[Federal Register Volume 77, Number 246 (Friday, December 21, 2012)]
[Rules and Regulations]
[Pages 75766-75780]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-30592]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 22, and 52
[FAC 2005-64; FAR Case 2011-028; Docket 2011-028; Sequence 1]
RIN 9000-AM21
Federal Acquisition Regulation; Nondisplacement of Qualified
Workers Under Service Contracts
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement an Executive order
for nondisplacement of qualified workers under service contracts, as
implemented in Department of Labor regulations.
DATES: Effective Date: January 18, 2013.
Applicability Date: This final rule is applicable to solicitations
issued on or after the effective date.
Contracting officers are expected to work with their existing
service contractors and bilaterally modify their contracts, to the
extent feasible, to include the clause at FAR 52.222-17. As an
alternative, contracting officers should consider entering into
bilateral modifications with existing service contractors to agree to
perform paragraph (c) of the clause at FAR 52.222-17, which: (1)
Informs the existing predecessor contractor's workforce of their right
of first refusal; and (2) provides the list of service employees to the
contracting officer no less than 30 days before contract completion.
Contracting officers shall document the contract files of their
existing service contracts to describe the steps that were taken.
FOR FURTHER INFORMATION CONTACT: Mr. Edward Loeb, Procurement Analyst,
at 202-501-0650 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAC 2005-64, FAR Case 2011-
028.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule at 77 FR 26232 on May
3, 2012, to implement Executive Order (E.O.) 13495, Nondisplacement of
Qualified Workers Under Service Contracts, dated January 30, 2009,
published at 74 FR 6103 on February 4, 2009, and the Department of
Labor (DOL) regulations at 29 CFR part 9. This final rule amends the
FAR to add subpart 22.12 and a new clause at FAR 52.222-17, providing
the policy of the Federal Government, as expressed in E.O. 13495, to
require service contractors and their subcontractors under successor
contracts to offer employees of the predecessor contractor and its
subcontractors a right of first refusal of employment for positions for
which they are qualified. Twenty seven respondents submitted comments
on the proposed rule.
[[Page 75767]]
On January 4, 2011, Public Law 111-350 enacted a new codified
version of Title 41 United States Code (U.S.C.), entitled ``Public
Contracts.'' The CAAC and DARC published a proposed rule on September
18, 2012, at 77 FR 57950 to update all references to Title 41 in the
FAR to conform to the positive law codification. As part of these
changes, the proposed rule would replace the term ``Service Contract
Act'' with the term ``Service Contract Labor Standards statute'' (SCLS
statute). If this change is adopted through that rulemaking, similar
conforming changes in the use of terms will be made in the text to this
final rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule. A discussion of the comments and the
changes made to the proposed rule as a result of those comments are
provided as follows:
A. Summary of Significant Changes
Revised FAR 22.1200, Scope of subpart, to make it clear
that the DOL regulations (29 CFR part 9) implementing E.O. 13495 are
applicable.
Revised the policy, FAR 22.1202, to clarify the
applicability of the subpart.
Revised FAR 22.1203-3, Waiver, to require the approval of
waivers by the agency Senior Procurement Executive, without power of
redelegation.
Added three subsections to FAR 22.1203 to address ``Method
of job offer,'' ``Exceptions,'' and ``Reduced staffing.''
Added cross-references throughout FAR subpart 22.12 to the
applicable section of the DOL implementing regulations.
For clarity, a definition of ``service employee'' was
added, and the term ``service employee'' is used throughout the rule.
B. Analysis of Public Comments
1. General Comments
Comments: Two respondents expressed support for the proposed rule
and the underlying policy concerns it addresses, including minimizing
the risk of disruption of services during transition between
predecessor and successor contractors and efficiency through the
employment of trained employees.
Response: Although no response is required, the FAR Council
appreciates all comments.
Comments: A respondent questioned the need for this rule, stating
that most contractors try to hire incumbents where it makes sense. This
respondent also expressed concern that the proposed rule would
interfere with the employer/employee relationship and convert covered
contracts to personal services contracts.
Response: In accordance with E.O. 13495 section 6(b), the Federal
Acquisition Regulatory Council (FAR Council) is required to issue
regulations implementing the E.O. Based upon the statement that most
contractors try to hire incumbents, it does not appear that this rule
will disrupt current hiring practices. Regarding the concern that this
rule will interfere with the employer/employee relationship and convert
covered service contracts to personal services contracts, nothing in
this rule establishes an employer/employee relationship between the
Government and a contractor's employees.
2. Out-of-Scope Comments
Comments: A respondent stated that evaluation criteria must focus
on transition plans instead of staffing plans. Another respondent
stated the belief that E.O. 13495 was short-sighted and that the
Federal Government should not require the successor to hire predecessor
contractor employees. The same respondent also stated that there are
risks as well as rewards in hiring and training a workforce when
competing for contracts. Another respondent questioned why the
Government has no faith in open market efficiencies and why it is
willing to exchange poor performance on contracts to provide longtime
employment for poor job performers. Another respondent stated that the
nondisplacement rule conflicts with the Service Contract Act (SCA)
statute because the SCA does not authorize the FAR Council, the DOL, or
the President to require successor contractors to hire predecessor
contractor employees who are covered by the SCA. The same respondent
stated that the rule does not provide evidence that its implementation
will result in greater efficiencies in Federal procurement. This
respondent felt that, because the rule conflicts with the SCA, it must
be withdrawn in its entirety. One respondent expressed concern that, by
requiring the successor contractor to hire the predecessor contractor's
employees, the contracting officer would be dictating how contractors
staff their contracts.
Response: The purpose of this rule is to implement E.O. 13495,
Nondisplacement of Qualified Workers Under Service Contracts and the
DOL implementing regulations. Issues relating to the scope or coverage
of either the E.O. or the DOL implementing regulations are outside the
scope of this final rule.
Comments: One respondent asked the purpose of the rule. The
respondent stated it would be more costly for successor contractors to
train an entire workforce. The respondent asked whether the rule was
intended to unionize everyone.
Response: The preamble of E.O. 13495 states that a carryover
workforce ``provides the Federal Government the benefits of an
experienced and trained work force.'' In cases where the agency
believes that extensive training would be needed to learn new
technology or processes that would not be required of a new workforce,
the agency could consider waiving FAR subpart 22.12. (See 29 CFR
9.4(d)(4)(ii)(A)).
Comments: One respondent indicated that this rule would seem to
favor time-and-material contracting instead of fixed-price contracting.
The respondent indicates that in order to be most beneficial to the
Government, vendors would need the ability to be creative and structure
the approach in such a way that is flexible for technology changes and
allows the vendor the best way to accomplish the objectives.
Response: The respondent's comment is outside the scope of this
case. Nothing in this rule addresses or limits the type of contract to
be used for service contracts.
Comments: A respondent recommended that the Councils consider
possible privacy and liability implications.
Response: This comment is outside the scope of the FAR rule, as the
FAR final rule is implementing the requirements of the E.O. and the DOL
implementing regulations at 29 CFR part 9, which would have considered
this issue (see 76 FR 53720 at 53731-53732).
3. Applicability
Comments: A respondent asked whether this rule will apply only to
contracts covered by the SCA and whether professional services will be
exempted. Another respondent stated that the proposed rule posed
serious issues in contracting for information technology functions
because of the need to be responsive to rapid changes in technology and
opportunities for cost savings. A third respondent asked whether the
rule would apply to competed task orders or to service contracts
performed outside the United States.
[[Page 75768]]
Response: There appears to be a broad misunderstanding of the types
of work that are exempt from the SCA. Professional services (including
professional services for information technology) are exempt from
applicability of FAR subpart 22.12 for the reasons that follow. Section
2 of E.O. 13495 defines ``employee'' to mean a ``service employee'' as
defined in the SCA. The definition of ``service employee'' at 41 U.S.C.
6701(3) provides, in part, that it ``does not include an individual
employed in a bona fide executive, administrative, or professional
capacity, as those terms are defined in part 541 of title 29, Code of
Federal Regulations.'' The regulation referenced, 29 CFR 541, entitled
``Defining and Delimiting the Exemptions for Executive Administrative,
Professional, Computer, and Outside Sales Employees,'' refers to
``exempt professionals'' as those whose primary duty is the
``performance of work requiring knowledge of an advanced type in a
field of science or learning customarily acquired by a prolonged course
of specialized intellectual instruction or the performance of work
requiring invention, imagination, originality or talent in a recognized
field of artistic or creative endeavor'' (29 CFR 541.3(b)(4)).
FAR 22.1003-5, entitled ``Some examples of contracts covered,''
sets forth examples. One example of a contract covered by the SCA, at
FAR 22.1003-5(k), is ``maintenance and repair of all types of
equipment, for example, electronic, office, and related business and
construction equipment.'' The definition of ``service employee''
addresses this concept. Therefore, FAR 22.001, in the proposed rule,
moved the definition of ``service employee'' from 22.1001 to 22.001 so
that it would apply to this rule.
The SCA applies to service contracts over $2,500, the principal
purpose of which is to furnish services in the United States through
the use of service employees. FAR subpart 22.10, entitled ``Service
Contract Act of 1965, as amended,'' defines the term ``Act or Service
Contract Act''. The definition of ``Service contract'' is moved to FAR
22.001. Paragraph (c)(1)(ii) of the clause at FAR 52.222-17 does not
give a right of first refusal to ``any service employee(s) of the
predecessor contractor who are not service employees within the meaning
of the Service Contract Act, 41 U.S.C. 6701(3).''
