[Federal Register Volume 62, Number 99 (Thursday, May 22, 1997)]
[Rules and Regulations]
[Pages 28176-28193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13336]



[[Page 28175]]

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Part VI





Department of Labor





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Employment Standards Administration; Wage and Hour Division



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29 CFR Part 9



Executive Order 12933 of October 20, 1994--Nondisplacement of Qualified 
Workers Under Certain Contracts; Final Rule

  Federal Register / Vol. 62, No. 99 / Thursday, May 22, 1997 / Rules 
and Regulations  

[[Page 28176]]


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DEPARTMENT OF LABOR

Employment Standards Administration
Wage and Hour Division

29 CFR Part 9

RIN 1215-AA95


Executive Order 12933 of October 20, 1994--``Nondisplacement of 
Qualified Workers Under Certain Contracts''

AGENCY: Wage and Hour Division, Employment Standards Administration, 
Labor.

ACTION: Final rule.

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SUMMARY: This document provides the text of final regulations to 
implement Executive Order 12933, ``Nondisplacement of Qualified Workers 
Under Certain Contracts'' (59 FR 53560, October 24, 1994). The 
Executive Order requires that workers on a building service contract 
for a public building be given the right of first refusal for 
employment with a successor contractor, if they would otherwise lose 
their jobs as a result of the termination of the contract. The final 
rules contain a contract clause that must be incorporated into each 
covered contract, implementing regulations, and enforcement procedures.

DATES: These rules are effective on July 21, 1997.

FOR FURTHER INFORMATION CONTACT: Ethel P. Miller, Government Contracts 
Team, Office of Enforcement Policy, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor, Room S-3018, 200 
Constitution Avenue, NW, Washington, DC 20210; telephone (202) 219-
7541. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

    The reporting and recordkeeping requirements contained in 
Secs. 9.6(c), 9.9(b) and 9.11 of this rule were submitted to and 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 and assigned OMB Control No. 1215-0190.
    The reporting requirements of Secs. 9.6(c) and 9.11 are already 
required by the McNamara-O'Hara Service Contract Act regulations, 29 
CFR 4.6(l)(2), assigned OMB Control No. 1215-0150, and impose no 
additional burdens.
    No comments were received from the public regarding this burden or 
these regulatory provisions.
    No material change has been made in this final rule which affect 
the reporting or recordkeeping requirements and estimated burdens 
previously submitted to OMB and discussed in the proposed rule.

II. Background

    Executive Order 12933 was signed October 20, 1994, by President 
Clinton, and published in the Federal Register on October 24, 1994 (59 
FR 53560). The purpose and need for the Executive Order are clearly 
stated in the Executive Order itself:

    When a service contract for the maintenance of a public building 
expires and a follow-on contract is awarded for the same service, 
the successor contractor typically hires the majority of the 
predecessor's employees. On occasion, however, a follow-on 
contractor will hire a new work force, and the predecessor's 
employees are displaced.
    As a buyer and participant in the marketplace, the Government is 
concerned about hardships to individuals that may result from the 
operation of our procurement system.
    Furthermore, the Government's procurement interests in economy 
and efficiency benefit from the fact that a carryover work force 
will minimize disruption to the delivery of services during any 
period of transition and provide the Government the benefits of an 
experienced and trained work force rather than one that may not be 
familiar with the Government facility.

    In order to address these concerns, section 1 of the Executive 
Order makes the following statement of policy:

    It is the policy of the Federal Government that solicitations 
and building service contracts for public buildings shall include a 
clause that requires the contractor under a contract that succeeds a 
contract for performance of similar services at the same public 
building to offer those employees (other than managerial or 
supervisory employees) under the predecessor contract whose 
employment will be terminated as a result of the award of the 
successor contract, a right of first refusal to employment under the 
contract in positions for which they are qualified. There shall be 
no employment openings under the contract until such right of first 
refusal has been provided. Nothing in this order shall be construed 
to permit a contractor to fail to comply with any provision of any 
other Executive order or laws of the United States.

    The Executive Order requires implementing regulations to be issued 
by the Secretary of Labor in consultation with the Federal Acquisition 
Regulatory (FAR) Council, and that DOL and FAR regulations be issued 
which require inclusion of the contract clause in covered Federal 
solicitations and contracts. The Executive Order provides that the 
order does not confer any right or benefit enforceable against the 
United States, but that it is not intended to preclude judicial review 
of final decisions by the Secretary of Labor in accordance with the 
Administrative Procedure Act, 5 U.S.C. 701 et seq.
    To obtain public input and assist in the development of these 
regulations, the Department published a notice of proposed rulemaking 
in the Federal Register on July 18, 1995 (60 FR 36756), inviting 
comments until September 1, 1995, on a variety of questions and issues. 
As required by the Executive Order, the Department of Labor (DOL) has 
consulted with the FAR Council with respect to the implementation of 
the Executive Order.

