Nondisplacement of Qualified Workers Under Service Contracts

CourtExecutive Office Of The President
Citation86 FR 66397
Record Number2021-25715
Publication Date23 November 2021
Presidential Documents
66397
Federal Register
Vol. 86, No. 223
Tuesday, November 23, 2021
Title 3—
The President
Executive Order 14055 of November 18, 2021
Nondisplacement of Qualified Workers Under Service Con-
tracts
By the authority vested in me as President by the Constitution and the
laws of the United States of America, including the Federal Property and
Administrative Services Act, 40 U.S.C. 101 et seq., and in order to promote
economy and efficiency in procurement, it is hereby ordered as follows:
Section 1. Policy. When a service contract expires, and a follow-on contract
is awarded for the same or similar services, the Federal Government’s pro-
curement interests in economy and efficiency are best served when the
successor contractor or subcontractor hires the predecessor’s employees, thus
avoiding displacement of these employees. Using a carryover work force
reduces disruption in the delivery of services during the period of transition
between contractors, maintains physical and information security, and pro-
vides the Federal Government with the benefits of an experienced and
well-trained work force that is familiar with the Federal Government’s per-
sonnel, facilities, and requirements. These same benefits are also often real-
ized when a successor contractor or subcontractor performs the same or
similar contract work at the same location where the predecessor contract
was performed.
Sec. 2. Definitions.
(a) ‘‘Service contract’’ or ‘‘contract’’ means any contract, contract-like instru-
ment, or subcontract for services entered into by the Federal Government
or its contractors that is covered by the Service Contract Act of 1965,
as amended, 41 U.S.C. 6701 et seq., and its implementing regulations.
(b) ‘‘Employee’’ means a service employee as defined in the Service Con-
tract Act of 1965, as amended, 41 U.S.C. 6701(3).
(c) ‘‘Agency’’ means an executive department or agency, including an
independent establishment subject to the Federal Property and Administra-
tive Services Act, 40 U.S.C. 102(4)(A).
Sec. 3. Nondisplacement of Qualified Workers. (a) Each agency shall, to
the extent permitted by law, ensure that service contracts and subcontracts
that succeed a contract for performance of the same or similar work, and
solicitations for such contracts and subcontracts, include the following clause:
‘‘Nondisplacement of Qualified Workers: (a) The contractor and its sub-
contractors shall, except as otherwise provided herein, in good faith offer
service employees (as defined in the Service Contract Act of 1965, as amend-
ed, 41 U.S.C. 6701(3)) employed under the predecessor contract and its
subcontracts whose employment would be terminated as a result of the
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 those 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 more
or fewer employees than the predecessor contractor employed in connection
with performance of the work solely on the basis of that determination.
Except as provided in paragraph (b), there shall be no employment opening
under this contract or subcontract, and the contractor and any subcontractors
shall not offer employment under this contract to any person prior to having
complied fully with the obligations described in this clause. The contractor
and its subcontractors shall make an express offer of employment to each
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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 business days.
‘‘(b) Notwithstanding the obligation under paragraph (a) above, the con-
tractor and any subcontractors (1) 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. 6701(3), and (2) are not required to offer a right of
first refusal to any employee(s) of the predecessor contractor for whom
the contractor or any of its subcontractors reasonably believes, based on
reliable evidence of the particular employees’ past performance, that there
would be just cause to discharge the employee(s) if employed by the con-
tractor or any subcontractors.
‘‘(c) The contractor shall, not less than 10 business days before the earlier
of the completion of this contract or of its work on 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 sub-
contractors. The Contracting Officer shall provide the list to the successor
contractor, and the list shall be provided on request to employees or their
representatives, consistent with the Privacy Act, 5 U.S.C. 552a, and other
applicable law.
‘‘(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, the Secretary may impose appropriate sanctions against
the contractor or its subcontractors, as provided in Executive Order (No.)
llll, the regulations implementing that order, 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) and (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 (c) of this clause. The contractor shall 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 sanc-
tions for noncompliance: 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.’’
(b) Nothing in this order shall be construed to require or recommend
that agencies, contractors, or subcontractors pay the relocation costs of em-
ployees who exercise their right to work for a successor contractor or subcon-
tractor pursuant to this order.
Sec. 4. Location Continuity. (a) When an agency prepares a solicitation
for a service contract that succeeds a contract for performance of the same
or similar work, the agency shall consider whether performance of the
work in the same locality or localities in which the contract is currently
being performed is reasonably necessary to ensure economical and efficient
provision of services.
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(b) If an agency determines that performance of the contract in the same
locality or localities is reasonably necessary to ensure economical and effi-
cient provision of services, then the agency shall, to the extent consistent
with law, include a requirement or preference in the solicitation for the
successor contract that it be performed in the same locality or localities.