The term ``United States,'' for purposes of the implementation of
E.O. 13495, is defined at FAR 22.1201. The rule does not apply to
service contracts that are performed entirely outside the United
States.
If the clause is in the basic contract, then the clause applies to
task orders issued under the contract to which the SCA applies. The
exemptions to the SCA are listed at FAR 22.1003-3.
Comments: One respondent indicated that the FAR rule did not
incorporate many of the provisions in the DOL rule. The respondent also
indicated that the FAR rule differs from the DOL rule in many ways but
fails to provide clear guidance as to the extent to which both sets of
rules may be applicable. The respondent indicated that, for each
provision in the DOL rule that is neither repeated nor cross-
referenced, the FAR final rule should expressly state that the proposed
rule does not incorporate the relevant DOL provision so contractors
have clear direction on their obligations.
Response: The final rule has been revised to include guidance
incorporating the DOL rule and adding cross-references throughout the
FAR coverage where appropriate. The FAR and the DOL rule are
consistent, and the changes noted above should eliminate any questions.
Comments: A respondent expressed a concern that the rule would
hinder competition because it would be difficult for competitors to get
commitments from individuals to fill key personnel positions when they
can be displaced by the incumbent personnel. This concern was echoed by
another respondent, who felt that, if the Government were to require
key staff resumes, then, the Government would also have to provide
information regarding the key incumbent personnel the Government
expects the successor contractor to hire. Other respondents stated that
the rule will create disincentives for a firm to compete on a
competitive project because the firm will not be able to employ its own
staff and/or will have to make the case for not retaining incumbent
staff.
Response: If the key person position is covered by the SCA, then a
qualified employee of the predecessor contractor must be given the
right of first refusal.
With regard to decreased competition, this rule could be one factor
for a contractor to consider when deciding whether to participate in
the Government market. The rule is unlikely to have a significant
effect on competition.
Comments: A respondent stated that the solicitation must provide
direct labor information (salaries and benefits) for every labor
category; otherwise, the respondent felt, the incumbent (predecessor)
contractor would have an unfair competitive advantage. Another
respondent expressed a similar concern: Given that ``only the incumbent
contractor knows the qualifications and realistic costs of the affected
personnel, how can any other offeror submit an adequate bid and the
Government perform a realistic analysis of the bid when a portion of
the proposal cannot be accurately determined until after contract
award?'' This respondent was concerned that the right of first refusal
would jeopardize a potential offeror's ingenuity in proposing a
technical approach or solution based on limitations of the existing
workforce. Further, a third respondent believed that offerors might
tailor their personnel requirements to what was currently being done
under the incumbent contract instead of proposing a more efficient
solution. Another respondent expressed concern that the rule would
limit offerors' ability to craft innovative solutions to Government
requirements.
Response: Under the SCA, the successor contractor must pay the wage
rates and fringe benefits found by the DOL to prevail in the locality,
unless the predecessor contractor is operating under a collective
bargaining agreement. In the latter case, the successor contractor must
pay wages and fringe benefits specified in the collective bargaining
agreement (see FAR 22.1002 and 29 CFR 4.53), which would be an
attachment to the solicitation.
Each offeror must propose an efficient method of performing the
required work as that offeror understands the statement of work. The
proposed rule made clear, at paragraph (b) of the clause at FAR 52.222-
17, that the predecessor employees are offered a right of first refusal
only for positions for which they are qualified; and the successor
contractor and its subcontractors may employ fewer employees than did
the predecessor contractor. The rule does not limit the technical
solutions that may be proposed to meet Government requirements. It only
implements the requirement to provide a right of first refusal to
service contract employees of predecessor contractors in accordance
with the regulations promulgated in this final rule and the DOL
regulations set forth at 29 CFR part 9.
Comments: A respondent stated that the ``same location'' limitation
on applicability of FAR subpart 22.12 was not clear. The respondent
asked whether it meant the same building, base, city, county, command,
or something else. The respondent noted that many indefinite delivery/
indefinite quantity contracts require services in a wide geographic
area and questioned whether, in the Washington, DC, area,
[[Page 75769]]
services to be performed at Fort Myer or the Navy Yard would be
considered the same location.
Response: Chapter 67, entitled ``Service Contract Labor
Standards,'' of Title 41, United States Code, does not define ``same
location.'' As a general matter, what constitutes the ``same location''
in this context will depend upon the geographic area in which
performance under the predecessor and successor contracts occur. The
determination of whether the predecessor and successor contract involve
services at the ``same location'' may be resolved by reference to what
the statement of work, or any similar contract provision (such as a
statement of objectives) specified.
Comments: One respondent asked how ``similar'' will be defined in
``same or similar'' services. Another respondent asked how much
variation in locations of performance would be permissible while
claiming that a successor contract was for the same or similar job.
Response: 29 CFR 9.2 defines ``same or similar service'' to mean
``a service that is either identical to or has one or more
characteristics that are alike in substance to a service performed at
the same location on a contract that is being replaced by the Federal
Government or a contractor on a Federal service contract.''
Comments: A respondent noted that the proposed rule is silent on
part-time or shared positions and asked whether such individuals must
receive a bona fide offer of full time employment, given that they may
be qualified to perform many other jobs.
Response: The DOL notes that ``the Fair Labor Standards Act * * *
does not define part-time or full-time employment; rather, this is
generally a matter of agreement between the employer and the
employee.'' (See www.dol.gov/dol/topic/workhours/full-time.htm). This
is addressed at paragraph (a)(2) of 29 CFR 4.165, which states that the
SCA ``makes no distinction, with respect to its compensation
provisions, between temporary, part-time, and full-time employees, and
the wage and fringe benefit determinations apply, in the absence of an
express limitation, equally to all such service employees engaged in
work subject to the Act's provisions.'' Therefore, the FAR does not
provide an alternate definition of the term. If an individual is
employed part-time by a predecessor, then the successor contractor must
give that individual a right of first refusal. However, if the
successor contractor needs that position to be full-time or part-time,
the contractor can make that a requirement for hiring.
Comments: A respondent noted that the DOL regulations expressly
acknowledge that an offer by a successor contractor that contains
different terms and conditions of employment is considered a bona fide
offer and stated that no such provision was included in the proposed
FAR rule.
Response: The final rule adds a subsection to FAR 22.1203-4
entitled ``Method of job offer.'' This subsection includes the elements
required for a job offer to be considered ``bona fide.''
Comments: A respondent suggested that the final rule would benefit
if it provided additional guidance for contracting officers and
contractors to better define when the rule is applicable. The
respondent proposed the addition of some examples to assist
interpretation of its applicability. Another respondent echoed the same
comment.
Response: Examples of the applicability of the SCA are included at
FAR 22.1003-5, ``Some examples of contracts covered.'' In addition, a
specific reference to the DOL final rule (29 CFR part 9) is added at
FAR 22.1200, Scope of Subpart, and cross-references have been added
where appropriate throughout the final rule.
Comments: A respondent stated that the proposed rule imposed such
significant changes in business practices for both predecessor and
successor contractors that the rule should be applied only to new
contracts that are first solicited after the effective date of the FAR
rule and DOL's rule. The respondent stated that this would be
appropriate for two reasons: (1) The FAR rule does not provide for
agencies' waiving nondisplacement requirements for existing contracts;
and (2) contractors with existing contracts should not be required to
prepare for the imposition of the requirements in the middle of
contract performance at some unknown future date. Yet, a second
respondent stated that the final rule must ensure that no service
contractor ``be permitted to not give employees notice of their right
to continued employment with the successor contractor.''
Response: The preamble to this final rule includes a section
entitled ``Applicability,'' which invokes the standard applicability
rules at FAR 1.108(d). The rule will not be applied retroactively
unless there is a bilateral modification to the contract with
consideration. In addition, this section of the preamble provides that
contracting officers are expected to work with their existing service
contractors and bilaterally modify their contracts, to the extent
feasible to ensure that successor contractors under new solicitations
will receive the required written notice and ensure contracting
officers (and, hence, successor contractors) receive the employee list
in sufficient time to ensure continuity of service. Specifically, under
this rule, the predecessor contractor must provide a notice 30 days
before the end of the contract. However, predecessor contractors
performing at Federal facilities will already be operating under the
existing notification clause set forth at FAR 52.222-41(n), under the
SCA, which only requires a 10-day notice. While some have recommended
that the rule be relaxed during the interim period, DOL explained in
the preamble to its final rule that waiving the predecessor employees'
right of first refusal of employment is not consistent with the E.O.,
and DOL is not authorized under the E.O. to provide such relief in any
event.
Comments: A respondent was concerned that the FAR rule creates a
protest risk by the predecessor contractor, as it may not want its
employees to work for its competitor.
Response: For existing contracts, the predecessor contractor is
required by paragraph (n) of the clause at FAR 52.222-41, Service
Contract Act of 1965, to provide to the contracting officer a certified
list, not less than 10 days prior to completion of any contract at a
Federal facility, of the names of all service employees on the
contractor's or its subcontractors' payroll during the last month of
contract performance. This list must contain the anniversary dates of
employment on the contract. This final rule requires, at paragraph
(d)(1) of the clause at FAR 52.222-17, for the contractor to furnish
the list, including anniversary dates, not less than 30 days prior to
completion of performance under the predecessor contract. Furnishing
the list is a contractual requirement for predecessor contractors, and
the rules for the successor contractor to make job offers are similarly
included in the contract. Therefore, there is little or no risk of a
non-frivolous protest.