III. Summary of Comments and Discussion

    Comments were received in response to the notice from the Building 
Service Contractors Association International (BSCAI), the Service 
Employees International Union, AFL-CIO (SEIU), the Laborers' 
International Union of North America (LIUNA), and from Mr. Russell E. 
Willis.
    The BSCAI questioned the legality of and the rationale for the 
Executive Order. These issues are clearly not within the purview of 
this rulemaking action. All other comments are summarized in the 
preamble under the relevant subsections.

Scope of Coverage

General Coverage (9.2)
    The Executive Order applies only to ``building service contracts'' 
for ``public buildings'' where the contract is entered into by the 
United States. These terms are defined in the Executive Order and 
elsewhere in the regulations. The Order applies only to contracts of an 
amount equal to or greater than the simplified acquisition threshold, 
set by the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)) 
at $100,000.
    Where a contract is for both recurring building services and some 
other purpose, such as construction or other types of services, the 
building services for the public building are subject to the Order, but 
not any other portions of the contract. However, where the building 
services are only incidental to a contract for another purpose, such as 
incidental maintenance performed under a contract to operate a day-care 
center, the Order would not apply to such services. The standards used 
for determining when construction work performed under a mixed contract 
is covered by the Davis-Bacon Act are incorporated in the regulation as 
the standard for determining when building services for

[[Page 28177]]

a public building are more than incidental. See 29 CFR 4.116(c)(2); 48 
CFR 22.402(b)(ii).
    As discussed under Sec. 9.3, below, the regulation is amended to 
make it clear that if a contract provides services for more than one 
public building, only buildings for which services were provided under 
a predecessor contract are covered.
    It should be recognized that the coverage principles of the 
Executive Order differ from those of the McNamara-O'Hara Service 
Contract Act (SCA), 41 U.S.C. 351 et seq., although there is 
significant overlap between the two programs. SCA prevailing wage 
requirements apply to service contracts of Federal agencies and the 
District of Columbia, the principal purpose of which is to furnish 
services in the United States through the use of service employees. 29 
CFR 4.110. The Executive Order covers service contracts of $100,000 or 
more with the Federal government for the maintenance of a public 
building and contains no principal purpose requirement. Therefore, not 
all SCA covered contracts are within the scope of the Executive Order, 
and it may be that some contracts covered under the Executive Order are 
not covered by the SCA.
Building Services Contract (9.3)
    Section 2(b) of the Executive Order defines the term ``building 
services contract'' to include contracts ``for recurring services 
related to the maintenance of a public building, e.g., janitorial, 
window washing, food service * * *.'' The regulations define 
``recurring services'' to include services performed regularly or 
periodically throughout a contract (and its follow-on contract) at the 
same building. Contracts which are for non-recurring maintenance 
services, such as servicing of fixed equipment which is performed only 
one time each year, and contracts for services which are not 
maintenance services, such as operation of a day care center, are not 
subject to the Order.
    SEIU suggested that the last sentence in Sec. 9.3(a) be clarified 
to indicate which contracts are excluded. LIUNA expressed concern that 
restricting the Executive Order's coverage to successor or follow-on 
contracts ``at the same building'' may exclude a workforce that is 
employed at multiple locations, all of which are public buildings. 
LIUNA suggests that the final regulations should expressly state that 
the Executive Order applies to contracts such as pest control, trash 
removal, and window washing where the contractor's workforce is 
employed only at buildings covered by the Executive Order.
    We agree that the intent of the Executive Order was to cover 
contracts which provided recurring building services at more than one 
public building. However, as provided in Sec. 9.5(b)(5), the Executive 
Order does not apply in certain cases to services where the 
contractor's employees perform work both at a covered public building 
