On November 18, 2021, the Biden Administration announced an executive order (EO) bringing back to life what was formerly EO 13495, Nondisplacement of Qualified Workers Under Service Contracts. The EO establishes that where a federal government contract subject to the Service Contract Act expires and a follow-on contract is awarded for the same or similar services at the same location, a successor contractor must grant a right of first refusal to the predecessor contractor’s employees (other than management and supervisory employees) before offering the positions to non-predecessor employees. Government contractors need to be aware of the forthcoming regulations as they plan for new contracts.
While regulations are forthcoming, the EO is very similar to the former provisions which were revoked by the Trump Administration. The key provisions include:
- Incumbent contractors must provide a list of incumbent employees to the contracting officer prior to the end of the contract term, to which the incoming contractor is entitled;
- Incoming Service Contractors will be required to make a written offer of employment to all incumbent Service Employees to the extent there is a position available, providing at least 10 days to respond;
- Prime contractors must flow down the provisions to subcontractors and ensure in the subcontract that subcontractors have an obligation to provide employee information as needed to comply with EO; and
- The EO will not apply to contracts under the simplified acquisition threshold or to employees hired to work as part of a single job to the extent the hiring was not structured to avoid this EO.
The Secretary of Labor will issue final regulations within 180 days of the EO and the FAR Council will issue an applicable FAR provision 60 days following the issuance of the final regulations. As with the prior EO 13495, the United States Department of Labor will have enforcement authority. The EO will apply to solicitations issued on or after the effective date of the final regulations issued by the FAR Council.
PilieroMazza’s Labor and Employment Group will continue monitoring the forthcoming regulations and publish updates as we receive them. Please contact Nichole Atallah, the author of this Client Alert, or a member of the Labor and Employment Group, with any questions.
