You unseated an incumbent for a service contract and need to staff up quickly. As a small business, this can be an extremely daunting task. But is your company aware that you can find out who worked for the incumbent? And did you know you are required to make a good faith effort to offer the qualified staff jobs – even as subcontractors????
The Federal Acquisition Regulation (FAR) Part 22.12, is about the non-displacement of qualified workers under service contracts. Non-displacement of qualified workers under service contracts is based on an Executive Order (E.O.) (13495) dated January 30, 2009 with an effective date of January 18, 2013. The E.O. mandates that a successor service contractor for the same or similar services in the same location shall provide the right of first refusal to qualified workers that would lose their jobs because the contract they are currently working on is ending. This E.O. was issued for socioeconomic reasons and to maintain an experienced and trained workforce and applies to those service contractors covered by the Service Contract Labor Standards Act (SCLSA) (formerly known as the Service Contract Act).
But as in everything Government, there are always exceptions. The E.O. excludes a number of contracts including those under the simplified acquisition threshold and for services performed by persons who are blind or have severe disabilities. The Head of the Contracting Department or Agency (the Senior Procurement Executive under the FAR) may also waive – prior to the solicitation – the requirement if they determine the order would impair the Federal Government’s ability to procure the services on an economical and efficient basis. This function is not delegable and the contracting agency is required to notify the Department of Labor (DOL) of its waiver decision – which will be posted on the DOL website.
So how does it work? The predecessor contractor has to provide the Contracting Officer with a certified list of all employees (including subcontractor employees) along with their anniversary date to the Contracting Officer 30 days prior to the end of the period of performance. This list will be provided to the successor contractor after award. The successor contractor must offer employment to qualified workers on the list that have been on the contract for at least three months and would otherwise be fired or laid off. The successor contractor, however, has some discretion to determine the level of effort needed for efficient performance and employ fewer people than the predecessor, but they still have to offer the right of first refusal. And the right of first refusal continues for 90 days after the start of the contract – which means no offer of employment can be extended by a successor contractor or subcontractor to anyone prior to fully complying with this obligation.
The successor contractor does not have to offer the workers the same position, either! They only have to offer a position for which they are qualified. Qualification standards come from the information provided by the employee – and are based on their education, employment history and experience on the predecessor contract. That also means, the pay and benefits don’t have to be the same in order to constitute a bona fide offer of employment as long as the reasons for the offer are valid.
FAR Clause 52.222.17 is required in solicitations and the resulting contract for a successor contract (or subcontract) for the same or similar services at the same location. This applies only to SCLSA employees unless they are defined as executive, administrative or professional employees exempt under the Fair Labor Standards Act (29 CFR Part 541). This is a very basic (limited) overview and can get complicated and confusing very quickly. Please consult with counsel for additional guidance.