Mayor Bowser proposes delaying and limiting DC’s PLA requirement
Taking a stand for the responsible stewardship of public dollars.
Yesterday, Mayor Muriel Bowser released her Fiscal Year 2026 budget proposal. In her budget, the Mayor is proposing to delay the city’s requirement that certain District-funded construction projects include a Project Labor Agreement (PLA) until 2032. Currently, District-funded construction contracts over $50 million in value require a PLA. The D.C. Council reduced the cost threshold for this requirement from $75 million to $50 million last year. In addition to a six-year delay, however, the Mayor is also proposing to increase the cost trigger for the PLA requirement to construction contracts of $100 million or more when the requirement takes effect again in FY 2032. This will further limit the number of projects covered by the mandate.
In proposing this subtitle, the Mayor has taken a stand for the responsible stewardship of public resources. The subtitle will save District taxpayers tens of millions of dollars by postponing and limiting the use of PLAs on District projects. The Mayor’s proposal is part of an emerging trend among Democratic Executives. Recently, California Governor Gavin Newsom and Maine Governor Janet Mills vetoed PLA mandates over the issues of cost and local business participation.
The independent, peer-reviewed research on PLA costs is clear – PLAs dramatically reduce bid competition and that dramatically inflates project costs, crowding out public benefits that could have otherwise been achieved with the same level of taxpayer investment.
For example, in 2021 and 2024, the RAND Corporation’s Center on Housing and Homelessness examined the impact of PLAs on the construction of affordable housing in Los Angeles. RAND is a highly respected, non-profit, and non-patisan research organization that is committed to the public interest. RAND’s seminal studies on PLA costs used data from Proposition HHH, a voter-approved effort to invest $1 billion towards the construction of 10,000 units of affordable housing. Prior to implementation, however, the Los Angeles City Council mandated a PLA for a portion of the units constructed.
“A simple rule of thumb is that the use of a PLA incurs a cost equal to 1 of every 5 affordable housing units that could be produced through funding programs without a PLA”
Using regression analysis to hold other factors constant, the authors concluded that a PLA requirement adds 21% to the cost of an affordable unit and adds 27% to the time it takes to complete the unit. The authors wrote that, “A simple rule of thumb is that the use of a PLA incurs a cost equal to 1 of every 5 affordable housing units that could be produced through funding programs without a PLA.” That means that the decision to impose a PLA on affordable housing projects deprives taxpayers of 20 affordable housing units for every 100 units they pay for.
It’s simple. With a PLA, taxpayers pay more to get less. Kudos to Mayor Bowser for putting a temporary stop to these wasteful requirements.
What happens now?
The Mayor’s budget proposal is now before the D.C. Council, specifically under the purview of the Committee on Public Works and Operations, chaired by Councilmember Brianne Nadeau (Ward 1). The Council could still reverse the Mayor’s proposal when it is scheduled to vote on the budget in late July. This is why it’s critical for the construction industry to weigh-in in favor of the Mayor’s proposal.
The budget hearing for the Office of Contracting and Procurement, the agency that administers the District’s procurement law, is scheduled for Monday, June 2 at 9:00 a.m.