4. Exemptions and HUBZone Considerations
Comments: Three comments were received concerning the policy
statement and clause relating to the interaction of E.O. 13495 and
other E.O.s or laws, such as the HUBZone provisions of the Small
Business Act. One respondent stated that the rule did not consider the
effect of E.O. 13495 on HUBZone small business concerns and
[[Page 75770]]
the ability to meet the HUBZone program's residency requirements, while
another respondent wanted to emphasize the importance of excluding
HUBZone small businesses from this rule. A third respondent thought
that the rule should incorporate express guidance on how to comply with
the nondisplacement obligations, while at the same time complying with
a potentially conflicting law. This respondent believed the rule should
incorporate an example into the rule, such as the one set forth in the
preamble of the DOL regulation for HUBZone small business concerns.
Response: The proposed rule considered the effect E.O. 13495 may
have on HUBZone small business concerns. Specifically, the rule set
forth a policy statement and a paragraph in the contract clause, which
state that nothing in E.O. 13495 can be construed to permit a
contractor or subcontractor to fail to comply with any provision of
other E.O. or law. This would include a HUBZone small business
concern's compliance with the HUBZone provisions of the Small Business
Act and any contractor's or subcontractor's compliance with E.O. 11246
(Equal Employment Opportunity) or the Vietnam Era Veterans'
Readjustment Assistance Act of 1974. Therefore, HUBZone small business
concerns are not exempt from the E.O.; instead, the policy statement
and clause explain that HUBZone small business concerns must try to
meet the E.O.'s requirements in tandem with the HUBZone program's
requirements. (See 76 FR 53720 at page 53723).
Comments: One respondent stated that it was pleased the rule
excluded service contracts and subcontracts awarded through the
AbilityOne Program, which is administered by The Committee for Purchase
From People Who Are Blind or Severely Disabled.
Response: Noted.
5. Predecessor's List of Qualified Employees
Comments: One respondent requested clarification for situations
where the predecessor contract is split into more than one follow-on
contract action. In this case, the respondent questioned whether the
incumbent (predecessor) contractor would provide the agency only one
list of covered employees or would be required to provide a list of
covered employees for each of the follow-on contract actions.
Response: As stated in FAR 22.1204(a), the predecessor contractor
is required to furnish the contracting officer a list of all service
employees under the predecessor contract and its subcontracts. In FAR
22.1204(b), the contracting officer is responsible for providing the
list to the successor contractor. In the respondent's scenario, where
there is more than one successor contractor, then the contracting
officer, not the predecessor contractor, would be responsible for
providing the list to the successor contractors. Without regard to the
number of successor contracts, there is no obligation for all of the
predecessor's employees to get a job offer if the number of job
openings on the successor contract(s) is lower than the number of
qualified predecessor employees. However, if an employee of the
predecessor contractor thinks that he/she has not been offered a job
and should have been offered a job, the employee may file a complaint
with the Wage and Hour Division of the DOL within 120 days of the first
date of contract performance (see 29 CFR 9.21).
Comments: One respondent noted that FAR 52.222-41(n) requires the
contractor to submit a list of the names of all service employees and
their anniversary dates of employment and that the proposed change at
FAR 22.1204 requires no additional information. The respondent asked
how the successor contractor would be able to contact these employees
to offer employment when there is no information on how to contact the
employees, what jobs these individuals held or were qualified for, or
the individual's qualifications or work experience.
Response: The lists are not required to include contact
information. The DOL rule (29 CFR part 9) did not add a requirement for
the predecessor contractor to provide contact information, and, if the
predecessor contractor does not voluntarily provide contact
information, then the successor contractor will still be required to
reach out to those employees (see 29 CFR 9.12(a)(2) and 76 FR 53720 at
53734) (e.g., posting notices of job fairs or holding a session with
current employees).
Comments: One respondent recommended sanctions against predecessor
contractors that do not submit the certified list of employees within
the required timeframe. Specifically, the respondent recommended the
final rule include language allowing contracting officers to submit a
negative performance review in the Federal Awardee Performance
Integrity Information System (FAPIIS) or the Contractor Performance
Assessment Reporting System (CPARS).
Response: FAPIIS is intended to track information regarding
criminal, civil, or administrative proceedings in connection with the
award or performance of a Government contract; it is not appropriate
for information regarding failure to meet a contract requirement. CPARS
is the appropriate venue for contractor performance information. While
contracting officers may choose to note the predecessor contractor's
failure to provide the required list in a timely manner in CPARS, it is
not necessary to remind contracting officers of each circumstance where
non-performance may be reported in CPARS. FAR 22.1206(c) provides that
the Government may suspend contract payments until the list is
provided.
Comments: A respondent suggested that the successor contractor
should be required to offer employment to predecessor contractor
employees who have worked on the predecessor contract for at least six
months.
Response: The DOL examined this same comment prior to publishing
its final rule and stated that ``the Department does not agree that * *
* predecessor contractors will be encouraged to `dump' unsuitable
employees onto expiring contracts.'' Lengthening the period of
employment with the predecessor contractor would not address the
concern that the predecessor contractor may retain some of its most
qualified workforce (76 FR 53720 at page 53738).
Comments: One respondent stated it is unclear in FAR 52.222-
17(d)(2) and (e)(2) who is responsible for providing the predecessor
contractor's list of employees to ``employees and their
representatives.''
Response: FAR 52.222-17(d)(2) and (e)(2) are revised in the final
rule to match FAR 22.1204(b) and read as follows: ``(2) Immediately
upon receipt of the certified service employee list but not before
contract award, the contracting officer shall provide the certified
service employee list to the successor contractor, and, if requested,
to employees of the predecessor contractor or subcontractors or their
authorized representatives.''
Comments: Two respondents requested clarification with respect to
the timing of required notices when the successor contractor will begin
performance before the predecessor's contract ends, e.g., when there is
a phase-in period.
Response: The timing of the lists is mandated by the DOL and
implemented at FAR 52.222-41(n) and the final rule at FAR 52.222-
17(d)(1).
Comments: One respondent reiterated the requirement to submit an
updated list ``not less than 10 days before completion of services on
the
[[Page 75771]]
contractor'' and stated that this timeframe is inadequate for the
successor contractors to inform, interview, and evaluate displaced
workers prior to commencement of the contract. Another respondent asked
that the rule be amended to require the incumbent (predecessor)
contractor to identify its qualified service employees earlier in the
procurement process. A third respondent requested that, when there is a
protest of the successor contract, then an additional time period
should be added to FAR 22.1204(b) to ensure that no potential source
selection sensitive data is released prior to clearing all potential
protest periods.
Response: Under the final rule, the ten-day notification will apply
only in cases where the predecessor contractor has assigned employees
to, or removed employees from, the contract after the 30-day notice has
been submitted to the contracting officer. The predecessor contractor
is not precluded from providing a list prior to the 30-day requirement
in the final rule. The contract clause requires that the predecessor
contractor must provide the list not less than 30 days prior to the end
of contract performance. The DOL rule does not provide for additional
time to provide the list for any reason.
Comments: One respondent asked how the contracting officer will
know if the predecessor contractor is actually terminating the
employment of the listed employees when the contract ends. In some
cases, these employees may move to another job with the same
contractor.
Response: As stated at 29 CFR 9.12(c), the successor contractor is
required to presume that all employees hired to work on the predecessor
contract: (1) Will be terminated, (2) are service employees, and (3)
performed suitable work under the contract. Once contacted by the
successor contractor, employees on the list are free to accept or
decline the offer of employment.
6. Predecessor's Written Notice to Employees
Comments: A respondent asked how Government contracting officers
can enforce the requirement for the predecessor contractor to provide
written notice to its employees of their possible right to an offer of
employment with the successor contractor when there is no longer any
contractual agreement between the predecessor contractor and the
Government.
Response: Contracting officers may document the predecessor
contractor's failure to provide the required notice to employees as an
issue in a past performance evaluation. Completed past performance
evaluations are made available to source selection officials evaluating
offers for new contract awards. In addition, the contracting officer
may suspend payments to the contractor until it complies with all
contractual requirements. Further, in the case of willful or aggravated
violations, then the contracting officer may refer the contractor to
DOL or to the agency suspension and debarment official.
7. Which Employees Are Qualified
Comments: Several respondents asked how the successor contractor
could determine all the positions that the current employee was
qualified to perform. The seniority list only provides very limited
information.
Response: The FAR and the DOL rule allow the contractor to ask for
information about employee qualifications. See 29 CFR 9.12(b)(4), which
requires a successor contractor to base its decision regarding an
employee's qualifications on credible information provided by a
knowledgeable source such as the predecessor contractor, the local
supervisor, the employee, or the contracting agency. If the issue is
unsuitable performance by a particular employee, the credible
information must be in writing (29 CFR 9.12(c)(4)(ii)(A)). In its final
rule preamble, the DOL explained that it would not require the list of
employees to identify the relevant labor category, job duties, and
current contact information, as the employee list is already a
requirement of Federal service contractors under the SCA (see 76 FR
53720 at page 53739).
Comments: One respondent asked how the determination was to be made
of which employees were qualified. According to the respondent, it was
unclear whether this was to be determined by the predecessor contractor
or, instead, anyone employed in the position during the last month of
the contract was qualified.
Response: The FAR proposed rule preamble incorrectly referred to
the list of employees as a list of qualified employees (see 77 FR 26234
in section E). The predecessor contractor does not determine whether
the employee is qualified when the predecessor contractor makes the
list. The successor contractor determines to which employees it will
offer employment, based on the rule's requirements.