and at other locations under contracts not covered by the Executive 
Order. To avoid possible confusion, the discussion in Sec. 9.3 of 
contracts which may be excluded from coverage has been moved to 
Sec. 9.5. Sections 9.3 and 9.5 have been clarified in accordance with 
this discussion.
Public Building (9.4)
    Section 2 of the Executive Order defining the term ``public 
building'' is patterned after the definition of a public building in 
Section 13 of the Public Buildings Act of 1959, 40 U.S.C. 612. The 
definition in the Executive Order is set forth and explained in 
Sec. 9.4 of the regulations. Generally, buildings suitable for office 
or storage space and administered by the General Services 
Administration (GSA) or by another Federal agency under a delegation 
from GSA are considered to be ``public buildings.''
    Many buildings are specifically excluded from the term ``public 
building,'' including buildings on properties of the United States 
Postal Service, on military installations, and on Department of 
Veterans Affairs installations used for hospital or domiciliary 
purposes. In addition, buildings ``on the public domain (including that 
reserved for national forests and other purposes)'' are not ``public 
buildings.'' We have been unable to find any regulation, opinion, or 
case law interpreting ``public domain'' as the term is used in the 
Public Buildings Act of 1959, but the term is commonly considered to 
refer to public lands in the West. Because these lands are administered 
by the Department of Interior, Bureau of Land Management (BLM) (see 43 
CFR 2091.0-5(c)), ``public domain'' was so defined in the proposed 
regulations. In addition, because national forests are specifically 
referenced in the Executive Order, lands administered by the Department 
of Agriculture, U.S. Forest Service were included in the definition. 
Buildings on other Federal property are not considered to be ``on the 
public domain'' for purposes of the Executive Order.
    SEIU and LIUNA objected to the proposed definition of ``public 
domain'' as too broad, because it includes all lands administered by 
the BLM and the U.S. Forest Service. LIUNA suggested a definition which 
would exclude from the ``public domain'' land that ``has not been 
specifically designated for a public or governmental use.'' SEIU 
suggests that the public domain exception apply to buildings on land 
``which has not been reserved for any specific governmental purpose or 
purchased for a specific purpose such as an office building.''
    These suggestions would be contrary to the plain meaning of the 
Executive Order, which states that ``public domain'' includes land 
``reserved for national forests and other purposes. For purposes of the 
Executive Order, the Department agrees that the term ``public domain'' 
should be construed narrowly. The Department believes that an 
appropriate definition of ``public domain'' is (1) any public lands 
owned by the United States and administered by the Department of the 
Interior, Bureau of Land Management, and (2) the National Forest System 
administered by the Department of Agriculture, U.S. Forest Service. 
However, the Department agrees with the commenters that the ``public 
domain'' does not include Federal office buildings occupied by BLM or 
the U.S. Forest Service where such buildings are not on lands 
administered by those agencies, such as office buildings in cities and 
towns. The regulation has been clarified accordingly.
    A unique situation arises with respect to the Pentagon. Originally, 
the Pentagon was considered a ``public building'' within the scope of 
the Public Buildings Act (not an exempt ``military installation''). 
Subsequently, Section 2804 of the National Defense Authorization for FY 
1991 (10 U.S.C. 2674) removed the Pentagon from GSA's authority under 
the Public Buildings Act; however, that legislation did not change the 
Public Buildings Act's definition of a public building. For these 
reasons, and consistent with the purpose of the Executive Order to 
cover Government office buildings, the preamble to the proposed 
regulations stated that the Department of Labor considers the Pentagon 
to be a ``public building'' within the meaning of the Executive Order.
    Russell Willis commented that by covering the Pentagon, the 
Executive Order appears to provide broader coverage than coverage under 
GSA's authority. SEIU and LIUNA commented that the Pentagon should be 
covered by the Executive Order.
    As explained above, the Pentagon was removed from GSA's 
jurisdiction without similarly restricting the definition of ``public 
building.'' The

