Can Virginia attach PLA-neutral procurement conditions to state grants given to MWAA?

Plain-English summary

In July 2012, Delegate Mark Sickles asked the AG about new Virginia legislation (HB 33 and SB 242 from the 2012 session, codified as § 2.2-4321.2) that prohibited state grants for public works construction from being conditioned on Project Labor Agreement (PLA) requirements. The specific factual concern was the Metropolitan Washington Airports Authority (MWAA), which was building the Silver Line Metro extension to Dulles airport and had been considering PLA preferences in its procurement. Could Virginia force MWAA, an interstate compact authority, to follow Virginia's PLA-neutrality rule when receiving state funds?

The AG drew a distinction between authority and statutory enforcement mechanisms.

Authority by contract: Yes. A state agency providing grants to MWAA can absolutely negotiate to include PLA-neutrality as a condition of the grant. § 2.2-4321.2(C) tells state agencies that they "shall ensure" recipients of grants do not require or prohibit PLAs in their bid specifications. To comply, state agencies dealing with MWAA must require the no-PLA-preference condition in their grant contracts, and must provide remedial measures if MWAA breaches. Even setting aside § 2.2-4321.2, state agencies have always had general authority to condition grants on the recipient's behavior. That is just standard contract law.

Special statutory remedies in the new legislation: No. The new section gives "offerors, contractors, and others" standing to challenge bid specifications that violate the PLA-neutrality rule and authorizes injunctive relief. But § 2.2-4321.2 is part of the Virginia Public Procurement Act (VPPA), and the General Assembly expressly exempted MWAA from the VPPA. So the special remedies do not apply against MWAA directly.

The implicit "fund withhold" enforcement of § 2.2-4321.2(C): The statute's "shall ensure" command implicitly prohibits state agencies from providing the funds until compliance is ensured. So MWAA could keep its PLA preference, but Virginia funds would be off the table.

Enforcement against MWAA in court: MWAA's exemption from the VPPA does not insulate it from the general laws on enforcement of contracts. So if MWAA breached a PLA-neutrality clause in a grant agreement, a state agency could seek the usual judicial contract remedies, just not via the streamlined remedies in the new legislation.

The AG also briefly addressed and declined a separate question Sickles asked about MWAA Board appointments, citing pending litigation as a reason not to opine.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

A Project Labor Agreement (PLA) is a pre-hire collective bargaining agreement between contractors and one or more labor unions that sets the terms and conditions for a particular construction project. PLAs are common in large public works projects. Critics argue that PLA preferences disadvantage open-shop contractors and increase costs; defenders argue they reduce labor disputes and improve worker safety on complex projects.

The 2012 Virginia legislation (HB 33, SB 242, enacted as § 2.2-4321.2) prohibited state agencies and grant recipients from giving PLA preferences or imposing PLA requirements in public works bid specifications. The new statute applied to procurements by state agencies and by recipients of state grants.

The Metropolitan Washington Airports Authority is an interstate compact authority created jointly by Virginia, the District of Columbia, and Congress to operate Reagan National and Dulles airports. The opinion describes MWAA as "a public body corporate and politic that is independent of Virginia," and notes that the General Assembly expressly exempted MWAA from the Virginia Public Procurement Act. Even so, the AG explained, that exemption does not insulate MWAA from the general laws on enforcement of contracts.

The Silver Line Metrorail extension was a major MWAA-led construction project relying on state and federal funds. PLA preferences had become a flashpoint during the early phases of the project.

Common questions

Q: Can Virginia force MWAA to abandon Project Labor Agreement preferences?
A: Not directly. MWAA is exempt from the Virginia Public Procurement Act, so § 2.2-4321.2 does not apply to MWAA on its own terms. Virginia's leverage is conditional: state grants can require PLA-neutrality, and the implicit "fund withhold" mechanism of § 2.2-4321.2(C) means MWAA's choice is to accept the condition or forgo state funds.

Q: If MWAA accepts a Virginia grant with a PLA-neutrality clause and then breaches it, what happens?
A: The state agency can seek judicial remedies against MWAA for breach of contract, because MWAA's VPPA exemption does not insulate it from the general laws on enforcing contracts. The streamlined statutory remedies in the new legislation (offeror standing, injunctive relief) are not available against MWAA.

Q: Why is the answer different from a typical state agency grant recipient?
A: Because typical Virginia government bodies and grant recipients are themselves subject to the VPPA, so § 2.2-4321.2's remedies apply directly. MWAA's express exemption from the VPPA cuts off those streamlined remedies. General contract law fills the gap.

Q: Why didn't the AG address the MWAA Board appointments question?
A: Pending litigation. AG opinions traditionally avoid weighing in on questions that are or are likely to be subject to active litigation.