Comments: The proposed rule, at FAR 22.1202(a), stated that
employees have a right of refusal for positions for which he/she is
qualified. A respondent asked how the successor contractor should
determine who has priority for that position, e.g., should this be done
by seniority, where the most senior employee would have first choice of
every position until accepting one, or should the more qualified
employee be given the first choice. The respondent wanted to know if it
would matter if the successor contractor was unionized.
Response: Executive Order 13495 does not mention seniority as a
factor in offering a right of first refusal to employment. Therefore,
the successor contractor will determine the order in which employees
will be offered employment. Regardless of whether the successor
contractor is unionized, the successor contractor determines which
employees will be offered employment.
Comments: A respondent stated that offerors would have a hard time
preparing a proposal because they would not know the expected salaries
for the incumbent (predecessor) contractor's employees.
Response: This rule only concerns service employees covered by the
SCA. Employees covered by the SCA would receive at least the minimum
wage rates and fringe benefits required by the SCA procedures, based on
prevailing rates or based on a collective bargaining agreement. (See
FAR 22.1002). The SCA does not cover managerial, supervisory, or
professional employees.
8. Poor Performance of Predecessor Employees
Comments: One respondent (6) stated that existing workers may be
slow or resistant to adopt changes that the incoming contractor may
feel are necessary to meet goals. Another respondent noted that, if a
new contractor is brought on because of poor performance of the
predecessor contractor, and that performance is due more to the
contractor's personnel in place rather than the management, the
Government would be perpetuating the problem rather than solving it.
Several respondents remarked that the incumbent (predecessor)
contractor would keep its best employees and leave the worst ones for
the incoming contractor; this would affect the incoming contractor's
ability to do the work, disrupting the work, and injuring the
contractor's reputation. Another respondent asked for additional
flexibility to review qualifications of incumbent personnel when the
predecessor contract was terminated for cause or default.
Response: DOL did not agree that predecessor contractors will be
encouraged to place unsuitable employees onto expiring contracts, and
would retain its most qualified
[[Page 75772]]
workforce. DOL noted that employees not being retained would likely
have more experience with the contract and contracting agency than new
hires recruited by the successor contractor for the purpose of filling
the contract requirements. (See 76 FR 53720 at page 53738). The
successor contractor must extend offers to those service employees
whose employment will be terminated; for those employees whose
employment would not be terminated, the successor contractor may extend
offers to them. DOL recognized that some predecessor contracts would be
terminated for poor performance, but made clear that successor
contractors were not to assume that this was the fault of the service
employees rather than management; no extra time was given for review
under this circumstance. An agency may waive subpart 22.12 application
if the agency determines that performance problems on the predecessor
contract are not just due to the management but the entire predecessor
workforce failing individually, as well as collectively, and that it is
not in the interest of economy and efficiency to provide supplemental
training to the predecessor's workers. (See 29 CFR 9.4(d)(4)(ii)(C)).
Comments: A respondent was concerned that the successor contractor
would be unable to obtain information about the poor performance of a
particular worker, and therefore would hire that poor performer. The
contractor is required to presume that all employees working under the
predecessor contract in the last month of performance performed
suitable work on the contract. Neither the FAR Council's rule nor DOL's
rule requires a predecessor contractor to provide performance
information for predecessor employees. The respondent stated that the
potential lack of information about these workers' past performance and
the limited time in which to vet them deprives the successor contractor
of appropriate tools to determine whether the predecessor employee
failed to perform suitably. Another respondent commented that relying
on the predecessor contractor or the Government to furnish past
performance information on individual employees would be problematic.
Response: The respondent is correct about the presumption and also
correct that the predecessor contractor is not required to provide
performance information. The emphasis of the E.O. is not on screening
out predecessor employees, but on hiring them. Any evidence of poor
performance by a particular employee needs to be credible information
provided in writing by a knowledgeable source, such as the predecessor
contractor and its subcontractors, the local supervisor, the employee,
or the contracting agency. (See 29 CFR 9.12(c)(4)).
Comments: Several respondents asked about predecessor employees who
perform poorly under the new contract. The respondents asked if the
successor contractor would have the right to fire them. The respondents
also asked whether the Government would assume the responsibility and/
or risk for that poor performance or for performance that is lesser
quality than the contractor could have provided with its own staff.
Response: The Government expects the successor contractor to manage
its employees, including the predecessor's former employees who have
been hired. If the contractor terminates an employee under
circumstances suggesting the offer of employment may not be bona fide,
the facts and circumstances of the offer and the termination will be
closely examined during any compliance action to ensure the offer was
bona fide. (See 29 CFR 9.12(b)(6)). The successor contractor bears the
responsibility for claiming an exception to the requirement to offer
employment to any employee who had worked for the predecessor
contractor (see FAR 22.1203-5). The successor contractor is expected to
comply with the business ethics requirements of FAR subpart 3.10 and
the relevant clauses in the contract.
Comments: Several respondents asked about a successor contractor
having different standards. If a successor contractor had a better
qualified employee with proven capabilities, could the successor
contractor keep and promote the employee after award of the contract,
rather than replacing the employee with an incumbent employee. The
respondents asked what would happen if the successor contractor
proposed a solution using its own employees who were more qualified, or
less costly, than the predecessor contractor's employees. The
respondents also asked what would happen if the successor contractor
has a different level of acceptable conduct and performance.
Response: Paragraph (c)(1)(i) of FAR clause 52.222-17 allows the
successor contractor to keep its own employees who would otherwise be
facing lay-off or discharge, if the employee had worked for the
successor contractor for at least three months before the commencement
of the new contract. The purpose of the E.O. and the DOL rule, as well
as the FAR rule, is to give a right of first refusal to qualified
predecessor contract employees who would otherwise be terminated. The
successor contractor's belief that it can supply employees which it
believes are better qualified or less costly is not the issue here. For
example, the successor contractor could not determine that otherwise-
qualified service employees are not qualified to perform the same or
similar services on a successor contract because they lack a college
degree. (See 76 FR 53720 at page 53736). The issue of an otherwise
qualified employee being less qualified is different from the issue of
an employee being unqualified or exhibiting unacceptable conduct or
performance.
Comments: One respondent expressed concern that the process could
result in denying the Government the discretion to select a new service
provider when the predecessor's employees were qualified but lacking in
performance. The respondent added that the process will allow successor
contractors and subcontractors to manipulate the system by submitting a
bid using employees that the successor contractor has no intention of
hiring and then, after award, replacing them with employees of the
predecessor contractor who are poor performers.
Response: Under the E.O., this rule, and 29 CFR part 9, the
successor contractor is not required to offer a right of first refusal
to any employee(s) whom it reasonably believes, based on the particular
employee's past performance, has failed to perform suitably on the job.
Additionally, the hypothetical workforce manipulation mentioned is
unlikely to pose a problem, given that both the contracting agency and
the successor contractor are aware of the rules on right-of-first
refusal and the successor contractor clearly is responsible for the
quality of its performance. The fact that the successor contractor has
hired employees of the predecessor contractor does not absolve the
former from the required level of performance.
9. Successor Efficiencies Require Fewer Employees
Comments: A question was posed regarding whether a reduction in
staffing by the successor contractor due to efficiencies required a
waiver.
Response: No waiver is required (FAR 22.1203-3) when the successor
contractor employs fewer employees than the predecessor contractor due
to efficiencies. The proposed rule is modified to include an additional
provision addressing this issue: FAR 22.1203-6, entitled ``Reduced
staffing.''
Comments: Another respondent noted that the proposed rule did not
include guidance in determining which of the predecessor contractor
employees to
[[Page 75773]]
extend offers of employment when the successor contractor's solution
results in reduced staffing. It was suggested that the final FAR rule
include a provision similar to the DOL's regulation at 29 CFR
9.12(d)(2) that allows the successor contractor to determine which of
the predecessor contractor employees are provided offers of employment.
Response: Because this rule implements both E.O. 13495 and the
DOL's regulations at 29 CFR part 9, the guidance at 29 CFR 9.12(d)(2)
should be followed. The service anniversary (``seniority'') date is not
meant to imply that the successor contractor must offer positions
according to seniority.
10. Successor Hiring Process
Comments: Three respondents commented about the requirement for the
offer to an employee to remain open for 10 days. This will potentially
create a very long period to fill many positions when all the
combinations and permutations are considered. If the prospective
employee declines employment, it is possible that the successor
contractor will be unable to find a suitable replacement on such short
notice. Indeed, under the proposed rule, it is conceivable that a
successor contractor may not have its workforce in place for months.
Response: The contracting agency will be aware of these issues and
should plan for such contingencies because compliance with E.O. 13495
and 29 CFR part 9 is mandatory, not optional.
Comments: One respondent asked either for the list to be provided
with the release of the solicitation or for an equitable adjustment for
the increased costs.
Response: E.O. 13495 cited FAR 52.222-41(n) and the requirement to
provide the certified list of employees no less than 10 days before the
end of performance on the predecessor contract. Using its authority as
Executive implementing agency for E.O. 13495, DOL extended that time
period to no less than 30 days prior to completion of performance on
the predecessor contract. The FAR does not further extend that amount
of time.
Comments: Three respondents were concerned with the prohibition in
the DOL final rule at 29 CFR 9.12(b)(1) against screening employees
prior to hire unless dictated by the agency or the terms of the
contract. Many contractors have implemented Human Resources and
recruiting systems that entail robust screening of all applicants with
respect to their educational background and work history, drug use, and
other factors that could impact work performance, particularly with
respect to job duties that entail access to sensitive or proprietary
government or contractor information. Requiring contractors to develop
a separate system of policies and modified hiring and screening
processes for follow-on service employees is burdensome, costly, and
disruptive to many companies' existing practices. Many contractors use
the pre-employment drug testing program to demonstrate compliance with
the Drug Free Workplace Act of 1988 and implementing FAR regulations.
