EO requiring the succeeding contractor to offer employment to qualified incumbent employees is immediately revoked
On October 31, 2019 President Trump signed Executive Order (EO) 13897 (Improving Federal Contractor Operations) by revoking EO 13495, otherwise known as the nondisplacement executive order. EO 13495 required successor contractors to offer a right of first refusal of employment to “qualified” non-managerial employees when succeeding a government contract for the same or similar services in the same location.
Since going into effect in January 2009 EO 13495 was not in favor of many contractors who felt that the requirements prevented them from hiring a worker they felt were better qualified for the position. Contractors also felt compelled to offer employment to unsuitable employees of the predecessor contractor in order to avoid DOL investigations and penalties.
EO 13897 directs the DOL to immediately terminate any investigation or compliance action and to begin withdrawing rules and guidance implementing the nondisplacement EO. This revocation will enable contractors to have more flexibility in setting up their ideal staff when bidding on contract proposals. Contractors will still be able to make employment offers to incumbent employees who have the experience and skills needed to perform the contract requirements but they will not be forced to do so.
Contractors with pending solicitations should review the contract language to ensure that it does not include EO 13495 or any FAR provisions or clauses implementing EO 13495.