Project Labor Agreements in Virginia: Legal and Practical Perils in Public Contracting
The following was published in the February 2026 issue of Virginia Lawyer, written by James Harvey. Click here to read it there.
By James R. Harvey, Principal at Woods Rogers Vandeventer Black, PLC, in Norfolk, VA.
Project labor agreements are receiving a lot of attention in Virginia in local public contracting without a firm understanding of their meaning or impact on the public and on the contracting community. Great legal uncertainty exists about their use and is sure to create endless cycles of litigation, delaying needed public projects. This article attempts to explain project labor agreements and the challenges posed by their mandated use in Virginia public construction projects.
What is a Project Labor Agreement?
The Virginia Public Procurement Act provides a succinct but unsatisfying definition of a Project Labor Agreement (PLA): “a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific public works project.” Simply, this means that any contractor awarded a public construction project, and all its subcontractors, must agree with a labor organization before work begins for the supply of labor on the project. This is no simple matter, as each construction trade may be subject to a different union. For example, electricians, plumbers, bricklayers, insulators, iron workers, operating engineers, laborers, plasterers, painters, sprinkler fitters, roofers, sheet metal workers, carpenters, carpet and floor layers, and millwrights each have separate unions. This may create a labyrinth of requirements for labor on the project relating to the use of apprentices, work hours, the control of labor, and limits on who can handle and transport materials to or on the project site.
All labor, including non-union labor, must register with the applicable union hall to be able to work on the project, and the union hall selects who can work on the project. The contractor and subcontractors must pay union benefits even for workers who are not members of the union or not eligible to receive the union benefits.
A common justification for PLAs is that they prohibit work stoppages—or strikes—on a project. Not a single documented case exists of a strike or work stoppage on a Virginia public project.
What Is the Impact of a PLA on Virginia Contractors?
In Virginia, about 94 percent of the construction workforce is not a member of a union. Instead, construction workers are typically employees of trade contractors, who provide benefits like health insurance, disability, paid time off, sick leave, and retirement contribution plans. In addition, all procurements by any state agency in Virginia must use prevailing wage rates determined by the Commissioner of Labor and Industry. Any locality may choose to require prevailing wage rates. These wage requirements level the field for worker pay between contractors, whether union or non-union.
Virginia contractors are at a distinct disadvantage in participating in a project that mandates the use of a PLA. Their efforts to provide a competitive wage and benefits to employees mean that, on top of these costs, they must pay the union its charges and benefits for every worker on the project. Meanwhile, Virginia workers do not see the benefit of these higher labor costs, as up to 34 percent of PLA labor costs go to union pension funds, benefit funds, and dues. Several studies estimate that PLAs increase the average cost of construction between 20 and 30 percent. These costs are borne by the taxpayers and limit the size or number of projects public bodies can undertake.
In short, a Virginia contractor’s cost of labor is artificially increased, making it uncompetitive in bidding for PLA work. The result is that out-of-state contractors with existing union relationships are the only entities practically able to perform the work, shutting out Virginia contractors and workers. PLAs tend to reduce competition, increase project costs, and delay performance.
Successful Challenges to Federal Project Labor Agreement Requirements
The use of PLAs on federal construction projects has vacillated under presidential administrations through executive orders. Most recently, President Biden mandated the use of PLAs in “large-scale” government construction projects exceeding $35 million to “avoid labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes and by prohibiting work stoppages, including strikes and lockouts.”
The only exceptions to the Biden executive order’s mandated use of a PLA required a written explanation by an agency senior official that (1) requiring a PLA would not advance the federal government’s interest in achieving economy and efficiency in federal procurement; (2) an inclusive market survey demonstrates a PLA would substantially reduce the number of bidders to frustrate full and open competition; or (3) requiring a PLA would be inconsistent with statutes, regulations, or presidential memoranda. President Trump chose not to revoke this executive order.
The mandated use of PLAs on federal construction projects generated many bid protests challenging the requirement. In January 2025, the Court of Federal Claims sustained eight bid protests challenging the PLA requirement as violative of the Competition in Contracting Act, 41 U.S.C. § 3301 (CICA), which requires procuring agencies to “obtain full and open competition through the use of competitive procedures.”
