, labor and employment 
standards, and other matters.''\1\
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    \1\Exec. Order No. 13502, 74 Fed. Reg. 6985, Use of Project Labor 
Agreements for Federal Construction Projects (Feb. 6, 2009) (online at 
www.gpo.gov/fdsys/pkg/FR-2009-02-11/pdf/E9-3113.pdf).
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    According to a report issued in 1998 by the then-General 
Accounting Office (GAO), ``PLAs have been used in all 50 states 
and the District of Columbia on federal, state, local 
government, or private sector construction projects.'' GAO also 
found that PLAs have been used extensively by the private 
sector, including on such projects as the Trans-Alaska Pipeline 
and Disney World.\2\
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    \2\General Accounting Office, Project Labor Agreements: The Extent 
of Their Use and Related Information (May 29, 1998) (GAO/GGD-98-82) 
(online at www.gao.gov/assets/230/225719.pdf).
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    The government should have the option of using the same 
construction industry practices used in the private sector if 
those practices will help save money and ensure that projects 
are completed on time and within budget. It would be a 
potentially costly and ill-advised disservice to American 
taxpayers to forbid federal agencies from using PLAs even when 
they protect the government's investment and save taxpayer 
funds.
                                   Elijah E. Cummings,
                                           Ranking Member.

                                  [all]