PLA Construction Alert

New Jersey recently enacted A-5967 / S-4864 (P.L. 2025, c.327), which significantly expands the authority of local public entities to utilize Project Labor Agreements (PLAs) on public works projects. The prior law limited the use of PLAs primarily to larger public works projects with an estimated construction cost of $5 million or more. Under the new law, local government units may now enter into PLAs for public works projects below the $5 million threshold. This effectively permits local contracting units to require PLAs on projects of any value, subject to their discretion. This is likely to significantly impact bidding on public works projects. Contractors should anticipate the increased use of PLAs on smaller projects and bid specifications that require compliance with union labor terms set forth in a PLA that may be negotiated by the public entity. Contractors should scrutinize bid solicitations carefully to determine if PLAs are required, and they should submit requests for clarification, or even challenge any bid specifications before bid opening if the public entity’s bid solicitation is not clear about whether a PLA is required for a given project. If you have questions about PLA requirements, bid compliance, or how this change may affect your ability to bid on local public works projects, please contact our office.