District residents have long complained that the city does not do enough to require builders working for the city to hire city residents. In December, city officials strengthened those requirements, called First Source, adding new penalties for companies that failed to meet them.

In May, the Associated Builders and Contractors of Metropolitan Washington, along with two local companies and three workers from Maryland and Virginia, sued the city to have the rules struck down.

Companies working on District-subsidized construction projects say they are suffering unfairly from lower productivity, employee morale problems and higher legal fees as a result of the new rules, which update the original 1984 legislation.

Miller & Long, a concrete firm based in Bethesda, has to screen about 60 applicants from the District in order to find 25 acceptable workers, “the majority of whom wind up not being employed six months later,” according to the suit.

“These screening numbers and percentages for District residents are approximately three times higher than for residents of other jurisdictions such as Maryland and Virginia,” the suit reads.

Hawkins Electrical Construction, based in the District, also joined the suit, as well as three individuals: Warren Weems, a safety flagger from Maryland; Emmett Morris Jr., a carpenter foreman from Virginia; and Tron Hill Sr., an apprentice carpenter from Maryland.

The plaintiffs contend that the laws have long been unfair. “But with the recent amendments to the First Source Act, contractors cannot possibly comply with the act’s hiring and quota requirements, and they are threatened with job losses, business failures, and debarment from government contracting,” the suit reads.

The city has not filed a response, but one of the authors of the legislation, Council member Michael A. Brown (I-At large), said the suit’s assertion that there are insufficient numbers of qualified District residents had been “debunked by the convention center hotel project,” which is meeting many of the hiring targets set by the city.

Companies that don’t want to rearrange their workforce, Brown said, are free to skip District-sponsored projects.

“They want to use their own crews that they are comfortable with from other jurisdictions,” Brown said. “Now if they don’t want any subsidy from the District, they are more than welcome to use their crews. But if they want D.C. subsidies, they are going to have to hire D.C. residents.”