Presidential Documents

Federal Register / Vol. 74, No. 22 / Wednesday, February 4, 2009 / Presidential Documents 6103 

Executive Order 13495 of January 30, 2009 

Nondisplacement of Qualified Workers Under Service Contracts 

When a service contract expires, and a follow-on contract is awarded for 

the same service, at the same location, the successor contractor or its subcontractors often hires the majority of the predecessor’s employees. On some 

occasions, however, a successor contractor or its subcontractors hires a new 

work force, thus displacing the predecessor’s employees. 

The Federal Government’s procurement interests in economy and efficiency 

are served when the successor contractor hires the predecessor’s employees. 

A carryover work force reduces disruption to the delivery of services during 

the period of transition between contractors and provides the Federal Government the benefits of an experienced and trained work force that is familiar 

with the Federal Government’s personnel, facilities, and requirements. 

Therefore, 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 Federal Government procurement, it 

is hereby ordered as follows: 

Section 1. Policy. It is the policy of the Federal Government that service 

contracts and solicitations for such contracts shall 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. There shall be no employment openings under 

the contract until such right of first refusal has been provided. Nothing 

in this order shall be construed to permit a contractor or subcontractor 

to fail to comply with any provision of any other Executive Order or law 

of the United States. 

Sec. 2. Definitions. 

(a) ‘‘Service contract’’ or ‘‘contract’’ means any contract 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. 

351 et seq., and its implementing regulations. 

(b) ‘‘Employee’’ means a service employee as defined in the Service Contract Act of 1965, 41 U.S.C. 357(b). 

Sec. 3. Exclusions. This order shall not apply to: 

(a) contracts or subcontracts under the simplified acquisition threshold 

as defined in 41 U.S.C. 403; 

(b) contracts or subcontracts awarded pursuant to the Javits-Wagner-O’Day 

Act, 41 U.S.C. 46–48c; 

(c) guard, elevator operator, messenger, or custodial services provided 

to the Federal Government under contracts or subcontracts with sheltered 

workshops employing the severely handicapped as described in section 505 

of the Treasury, Postal Services and General Government Appropriations 

Act, 1995, Public Law 103–329; 

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(d) agreements for vending facilities entered into pursuant to the preference 

regulations issued under the Randolph-Sheppard Act, 20 U.S.C. 107; or 

(e) 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. 4. Authority to Exempt Contracts. If the head of a contracting department 

or agency finds that the application of any of the requirements of this 

order would not serve the purposes of this order or would impair the 

ability of the Federal Government to procure services on an economical 

and efficient basis, the head of such department or agency may exempt 

its department or agency from the requirements of any or all of the provisions 

of this order with respect to a particular contract, subcontract, or purchase 

order or any class of contracts, subcontracts, or purchase orders. 

Sec. 5. Contract Clause. The following contract clause shall be included 

in solicitations for and service contracts that succeed contracts for performance of the same or similar work at the same location: 

‘‘NONDISPLACEMENT OF QUALIFIED WORKERS 

‘‘(a) Consistent with the efficient performance of this contract, the contractor and its subcontractors shall, except as otherwise provided herein, 

in good faith offer those employees (other than managerial and supervisory 

employees) employed under the predecessor contract whose employment 

will be terminated as a result of 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 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 fewer employees than the predecessor contractor 

employed in connection with performance of the work. Except as provided 

in paragraph (b) there shall be no employment opening under this contract, 

and the contractor and any subcontractors shall not offer employment under 

this contract, to any person prior to having complied fully with this obligation. The contractor and its subcontractors shall make an express offer 

of employment to each 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 days. 

‘‘(b) Notwithstanding the obligation under paragraph (a) above, the contractor and any subcontractors (1) may employ under this contract any 

employee who has worked for the contractor or subcontractor for at least 

3 months immediately preceding the commencement of this contract and 

who would otherwise face lay-off or discharge, (2) 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. 357(b), and (3) are not required to 

offer a right of first refusal to any employee(s) of the predecessor contractor 

whom the contractor or any of its subcontractors reasonably believes, based 

on the particular employee’s past performance, has failed to perform suitably 

on the job. 

‘‘(c) In accordance with Federal Acquisition Regulation 52.222–41(n), the 

contractor shall, not less than 10 days before completion of 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 

subcontractors. The Contracting Officer will provide the list to the successor 

contractor, and the list shall be provided on request to employees or their 

representatives. 

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‘‘(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, appropriate sanctions may be imposed and remedies invoked 

against the contractor or its subcontractors, as provided in Executive Order 

(No.) lllllll, the regulations, 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) through (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 5(c), above. The contractor will 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 sanctions 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.’’ 

Sec. 6. Enforcement. (a) The Secretary of Labor (Secretary) is responsible 

for investigating and obtaining 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 

also may provide that where 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 

subcontractor, and its responsible officers, and any firm in which the contractor or subcontractor has a substantial interest, shall 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 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 for a hearing. 

(b) This order creates no rights under the Contract Disputes Act, and 

disputes regarding the requirement of the contract clause prescribed by 

section 5 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. 

To the extent practicable, such regulations shall favor the resolution of 

disputes by efficient and informal alternative dispute resolution methods. 

The Secretary shall, in consultation with the Federal Acquisition Regulatory 

Council, issue regulations, within 180 days of the date of this order, to 

the extent permitted by law, to implement the requirements of this order. 

The Federal Acquisition Regulatory Council shall issue, within 180 days 

of the date of this order, to the extent permitted by law, regulations in 

the Federal Acquisition Regulation to provide for inclusion of the contract 

clause in Federal solicitations and contracts subject to this order. 

Sec. 7. Revocation. Executive Order 13204 of February 17, 2001, is revoked. 

Sec. 8. Severability. If any provision of this order, or the application of 

such provision or amendment to any person or circumstance, is held to 

be invalid, the remainder of this order and the application of the provisions 

of such to any person or circumstances shall not be affected thereby. 

Sec. 9. General Provisions. (a) Nothing in this order shall be construed 

to impair or otherwise affect: 

(i) authority granted by law to an executive department, agency, or 

the head thereof; or 

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(ii) 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. 

(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. This order is not intended, 

however, to preclude judicial review of final decisions by the Secretary 

in accordance with the Administrative Procedure Act, 5 U.S.C. 701 et seq. 

Sec. 10. Effective Date. This order shall become effective immediately and 

shall apply to solicitations issued on or after the effective date for the 

action taken by the Federal Acquisition Regulatory Council under section 

6(b) of this order. 

THE WHITE HOUSE, 

January 30, 2009. 

[FR Doc. E9–2484 

Filed 2–3–09; 8:45 am] 

Billing code 3195–W9–P 


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