Sec. 5. Exclusions. This order shall not apply to:
(a) contracts under the simplified acquisition threshold as defined in
41 U.S.C. 134; or
(b) employees who were hired to work under a Federal service contract
and one or more nonfederal service contracts as part of a single job, provided
that the employees were not deployed in a manner that was designed to
avoid the purposes of this order.
Sec. 6. Exceptions Authorized by Agencies. (a) A senior official within
an agency may grant an exception from the requirements of section 3 of
this order for a particular contract by, no later than the solicitation date,
providing a specific written explanation of why at least one of the following
circumstances exists with respect to that contract:
(i) Adhering to the requirements of section 3 of this order would not
advance the Federal Government’s interests in achieving economy and
efficiency in Federal procurement;
(ii) Based on a market analysis, adhering to the requirements of section
3 of this order would:
(A) substantially reduce the number of potential bidders so as to frustrate
full and open competition; and
(B) not be reasonably tailored to the agency’s needs for the contract;
or
(iii) Adhering to the requirements of section 3 of this order would otherwise
be inconsistent with statutes, regulations, Executive Orders, or Presidential
Memoranda.
(b) To the extent permitted by law and consistent with national security
and executive branch confidentiality interests, each agency shall publish,
on a centralized public website, descriptions of the exceptions it has granted
under this section, and ensure that the contractor notifies affected workers
and their collective bargaining representatives, if any, in writing of the
agency’s determination to grant an exception.
(c) On a quarterly basis, each agency shall report to the Office of Manage-
ment and Budget descriptions of the exceptions granted under this section.
Sec. 7. Regulations and Implementation. (a) The Secretary of Labor (Secretary)
shall, to the extent consistent with law, issue final regulations within 180
days of the date of this order to implement the requirements of this order,
other than those specified in sections 6(b) and (c) of this order.
(b) Within 60 days of the Secretary issuing final regulations, the Federal
Acquisition Regulatory Council (FAR Council), to the extent consistent with
law, shall amend the Federal Acquisition Regulation to provide for inclusion
in Federal procurement solicitations and contracts subject to this order the
clause described in section 3 of this order.
(c) The Director of the Office of Management and Budget shall, to the
extent consistent with law, issue guidance to implement section 6(c) of
this order.
Sec. 8. Enforcement. (a) The Secretary shall have the authority to investigate
potential violations of, and obtain compliance with, this order. In such
proceedings, the Secretary shall have the authority to issue final orders
prescribing appropriate sanctions and remedies, including, but not limited
to, orders requiring employment and payment of wages lost. The Secretary
may also provide that, if a contractor or subcontractor has failed to comply
with any order of the Secretary or has committed willful violations of
this order or the regulations issued pursuant thereto, the contractor or subcon-
tractor, and its responsible officers, and any firm in which the contractor
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or subcontractor has a substantial interest, may be ineligible to be awarded
any contract of the United States for a period of up to 3 years. Neither
an order for debarment of any contractor or subcontractor from further
Federal Government contracts under this section nor the inclusion of a
contractor or subcontractor on a published list of noncomplying contractors
shall be carried out without affording the contractor or subcontractor an
opportunity to present information and argument in opposition to the pro-
posed debarment or inclusion on the list.
(b) This order creates no rights under the Contract Disputes Act, 41 U.S.C.
7101 et seq., and disputes regarding the requirements of the contract clause
prescribed by section 3 of this order, to the extent permitted by law, shall
be disposed of only as provided by the Secretary in regulations issued
under this order.
Sec. 9. Revocation. Executive Order 13897 of October 31, 2019 (Improving
Federal Contractor Operations by Revoking Executive Order 13495), is re-
voked. Executive Order 13495 of January 30, 2009 (Nondisplacement of
Qualified Workers Under Service Contracts), remains revoked.
Sec. 10. Severability. If any provision of this order, or the application of
any provision of this order to any person or circumstance, is held to be
invalid, the remainder of this order and its application to any other person
or circumstance shall not be affected thereby.
Sec. 11. Effective Date. This order shall become effective immediately and
shall apply to solicitations issued on or after the effective date of the final
regulations issued by the FAR Council under section 7 of this order. For
solicitations issued between the date of this order and the date of the
action taken by the FAR Council under section 7 of this order, or solicitations
that have already been issued and are outstanding as of the date of this
order, agencies are strongly encouraged, to the extent permitted by law,
to include in the relevant solicitation the contract clause described in section
3 of this order.
Sec. 12. General Provisions. (a) Nothing in this order shall be construed
to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency,
or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget
relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and
subject to the availability of appropriations.
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(c) This order is not intended to, and does not, create any right or benefit,
substantive or procedural, enforceable at law or in equity by any party
against the United States, its departments, agencies, or entities, its officers,
employees, or agents, or any other person.
THE WHITE HOUSE,
November 18, 2021.
[FR Doc. 2021–25715
Filed 11–22–21; 8:45 am]
Billing code 3395–F2–P
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