Nondisplacement of Qualified Workers Under Service Contracts, 66397-66401 [2021-25715]

Agencies

• Executive Office of the President

[Federal Register Volume 86, Number 223 (Tuesday, November 23, 2021)]
[Presidential Documents]
[Pages 66397-66401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25715]




                        Presidential Documents 



Federal Register / Vol. 86 , No. 223 / Tuesday, November 23, 2021 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 66397]]

                Executive Order 14055 of November 18, 2021

                
Nondisplacement of Qualified Workers Under 
                Service Contracts

                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 
                procurement, it is hereby ordered as follows:

                Section 1. Policy. When a service contract expires, and 
                a follow-on contract is awarded for the same or similar 
                services, the Federal Government's procurement 
                interests in economy and efficiency are best served 
                when the successor contractor or subcontractor hires 
                the predecessor's employees, thus avoiding displacement 
                of these employees. Using a carryover work force 
                reduces disruption in the delivery of services during 
                the period of transition between contractors, maintains 
                physical and information security, and provides the 
                Federal Government with the benefits of an experienced 
                and well-trained work force that is familiar with the 
                Federal Government's personnel, facilities, and 
                requirements. These same benefits are also often 
                realized when a successor contractor or subcontractor 
                performs the same or similar contract work at the same 
                location where the predecessor contract was performed.

                Sec. 2. Definitions.

                (a) ``Service contract'' or ``contract'' means any 
                contract, contract-like instrument, 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. 6701 et seq., and its 
                implementing regulations.

                    (b) ``Employee'' means a service employee as 
                defined in the Service Contract Act of 1965, as 
                amended, 41 U.S.C. 6701(3).
                    (c) ``Agency'' means an executive department or 
                agency, including an independent establishment subject 
                to the Federal Property and Administrative Services 
                Act, 40 U.S.C. 102(4)(A).

                Sec. 3. Nondisplacement of Qualified Workers. (a) Each 
                agency shall, to the extent permitted by law, ensure 
                that service contracts and subcontracts that succeed a 
                contract for performance of the same or similar work, 
                and solicitations for such contracts and subcontracts, 
                include the following clause:

                    ``Nondisplacement of Qualified Workers: (a) The 
                contractor and its subcontractors shall, except as 
                otherwise provided herein, in good faith offer service 
                employees (as defined in the Service Contract Act of 
                1965, as amended, 41 U.S.C. 6701(3)) employed under the 
                predecessor contract and its subcontracts whose 
                employment would be terminated as a result of the 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 those 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 more or fewer 
                employees than the predecessor contractor employed in 
                connection with performance of the work solely on the 
                basis of that determination. Except as provided in 
                paragraph (b), there shall be no employment opening 
                under this contract or subcontract, and the contractor 
                and any subcontractors shall not offer employment under 
                this contract to any person prior to having complied 
                fully with the obligations described in this clause. 
                The contractor and its subcontractors shall make an 
                express offer of employment to each

[[Page 66398]]

                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 
                business days.
                    ``(b) Notwithstanding the obligation under 
                paragraph (a) above, the contractor and any 
                subcontractors (1) 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. 6701(3), and (2) are not required to 
                offer a right of first refusal to any employee(s) of 
                the predecessor contractor for whom the contractor or 
                any of its subcontractors reasonably believes, based on 
                reliable evidence of the particular employees' past 
                performance, that there would be just cause to 
                discharge the employee(s) if employed by the contractor 
                or any subcontractors.
                    ``(c) The contractor shall, not less than 10 
                business days before the earlier of the completion of 
                this contract or of its work on 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 shall provide 
                the list to the successor contractor, and the list 
                shall be provided on request to employees or their 
                representatives, consistent with the Privacy Act, 5 
                U.S.C. 552a, and other applicable law.
                    ``(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, the Secretary may impose 
                appropriate sanctions against the contractor or its 
                subcontractors, as provided in Executive Order (No.) 
                ____, the regulations implementing that order, 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) and (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 (c) 
                of this clause. The contractor shall 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.''
                    (b) Nothing in this order shall be construed to 
                require or recommend that agencies, contractors, or 
                subcontractors pay the relocation costs of employees 
                who exercise their right to work for a successor 
                contractor or subcontractor pursuant to this order.

                Sec. 4. Location Continuity. (a) When an agency 
                prepares a solicitation for a service contract that 
                succeeds a contract for performance of the same or 
                similar work, the agency shall consider whether 
                performance of the work in the same locality or 
                localities in which the contract is currently being 
                performed is reasonably necessary to ensure economical 
                and efficient provision of services.