In MVL USA, Inc. v. United States, 174 Fed. Cl. 437 (2025), the court noted that the federal agencies for the procurements (U.S. Army Corps of Engineers (USACE), General Services Administration (GSA), and Naval Facilities Command (NAVFAC)) performed market surveys before issuing solicitations requiring a PLA. The market surveys for USACE demonstrated that a PLA would not contribute to the economy or efficiency but instead “would reduce competition, increase costs, and create inefficiencies for contractors and procurement officials.” The majority of respondents to the survey stated that the PLA requirement would reduce competition and increase costs. Similarly, the GSA performed a pre-bid study and determined that removing the PLA requirement would result in more contractor interest and a “more competitive bid environment.” Still, in each solicitation, the Government proceeded to mandate the use of a PLA.
The Federal Court of Claims found that the PLA mandate violates CICA’s full and open competition requirement if it will exclude otherwise responsible offerors regardless of that offeror’s capability to perform the contract.¹¹ Rejecting the government’s argument that bidders are not excluded because they have the choice to enter into a PLA, the court held, “the record indicates [that] a PLA requirement has no bearing on whether plaintiffs can perform the contract at issue.”¹² In upholding the bid protests, the federal court found the PLA requirement arbitrarily reduced full and open competition without any relationship to the performance of the work:
In sum, the PLA mandate precludes full and open competition by effectively excluding a non-PLA offeror from winning an award.... Accordingly, the Court finds the PLA mandates have no substantive performance relation to the substance of the solicitations at issue and violate CICA’s requirement that procuring agencies “obtain full and open competition through the use of competitive procedures.”
The Court later declined to issue a nationwide injunction against federal PLAs, instead insisting that each PLA must be evaluated to see if it complies with the requirements of CICA. This decision informs any analysis concerning the mandated use of PLAs in Virginia.
Project Labor Agreements and Conflicts with Virginia Law
Like CICA, the Virginia Public Procurement Act (VPPA) requires for all procurements that solicitations must be conducted fairly and impartially; that all qualified vendors have access to public business and that no offeror be arbitrarily or capriciously excluded; and that competition be sought “to the maximum feasible degree,” while individual public bodies enjoy broad flexibility in fashioning the details of such competition.
In 2020, the General Assembly amended a statute within the VPPA to permit local bodies to require bidders, offerors, contractors, or subcontractors to enter into or adhere to project labor agreements with one or more labor organizations on the same or related public works projects. This statute does not expressly invalidate or supersede the other requirements of the VPPA or other laws, such as Virginia’s Right to Work laws. Notably, of the states that authorize the use of PLAs on public projects, Virginia’s statute is the only one that does not outline conditions for their use.
Any public body mandating the use of a PLA must still demonstrate that its solicitation will not arbitrarily exclude otherwise qualified bidders or offerors and that it will seek competition to the maximum feasible degree. The MVL USA case instructs that a solicitation’s PLA requirement has no bearing on whether a contractor is otherwise qualified to perform the work. The VPPA’s requirement of “competition to the maximum feasible degree” appears to exceed the requirements for “full and open competition” in federal procurements through CICA. No caselaw evaluates these requirements in Virginia.
Virginia’s Right to Work statutes also create a significant hurdle to the use of mandated PLAs in Virginia. Virginia Code § 40.1-59 makes illegal any combination between any employer and any labor union where persons not members of the union are denied the right to work for the employer or union membership is a condition of continued employment. Virginia Code § 40.1-59 also declares any agreement between employer and union or labor organization an unenforceable, illegal combination or conspiracy where a union or organization acquires an employment monopoly in any enterprise. Any violation of the Right to Work statutes is a crime. Any employer, person, firm, association, or corporation injured as a result of a violation or threatened violation of Virginia’s Right to Work laws is entitled to injunctive relief against any violators or persons threatening violation and to recover any damages.
