[co-author: Whitney Alston]

To avoid displacement of current service employees, the proposed rule will require contractors and their subcontractors to offer qualified employees a right of first refusal of employment under the successor contract.

TAKEAWAYS

• This proposed rule reinstitutes the Right of First Refusal for Service Employees implemented under President Obama’s Executive Order 13495, which was rescinded by President Trump’s Executive Order 13897.

• This proposed rule requires agencies to consider whether performance of a successor contract is reasonably necessary to ensure economic and efficient provision of services and, if so, include a preference or requirement for performance in the current location.

The Department of Labor has issued a proposed rule to implement Executive Order 14055, Nondisplacement of Qualified Workers Under Service Contracts, signed by President Joseph Biden on November 18, 2021. The proposed rule requires service contracts which succeed contracts for the same or similar services, and solicitations for such contracts, to include a nondisplacement clause. The nondisplacement clause requires the contractor and its subcontractors to offer qualified employees employed under the predecessor contract a right of first refusal of employment under the successor contract.

Under the proposed rule, the incumbent contractor must provide a certified list of the names of its service employees, as defined by the Service Contract Act of 1965, no less...

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