Governor addresses proposed federal rule on construction contracts

Today I would like to talk about a proposed federal rule dealing with construction contracts and my efforts to lead the 17 other governors who oppose this executive order.

Earlier this year, President Biden signed an executive order that requires project work agreements for federal construction projects. This action will require federal construction contracts of $35 million or more to have a government-mandated project work agreement.

A project collective agreement is a collective agreement with trade unions to establish terms and conditions of employment for a specific construction project.

When a project work agreement is required by government agencies, it interferes with the current competition between union and non-union contractors. This executive order requirement will discriminate against local construction workers in favor of out-of-state union jobs for these federal contracts.

The federal government will decide who will work on a construction project and will favor unionized construction companies over non-unionized ones. This directly interferes with our workforce and the ability of Arkansas businesses to receive these construction contracts.

A reduction in competition from some of our state’s best unionized and non-union construction companies and workers will exacerbate the shortage of skilled labor in the construction industry. This will delay projects and increase construction costs by approximately 12-20% per project. These problems will lead to fewer infrastructure improvements, less job creation in the construction industry and higher costs for taxpayers. Everything I object to.

In 2021, Arkansas had one of the lowest union membership rates in the nation at 3.9%, according to the Bureau of Labor Statistics. This proposed rule will put Arkansas at a disadvantage when using our Infrastructure Investment and Jobs Act funding.

Unions have played an important role in the history of our country. But I believe the role of government in business is to provide a path to success, not an obstacle. This rule will create an uneven playing field as it provides an advantage to unionized companies.

Onerous regulations and red tape increase the cost of doing business and suppress economic vitality. The rule proposed by the Biden administration will hamper our state’s ability to effectively and fully utilize federal funding.

I am honored to have the support of 17 fellow governors from every corner of our country as we seek to oppose this rule and support fairness for our states.

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