Government Contracting News: Executive Order 13897 Revokes Nondisplacement Of Qualified Workers Under Service Contracts

Written on November 11, 2019

President Trump issued Executive Order (EO) 13897 on October 31st, revoking a previous EO that had required successor contractors and subcontractors to offer employees working under a predecessor contract a right of first refusal of employment under the successor contract if they were to otherwise be terminated.  The original EO, Nondisplacement of Qualified Workers Under Service Contracts (13495), was intended to protect workers when a contract changed hands from company to company.   EO 13495 was frequently criticized by industry over the requirement to offer employment to nonmanagerial employees who may not have been the successor contractor’s preferred candidate and who may have been less qualified than another potential employee.  Because of EO 13897, federal contractors now have the flexibility to develop their workforce on a contract new to them without being required to first offer positions to the incumbent employees who had done work under the previous contract.  Contractors can now choose which positions would benefit from being staffed with new employees without the risk of triggering an investigation by the Department of Labor.  EO 13897 directs the Secretary of Labor and the Federal Acquisition Council to promptly move to rescind any orders, guidelines, programs or policies implementing EO 13495.  In addition, EO 13897 directs the Department of Labor to immediately terminate any investigations or compliance actions based on EO 13495.  Read a copy of the Executive Order 13897 here.

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