A provision in Delaware's bond bill quietly changes how some public construction contracts are awarded—and it affects eligibility, not just pricing.
Most Delaware property owners and construction firms bidding on public works projects don't realize that HB500, the state's bond and capital improvements bill, contains a provision that fundamentally changes how certain large contracts are awarded.
Buried in Section 28 of HB500 is a Community Workforce Agreement pilot that mandates union labor participation on up to four large Office of Management and Budget (OMB) public works projects. This isn't a preference or a scoring advantage—it's a contract eligibility requirement.
Under the new provision, small construction businesses bidding on these designated OMB public works contracts must satisfy one of three conditions to be eligible:
Hold a Collective Bargaining Agreement (CBA) with a union; Subcontract to a union firm; or Hire union workers to meet a mandated percentage threshold.
If your firm doesn't meet one of these requirements, you cannot bid on these contracts. This is a hard gate, not a scoring factor.
The provision also explicitly waives the standard low-bid award rule that normally governs public construction contracts under Delaware Code Title 29, Section 6962(d)(13)a.4. This means the contract may not go to the lowest bidder if that bidder doesn't satisfy the union labor requirement.
The pilot applies to up to four large OMB public works projects. If you're a general contractor, subcontractor, or construction firm that regularly bids on state-funded infrastructure work, you need to understand whether your company or projects fall under this mandate.
Firms without existing union relationships will need to either establish a CBA, identify union subcontractors, or plan to hire union labor at the required percentage. This may increase project costs, change your supply chain, or require new labor negotiations.
Property managers and owners who oversee public facilities or manage state-funded construction projects should also be aware, as this affects project timelines and contractor selection.
The provision became effective upon enactment of HB500. The state is required to submit pilot reporting annually, with the first report due January 1. This means the program is already active and will be evaluated based on early results.
If you're considering bidding on OMB public works contracts in the coming months, you should verify whether your project is one of the four designated pilot projects and plan accordingly.
Review your current labor agreements and subcontractor relationships. If you bid on public works, contact your bonding agent and legal counsel to understand the specific requirements for any projects you're pursuing. The state will be tracking compliance and outcomes, so documentation of your union labor arrangement will be important.
The Delaware Contractors Association and other trade groups have detailed guidance on navigating CBA requirements and union subcontracting options available to members.
Source: HB500—A Bond And Capital Improvements Act Of The State Of Delaware, Section 28, Page 23; effective upon enactment; reporting due January 1 annually per Section 173.