A PLA that mandates that a labor organization decides or controls who can work on a project site runs the risk of creating an illegal employment monopoly in Virginia. Similarly, a PLA that incorporates collective bargaining agreements that require union membership to obtain work may illegally deny the right to work to persons not members of the union.
Finally, solicitations that require a bidder or offeror to enter into a PLA with a third party after award may create an unenforceable requirement under Virginia law. “In Virginia, it is well-settled that contractual provisions that ‘merely set out agreements to negotiate future subcontracts’ are unenforceable.” This concern is real. What if a successful bidder attempts to negotiate a PLA with a labor organization that does not create an employment monopoly and guarantees participation of non-union members without financial penalty, but the union refuses? Can the public owner terminate the contractor for a default? Can it call upon the contractor’s bid bond or performance bond surety? Such consequences would be dire for a contractor, jeopardizing its bonding capacity and ability to win future work.
The Future of Project Labor Agreements in Virginia
Virginia localities continue to push for project labor agreements on public procurements without demonstrated benefit to the taxpayers, Virginia contractors, or construction workers.
Loudoun County issued a solicitation in August 2025 for the construction of a new government office building that required a PLA. It did so despite having published in 2023 a memorandum advising against the use of a PLA due to increased costs and decreased competition, no history of work stoppages, and no objective data supporting the proposition that a PLA increases the timeliness of a construction project. The county also ignored its own market survey, where one half of the respondent contractors indicated that they would not bid on a project with a PLA or opposed its use. The county hired a consultant to pre-negotiate the terms of a PLA on behalf of contractors, even though it was not a signatory to the agreement. When faced with an injunction hearing challenging the PLA requirement of the solicitation, the county cancelled the solicitation.
Fairfax County issued a solicitation for the construction of a wastewater treatment facility using a PLA. Predictably, an out-of-state contractor was awarded the project. Arlington County rescinded a request for qualifications for a park rehabilitation requiring a PLA after public opposition to its requirement. Arlington also proposed a bridge replacement project using a PLA, but its use was not approved by VDOT or the Federal Highway Administration. The revised solicitation, without the PLA, generated bids that were 60 percent cheaper than the county’s estimate of costs using a PLA. Alexandria has proposed the construction of rapid bus transit lanes using a mandated PLA. Prince William County authorized spending $300,000 for a PLA consultant for a new high school project, resulting in an additional cost for the county before design is complete and construction begins.
In November 2025, Virginia’s Commonwealth Transportation Board (CTB) adopted detailed policy requirements for the use of PLAs on the projects it funds. This policy requires CTB approval for each project with a PLA based on written findings supported by an independent third-party. The findings must make a clear and compelling case that a PLA will significantly benefit the project and advance the interests of the public and Commonwealth from the standpoint of quantifiable cost savings, effectiveness, efficiency, quality, safety, and timeliness, the impact on the Virginia workforce, and compliance with Virginia’s Right to Work statutes. The policy specifies at least eight factors for consideration, contains a process for seeking approval, and includes reporting requirements to measure project performance and workforce benefits to Virginia residents.
The CTB policy can serve as a valuable template for other state agencies and localities seeking to use a PLA while avoiding increased costs and project delays. It attempts to balance Virginia laws requiring competition and to ensure that all qualified contractors have access to Virginia construction projects, while avoiding an employment monopoly or excluding participation by non-union members.
Conclusion—Trouble Ahead
Many politicians appear attracted to the concept of PLAs but lack an understanding of their impact on budgets, the contracting community, and Virginia workers. PLAs cost the public more money, and that money does not go to improve the wages and benefits of Virginia construction workers. Instead, they reduce competition by arbitrarily excluding contractors without an established union workforce. PLAs often create an employment monopoly, and the collective bargaining agreements they incorporate mean that non-union workers are excluded from participation, in violation of Virginia’s Right to Work statutes. The beneficiaries of PLAs appear to be union pension funds and out-of-state contractors. New projects mandating the use of PLAs will certainly generate new legal challenges, with the result of delaying needed public projects.
Agencies and localities should adopt guidelines for the use of PLAs that attempt to harmonize the conflicting laws and priorities governing their use to determine how the public will benefit from a project labor agreement on a specific project.