[[Page 28178]]

final rule has been revised to expressly provide that the Pentagon is 
not excluded from the Executive Order.
    Leased buildings are not public buildings covered by the Executive 
Order unless they are being leased to the Government pursuant to lease-
purchase contracts. It should be noted, however, that building services 
performed on a building being leased pursuant to a lease-purchase 
contract would be covered only if the services are being performed 
under a contract directly with the Government; building services 
performed by the lessor would be considered incidental to the lease 
(see Sec. 9.2) and would not be covered.
    LIUNA expressed concern that excluding other leased facilities 
would create a gap in protection for building service employees. The 
plain language of the Executive Order, however, limits coverage to 
``Government-owned building(s).''
Coverage Limitations (9.5)
    The Order does not apply to contracts under the simplified 
acquisition threshold, which is currently $100,000. In addition, 
certain other contracts are excluded from coverage pursuant to sections 
3 (b)-(d) of the Executive Order, including: Contracts for commodities 
or services by the blind or severely handicapped awarded pursuant to 
the Javits-Wagner-O'Day Act, 41 U.S.C. 46-48a; contracts for certain 
services provided by sheltered workshops for the severely handicapped, 
awarded pursuant to the Edgar Amendment of the Treasury, Postal 
Services and General Government Appropriations Act, Pub. L. 103-329; 
and vending service contracts operated by the blind, awarded pursuant 
to the Randolph-Sheppard Act, 20 U.S.C. 107.
    The Executive Order also excludes ``services where the contractor's 
employees perform work at the public building and at other locations 
under contracts not subject to (the) Order (e.g., pest control or trash 
removal where the contractor's employees visit the site periodically 
and where the employees under the contract respond to service calls),'' 
provided that employees are not deployed in a manner designed to avoid 
the purposes of the Order. Thus, the manner in which employees are 
deployed by the successor contractor to perform the contract services, 
as well as the nature of the services must both be considered in 
determining whether a building services contract is subject to the 
Executive Order.
    The following discussion of comments regarding the exclusion of 
contracts for services at a public building which are also performed at 
locations under contracts not subject to the Executive Order, also 
addresses the corresponding provision Sec. 9.8(b)(3) regarding when a 
successor contractor must offer employment to the predecessor's 
employees.
    In commenting on these sections (Secs. 9.5 and 9.8(b)(3)) of the 
proposed rule, SEIU suggested that these sections erroneously interpret 
the Executive Order. SEIU is of the view that there is no basis in the 
Executive Order for excluding ``positions'' as provided in 
Sec. 9.8(b)(3) of the proposed regulations, and that the exclusion 
refers only to ``services.'' SEIU asserts that this reference is to 
services performed under a particular building service contract. SEIU 
maintains that a particular contract should either be covered or not 
covered by the Executive Order, and once a building service contract is 
covered, the only ``positions'' excluded are those positions which are 
not deemed to be ``service employees'' within the meaning of SCA, 41 
U.S.C. 357(d), citing section 4(b)(2) of the Executive Order.
    In support of their view, SEIU explained that to exclude certain 
positions under covered contracts will mean that coverage depends upon 
whether particular employees of the predecessor contractor 
coincidentally decided to work for the same contractor at another 
building. SEIU contends that this result is inconsistent with the 
purpose of section 3(e) of the Executive Order and is likely to lead to 
confusion.
    In a similar manner, LIUNA and SEIU also commented that the 
regulations could be read to exclude from coverage building service 
contracts where all or part of the workforce was incidentally employed 
by the contractor at other non-covered buildings. They suggested that, 
under the proposed regulation, the exclusion would depend upon whether 
the predecessor's employees happen to work for the contractor at 
another location; that contract coverage will be determined at any 
particular time based upon who the incumbent contractor is and the 
employment needs of that contractor's employees, rather than on the 
nature of the service contract itself and how those services are 
typically rendered to the government. They contend that such an 
unworkable result was not intended by the Executive Order. Similar or 
even identical building service contracts might be covered in one case 
and excluded in another.
    SEIU pointed out that federal service contracts often have a work 
force that is employed less than full time under that contract. The 
employees will sometimes also apply to work for the same contractor 
under another non-federal contract. SEIU reports that the practice in 
the industry is for the workers to apply separately for work on the 
non-federal job. The SEIU notes the difference between this situation 
and one in which the entire workforce moves from location to location 
performing the same work under many different contracts, only a few of 
which are covered by the Executive Order.
    SEIU recommends that Sec. 9.8(b)(3) be deleted and that the final 
regulations clarify that entire contracts are either covered or not 
covered based upon whether the workforce that performs the contract was 
normally hired to (1) perform only that contract or (2) perform a 
number of contracts including contracts not covered by the Executive 
Order.
    In a similar manner, LIUNA and SEIU also commented that the 
Executive Order provides examples of services which are excluded from 
coverage, where the employees only periodically visit the site and 
where the employees respond to service calls at other non-covered 
locations. As an exclusion from coverage, they contend that this 
provision should be given a narrow interpretation.
    LIUNA suggests that Sec. 9.8(b)(3) of the regulation be qualified 
by the addition of language identical to that found in proposed 
Sec. 9.3(b)(1), limiting the exclusion to services offered ``once a 
year'' or on a ``one-time or annual basis.'' LIUNA asserts that 
otherwise, large categories of typical building service contracts which 
were intended to be covered, such as janitorial contracts performed 
continuously, but only for several hours a day, will be excluded from 
the Executive Order.
    The Executive Order expressly excludes services where the 
contractor's employees perform work at the public building and at other 
locations under contracts not subject to the Executive Order and these 
regulations, provided that the employees are not deployed in a manner 
that is designed to avoid the purposes of the Order. The Executive 
Order provides examples of services which are excluded from coverage, 
where the employees only periodically visit the Federal building site 
to perform contract work and where the employees typically respond as 
well to service calls at non-covered locations. As an exclusion from 
coverage, this provision should be given a narrow interpretation. The 
Department agrees that the proposed regulations are confusing and could 
allow results which would be inconsistent with the intent of the 
Executive Order.

[[Page 28179]]

