Trump Revokes Nondisplacement of Qualified Workers EO 13495
On October 31, 2019, President Trump signed Executive Order ("EO") 13897, which revoked EO 13495 (Nondisplacement of Qualified Workers Under Service Contracts). As many might recall, EO 13495 required Federal contractors to offer a right of first refusal of employment to "qualified" service employees [1] (other than managerial and supervisory employees) employed under an incumbent contract. [2]
To implement EO 13897, the President directed the "Secretary of Labor (Secretary), the Federal Acquisition Regulatory Council, and heads of executive departments and agencies shall, consistent with law, promptly move to rescind any orders, rules, regulations, guidelines, programs, or policies implementing or enforcing Executive Order 13495." [3] In addition, the President ordered the Secretary to terminate all "investigations or compliance actions" of government contractors that are based on EO 13495.
In practice, EO 13495 was subject of debate among some in the government contracting space as it put in place something that historically had been done. After all, EO 13495 was implemented not only to curb unemployment among incumbent contractor personnel when a successor contractor took over the contract but also to help continuity of operations on Federal contracts.
Now that EO 13495 has been revoked, contractors are free to offer tailor-made solutions in their proposals without this restriction. Given broad agency discretion, however, contractors should be mindful that agencies may nevertheless include a contractor's ability to recruit incumbent contractor personnel as part of a solicitation's evaluation criteria.
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[1] Under EO 13495, an "employee" means "a service employee as defined in the Service Contract Act of 1965, 41 U.S.C. 357(b)."
[2] Specifically, EO 13495 provided in relevant part:
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.
[3] This includes rescinding FAR § 52.222-17 (Nondisplacement of Qualified Workers).
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