[Federal Register Volume 68, Number 201 (Friday, October 17, 2003)]
[Rules and Regulations]
[Pages 59848-59849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26317]



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Part II





Department of Housing and Urban Development





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24 CFR Part 5



Open Competition and Government Neutrality Towards Government 
Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects; Final Rule

  Federal Register / Vol. 68, No. 201 / Friday, October 17, 2003 / 
Rules and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-4695-F-02]
RIN 2501-AC98


Open Competition and Government Neutrality Towards Government 
Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule provides for codification of the requirements 
of Executive Order 13202 (the Executive Order), entitled ``Preservation 
of Open Competition and Government Neutrality Towards Government 
Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects.'' The Executive Order provides that, to the 
extent permitted by law, agencies may not permit inclusion of contract 
conditions requiring or prohibiting entering into or adhering to 
agreements with a labor organization, or otherwise discriminating 
against parties entering into or adhering to such agreements, as a 
condition for award of any federally funded contract or subcontract for 
construction. This final rule follows publication of a May 22, 2003, 
interim rule. HUD did not receive any public comments on the interim 
rule and, therefore, is adopting the interim rule without change.

DATES: Effective Date: November 17, 2003.

FOR FURTHER INFORMATION CONTACT: Edward L. Johnson, Director, Office of 
Labor Relations, Office of Departmental Operations and Coordination, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410-8000; telephone (202) 708-0370 (this is not a 
toll-free number). Hearing- or speech-impaired individuals may access 
this number through TTY by calling the toll-free Federal Information 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background--HUD's May 22, 2003, Interim Rule

    On May 22, 2003 (68 FR 28102), HUD published an interim rule 
establishing regulations to codify the requirements of Executive Order 
13202 for HUD's programs. President George W. Bush signed Executive 
Order 13202, entitled ``Preservation of Open Competition and Government 
Neutrality Towards Government Contractors' Labor Relations on Federal 
and Federally Funded Construction Projects'' on February 17, 2001 (the 
Order was published in the Federal Register on February 22, 2001, at 66 
FR 11225). Executive Order 13202 is intended to improve the internal 
management of the Executive Branch. The Order provides that agencies 
may not require or prohibit bidders, offerors, contractors, or 
subcontractors from entering into or adhering to agreements with one or 
more labor organizations. The Executive Order also permits agency heads 
to exempt a project from its requirements under special circumstances, 
but the exemption may not be related to the possibility of or an actual 
labor dispute.
    The Order was amended by Executive Order 13208, issued on April 6, 
2001. The amendment was to add a paragraph (c) to section 5 of 
Executive Order 13202. The new paragraph (c) addresses exemption of a 
project from the provisions of sections 1 and 3 of the Executive Order. 
(Executive Order 13208 was published in the Federal Register on April 
11, 2001, at 66 FR 18717.)
    HUD's May 22, 2003, interim rule added a new section Sec.  5.108 to 
HUD's regulations in 24 CFR part 5, subpart A. The interim rule 
codified the requirements of Executive Order 13202 for HUD's programs. 
The regulations in subpart A of part 5 contain the definitions and 
federal requirements generally applicable to all of HUD's programs. By 
placing the requirements of the Executive Order in those HUD 
regulations that contain across-the-board requirements, HUD is ensuring 
the broadest applicability of the requirements of Executive Order 
13202. The preamble to the May 22, 2003, interim rule provides a 
detailed description of the regulatory amendments to 24 CFR part 5.

II. This Final Rule

    This final rule follows publication of the May 22, 2003, interim 
rule. The interim rule became effective on June 23, 2003, and provided 
for a 60-day public comment period. The comment period on the interim 
rule closed on July 21, 2003. HUD did not receive any public comments 
on the interim rule. Accordingly, this final rule adopts the interim 
rule without changes.

III. Findings and Certifications

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this rule before publication and by 
approving it certifies that this rule does not have a significant 
economic impact on a substantial number of small entities. The final 
rule implements Executive Order 13202, which revokes previous 
requirements encouraging the inclusion of project labor agreements as a 
condition for award of federally funded contracts or subcontracts on 
construction projects. The Executive Order directs government 
neutrality towards the use of such agreements, thus placing the 
decision of whether to enter into a project labor agreement with 
individual contractors and subcontractors.
    This applies equally to large and small entities that seek 
federally funded construction contracts and does not establish 
requirements applicable to entities based on their size. Further, HUD 
neither requires nor prohibits the use of project labor agreements on 
HUD-funded construction projects. Although some HUD-funded construction 
projects are subject to project labor agreements, in many instances 
this is due to the voluntary decision of individual contractors and 
subcontractors. Therefore, the final rule will not significantly revise 
existing practices or hiring costs for small contractors and 
subcontractors participating in HUD's construction programs. To the 
extent the rule has an impact on small entities, it should be a 
positive economic impact on those small entities that are not union 
shops, because the rule may provide additional opportunities to work on 
federally funded construction projects by non-union small businesses.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made at the interim rule stage, in accordance with HUD regulations 
at 24 CFR part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332). The Finding of No 
Significant Impact is available for public inspection between the hours 
of 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket 
Clerk, Office of General Counsel, Room 10276, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410-0500.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1531-1538) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This final rule does not 
impose any federal mandates on any state, local, or tribal governments 
or the private sector within the meaning of the UMRA.

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Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the Executive Order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the Executive Order.

List of Subjects in 24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Individuals with disabilities, 
Loan programs--housing and community development, Low and moderate 
income housing, Mortgage insurance, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements.
    Accordingly, for the reasons stated in the preamble, the interim 
rule for part 5 of subtitle A of title 24 of the Code of Federal 
Regulations, published on May 22, 2003, at 68 FR 28102, is promulgated 
as final, without change.

    Dated: October 7, 2003.
Mel Martinez,
Secretary.
[FR Doc. 03-26317 Filed 10-16-03; 8:45 am]
BILLING CODE 4210-32-U