    The regulations have been amended to look at how the services in 
question are performed, by examining whether a majority of the 
employees performing the services in question under the contract work 
both at buildings under contracts subject to the Executive Order and at 
other locations not subject to the Executive Order. Where a majority of 
the workers furnishing the contract services in question go from 
location to location, including other locations under contracts not 
subject to the Order, the exclusion will apply. In addition, the 
regulation provides that the exclusion does not apply where the 
employees separately applied for the non-federal job.
    The Executive Order's exclusion would not apply if the employees 
are deployed in a manner designed to avoid the purposes of the 
Executive Order. The regulation has been clarified to provide that in 
examining whether or not there is an attempt to avoid coverage under 
the Executive Order, the Department will look carefully at how the 
predecessor contractor deployed its workforce. The Department may also 
consider the manner in which the work force is typically deployed to 
perform the services in question and the manner in which the contracts 
are structured to determine whether the building services contract 
meets the coverage provisions of the Executive Order.
Contract Clause (9.6)
    Section 4 of the Executive Order specifies the contract clause that 
must be included in solicitations and contracts for building services 
that succeed contracts for the performance of similar work at the same 
public building. The regulations set forth additional provisions which 
are necessary to implement the Order. In accordance with Section 5 of 
the Order, a provision of the clause makes it clear that disputes under 
the Order are to be resolved in accordance with Department of Labor 
procedures rather than pursuant to the general disputes clause of the 
Contract Disputes Act, 41 U.S.C. 601 et seq.
    Other provisions state that contract funds may be withheld in the 
event the contractor is determined to have violated the provisions of 
the Executive Order and is found liable for lost wages or other 
monetary relief, and require contractors to cooperate in investigations 
by the Department of Labor or the contracting agency.
    Introductory language has been added so that the clauses would not 
be included in contracts which are excluded from the Executive Order 
pursuant to subsections (b), (c) and (d) of section 3 of the Order and 
Secs. 9.5(b) (2), (3) and (4) of these regulations. However, the 
clauses must be included in contracts which may be exempt pursuant to 
subsection (e) (Sec. 9.5(b)(5) of the regulations) since exclusion of 
such a contract is dependent upon how workers are deployed by the 
successor contractor, rather than just the nature of the contract 
services and how the workers were deployed by the predecessor 
contractor, and therefore cannot be known at the time of the bid 
solicitation. A new paragraph (d) has been added, and the remaining 
paragraphs have been re-ordered accordingly, to address the exclusion 
from coverage in Sec. 9.5(b)(5), where the services are performed by 
workers who also work at other locations under contracts not subject to 
the Executive Order.
    The application of the clause in paragraph (c), concerning the list 
of employees to be provided by the predecessor contractor, is explained 
in Sec. 9.11 of the regulations. Because paragraph (c) is confusing, 
however, and this provision rather than Sec. 9.11 will be included in 
contracts, the language is revised to conform to Sec. 9.11 by stating 
that the list must contain the names of all employees working for the 
contractor at the time the list is provided, to make it clear that 
compliance with this provision will constitute compliance with the 
referenced provision in the Service Contract Act regulations, and to 
use the title of the clause utilized in the Federal Acquisition 
Regulations. The Department notes that the situation may arise where 
the clauses are not included in a contract because it does not itself 
succeed a contract for the performance of similar services. In such 
circumstances, in order to assist the successor contractor, it is 
suggested that contracting agencies request that the predecessor 
contractor, where possible, provide the list required by the SCA 
regulations 60 days before the end of the contract.
    Because the phrase ``[d]isputes arising out of this clause'' may be 
construed too broadly to include disputes over issues such as whether 
contractors should be reimbursed for costs incurred, paragraph (h) is 
revised to provide language similar to the SCA provision entitled 
``Disputes Concerning Labor Standards'' in the FAR at 48 CFR 52.222-
42(t).

Contractor Obligations

Employee coverage/staffing (9.7/9.8)
    With certain exclusions, all employees performing recurring 
building services on the predecessor contract whose employment would 
otherwise be terminated as the result of the award of the contract to a 
new contractor, must in good faith be offered the right of first 
refusal to employment under the successor contract before any other 
employees may be hired. Because the successor contractor will not know 
whether an individual employee of the predecessor contractor will 
continue to be employed or will be terminated because of the change in 
contracts, the regulations state a presumption that all employees will 
be terminated when the predecessor's contract expires. This presumption 
can be defeated by specific evidence to the contrary, which the 
successor contractor could obtain through inquiries of, or contact 
with, the contracting officer, the employees, or the predecessor 
contractor after award of the contract to the successor.
    The Executive Order does not require that a successor contractor 
perform a contract with the same number of employees as the 
predecessor. For example, if the predecessor employed twenty (20) 
custodial workers, the successor may determine it can perform the 
contract work with only eighteen (18) custodial workers. Thus if the 
contractor continues to employ five (5) of its existing workers, the 
offer of the right of first refusal would initially be limited to 
thirteen (13) employees of the predecessor. The successor contractor 
has discretion, within the constraints of these regulations, to 
determine which employees will first be offered a right of first 
refusal. If any of the predecessor's employees to whom the right of 
first refusal is offered declines that offer, then the successor must 
offer the right of first refusal to any remaining employees of the 
predecessor who were not originally offered the right of first refusal.
    The question arises, however, whether the successor contractor's 
obligations continue throughout the performance of the contract. 
Although the language of the Executive Order could suggest such a 
result, it would be impractical and unduly burdensome. Therefore, the 
proposed regulations provided at Sec. 9.8(c) that once the contract had 
been fully staffed and contract performance had commenced, the 
obligation to offer the right of first refusal ceased, and any 
subsequent vacant positions could be filled in accordance with the 
successor's normal business practices. The only proposed exception to 
this provision was if the evidence showed that the successor contractor 
increased the initial staffing level within the first three months 
after commencement of the contract. Three months was selected as a 
reasonable