Background checks are one of several tools that responsible employers
use to ensure that trustworthy employees are assigned to perform
Government contracts, for example where the jobs involve handling
sensitive Government and third party personal information. The
respondents requested a clear statement that successor contractors will
be permitted to perform identical screenings for all employees,
regardless of their status as qualifying for hire under the
Nondisplacement of Qualified Workers under Service Contract rule.
Response: DOL's preamble suggested that an offeror inform the
contracting agency that the offeror requires drug screening of all of
its service employees, and recommended that the contracting agency
provide for such drug testing in connection with the service contract.
See 76 FR 53720 at page 53735. The requirements of the DOL rule
concerning employment screening processes such as drug tests,
background checks, and security clearance checks (29 CFR 9.12(b)) are
addressed at FAR 22.1203-4, Method of job offer.
11. Waiver
Comments: A respondent suggested that the Government should provide
supplemental information and/or subset lists to assist contracting
officials with the written analysis as described in 29 CFR 9.4(d)(4)(i)
in support of a waiver. The respondent expressed concern with the
requirement that contracting officers must cross reference the
requirements in 29 CFR 9.4 to effectuate the waiver.
Response: The FAR implementation conforms to the requirements in
the DOL regulations and the E.O. Cross-referencing 29 CFR 9.4(d)
ensures that contracting officials are familiar with all appropriate
considerations for waiver. As noted in 29 CFR 9.4(d)(4)(i), a waiver is
only appropriate where ``any of the requirements of E.O. 13495 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.'' As waivers are meant to be limited exceptions,
supplemental information is not necessary.
Comments: One respondent noted that the waiver provisions at FAR
22.1203-3 do not provide the option for the agency to waive only some
provisions of the requirement. The respondent stated that an agency
should be authorized to waive the entire nondisplacement obligation, or
one or more individual provisions of the obligation, despite the fact,
reported by the respondent in a footnote, that ``E.O. 13495 * * * does
not address waivers in its text.'' Doing so, according to the
respondent, would afford flexibility to agencies to determine how best
to transition services efficiently under particular contracts and
classes of contracts.
Response: In fact, section 4 of E.O. 13495 addresses waivers,
allowing for an agency waiver ``from the requirements of any or all of
the provisions of the order * * *'' The DOL final rule, at 29 CFR
9.4(d)(1), allows that an ``agency may exempt the agency from one or
more individual provisions'' as an alternative to exempting the agency
from all provisions of 29 CFR part 9. The FAR proposed rule also
allowed for the waiver of some of the provisions of subpart 22.12 at
FAR 22.1203-3(a).
Comments: One respondent stated that, in keeping with FAR practice,
contracting agency heads should be permitted to delegate waiver
decision-making to the same extent they delegate other decisions.
Another respondent also noted that approval levels for waivers should
not rest at a level within the agency that would make obtaining a
waiver unfeasible.
Response: The final rule limits the waiver authority to the senior
procurement executive, without power of redelegation. FAR 1.108(b)
states that each authority is delegable unless specifically stated
otherwise. It is common practice in the FAR to limit redelegation when
appropriate. The determination to waive some or all of the provisions
of FAR subpart 22.12 is most appropriately made by senior officials
within agencies.
12. Miscellaneous and Editorial Comments
Comments: A respondent stated that the FAR rule should mirror the
DOL rule by incorporating limits on the Government's use of suspension
and debarment action for violation under the non-displacement rule.
Response: The final FAR rule references the DOL rule at FAR 22.1200
and adds appropriate cross-references to the DOL rule throughout the
FAR
[[Page 75774]]
coverage. The Governmentwide debarment and suspension authority is
addressed at FAR subpart 9.4. That authority is in addition to the
specific authority provided to DOL to debar or suspend an entity due to
noncompliance with the implementation of E.O. 13495.
Comments: One respondent indicated that the requirements of the
E.O. will result in additional work for the Government contracting
community to follow up to make sure that the contractor complies with
the requirements.
Response: There may be some additional contract administration
responsibilities for the Government contracting officer, but these
responsibilities will not be significant. In any case, these
requirements are mandated by E.O. 13495 and 29 CFR part 9.
Comments: One respondent recommended a number of edits which should
be adopted to correct drafting errors and conform to the FAR Drafting
Guide.
Response: The edits have been made in the final rule.
C. Changes Requested by DOL
Comments: DOL provided language to be added as a new subsection of
FAR 22.1203, Applicability. The new subsection, to be entitled ``Method
of job offer,'' springs from the requirements at 29 CFR 9.12(a), which
states, in part, ``the contractor and its subcontractors shall make a
bona fide, express offer of employment to a position for which the
employee is qualified to each employee 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.''
Response: The new subsection FAR 22.1203-4, Method of job offer, is
added in the final rule. In addition to restating the means of making a
job offer and the minimum of 10 days for the employee's acceptance, the
new subsection also explains in more detail what constitutes a ``bona
fide'' job offer (based on 29 CFR 9.12(b), Method of job offer) and how
to determine a predecessor employee's qualifications.
Comments: DOL provided language to be added as a new subsection of
FAR 22.1203, Applicability. The new subsection, to be entitled
``Exceptions'' and numbered FAR 22.1203-5, is based on the requirements
at 29 CFR 9.12(c), Exceptions, which provides the following exceptions
from the requirement to provide the right of first refusal to employees
of the predecessor contractor:
Nondisplaced employees of the predecessor contractor.
Successor's current employees who would otherwise face
lay-off or discharge and who have worked for the successor contractor
at least three months immediately preceding performance of the
successor contract.
Predecessor contractor's non-service employees.
Predecessor contractor's employees with past unsuitable
performance.
Comments: DOL provided language to be added as a new subsection of
FAR 22.1203, Applicability. The new FAR subsection, 22.1203-6, entitled
``Reduced staffing,'' repeats some of the requirements in 29 CFR
9.12(d), Reduced staffing.
Response: The new FAR subsection 22.1203-6 addresses circumstances
when the successor contractor need not offer employment to all of the
displaced employees of the predecessor contractor. In addition, the new
FAR subsection repeats the caveat from 29 CFR 9.12(d) that, when
employment is not initially offered to all of the displaced employees,
the successor contractor and its subcontractors still remain obligated
for 90 days after the first date of performance on the contract to
provide displaced employees a right of first refusal if additional
service personnel are needed.
D. Other Issues
29 CFR Section 9.12(e)(1) of the DOL regulations implementing E.O.
13495 provides that the contractor shall furnish the contracting
officer with a certified list of the names of all service employees
working under the contract and its subcontracts at the time the list is
submitted. This requirement is implemented in paragraph (d)(1) of FAR
clause 52.222-17, Nondisplacement of Qualified Workers. Pursuant to 41
U.S.C. 1304, a new non-statutory certification may not be included in
the FAR unless written justification for such certification is provided
to the OFPP Administrator by the FAR Council, and the Administrator
approves such request in writing. In accordance with FAR 1.107, this
non-statutory certification requirement was approved.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is a significant regulatory action and, therefore, was subject to
review under Section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This rule is not a major rule under 5
U.S.C. 804.
IV. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
Executive Order (E.O.) 13495, Nondisplacement of Qualified
Workers Under Service Contracts, dated January 30, 2009, and the DOL
implementing regulations, published August 29, 2011, in the Federal
Register at 76 FR 53720, make the policy of the Federal Government
to require service contractors and their subcontractors under
successor contracts to offer employees of the predecessor contractor
a right of first refusal of employment for positions for which they
are qualified. The E.O. provides a contract clause for service
contract solicitations that will succeed service contracts for
performance of the same or similar work at the same location.
Five comments were received on the initial regulatory
flexibility analysis. Four of these comments alleged an increased
administrative burden on contractors, and they failed to account for
the decreased burden of not having to recruit and process new
employees. The fifth comment requested the publication of a Small
Entity Compliance Guide with the final rule. These comments did not
cause a change in the final rule.
No comments were received from the Office of Advocacy of the
Small Business Administration on this rule because the office
submitted comments on the DOL rule.
The estimated impact that follows is based entirely upon the DOL
figures reported in the proposed and final rules it published
implementing E.O. 13495 (29 CFR part 9). Although DOL prepared an
initial regulatory flexibility analysis, the agency, in the final
rule, certified that 29 CFR part 9 does not have a significant
economic impact on a substantial number of small entities. There is
no additional impact due to the implementation of the DOL
regulations in the FAR. The requirements in the FAR are taken from
the E.O. and 29 CFR part 9 without addition.
DOL estimated that 28,800 small entities will be subject to the
regulations and the majority of these small entities will incur
compliance costs of less than $100. The analysis offsets the actions
that a successor contractor would already be taking, such as
determining an individual's suitability for available positions and
documenting employment decisions. Further, DOL assumed a time/cost
savings on the part of small entities because the entities will not
[[Page 75775]]
have to engage in recruiting and training an entirely new workforce.
The predecessor contractor is required to provide to the
successor contractor a certified list of the names of all service
employees working under that contract, and its subcontracts, no
later than 30 days before completion of performance of the
predecessor contract. DOL notes, however, that there is little or no
cost associated with this requirement because the certified list
contains the same information as the seniority list currently
required to be provided under paragraph (n) of the clause at FAR
52.222-41, Service Contract Act of 1965.