[[Page 66399]]

                    (b) If an agency determines that performance of the 
                contract in the same locality or localities is 
                reasonably necessary to ensure economical and efficient 
                provision of services, then the agency shall, to the 
                extent consistent with law, include a requirement or 
                preference in the solicitation for the successor 
                contract that it be performed in the same locality or 
                localities.

                Sec. 5. Exclusions. This order shall not apply to:

                    (a) contracts under the simplified acquisition 
                threshold as defined in 41 U.S.C. 134; or
                    (b) 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. 6. Exceptions Authorized by Agencies. (a) A senior 
                official within an agency may grant an exception from 
                the requirements of section 3 of this order for a 
                particular contract by, no later than the solicitation 
                date, providing a specific written explanation of why 
                at least one of the following circumstances exists with 
                respect to that contract:

(i) Adhering to the requirements of section 3 of this order would not 
advance the Federal Government's interests in achieving economy and 
efficiency in Federal procurement;

(ii) Based on a market analysis, adhering to the requirements of section 3 
of this order would:

  (A) substantially reduce the number of potential bidders so as to 
frustrate full and open competition; and

  (B) not be reasonably tailored to the agency's needs for the contract; or

(iii) Adhering to the requirements of section 3 of this order would 
otherwise be inconsistent with statutes, regulations, Executive Orders, or 
Presidential Memoranda.

                    (b) To the extent permitted by law and consistent 
                with national security and executive branch 
                confidentiality interests, each agency shall publish, 
                on a centralized public website, descriptions of the 
                exceptions it has granted under this section, and 
                ensure that the contractor notifies affected workers 
                and their collective bargaining representatives, if 
                any, in writing of the agency's determination to grant 
                an exception.
                    (c) On a quarterly basis, each agency shall report 
                to the Office of Management and Budget descriptions of 
                the exceptions granted under this section.

                Sec. 7. Regulations and Implementation. (a) The 
                Secretary of Labor (Secretary) shall, to the extent 
                consistent with law, issue final regulations within 180 
                days of the date of this order to implement the 
                requirements of this order, other than those specified 
                in sections 6(b) and (c) of this order.

                    (b) Within 60 days of the Secretary issuing final 
                regulations, the Federal Acquisition Regulatory Council 
                (FAR Council), to the extent consistent with law, shall 
                amend the Federal Acquisition Regulation to provide for 
                inclusion in Federal procurement solicitations and 
                contracts subject to this order the clause described in 
                section 3 of this order.
                    (c) The Director of the Office of Management and 
                Budget shall, to the extent consistent with law, issue 
                guidance to implement section 6(c) of this order.

                Sec. 8. Enforcement. (a) The Secretary shall have the 
                authority to investigate potential violations of, and 
                obtain 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 may also provide that, if 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

[[Page 66400]]

                or subcontractor has a substantial interest, may 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 Federal 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 to present information and 
                argument in opposition to the proposed debarment or 
                inclusion on the list.

                    (b) This order creates no rights under the Contract 
                Disputes Act, 41 U.S.C. 7101 et seq., and disputes 
                regarding the requirements of the contract clause 
                prescribed by section 3 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.

                Sec. 9. Revocation. Executive Order 13897 of October 
                31, 2019 (Improving Federal Contractor Operations by 
                Revoking Executive Order 13495), is revoked. Executive 
                Order 13495 of January 30, 2009 (Nondisplacement of 
                Qualified Workers Under Service Contracts), remains 
                revoked.

                Sec. 10. Severability. If any provision of this order, 
                or the application of any provision of this order to 
                any person or circumstance, is held to be invalid, the 
                remainder of this order and its application to any 
                other person or circumstance shall not be affected 
                thereby.

                Sec. 11. Effective Date. This order shall become 
                effective immediately and shall apply to solicitations 
                issued on or after the effective date of the final 
                regulations issued by the FAR Council under section 7 
                of this order. For solicitations issued between the 
                date of this order and the date of the action taken by 
                the FAR Council under section 7 of this order, or 
                solicitations that have already been issued and are 
                outstanding as of the date of this order, agencies are 
                strongly encouraged, to the extent permitted by law, to 
                include in the relevant solicitation the contract 
                clause described in section 3 of this order.

                Sec. 12. General Provisions. (a) Nothing in this order 
                shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or 
the head thereof; or

(ii) the 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.

[[Page 66401]]

                    (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.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    November 18, 2021.

[FR Doc. 2021-25715
Filed 11-22-21; 8:45 am]
Billing code 3395-F2-P