That seems very odd. Do you accidentally have a subset of features selected, and it's only running on a few features? It would be a kind of silly mistake, but one I've made more than once.
EDIT: If you want a workaround, you could use "Select by Attributes" to identify local projects, then use the Attributes pane to bulk-update the selected features. Then simply invert the selection and bulk-update the remaining features with the other value.
- Josh Carlson
Kendall County GIS