On July 14, 2022, the Department of Labor (DOL) published a Notice of Proposed Rulemaking (NPRM) which requires that non-displacement clauses be included in successor contracts for current contracts covered by the Service Contact Act (SCA.) The rule would require federal contractors and subcontractors who take over the same or similar work to make good faith offers of employment to employees working on the SCA job, with some exceptions.
The NPRM was issued to implement the requirements of Executive Order 14055, which was signed by President Biden in November 2021. This Executive Order established a general policy of the federal government that contracts which succeed contracts for the same or similar services, and solicitations for such services, should include a non-displacement clause.
The NPRM notes that the federal government's procurement interests in economy and efficiency are best served when the successor contractor or subcontractor hires the predecessor's employees. The proposed rule notes that a carryover workforce minimizes disruption in the delivery of services, and the federal government will benefit by having a well-trained workforce that is already familiar with the services to be rendered.
Unless an exclusion applies, an employer working on a SCA job must provide the contracting officer with a certified list of all employees working on the SCA job during the last month of the contract, at least 10 business days before contract completion. The proposed rule...
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