[[Page 28180]]

period for continuing to impose an obligation to offer a right of first 
refusal in order to ensure that any necessary staffing adjustments 
during the start-up period would be covered, and at the same time to 
discourage attempts to manipulate the starting work force. The proposed 
regulation required that the right of first refusal be offered to any 
eligible employees of the predecessor contractor during this three-
month period, or until the full staffing level is reached, whichever 
comes first.
    Both SEIU and LIUNA believe the Department of Labor incorrectly 
interpreted the Executive Order in Sec. 9.8(c) as relieving the 
successor contractor of its obligation to offer a right of first 
refusal to the predecessor's employees once the successor contractor 
reaches a full staffing level. They contend there is nothing in the 
Executive Order that relieves the successor employer of its obligation 
to offer a right of first refusal when vacancies become available under 
the contract. They believe the obligation by the successor contractor 
should continue until all predecessor employees have been offered 
employment or until three months after the successor contract has 
begun.
    In that regard, these commenters stated that proposed Sec. 9.8(c) 
(1) and (2) are inconsistent. Under proposed Sec. 9.8(c)(2), a 
successor contractor who employs fewer employees than the predecessor 
contractor must continue to offer a right of first refusal during the 
first three months of the contract if the successor contractor decides 
to increase the size of the workforce. However, under proposed 
Sec. 9.8(c)(1), the successor contractor does not need to continue to 
offer a right of first refusal if vacancies occur during the first 
three months of the contract due to termination of one of the employees 
who was employed under the successor contract. According to SEIU and 
LIUNA, the successor contractor should first be required to offer 
employment for that vacancy to any predecessor employees who have not 
yet received an offer of employment. They suggest that because DOL 
apparently determined in proposed Sec. 9.8(c)(2) that three months is a 
reasonable time to continue the obligation of the contractor where 
vacancies occur due to increases in the workforce, that same time 
limitation should also be applied to vacancies created for other 
reasons and Sec. 9.8(c)(1) should be so revised.
    The Department agrees with the commenters and Sec. 9.8(c)(1) is 
amended to reflect a continuing obligation of the successor contractor 
to offer employment to the predecessor's employees for any position 
vacancies which occur for any reason during the first three months of 
the contract, until all of the predecessor's employees have received a 
bona fide offer of employment.
    Existing employees of the successor contractor. The Executive Order 
provides that employees who worked for the successor contractor for at 
least three months immediately preceding the commencement of the 
successor contract and who would otherwise face lay-off or discharge, 
may be employed on the successor contract without regard to the 
successor's obligation to offer the right of first refusal. The key 
elements are that the employee (1) must have been employed by the 
successor for at least three months prior to the commencement of the 
successor contract, and (2) would otherwise face lay-off or discharge. 
Employees who had been laid-off by the successor prior to the 
commencement of the successor contract or existing employees of the 
successor who are not facing lay-off or termination because, for 
example, they would continue to be employed on another contract, may 
not be employed on the successor contract until all eligible employees 
of the predecessor have been offered the right of first refusal.
    No comments were received on this provision set forth in proposed 
Sec. 9.7(b) and no revisions have been made.
    Managerial and supervisory employees. The successor contractor is 
not required to offer a right of first refusal to employees who 
performed as managers or supervisors under the predecessor contract or 
to employees who are not service employees within the meaning of the 
SCA. Thus the proposed regulations provided at Sec. 9.8(b)(1) that 
those employees who are employed as bona fide executive, 
administrative, or professional employees within the meaning of the 
regulations issued under the Fair Labor Standards Act (FLSA) at 29 CFR 
part 541 (and therefore are exempt from the provisions of the FLSA and 
SCA), need not be offered a right of first refusal, but the successor 
contractor is under no obligation to make an offer to such a position.
    The successor contractor has complete discretion to decide who will 
be employed as managers and supervisors on the contract. If a service 
employee of the predecessor is qualified for a management/supervisory 
position, an offer of employment in that classification would satisfy 
the successor's obligation to offer the employee a right of first 
refusal, but the successor contractor is under no obligation to make an 
offer to such a position.
    No comments were received on this provision and no revisions have 
been made.
    Unsuitable employees. The successor contractor is not required to 
offer a right of first refusal to any employee who the successor 
reasonably believes, based on the particular employee's past 
performance, has failed to perform suitably on the job. The proposed 
regulation implementing this provision, Sec. 9.8(b)(2), did not define 
what constituted a ``reasonable belief'' or ``suitable performance.'' 
However, the successor contractor must base the conclusion that an 
employee failed to perform suitably on information relative to a 
particular employee's past performance on the job obtained from a 
credible source, such as the predecessor contractor, the employee's 
supervisor or foreman, or the contracting agency. Information that does 
not directly relate to an employee's performance on the predecessor 
contract may not be used as a basis for failing to offer a right of 
first refusal.
    BSCAI commented that the Executive Order will require a successor 
contractor to assume responsibility for workers that the contractor has 
not screened or trained. In addition, BSCAI stated that requiring the 
successor contractor to retain the predecessor's employees would defeat 
the purpose of changing contractors--i.e., quality, performance and 
cost could be compromised. The Executive Order expressly states, 
however, that the contractor ``is not required to offer a right of 
first refusal to any employee(s) of the predecessor contractor whom the 
contractor reasonably believes, based on the particular employee's past 
performance, has failed to perform suitably on the job.''
    SEIU and LIUNA both commented that the exception should not become 
a loophole to allow contractors to avoid their obligations under the 
Executive Order based upon undocumented oral conversations. They stated 
that the regulations should ensure the exception is limited to the 
employee who clearly has not performed suitably. In that regard, both 
commenters suggested that the regulations should make clear that an 
employer's reasonable belief as to a particular employee's past 
performance should be based upon a contemporaneous written record of 
the predecessor contractor. It was their view that a written record 
would help avoid disputes in the administration of the Executive Order 
with regard to what the contractor knew or did not know when it made 
the decision not to offer a right

