[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR5.108]

[Page 42-43]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 5_GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS--Table of Contents
 
  Subpart A_Generally Applicable Definitions and Federal Requirements; 
                                 Waivers
 
Sec. 5.108  Preservation of Open Competition and Government Neutrality 

Towards Government Contractors' Labor Relations on Federally Funded 
Construction 
          Projects.

    (a) Purpose. This section implements Executive Order 13202 (issued 
on February 17, 2001), as amended by Executive Order 13208 (issued on 
April 6, 2001), entitled ``Preservation of Open Competition and 
Government Neutrality Towards Government Contractors' Labor Relations on 
Federal and Federally Funded Construction Projects.''
    (b) Definitions. For purposes of this section:
    Construction contract means a contract for the construction, 
rehabilitation, alteration, conversion, extension, or repair of 
buildings, highways, or other improvements to real property, including 
any subcontracts awarded pursuant to such a contract.
    Financial assistance includes:
    (i) Grants, loans, and advances of federal funds; or
    (ii) Proceeds from loans guaranteed under section 108 of the Housing 
and Community Development Act of 1974, as amended (42 U.S.C. 5301 et 
seq.) and title VI of the Native American Housing Assistance and Self-
Determination

[[Page 43]]

Act of 1996 (25 U.S.C. 4101 et seq.). The term ``financial assistance'' 
does not include any other contract of insurance or guaranty.
    Labor organization has the same meaning it has in 42 U.S.C. 
2000e(d).
    (c) Neutrality towards government contractors' labor relations. To 
the extent permitted by law, the bid specifications, project agreements, 
or other controlling documents for a construction contract awarded on or 
after June 23, 2003, by a HUD grantee, recipient of financial assistance 
from HUD, or party to a cooperative agreement with HUD, for a 
construction project (or a construction manager acting on their behalf) 
shall not:
    (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 other related federally funded 
construction project; or
    (2) Otherwise discriminate against bidders, offerors, contractors, 
or subcontractors for becoming or refusing to become or remain 
signatories, or otherwise adhere to agreements with one or more labor 
organizations, on the same or other related federally funded 
construction project.
    (d) Exemptions--(1) Exemptions due to special circumstances. HUD may 
exempt a particular construction project, construction contract, 
subcontract, grant, or cooperative agreement from any requirement of 
this section, if HUD determines that special circumstances require an 
exemption in order to avert an imminent threat to public health or 
safety or to serve the national security. HUD will not base a finding of 
``special circumstances'' on the possibility or presence of a labor 
dispute concerning the use of contractors or subcontractors who are non-
signatories to, or otherwise do not adhere to, agreements with one or 
more labor organizations, or concerning employees on the construction 
project who are not members of, or affiliated with, a labor 
organization.
    (2) Exemption of construction projects subject to project labor 
agreements entered into as of June 23, 2003. HUD may exempt a particular 
construction project from any requirement of this section upon written 
request from the HUD grantee, recipient of financial assistance from 
HUD, or party to a cooperative agreement with HUD (or a construction 
manager acting on their behalf), if HUD determines that:
    (i) The HUD grantee, recipient of financial assistance from HUD, or 
party to the cooperative agreement with HUD (or a construction manager 
acting on their behalf) issued, or was a party to, as of June 23, 2003, 
bid specifications, project agreements, agreements with one or more 
labor organizations, or other controlling documents with respect to a 
particular construction project, that contain any of the requirements or 
prohibitions contained in paragraph (c) of this section; and
    (ii) One or more construction contracts subject to such requirements 
or prohibitions was awarded as of June 23, 2003.
    (e) Sanctions. If HUD determines that a HUD grantee, recipient of 
financial assistance from HUD, or party to a cooperative agreement with 
HUD (or a construction manager acting on their behalf) performs in a 
manner contrary to the requirements of this section, HUD will take such 
action, consistent with law and regulations, as HUD determines 
appropriate.
    (f) Voluntarily entering into project labor agreements. Nothing in 
this section prohibits contractors or subcontractors from voluntarily 
entering into project labor agreements.

[68 FR 28104, May 22, 2003]