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2012/12-025_Sickles.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

July 6, 2012

The Honorable Mark D. Sickles
Member, House of Delegates
Post Office Box 10628
Franconia, Virginia 22310

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

Dear Delegate Sickles:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You ask whether recent legislation directing a state agency, when providing a grant of state funds for the construction or operation of public works, to ensure that bid specifications and other documents for the project neither require nor prohibit bidders, offerors, contractors, or subcontractors to enter into, or adhere to, a Project Labor Agreement ("PLA") affects the Commonwealth's procurement authority for bodies such as the Metropolitan Washington Airports Authority ("MWAA"). You also ask a question relating to appointments to the MWAA Board of Directors. The subject of MWAA Board appointments is presently the subject of litigation. Thus, in accordance with longstanding principles, this Office will decline to opine on matters that are associated with pending litigation.

Response

It is my opinion that a state agency can negotiate to include in its grant agreement a provision that makes MWAA's receipt of Virginia funds conditional upon MWAA conducting the procurement in a manner that does not give a preference to offerors who will have a PLA. It is further my opinion that, although such a condition would be enforceable in accordance with general contract laws, it could not be enforced through the special remedial provisions contained in the new legislation, because MWAA is not subject to the statute providing those remedies.

Background

During its 2012 regular session, the General Assembly enacted House Bill 33 and Senate Bill 242. The Governor signed these bills on April 9, 2012, and they are effective beginning July 1, 2012. The legislation amended the Virginia Public Procurement Act by adding a new section, § 2.2-4321.2. The text of the provision pertinent to your inquiry, § 2.2-4321.2(C), is as follows:

A state agency issuing grants, providing financial assistance, or entering into cooperative agreements for the construction, manufacture, maintenance, or operation of public works shall ensure that neither the bid specifications, project agreements, nor other controlling documents therefor awarded by recipients of grants or financial assistance or by parties to cooperative agreements, nor those of any construction manager acting on behalf of such recipients, shall: (1) Require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or related projects; or (2) Otherwise discriminate against bidders, offerors, contractors, subcontractors, or operators for becoming or refusing to become or remain signatories or otherwise to adhere to agreements with one or more labor organizations, on the same or other related projects.

Applicable Law and Discussion

Pursuant to the newly enacted § 2.2-4321.2, a state agency issuing grants or providing financial assistance for construction of public works "shall ensure" that the bid specifications and certain other documents issued by the recipients do not discriminate against offerors based on whether they will have an agreement with a labor organization. To facilitate compliance, the amendment also provides that, if a recipient of such grants or financial assistance "performs in a manner contrary to" the new provisions, injunctive relief may be granted to prevent the violation, and confers upon offerors, contractors, and others standing "to challenge any bid specification . . . that violates the provisions of this section." As a further enforcement tool, the new section implicitly prohibits state agencies from providing the funds until such time as compliance with the bills is "ensure[d]." Additionally, irrespective of the enactment of § 2.2-4321.2 and in the absence of such a law, a granting agency can negotiate to include similar requirements as a condition of signing any commitment to provide grants or financial assistance.

MWAA is a public body corporate and politic that is independent of Virginia. The General Assembly expressly exempted MWAA from the provisions of the Virginia Public Procurement Act. Though otherwise permissible, the newly added remedies and requirements are not applicable to or enforceable against MWAA. Nonetheless, MWAA's exemption from the Virginia Public Procurement Act does not insulate it from general laws pertaining to the enforcement of contracts, and state agencies would be able to seek judicial remedies if MWAA were to breach a contractual commitment it made not to include a PLA preference in its procurement documents or to otherwise meet the conditions found in § 2.2-4321.2.

Although MWAA is exempt from § 2.2-4321.2, state agencies dealing with MWAA are not. To comply with the statute's command that they "shall ensure" no PLA preference be given, state agencies engaged in issuing grants to, providing financial assistance to, or entering into cooperative agreements for the construction, maintenance, or operation of public works with MWAA or similar entities must require that the contract documents specify that no PLA preference be given and that the conditions found in § 2.2-4321.2 be met, and must provide the appropriate remedial measures if the contract terms are not honored.

Conclusion

Accordingly, it is my opinion that a state agency can negotiate to include in its grant agreement a provision that makes MWAA's receipt of Virginia funds conditional upon MWAA conducting the procurement in a manner that does not give a preference to offerors who will have a PLA. It is further my opinion that, although such a condition would be enforceable in accordance with general contract laws, it could not be enforced through the special remedial provisions contained in the new legislation, because MWAA is not subject to the statute providing those remedies.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General