New Labor rule would constrict contractors' hiring options

Service workers would get right of first refusal for new jobs

Federal service contractors replacing a previous contractor for similar or identical work could be required to offer jobs to some of the previous contractor’s employees, under a new Labor Department proposed rule.

The proposed rule would implement President Obama’s Jan. 30, 2009, Executive Order on Nondisplacement of Qualified Workers Under Service Contracts.

The order and regulations are meant to address situations in which a federal service contract ends and work is taken over by another contractor. The executive order states that the federal government’s interests are better served when the successor contractor hires the predecessor’s employees, in order to reduce disruptions to services. Such a pattern generally is followed, but in some cases contractors bring in a new workforce.

The rule, which was published in the Federal Register on March 19, is being opposed by the Professional Services Council, a trade organization representing contractors, which alleges that it unfairly denies the incoming contractors the flexibility they need to fulfill their duties.

Under the proposed rule, qualified employees of the predecessor contractor, under certain conditions, would have the right of first refusal for jobs to be filled in the successor contract.

However, the Professional Services Council claims that the proposed requirement is too inflexible.

“While the 2009 Executive Order implied some reasonable hiring flexibility, the proposed rule eviscerates those flexibilities and effectively places the government in charge of selecting and managing a contractor’s workforce,” said Stan Soloway, council president.

“Most contractors retain incumbent employees because it is more efficient and effective to do so,” Soloway said. “At the same time, because the contractor ultimately holds the responsibility to perform under a contract, the contractor must have the ability and right to make their own, fair determinations of which employees best meet its contract needs. The proposed rule does precisely the opposite.”

The council also raises objections to stipulations in the proposed rule about giving employee personnel performance evaluations to the successor contractor to aid in determining whether the employee is qualified. Soloway described this as a “highly unusual” practice that raises privacy and liability issues.

The council also contends that the proposed rule could make immediate implementation of a contract more difficult and creates problems for bidding and contract execution.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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Reader comments

Wed, Mar 24, 2010

I have been in corporate america for 50 years, serving as an employee of big companies and as a contract worker also with large companies. Early on, the government compensation lagged private compensation. The government worker endured that because the benefits were superior. The Federal Govenment employees were competent but their numbers were too few. This resulted in shoddy performance by contractors because of lack of oversight caused by government undermanning. A good bit of this was by design; companies lobbied their legislators to restrict hiring in oversight departments. Thus you see the cost over-runs, fraught, and abuse.

Tue, Mar 23, 2010 M Reston, VA

It's clear the Democratic regime wants to protect everyone from the challenges of life and a healthy economy. Guess what, my green friends? It's not sustainable. Facing chellenges and dealing with them independently is what made us strong in the first place. How shameless we are to turn our backs on all our ancestors built and say we are going to sit comfortably in place. It's not a comfortable that is sustainable.

Tue, Mar 23, 2010 RayW

Can't read the ruling, the government internet blocked it for content problems. While I have had many friends over the years that have been 'sold' many times to a new company, I have also seen where getting a new contractor was a way of getting rid of a poor performing group of people. As with most royal decrees out of our federal level in recent times, this is a good idea when reading the brief, but upon deeper inspection appears to limit an organization from getting rid of poor performers by changing contractors. Granted there are ways to get rid of the 'welfare' folk who think a fed contract job is an excuse to be on easy street or who do not fit an organization, but in reality, most supervisors are ill-trained to do the requisite paperwork to avoid lawsuits of various types given the complexities that contracts usually have. Being able to look for a new contractor with new people is sometimes the best way to go. Personally I have never liked the contract scene where folks get shuffled from company to company; it reduces people in status to nothing more than a desk or a table, and they never get the benefits that seniority brings in most companies. (Contractor issues could fill up a book, anything less is subject to misinterpretation, and a law forcing one action only is like enforcing the NO LEFT TURN sign when the bridge is out to the front, the road is blocked to the rear, and a tsunami is due from the right.)

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