By: John Hofmann

New Economic Development Bill Provides Investments for Public Works and Promotes Project Labor Agreements (PLAs) for Future Public Construction Projects

On November 14, 2024, the state Legislature passed a wide-ranging economic development bill. This bill is the statewide plan put together by the Executive Office of Economic Development at the start of every Governor’s four-year term of office, as a joint effort between the Governor and the state Legislature.  Governor Maura Healey signed the bill on November 20, 2024.

Among the many policy changes that are part of the bill is Section 283.  This section, found at pages 287–288 of the bill — contains just 21 lines of text (out of 6,919 in the whole bill) — and allows (but does not require) public agencies and municipalities to use so-called “PLAs”, or Project Labor Agreements, for contracts involving public works.  As our readers likely know, a PLA is an agreement between the public awarding authority and a union for work on a given project.  The PLA requires the contractor who is awarded the contract to recognize the appropriate union and use its employees on the contract.

Under Section 283, the criteria for deciding whether to use a PLA in a particular public construction project is when the public agency or municipality has made a “determination” that using a PLA “on a specific project is in the best interest” of the commonwealth, the public agency or the municipality.

Part (b) of Section 283 lists six factors that must be considered when “making a determination of the best interest of the commonwealth, public agency or municipality.”  The agency or municipality must consider the effects a PLA may have on the following:

  1. Construction efficiency, cost and direct and indirect economic benefits to the public agency or municipality;
  2. The availability of a sufficient supply of skilled, qualified workers to complete the project;
  3. The timing of, and the prevention of delays or disruptions to, the construction process;
  4. The safety and quality of the public construction project;
  5. The expansion of registered apprenticeship programs and workforce development in the construction industry; and
  6. The promotion of employment and training opportunities for women, minority workers and veterans.

The use of “and” after (v) means that all six factors have to be considered. And this policy change, and its use of the standard of “best interest” of the state, public agency or municipality, raises questions of how this new policy interacts with the case of Callahan & Sons, Inc. v. City of Malden, decided by the Massachusetts Supreme Judicial Court in 1999.

In that case, the SJC held that a municipality can indeed choose to use a PLA as part of public construction project, but only in situations where the project is “of sufficient size, duration, timing, and complexity” and where the PLA would further the purposes of the public bidding statute (which are obtaining the lowest price and having an open and honest procedure for public contract bidding). In addition, the SJC held that the awarding authority opting to use a PLA must undertake a careful and reasoned process in determining that using a PLA will further the goals of the public bidding statute.

Comparing the Callahan case and Section 283 of the new economic development bill shows some overlap between them, such as the issues of “timing” and “duration.” And where the SJC in Callahan stated that the project needed to be of “sufficient” or “substantial” size, there is nothing similar in the language of the new bill. The new policy is more specific, spelling out other factors that promote the “best interest” of the commonwealth, agency or municipality. Specifically, considering apprenticeship programs and promoting opportunities for women, minority workers and veterans, adds new criteria (not mentioned in Callahan) that will need to be considered by an awarding authority that wants to adopt a PLA for a project.

In sum, the new provision about PLAs is encouraging their use, in the right situation. But the new standard for using a PLA — the “best interest” of the commonwealth, the agency or the municipality — and the six factors that go into that determination, don’t make application of PLAs a slam dunk for Towns to adopt. Even so, for certain public projects, contractors should be prepared to deal with PLAs and this new statutory framework.

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