The minimal new reporting requirements mandated by the DOL
implementation of E.O. 13495 are addressed in the information
collection justification submitted by DOL in connection with its
final rule (see 76 FR 53720 dated August 29, 2011). No additional
reporting requirements are imposed by the FAR final rule, which
merely relocates the contract clause from 29 CFR part 9 into FAR
part 52. The requirements of E.O. 13495 do not allow for any
alternatives.
Comments: Three respondents expressed concerns with the estimate
in the proposed rule with respect to Initial Regulatory Flexibility
Act (IRFA) analysis, which addresses the impact of the rule on small
entities. According to the respondents, the estimated costs of this
rule will be much higher than the Government's initial estimate. The
respondents stated their belief that the Government did not consider
the steps prime contractors must take to ensure smooth contract
transitions, hiring staff and pricing proposals, and requested that
the Government consider that, in some cases, successor contractors
may not be able to automatically absorb predecessor contractor
employees in a manner that creates a time/cost savings. One
respondent explained that with the new rule, the successor will have
to determine every available position and develop a matrix to allow
a timely execution of offers. Another of these respondents said that
it is unlikely that the successor contractor would be able to
perform as efficiently with the predecessor employees as it would
with a workforce of its own choosing.
Response: The IRFA explained that it was based entirely upon the
DOL's figures as set forth in the proposed and final rules that the
DOL published implementing E.O. 13495. Although DOL prepared an
IRFA, the agency, in the final rule, certified that 29 CFR part 9
does not have a significant economic impact on a substantial number
of small entities. The FAR rule does not impose any requirements
other than those set forth in the DOL regulations, which implement
the E.O. As a result, the Defense Acquisition Regulations Council
and the Civilian Agency Acquisition Council continue to rely on
DOL's certification that this rule will not have a significant
economic impact on a substantial number of small entities.
In addition, the Councils note that the actions required by the
E.O. are those that a successor contractor would already be taking,
such as determining an individual's suitability for available
positions and documenting employment decisions. The Councils do not
believe that the E.O. adds more to the steps the prime contractors
must currently undertake to ensure smooth contract transitions, the
hiring of staff, and the pricing of proposals. Rather, the successor
contractor will offer the right of first refusal only if it has
employment openings and will offer it only to those employees of the
predecessor who the predecessor will not retain and are qualified
for the position. As a result, DOL's IRFA assumed a time/cost
savings on the part of small entities because they will not have to
engage in recruiting and training an entirely new workforce.
Comments: A respondent expressed a concern that requiring
predecessor contractors to provide employee lists places an
administrative burden on contractors.
Response: Paragraph (n) of the clause at FAR 52.222-41 has for
many years required a predecessor contractor to provide a list when
the services were performed on a Federal facility. While this rule
applies to all service contracts for the same or similar work
performed at the same location, any additional administrative burden
is minimal for businesses, including small entities that have a
standard hiring process.
Comments: A respondent felt that the FAR Council should provide
small business contractors with a ``Small Entity Compliance Guide.''
Response: The Small Entity Compliance Guide will be prepared by
the Regulatory Secretariat in accordance with section 212 of the
Small Business Regulatory Enforcement Fairness Act of 1996. It
consists of a summary of the rule appearing in the Federal
Acquisition Circular, which amends the Federal Acquisition
Regulation.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy
of the FRFA to the Chief Counsel for Advocacy of the Small Business
Administration.
V. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply;
however, these changes to the FAR do not impose additional information
collection requirements to the paperwork burden previously approved
under Office of Management and Budget Control Number 1235-0007 and
1235-0025, entitled Labor Standards for Federal Service Contracts--
Regulations 29 CFR part 4, and Nondisplacement of Qualified Workers
Under Service Contracts, E.O. 13495, respectively.
List of Subjects in 48 CFR Parts 1, 2, 22, and 52
Government procurement.
Dated: December 14, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 22, and 52
as set forth below:
0
1. The authority citation for 48 CFR parts 1, 2, 22, and 52 is revised
to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
0
2. Amend section 1.106, in the table following the introductory text,
by adding in sequence, FAR segment ``22.12'' and its corresponding OMB
Control Numbers ``1235-0007 and 1235-0025'', and FAR Segment ``52.222-
17'' and its OMB Control Numbers ``1235-0007 and 1235-0025''.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
3. Amend section 2.101, in paragraph (b), in the definition of ``United
States'' by redesignating paragraphs (4) through (10) as paragraphs (5)
through (11), respectively; and adding a new paragraph (4) to read as
follows:
2.101 Definitions.
* * * * *
(b) * * *
United States * * *
(4) For use in subpart 22.12, see the definition at 22.1201.
* * * * *
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
0
4. Amend section 22.001 by adding, in alphabetical order, the
definitions ``Service contract'' and ``Service employees'' to read as
follows:
22.001 Definitions.
* * * * *
Service contract means any Government contract, or subcontract
thereunder, the principal purpose of which is to furnish services in
the United States through the use of service employees, except as
exempted by the Service Contract Act (41 U.S.C. chapter 67; see
22.1003-3 and 22.1003-4). See 22.1003-5 and 29 CFR 4.130 for a partial
list of services covered by the Act.
Service employee means any person engaged in the performance of a
service
[[Page 75776]]
contract other than any person employed in a bona fide executive,
administrative, or professional capacity, as those terms are defined in
29 CFR part 541. The term ``service employee'' includes all such
persons regardless of any contractual relationship that may be alleged
to exist between a contractor or subcontractor and such persons.
* * * * *
22.1001 [Amended]
0
5. Amend section 22.1001 by removing the definitions ``Service
contract'' and ``Service employee''.
0
6. Revise section 22.1103 to read as follows:
22.1103 Policy, procedures, and solicitation provision.
All professional employees shall be compensated fairly and
properly. Accordingly, the contracting officer shall insert the
provision at 52.222-46, Evaluation of Compensation for Professional
Employees, in solicitations for negotiated contracts when the contract
amount is expected to exceed $650,000 and services are to be provided
which will require meaningful numbers of professional employees. This
provision requires that offerors submit for evaluation a total
compensation plan setting forth proposed salaries and fringe benefits
for professional employees working on the contract. Supporting
information will include data, such as recognized national and regional
compensation surveys and studies of professional, public and private
organizations, used in establishing the total compensation structure.
Plans indicating unrealistically low professional employee compensation
may be assessed adversely as one of the factors considered in making an
award.
0
7. Add Subpart 22.12 to read as follows:
Subpart 22.12--Nondisplacement of Qualified Workers Under Service
Contracts
Sec.
22.1200 Scope of subpart.
22.1201 Definitions.
22.1202 Policy.
22.1203 Applicability.
22.1203-1 General.
22.1203-2 Exemptions.
22.1203-3 Waiver.
22.1203-4 Method of job offer.
22.1203-5 Exceptions.
22.1203-6 Reduced staffing.
22.1204 Certified service employee lists.
22.1205 Notification to contractors and service employees.
22.1206 Remedies and sanctions for violations of this subpart.
22.1207 Contract clause.
Subpart 22.12--Nondisplacement of Qualified Workers Under Service
Contracts
22.1200 Scope of subpart.
This subpart prescribes policies and procedures for implementing
Executive Order 13495 of January 30, 2009, Nondisplacement of Qualified
Workers Under Service Contracts, and related Secretary of Labor
regulations and instructions (see 29 CFR part 9).
22.1201 Definitions.
As used in this subpart--
United States means the 50 States, the District of Columbia, Puerto
Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S.
Virgin Islands, Johnston Island, Wake Island, and outer Continental
Shelf as defined in the Outer Continental Shelf Lands Act (43 U.S.C.
1331, et seq.), but does not include any other place subject to United
States jurisdiction or any United States base or possession in a
foreign country (see 29 CFR 4.112).
22.1202 Policy.
(a) When a service contract succeeds a contract for performance of
the same or similar services, as defined at 29 CFR 9.2, at the same
location, the successor contractor and its subcontractors are required
to offer those service employees that are employed under the
predecessor contract, and 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. Executive Order 13495 generally prohibits employment
openings under the successor contract until such right of first refusal
has been provided, when consistent with applicable law.
(b) Nothing in Executive Order 13495 shall be construed to permit a
contractor or subcontractor to fail to comply with any provision of any
other Executive order or law. For example, the requirements of the
HUBZone Program (see subpart 19.13), Executive Order 11246 (Equal
Employment Opportunity), and the Vietnam Era Veterans' Readjustment
Assistance Act of 1974 may, in certain circumstances, conflict with the
requirements of Executive Order 13495. All applicable laws and
Executive orders must be satisfied in tandem with, and if necessary
prior to, the requirements of Executive Order 13495 and this subpart.
22.1203 Applicability.
22.1203-1 General.
This subpart applies to service contracts that succeed contracts
for the same or similar services (29 CFR 9.2) at the same location.
22.1203-2 Exemptions.
(a) This subpart does not apply to--
(1) Contracts and subcontracts under the simplified acquisition
threshold;
(2) Contracts or subcontracts awarded pursuant to 41 U.S.C. chapter
85, Committee for Purchase from People Who Are Blind or Severely
Disabled;
(3) Guard, elevator operator, messenger, or custodial services
provided to the Government under contracts or subcontracts with
sheltered workshops employing the ``severely handicapped'' as described
in 40 U.S.C. 593;
(4) Agreements for vending facilities entered into pursuant to the
preference regulations issued under the Randolph Sheppard Act, 20
U.S.C. 107; or
(5) Service 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 service employees were not deployed
in a manner that was designed to avoid the purposes of this subpart.
(b) The exemptions in paragraphs (a)(2) through (a)(4) of this
subsection apply when either the predecessor or successor contract has
been awarded for services produced or provided by the ``severely
handicapped.''
