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US DOL Publishes Final Rule Affecting SCA Worker Displacement

September 20, 2011 Written by: Written by Kevin Frankovich, CGR Associates

In late August, the US Department of Labor published a final rule which implements a 2009 executive order aimed at preventing displacement of incumbent SCA workers if a contract for the same or similar services is awarded to a new company.  The rule will not be implemented until the accompanying FAR rule is complete.

Executive Order 13495 stated that that when a service contract expires and a follow-on contract is awarded for the same or similar services at the same location, the Federal Government’s procurement interests in economy and efficiency are better served when a successor contractor hires the predecessor’s employees.

Section 1 of Executive Order 13495 requires  that service contracts and solicitations for service contracts include a clause that requires the  contractor and its subcontractors, under a contract that succeeds a contract for performance of the same or similar services at the same location, to offer those employees (other than managerial and supervisory employees) employed under the predecessor contract, whose employment will be terminated as a result of the award of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified. Section 1 also provides that there shall be no employment openings under the contract until such right of first refusal has been provided.

More information on the final rule can be found here.