EO 13495.rtf

Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts (January 30, 2009)

Purpose

To grant employees under existing service contracts a “right of first refusal” for the same or similar jobs under a new follow-on contracts. This applies to custodial, elevator operator, guard services, messenger and other service contracts and subcontracts as specified in the definitions section below.

The Order states that service contracts (and solicitations for such contracts) shall include a clause that:

requires the contractor and its subcontractors, under a contract that succeeds a contract for performance of the same or similar services at the same location, to offer those employees employed under the predecessor contract whose employment will be terminated as a result of the award of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified.

Definitions

Service contract or contract - Any contract or subcontract for services entered into by the Federal Government or its contractors that is covered by the McNamara-O'Hara Service Contract Act of 1965 (SCA), as amended, 41 U.S.C. 351 et seq., and its implementing regulations.

Employee - A service employee as defined in the SCA. 74 FR 6103. See 41 U.S.C. 357(b).

Exemptions

Contracts or subcontracts under the simplified acquisition threshold;

Contracts or subcontracts awarded pursuant to the Javits-Wagner-O'Day Act;

Guard, elevator operator, messenger, or custodial services provided to the Federal Government under contracts or subcontracts with sheltered workshops employing the severely handicapped;

Agreements for vending facilities entered into pursuant to the preference regulations issued under the Randolph-Sheppard Act, 20 U.S.C. 107; and

Employees who were hired to work under a Federal service contract and one or more nonfederal service contracts as part of a single job, if the employees were not deployed in a manner that was designed to avoid the purposes of the Order.

Summary

The Order:

Directs the Department of Labor (DOL), in consultation with the Federal Acquisition Regulatory Council (FARC), to issue implementing regulations within 180 days of the date of the Order.

Provides that no position may be filled until the right of first refusal has been provided.

Authorizes exemption from any or all of the stated provisions if the head of a contracting department or agency determines that application of any of the requirements:

would not serve the purposes of the Order, or would impair the Federal Government’s ability to procure services on an economical and efficient basis.

Requires inclusion of the following contract clause in solicitations for and service contracts that succeed contracts for performance of the same or similar work at the same location:

NONDISPLACEMENT OF QUALIFIED WORKERS

"(a) Consistent with the efficient performance of this contract, the contractor and its subcontractors shall, except as otherwise provided herein, in good faith offer those employees (other than managerial and supervisory employees) employed under the predecessor contract whose employment will be terminated as a result of award of this contract or the expiration of the contract under which the employees were hired, a right of first refusal of employment under this contract in positions for which employees are qualified. The contractor and its subcontractors shall determine the number of employees necessary for efficient performance of this contract and may elect to employ fewer employees than the predecessor contractor employed in connection with performance of the work. Except as provided in paragraph (b) there shall be no employment opening under this contract, and the contractor and any subcontractors shall not offer employment under this contract, to any person prior to having complied fully with this obligation. The contractor and its subcontractors shall make an express offer of employment to each employee as provided herein and shall state the time within which the employee must accept such offer, but in no case shall the period within which the employee must accept the offer of employment be less than 10 days.

"(b) Notwithstanding the obligation under paragraph (a) above, the contractor and any subcontractors (1) may employ under this contract any employee who has worked for the contractor or subcontractor for at least 3 months immediately preceding the commencement of this contract and who would otherwise face lay-off or discharge, (2) are not required to offer a right of first refusal to any employee(s) of the predecessor contractor who are not service employees within the meaning of the Service Contract Act of 1965, as amended, 41 U.S.C. 357(b), and (3) are not required to offer a right of first refusal to any employee(s) of the predecessor contractor whom the contractor or any of its subcontractors reasonably believes, based on the particular employee's past performance, has failed to perform suitably on the job.

"(c) In accordance with Federal Acquisition Regulation 52.222–41(n), the contractor shall, not less than 10 days before completion of this contract, furnish the Contracting Officer a certified list of the names of all service employees working under this contract and its subcontracts during the last month of contract performance. The list shall also contain anniversary dates of employment of each service employee under this contract and its predecessor contracts either with the current or predecessor contractors or their subcontractors. The Contracting Officer will provide the list to the successor contractor, and the list shall be provided on request to employees or their representatives.

"(d) If it is determined, pursuant to regulations issued by the Secretary of Labor (Secretary), that the contractor or its subcontractors are not in compliance with the requirements of this clause or any regulation or order of the Secretary, appropriate sanctions may be imposed and remedies invoked against the contractor or its subcontractors, as provided in Executive Order (No.) _______, the regulations, and relevant orders of the Secretary, or as otherwise provided by law.

"(e) In every subcontract entered into in order to perform services under this contract, the contractor will include provisions that ensure that each subcontractor will honor the requirements of paragraphs (a) through (b) with respect to the employees of a predecessor subcontractor or subcontractors working under this contract, as well as of a predecessor contractor and its subcontractors. The subcontract shall also include provisions to ensure that the subcontractor will provide the contractor with the information about the employees of the subcontractor needed by the contractor to comply with paragraph 5(c), above. The contractor will take such action with respect to any such subcontract as may be directed by the Secretary as a means of enforcing such provisions, including the imposition of sanctions for non-compliance: provided, however, that if the contractor, as a result of such direction, becomes involved in litigation with a subcontractor, or is threatened with such involvement, the contractor may request that the United States enter into such litigation to protect the interests of the United States."

Assigns responsibility for investigating and obtaining compliance with the Order to the DOL. Appropriate sanctions and remedies for failure to comply with any order of the Secretary of Labor or willful violations of the Order or its implementing regulations include, but are not limited to:

orders requiring employment and payment of lost wages, and a determination that the contractor or subcontractor, its responsible officers, and any firm in which the contractor or subcontractor has a substantial interest will be ineligible for award of any contract of the United States for up to three years.

Creates no rights under the Contract Disputes Act, and disputes regarding the requirements of the contract clause will be subject to DOL regulations issued under the Order. To the extent practicable, such regulations shall favor the resolution of disputes by efficient and informal alternative dispute resolution methods.