[[Page 28181]]

of first refusal. If there is no written record, SEIU would require 
that reports of the employee's performance be from persons with first-
hand knowledge of the employee's past performance. Putting the burden 
of proof on the employer rather than the employee is clearly justified, 
according to SEIU and LIUNA.
    SEIU further commented that the regulations should state clearly 
that a contractor's determination that an employee has not suitably 
performed his or her job must be based on that employee's particular 
past performance and not on the past performance of the predecessor 
contractor. The Executive Order, by using the phrase ``based on the 
particular employee's past performance,'' makes clear that the general 
performance of the predecessor contractor is irrelevant to the 
successor contractor's assessment of an employee's ability to perform 
the work. Further, SEIU recommended that the regulations provide that 
where an employee has worked for more than thirty days for the 
predecessor contractor and has not been disciplined for inadequate 
performance during that period of time, there would be a presumption 
that the employee can suitably perform the job. The presumption would 
make it more difficult for contractors to abuse this exception, while 
making it rebuttable would still allow contractors to eliminate any 
truly unsuitable employee. SEIU believes that the presumption would not 
cause an undue hardship on successor contractors since the Executive 
Order does not impose a continuing obligation to employ an employee 
after the employee starts work with the successor contractor. The 
successor employer will have an opportunity to evaluate the employee on 
the job and to take appropriate action against the employee if that 
employee is not performing adequately.
    LIUNA recommended the creation of a similar presumption where an 
employee has not been subject to discipline by the predecessor 
contractor. The presumption would be greater for employees with greater 
seniority and no record of disciplinary action.
    The Department agrees with the comments that the Executive Order 
does put the responsibility on the employer rather than the employee 
regarding establishing a reasonable belief that the employee has failed 
to perform suitably based on the employee's past performance. 
Therefore, the regulation is revised to provide a presumption that an 
employee has performed suitably. This presumption can be rebutted by 
showing the contractor's reasonable belief that the employee had failed 
to perform suitably--e.g., by evidence of past discipline for 
unsuitable performance or evidence directly from contracting agency 
officials that the particular employee had not performed suitably. The 
Department is of the view that it is not necessary in every case to 
have written or first-hand evidence, since such evidence frequently 
will not be available to contractors. The evidentiary standard has been 
tightened, however, to provide that the evidence must be ``based on 
credible information provided by a knowledgeable source * * *'' 
Establishing a presumption based on a specific time frame under which 
an employee has performed without disciplinary action goes beyond the 
intent of the Executive Order, which requires only the successor 
contractor's ``reasonable belief.'' In addition, the requirement that 
past performance be based on the particular employee's performance 
rather than the general performance of the predecessor contractor is 
further clarified.
    Services at buildings not covered by the Order. The proposed 
regulation provided at Sec. 9.8(b)(3) that the successor contractor is 
not obligated to offer a right of first refusal to employment in a 
position which will perform building services both at public buildings 
covered by the Executive Order and at other buildings not covered by 
the Order.
    The comments on and discussion of this section are included above 
in Sec. 9.5, which has been amended to include a new explanatory 
paragraph in Sec. 9.5(b)(5)(ii). Section 9.8(b)(3) has been revised to 
include the language of the Executive Order exclusion, together with a 
cross-reference to Sec. 9.5(b)(5)(ii), which applies this exclusion 
only where a majority of the contractor's employees perform work at the 
public building and at other locations under contracts not covered by 
the Executive Order.
Offer of Employment/Recordkeeping (9.9, 9.10)
    The Executive Order requires the successor to make an express offer 
of employment to each employee and state the time within which the 
employee must accept such offer, which must be at least ten (10) days. 
The proposed regulation at Sec. 9.9 stated that the offer could be made 
either in writing or orally at a meeting of the predecessor 
contractor's employees, and required that the contractor keep either a 
copy of the offer or documentation regarding the meeting at which the 
offer was made, which could consist of notations on the attendance 
roster and a copy of any written notice distributed.
    The proposed regulations provided that the successor's obligation 
to extend a right of first refusal applied to all employees employed at 
the end of the contract, including any who began work within 60 days 
before the end of the predecessor contract and thus do not appear on 
the list of employees which Sec. 9.11 requires the predecessor 
contractor to provide at least 60 days before the end of the contract. 
Given that successor contractors commonly hire the predecessor's work 
force without the convenience of such a list, it is not likely that the 
absence of such employees' names from the list would be unduly 
burdensome.
    The proposed regulations at Sec. 9.10 discussed what is a bona fide 
offer of employment. In general, an offer of employment will be 
presumed to be bona fide. Employees need not be offered employment in 
the same job that they were employed in under the predecessor contract, 
provided the employee is qualified for the position offered. Thus an 
employee may be equipped by education, training or experience to 
perform the duties of a position to be filled by the successor 
contractor, even though he or she held a position under the predecessor 
contractor that did not require or utilize such education, training or 
experience. The proposed regulation further provided that an offer of 
employment at a lower level or to a different position may be a basis 
for closely examining whether the offer is bona fide, i.e., based on 
valid business reasons.
    Both SEIU and LIUNA suggested that the final regulations should 
require that the ``express offer of employment'' be made in writing in 
order to avoid disputes regarding whether an offer is properly made. 
Both parties also recommend that the offer be made in a language in 
which the employees are fluent in order to make it meaningful. SEIU 
does not believe this would be a hardship on the employer since the 
employer must have a supervisory employee fluent in the language of the 
employees in order to properly supervise them.
    The regulations have been revised to state that the employer should 
take reasonable efforts to make the employment offer in a language that 
the workers understand. We do not anticipate that this will place 
significant burden on contractors since both the predecessor and 
successor contractor will need to have some mechanism to communicate 
with the workers. This may be accomplished, for example, by having a 
co-worker or other person fluent in the workers' language at the 
meeting to translate or otherwise assist

