Nondisplacement of Qualified Workers Under Service Contracts

This executive order requires federal service contractors and their subcontractors to offer a right of first refusal of employment to qualified non-managerial employees from predecessor contracts when a successor contract is awarded for the same or similar services at the same location. The order aims to reduce service disruption and maintain an experienced workforce by preventing displacement of qualified workers during contract transitions.

Federal Register Open PDF 74 FR 6103

Impact dates

Jul 29, 2009
Secretary of Labor issues implementing regulations
Jul 29, 2009
Federal Acquisition Regulatory Council issues FAR regulations
Feb 9, 2009
Employee must accept offer of employment (minimum period)
Feb 9, 2009
Contractor furnishes certified employee list to Contracting Officer before contract completion

Key directives

Include nondisplacement clause in service contracts and solicitations for successor contracts
Offer right of first refusal to qualified non-managerial employees from predecessor contract
No employment openings until right of first refusal is provided
Minimum 10-day acceptance period for employment offers
Furnish certified employee list to Contracting Officer at least 10 days before contract completion
Secretary of Labor to issue regulations within 180 days
Federal Acquisition Regulatory Council to issue FAR regulations within 180 days
Secretary of Labor authorized to investigate compliance and impose sanctions including debarment up to 3 years

Who is ordered

Timeline

Immediate

Executive Order 13204 of February 17, 2001 is revoked
Order becomes effective immediately

Near term (90d)

Secretary of Labor must issue implementing regulations within 180 days
Federal Acquisition Regulatory Council must issue FAR regulations within 180 days

Long term

Order applies to solicitations issued on or after effective date of FAR Council action
Ongoing compliance requirements for successor service contracts

Risks & tensions

Exemption authority in Section 4 may weaken consistent application if agency heads broadly exempt contracts
Potential tension between 'economy and efficiency' goals and worker protection mandate—successor contractors may prefer different workforce for cost or performance reasons
Section 6(b) explicitly denies Contract Disputes Act rights, channeling disputes through Secretary of Labor's regulatory process
Vague: effective date for solicitations depends on FAR Council action timing, creating implementation uncertainty
Past-performance exclusion in Section 5(b)(3) leaves subjective judgment to contractor discretion