22.1203-3 Waiver.
(a) The senior procurement executive of the procuring agency may
waive some or all of the provisions of this subpart after determining
in writing that the application of this subpart would not serve the
purposes of Executive Order 13495 or would impair the ability of the
Federal Government to procure services on an economical and efficient
basis. Such waivers may be made for a contract, subcontract, or
purchase order, or with respect to a class of contracts, subcontracts,
or purchase orders. See 29 CFR 9.4(d)(4) for regulatory provisions
addressing circumstances in which a waiver could or would not be
appropriate. The waiver must be reflected in a written analysis as
described in 29 CFR 9.4(d)(4)(i) and must be completed by the contract
solicitation date, or the waiver is inoperative. The senior procurement
executive shall not redelegate this waiver authority.
(b)(1) When an agency exercises its waiver authority with respect
to any contract, subcontract, or purchase order, the contracting
officer shall direct the contractor to notify affected workers and
their collective bargaining representative in writing, no later than
[[Page 75777]]
five business days after the solicitation issuance date, of the
agency's determination. The notice shall include facts supporting the
determination. The contracting officer's failure to direct that the
contractor provide the notice as provided in this subparagraph shall
render the waiver decision inoperative, and the contracting officer
shall include the clause at 52.222-17 in the solicitation.
(2) Where a contracting agency waives application to a class of
contracts, subcontracts, or purchase orders, the contracting officer
shall, with respect to each individual solicitation, direct the
contractor to notify incumbent workers and their collective bargaining
representatives in writing, no later than five business days after each
solicitation issuance date, of the agency's determination. The notice
shall include facts supporting the determination. The contracting
officer's failure to direct that the contractor provide the notice
provided in this subparagraph shall render the waiver decision
inoperative, and the contracting officer shall include the clause at
52.222-17 in the solicitation.
(3) In addition, the agency shall notify the Department of Labor of
its waiver decision and provide the Department of Labor with a copy of
its written analysis no later than five business days after the
solicitation issuance date (see 29 CFR 9.4(d)(2)). Failure to comply
with this notification requirement shall render the waiver decision
inoperative, and the contracting officer shall include the clause at
52.222-17 in the solicitation. The waiver decision and related written
analysis shall be sent to the following address: U.S. Department of
Labor, Wage and Hour Division, Branch of Government Contracts
Enforcement, 200 Constitution Avenue, Room S-3006, Washington, DC
20210, or email to: Displaced@dol.gov.
22.1203-4 Method of job offer.
A job offer made by a successor contractor must be a bona fide
express offer of employment on the contract. Each bona fide express
offer made to a qualified service employee on the predecessor contract
must have a stated time limit of not less than 10 days for an employee
response. Prior to the expiration of the 10-day period, the contractor
is prohibited from offering employment on the contract to any other
person, subject to the exceptions at 22.1203-5. Any question concerning
an employee's qualifications shall be decided based upon the
individual's education and employment history, with particular emphasis
on the employee's experience on the predecessor contract, and a
contractor may utilize employment screening processes only when such
processes are provided for by the contracting agency, are conditions of
the service contract, and are consistent with the Executive Order. An
offer of employment will be presumed to be bona fide even if it is not
for a position similar to the one the employee previously held, but is
one for which the employee is qualified, and even if it is subject to
different employment terms and conditions, including changes to pay or
benefits. (See 29 CFR 9.12(b) for regulatory provisions addressing
circumstances in which a bona fide offer of employment can occur.)
22.1203-5 Exceptions.
(a) A successor contractor or its subcontractors are not required
to offer employment to any service employee of the predecessor
contractor who--
(1) Will be retained by the predecessor contractor.
(2) The successor contractor or any of its subcontractors
reasonably believes, based on the particular service employee's past
performance, has failed to perform suitably on the job. (See 29 CFR
9.12(c)(4) for regulatory provisions addressing circumstances in which
this exception would or would not be appropriate.)
(b) A successor contractor or its subcontractors may employ under
the contract any of its current service employees who (1) have worked
for the successor contractor or its subcontractors for at least three
months immediately preceding the commencement of the successor
contract, and (2) would otherwise face lay-off or discharge.
(c) The successor contractor bears the responsibility of
demonstrating the appropriateness of claiming any of the preceding
exceptions and the exemption listed at 22.1203-2(a)(5) involving
nonfederal work.
22.1203-6 Reduced staffing.
A successor contractor and its subcontractors may employ fewer
service employees than the predecessor contractor employed in
connection with performance of the work. Thus, the successor contractor
need not offer employment on the contract to all service employees on
the predecessor contract, but must offer employment only to the number
of eligible service employees the successor contractor believes
necessary to meet its anticipated staffing pattern. Where a successor
contractor does not initially offer employment to all the predecessor
contract service employees, the obligation to offer employment shall
continue for 90 days after the successor contractor's first date of
performance on the contract. (See 29 CFR 9.12(d) for regulatory
provisions addressing circumstances in which reduced staffing can
occur.)
22.1204 Certified service employee lists.
(a) Not less than 30 days before completion of the contract, the
predecessor contractor is required to furnish to the contracting
officer a certified list of the names of all service employees working
under the contract and its subcontracts at the time the list is
submitted. The certified list must also contain anniversary dates of
employment of each service employee under the contract and subcontracts
for services. The information on this list is the same as that on the
seniority list required by paragraph (n) of the clause at 52.222-41,
Service Contract Act of 1965. If there are no changes to the workforce
before the predecessor contract is completed, then the predecessor
contractor is not required to submit a revised list 10 days prior to
completion of performance and the requirements of 52.222-41(n) are met.
When there are changes to the workforce after submission of the 30-day
list, the predecessor contractor shall submit a revised certified list
not less than 10 days prior to performance completion.
(b) Immediately upon receipt of the certified service employee list
but not before contract award, the contracting officer shall provide
the certified service employee list to the successor contractor, and,
if requested, to employees of the predecessor contractor or
subcontractors or their authorized representatives.
22.1205 Notification to contractors and service employees.
(a) The contracting officer shall direct that the predecessor
contractor provides written notice to service employees of their
possible right to an offer of employment with the successor contractor.
The written notice shall be--
(1) Posted in a conspicuous place at the worksite; or
(2) Delivered to the service employees individually. If such
delivery is via email, the notification must result in an electronic
delivery receipt or some other reliable confirmation that the intended
recipient received the notice.
(b) Contracting officers may advise contractors to provide the
notice in Appendix B to 29 CFR chapter 9. Where a significant portion
of the predecessor contractor's workforce is not fluent in English, the
contractor shall provide the
[[Page 75778]]
notice in English and the language(s) with which service employees are
more familiar. English and Spanish versions of the notice are available
on the Department of Labor Web site at http://www.dol.gov/whd/govcontracts.
22.1206 Remedies and sanctions for violations of this subpart.
(a) The Secretary of Labor has the authority to issue orders
prescribing appropriate remedies, including, but not limited to,
requiring the successor contractor to offer employment, in positions
for which the employees are qualified, to service employees from the
predecessor contract and payment of wages lost. (See 29 CFR 9.24(a)).
(b) After an investigation (see 29 CFR 9.23) and a determination by
the Administrator, Wage and Hour Division, Department of Labor, that
lost wages or other monetary relief is due, the Administrator may
direct that so much of the accrued payments due on either the contract
or any other contract between the contractor and the Government shall
be withheld as are necessary to pay the monies due. Upon the final
order of the Secretary of Labor that such monies are due, the
Administrator may direct that such withheld funds be transferred to the
Department of Labor for disbursement. (See 29 CFR 9.24(c)).
(c) If the contracting officer or the Administrator, Wage and Hour
Division, Department of Labor, finds that the predecessor contractor
has failed to provide the list required by 22.1204, the contracting
officer may, in his or her discretion, or on request by the
Administrator, suspend contract payment until such time as the
contractor provides the list to the contracting officer.
(d) The Secretary of Labor may also suspend or debar a contractor
or subcontractor for a period of up to three years for violations of 29
CFR part 9.
22.1207 Contract clause.
The contracting officer shall insert the clause at 52.222-17,
Nondisplacement of Qualified Workers, in solicitations and contracts
for (1) service contracts, as defined at 22.001, (2) that succeed
contracts for performance of the same or similar work at the same
location and (3) that are not exempted by 22.1203-2 or waived in
accordance with 22.1203-3.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Amend section 52.212-5 by--
0
(a) Revising the date of the clause;
0
(b) Redesignating paragraphs (c)(7) and (c)(8) as paragraphs (c)(8) and
(c)(9), respectively;
0
(c) Adding a new paragraph (c)(7); and
0
(d) Adding paragraph (e)(1)(iii).
The revision and additions read as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes of
Executive Orders--Commercial Items (JAN 2013)
* * * * *
(c) * * *
----(7) 52.222-17, Nondisplacement of Qualified Workers (JAN
2013) (E.O.13495).
* * * * *
(e)(1) * * *
(iii) 52.222-17, Nondisplacement of Qualified Workers (JAN 2013)
(E.O. 13495). Flow down required in accordance with paragraph (l) of
FAR clause 52.222-17.
* * * * *
0
9. Add section 52.222-17 to read as follows:
52.222-17 Nondisplacement of Qualified Workers.
As prescribed in 22.1207, insert the following clause:
Nondisplacement of Qualified Workers (JAN 2013)
(a) Service employee, as used in this clause, means any person
engaged in the performance of a service contract other than any
person employed in a bona fide executive, administrative, or
professional capacity, as those terms are defined in 29 CFR part
541. The term ``service employee'' includes all such persons
regardless of any contractual relationship that may be alleged to
exist between a contractor or subcontractor and such persons.
