Key FAR Updates

Nondisplacement of Qualified Workers Under Service Contracts – Final Rule (FAR Case 2011–028)

By: Ryan Byrd

This final rule adds FAR subpart 22.12, entitled ‘‘Nondisplacement of Qualified Workers Under Service Contracts,’’ and a related contract clause.

The regulations require that workers on a federal service contract who would otherwise lose their jobs as a result of the completion or expiration of a contract be given the right of first refusal for employment with the successor contractor. The regulations apply to all service contracts (prime and subcontractor) above the simplified acquisition threshold (currently $150,000) and their solicitations, except those excluded, that succeed contracts for the same or similar services at the same location. The FAR excludes certain types of contracts and employees from its requirements, and allows the head of a contracting department or agency to exempt any of its contracts from the regulations if it finds the requirements would not serve the purposes of the Equal Opportunity Act or would impair the federal government’s ability to procure services economically or efficiently.

Under the regulations, a successor contractor may reduce the size of the workforce, give first preference to certain of its current employees, and offer employment to the predecessor’s employees in positions for which they are qualified other than those which they held previously.

The new regulations include provisions for investigating and resolving complaints of non-compliance. The regulations also provide for remedies and sanctions for violations—including payment of back wages, withholding of funds for unpaid wages, and exclusion from federal contracting.

The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.