Federal agencies will be issuing a final rule that will remove the infamous nondisplacement of qualified workers clause from the FAR. The final rule goes into effect June 5, 2020. Let’s take a look.
The new rule, issued May 6, 2020, implements Executive Order 13897, “Improving Federal Contractor Operations by Revoking Executive Order 13495” (published in the Federal Register on November 5, 2019, at 84 FR 59709), which we previously blogged about.
The prior Executive Order, through FAR 22.1207, implemented the nondisplacement of qualified workers requirement, which is currently found at FAR 52.222-17. This FAR clause applied to service contractors and their subcontractors and required that:
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.
Though this requirement was implemented with good intentions, such as promoting the continuity of knowledge and experience while reducing unemployment during contractor transitions, it also placed substantial burdens on contractors pursuing and performing federal contracts.
The new rule deletes FAR subpart 22.12 in its entirety and the corresponding clause at FAR 52.222–17. It also amends corresponding FAR clauses such as 2.101 and 52.212–5 to remove the references to the requirement and the revoked executive order. The new rule also provides that “[c]ontracting officers should not take any action on any complaints filed under former FAR subpart 22.12.”
This new rule automatically goes into effect on June 5, 2020. As it explains, 41 U.S.C. 1707(a)(1) does not require public comment on the rule “because it is simply removing a requirement that has become obsolete
as a result of an executive action that compelled the Federal Acquisition
Regulatory Council to rescind the requirement.” Any agencies that had still been relying on the FAR rule will no longer be able to do so, so you may see some additional effects from this change in the coming weeks.
If you have questions or concerns about how this new rule may affect your company in its federal contracting endeavors, email us or give us a call at 785-200-8919.