Walsh Construction Company II, LLC (B-423075.2)

You should care.

Category: Project labor agreement

Date: 20 February 2025

URL: https://www.gao.gov/products/b-423075.2

Walsh Construction Company II, LLC, protested the Army Corps of Engineers’ amendment of a task order solicitation for repairs at Naval Hospital Bremerton. Initially, the solicitation required offerors to submit a project labor agreement (PLA) under Executive Order 14063 and its implementing FAR clauses. However, after a prior protest and corrective action, the agency removed this requirement, arguing that it was inapplicable to the multiple-award task order contract (MATOC) under which the order was issued. Walsh argued that the PLA requirement should still apply and that its removal unfairly disadvantaged firms that had already entered into PLAs.

Applicability of PLA requirements: Army contended that because the underlying MATOCs were awarded before the PLA mandate took effect and were not modified to include the FAR clauses, the PLA requirement could not be enforced at the task order level. GAO agreed.

Retroactive application: Walsh argued that the PLA requirement applied regardless of whether the MATOC contained the relevant FAR clauses. GAO rejected this, holding that the FAR does not permit retroactive application of regulatory changes to existing contracts absent modification.

Corrective action discretion: GAO upheld the Army’s decision to remove the PLA requirement, finding that agencies have broad discretion in corrective action and that the amendment was a reasonable response to a procedural error.

Protest denied. GAO ruled that the agency properly removed the PLA requirement because the underlying MATOCs lacked the necessary FAR clauses, and retroactive application was not required. This decision clarifies that agencies cannot impose new FAR clauses on existing IDIQ contracts unless they have been expressly modified to include them.

Digest

Protest challenging the amended terms of a task order solicitation, resulting from an agency’s decision to take corrective action in response to an earlier protest, is denied. The agency amended the solicitation to remove the requirement for offerors to submit an executed project labor agreement with their proposals, and the protester has not established that removal of the requirement is contrary to applicable procurement law and regulation. Because the task order was competed among holders of multiple-award task order contracts that do not include any clauses regarding project labor agreements, the agency properly concluded that it could not include the project labor agreement requirements in task orders issued under those contracts.