(b) The Contractor and its subcontractors shall, except as
otherwise provided herein, in good faith offer those service
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 service employees were
hired, a right of first refusal of employment under this contract in
positions for which the service employees are qualified.
(1) The Contractor and its subcontractors shall determine the
number of service 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.
(2) Except as provided in paragraph (c) of this clause, 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.
(i) The successor Contractor and its subcontractors shall make a
bona fide express offer of employment to each service employee as
provided herein and shall state the time within which the service
employee must accept such offer, but in no case shall the period
within which the service employee must accept the offer of
employment be less than 10 days.
(ii) The successor Contractor and its subcontractors shall
decide any question concerning a service employee's qualifications
based upon the individual's education and employment history, with
particular emphasis on the employee's experience on the predecessor
contract, and the Contractor may utilize employment screening
processes only when such processes are provided for by the
contracting agency, are conditions of the service contract, and are
consistent with Executive Order 13495.
(iii) Where the successor Contractor does not initially offer
employment to all the predecessor contract service employees, the
obligation to offer employment shall continue for 90 days after the
successor contractor's first date of performance on the contract.
(iv) An offer of employment will be presumed to be bona fide
even if it is not for a position similar to the one the employee
previously held, but is one for which the employee is qualified, and
even if it is subject to different employment terms and conditions,
including changes to pay or benefits. (See 29 CFR 9.12 for a
detailed description of a bonafide offer of employment).
(c)(1) Notwithstanding the obligation under paragraph (b) of
this clause, the successor Contractor and any subcontractors (i) may
employ under this contract any service employee who has worked for
the contractor or subcontractor for at least three months
immediately preceding the commencement of this contract and who
would otherwise face lay-off or discharge, (ii) are not required to
offer a right of first refusal to any service employee(s) of the
predecessor contractor who are not service employees within the
meaning of the Service Contract Act, 41 U.S.C. 6701(3), and (iii)
are not required to offer a right of first refusal to any service
employee(s) of the predecessor contractor whom the Contractor or any
of its subcontractors reasonably believes, based on the particular
service employee's past performance, has failed to perform suitably
on the job (see 29 CFR 9.12(c)(4) for additional information). The
successor Contractor bears the responsibility of demonstrating the
appropriateness of claiming any of these exceptions.
(2) In addition, any Contractor or subcontractor that has been
certified by the U.S. Small Business Administration as a HUBZone
small business concern must ensure that it complies with the
statutory and regulatory requirements of the HUBZone Program (e.g.,
it must ensure that at least 35 percent of all of its employees
reside within a HUBZone). The HUBZone small business Contractor or
subcontractor must consider
[[Page 75779]]
whether it can meet the requirements of this clause and Executive
Order 13495 while also ensuring it meets the HUBZone Program's
requirements.
(3) Nothing in this clause shall be construed to permit a
Contractor or subcontractor to fail to comply with any provision of
any other Executive order or law. For example, the requirements of
the HUBZone Program (see FAR subpart 19.13), Executive Order 11246
(Equal Employment Opportunity), and the Vietnam Era Veterans'
Readjustment Assistance Act of 1974 may conflict, in certain
circumstances, with the requirements of Executive Order 13495. All
applicable laws and Executive orders must be satisfied in tandem
with, and if necessary prior to, the requirements of Executive Order
13495, 29 CFR part 9, and this clause.
(d)(1) The Contractor shall, not less than 30 days before
completion of the Contractor's performance of services on the
contract, furnish the Contracting Officer with a certified list of
the names of all service employees working under this contract and
its subcontracts at the time the list is submitted. The list shall
also contain anniversary dates of employment of each service
employee under this contract and its predecessor contracts with
either the current or predecessor contractors or their
subcontractors. Where changes to the workforce are made after the
submission of the certified list described in this paragraph, the
Contractor shall, in accordance with paragraph (e) of this clause,
not less than 10 days before completion of the services on this
contract, furnish the Contracting Officer with an updated certified
list of the names of all service employees employed within the last
month of contract performance. The updated list shall also contain
anniversary dates of employment, and, where applicable, dates of
separation of each service employee under the contract and its
predecessor contracts with either the current or predecessor
Contractors or their subcontractors.
(2) Immediately upon receipt of the certified service employee
list but not before contract award, the contracting officer shall
provide the certified service employee list to the successor
contractor, and, if requested, to employees of the predecessor
contractor or subcontractors or their authorized representatives.
(3) The Contracting Officer will direct the predecessor
Contractor to provide written notice (Appendix B to 29 CFR chapter
9) to service employees of their possible right to an offer of
employment with the successor contractor. Where a significant
portion of the predecessor Contractor's workforce is not fluent in
English, the notice shall be provided in English and the language(s)
with which service employees are more familiar. The written notice
shall be--
(i) Posted in a conspicuous place at the worksite; or
(ii) Delivered to the service employees individually. If such
delivery is via email, the notification must result in an electronic
delivery receipt or some other reliable confirmation that the
intended recipient received the notice.
(e)(1) If required in accordance with 52.222-41(n), the
predecessor 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. If there are no changes to the
workforce before the predecessor contract is completed, then the
predecessor Contractor is not required to submit a revised list 10
days prior to completion of performance and the requirements of
52.222-41(n) are met. When there are changes to the workforce after
submission of the 30-day list, the predecessor Contractor shall
submit a revised certified list not less than 10 days prior to
performance completion.
(2) Immediately upon receipt of the certified service employee
list but not before contract award, the contracting officer shall
provide the certified service employee list to the successor
contractor, and, if requested, to employees of the predecessor
contractor or subcontractors or their authorized representatives.
(f) The Contractor and subcontractor shall maintain the
following records (regardless of format, e.g., paper or electronic)
of its compliance with this clause for not less than a period of
three years from the date the records were created.
(1) Copies of any written offers of employment or a
contemporaneous written record of any oral offers of employment,
including the date, location, and attendance roster of any service
employee meeting(s) at which the offers were extended, a summary of
each meeting, a copy of any written notice that may have been
distributed, and the names of the service employees from the
predecessor contract to whom an offer was made.
(2) A copy of any record that forms the basis for any exemption
claimed under this part.
(3) A copy of the service employee list provided to or received
from the contracting agency.
(4) An entry on the pay records of the amount of any retroactive
payment of wages or compensation under the supervision of the
Administrator of the Wage and Hour Division to each service
employee, the period covered by such payment, and the date of
payment, and a copy of any receipt form provided by or authorized by
the Wage and Hour Division. The Contractor shall also deliver a copy
of the receipt to the service employee and file the original, as
evidence of payment by the Contractor and receipt by the service
employee, with the Administrator or an authorized representative
within 10 days after payment is made.
(g) Disputes concerning the requirements of this clause shall
not be subject to the general disputes clause (52.233-1) of this
contract. Such disputes shall be resolved in accordance with the
procedures of the Department of Labor set forth in 29 CFR part 9.
Disputes within the meaning of this clause include disputes between
or among any of the following: The Contractor, the contracting
agency, the U.S. Department of Labor, and the service employees
under the contract or its predecessor contract. The Contracting
Officer will refer any service employee who wishes to file a
complaint, or ask questions concerning this contract clause, to the:
Branch of Government Contracts Enforcement, Wage and Hour Division,
U.S. Department of Labor, 200 Constitution Avenue NW., Washington,
DC 20210. Contact email: displaced@dol.gov.
(h) The Contractor shall cooperate in any review or
investigation by the Department of Labor into possible violations of
the provisions of this clause and shall make such records requested
by such official(s) available for inspection, copying, or
transcription upon request.
(i) 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 13495, the
regulations, and relevant orders of the Secretary, or as otherwise
provided by law.
(j) The Contractor shall take such action with respect to any
such subcontract as may be directed by the Secretary of Labor as a
means of enforcing such provisions, including the imposition of
sanctions for noncompliance. However, 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, through the
Secretary, enter into such litigation to protect the interests of
the United States.
(k) The Contracting Officer will withhold, or cause to be
withheld, from the prime Contractor under this or any other
Government contract with the same prime Contractor, such sums as an
authorized official of the Department of Labor requests, upon a
determination by the Administrator, the Administrative Law Judge, or
the Administrative Review Board, that there has been a failure to
comply with the terms of this clause and that wages lost as a result
of the violations are due to service employees or that other
monetary relief is appropriate. If the Contracting Officer or the
Administrator, upon final order of the Secretary, finds that the
Contractor has failed to provide a list of the names of service
employees working under the contract, the Contracting Officer may,
in his or her discretion, or upon request by the Administrator, take
such action as may be necessary to cause the suspension of the
payment of contract funds until such time as the list is provided to
the Contracting Officer.
(l) Subcontracts. In every subcontract over the simplified
acquisition threshold entered into in order to perform services
under this contract, the Contractor shall include a provision that
ensures--
(1) That each subcontractor will honor the requirements of
paragraphs (b) through (c) of this clause with respect to the
service
[[Page 75780]]
employees of a predecessor subcontractor or subcontractors working
under this contract, as well as of a predecessor Contractor and its
subcontractors;
(2) That the subcontractor will provide the Contractor with the
information about the service employees of the subcontractor needed
by the Contractor to comply with paragraphs (d) and (e) of this
clause; and
(3) The recordkeeping requirements of paragraph (f) of this
clause.
(End of clause)
[FR Doc. 2012-30592 Filed 12-20-12; 8:45 am]
BILLING CODE 6820-EP-P