Council committee vets OCP FY26 budget as witnesses clash over project labor agreements

Council Member Brianne Nadeau, chair of the Committee on Public Works and Operations, convened a June 2, 2025 hearing in Room 123 of the Wilson Building and on Zoom to review Mayor Muriel Bowser's proposed fiscal year 2026 budget for the Office of Contracting and Procurement (OCP). The hearing featured public witnesses who debated a Budget Support Act subtitle that would curb the use of project labor agreements (PLAs) on District construction projects and OCP leadership who described planned IT and process investments for procurement modernization.

The proposed FY26 operating budget for OCP, as presented during the hearing, is $29,449,962 and includes 205 full-time equivalents; OCP's proposed capital funding discussed at the hearing includes line items for modernization work on the procurement automated support system (PASS) and related projects. Committee members questioned agency officials on a range of topics including a shift of some operating costs to the surplus property revenue (SPR) fund, planned PASS modernization, a proposed certified business enterprise (CBE) online marketplace, transparency portal performance, and staffing reductions.

The hearing opened with a contested policy debate. Marcus Jackson, director of government affairs for Associated Builders and Contractors of Metro Washington, testified in support of the Project Labor Agreement Amendment Act of 2025 (Title 6, Subtitle 1 of the Budget Support Act), telling the committee that limiting PLAs would "save district taxpayers millions by postponing and limiting the use of project labor agreements on district construction procurement for the next 6 years." Jackson argued PLAs reduce competition and cited RAND studies to claim PLA requirements raise costs and completion times on some projects. "When PLAs are imposed on public projects, taxpayers pay more to get less," he said.

Kathy Humm, founder of NTP HR (a woman-owned small business) and chair-elect of the Associated Builders and Contractors Metro Washington chapter, also supported the mayor's subtitle. She told the committee that, in her experience advising construction firms, "no construction firm I have ever known would sign a PLA," and warned that PLAs can expose contractors to large pension-related liabilities and operational risk tied to union hiring hall assignments.

Opposing the change, Victoria Leonard, representing the Baltimore DC Building Trades, asked the committee to strike the PLA section of the Budget Support Act. Leonard said PLAs have been District policy for more than a decade and credited them with producing local hires, apprenticeship hours, and CBE contract awards on recent PLA projects. She cited the Cedar Hill PLA project as an example, saying it employed 468 D.C. residents, generated substantial apprenticeship hours, and included contracts with 29 small local minority businesses that together earned more than $117 million. "We don't want to erase 10 wonderful years of public policy," Leonard said.

Committee members pressed witnesses on causation and data. Chair Nadeau asked whether cost increases on particular projects could be traced to PLAs rather than other factors such as scope changes or inflation; witnesses and council members agreed there is competing research and recommended scrutiny of both pro- and anti-PLA studies. Leonard and other witnesses urged improved reporting from the Department of Employment Services on First Source and other compliance statistics so outcomes could be analyzed across PLA and non-PLA projects; the committee agreed to follow up with OES on publishing data.

Nancy Hateman, OCP Chief Procurement Officer, testified about the agency's FY26 priorities and operational changes. Hateman said the mayor's proposed budget supports a multi-year modernization of PASS, beginning with a sourcing (solicitation/evaluation) phase in FY26 and potential contracts and buying modules thereafter. She said OCP engaged an IT consultant to evaluate modular and enterprise procurement systems and expected recommendations by June; OCP aims to select a system module for sourcing by the end of FY25 and implement sourcing by the end of FY26, with additional modules possibly completed in FY27 or later depending on complexity.

Hateman described planned investments and line items discussed during the hearing: $6.7 million proposed for PASS modernization, $3.5 million for PASS maintenance and support (including about $1.2 million for Octo technical support and $1.269 million for a vendor experience improvement project), and $1.2 million for a CBE online marketplace intended to evolve the DC supply schedule into a searchable, self-service portal for client agencies and certified business enterprises. Hateman said the CBE marketplace is intended to reduce manual small-dollar purchasing, let agency requisitioners order routine items directly, and allow payment via agency purchase card to speed fulfillment.

On fiscal structure, the committee questioned a budgetary shift that moves about $3.9 million in local funds to an increase of roughly $3.2 million in special purpose revenue (SPR) funds, yielding a net local reduction of about $700,000. Hateman explained that some surplus property staff and operating expenses are proposed to transfer to the SPR fund and noted the Budget Support Act contains language allowing SPR revenue to fund broader OCP operations rather than only surplus-property activities. She told the committee SPR has been a healthy revenue source recently, citing completed and anticipated sales (for example, circulator buses and surplus equipment from United Medical Center) and described how SPR revenue supports warehouse operations, online auction contracts, and contractor services for moving and staging large inventories.

On staffing, Hateman said the FY26 proposal reflects a net reduction of four FTEs (an attorney advisor, a training specialist, a contract specialist, and a senior deputy strategic logistics center position), and that OCP currently had 37 vacancies. She described steps OCP is taking on recruitment, training, and quality management, including a new quality management tool to evaluate training effectiveness and post-training assessments.

Committee members also explored transparency and performance. Hateman said approximately 88% of contracts over $100,000 were posted on OCP's transparency portal as of May, noting that portal mechanics can temporarily remove a contract from the "published" count while a modification is in process. She confirmed OCP's Office of Procurement Integrity and Compliance conducts random portal audits and agreed to provide the committee copies of audit reports for FY24 and FY25.

On sustainability and procurement, Hateman reported OCP has filled one of the two FTEs funded to meet the District's sustainable purchasing food procurement goals and is coordinating with the Department of Energy and Environment (DOEE) on certification and process details. She said language for solicitations has been drafted but awaits the finalized certification process from DOEE before full implementation; OCP hopes to implement certification-related solicitation language in Q1 of FY26.

The hearing included additional operational questions about vendor registration consolidation with the Office of the Chief Financial Officer, planned improvements to the procurement forecast module, and contract-suite reporting. The session concluded with Chair Nadeau noting written testimony remains part of the record and the hearing record will close at 5:30 p.m. on June 16, 2025.

What's next: Council committee staff will follow up on audit reports, OES data publication, and document requests described on the record. The Budget Support Act subtitle on PLAs remained a point of policy contention rather than an adopted change at the June 2 hearing.