[[Page 28182]]

employees who are not fluent in English. The Department recognizes that 
there may be a rare case where a contractor may need to hire an 
interpreter or translate a written offer.
    SEIU, while noting that there is nothing in the Executive Order 
that requires a successor contractor to offer employment to the 
employee in the same position that he or she held with the predecessor 
contractor, stated concerns that employers may offer employment in 
lower level positions or different positions in order to discourage 
acceptance of offers of employment. SEIU believes that the regulations 
should go further than to state that where an employee is offered a 
position at a lower level, the basis for doing so should be ``closely 
examined to insure that the offers are bona fide.'' SEIU and LIUNA 
believe that the final regulation should create a presumption that 
offers of employment to a lower or less favorable position are not bona 
fide offers, but that the presumption can be overcome by the employer 
showing a valid business reason for offering that particular employee 
employment at a lower or less favorable position. They state that the 
creation of this presumption will help to protect against contractors 
frustrating the purposes of the Executive Order. Otherwise, according 
to LIUNA, this proposed subsection does not provide sufficient 
protections to employees who may have performed acceptably at higher 
level positions under previous contractors.
    In addition, SEIU believes the final regulations should provide 
that there is a presumption that an employer has not made a good faith 
offer of employment if the employer terminates the employee within the 
first ninety days of employment. The presumption could be overcome by 
the employer by showing a valid business reason, such as a reduction in 
force or unsatisfactory performance by the employee. SEIU expressed the 
view that the use of the term ``good faith offer'' in the Executive 
Order was intended to guard against successor employers frustrating the 
intent of the Executive Order by making an offer, employing the 
individual and then terminating the individual immediately without any 
valid reason for doing so.
    The Department agrees with the concerns expressed by the commenters 
and has revised Sec. 9.10(b) to provide that an offer may be made to a 
position providing lower pay or benefits than the employee held with 
the predecessor if the contractor shows valid business reasons. The 
Department does not believe that it is appropriate to have a 
presumption that an offer is not bona fide where an employee is 
terminated from employment shortly after being hired. Terminations 
which are not for valid reasons would not ordinarily be in the 
employer's interest, due to such concerns as unemployment insurance 
obligations and similar reasons. However, the regulation has been 
revised to state that the Department will closely examine cases, 
including the facts and circumstances of the dismissal, where the 
timing of an employee's termination suggests that the offer of 
employment may not have been bona fide.
Predecessor's Obligation To Provide a List of Employees (9.11)
    The Executive Order requires that, no less than 60 days before the 
completion of the contract, the predecessor contractor provide the 
contracting officer with a certified list of all service employees 
working at the Federal facility during the last month of the contract. 
The list is also required to contain anniversary dates of employment, 
either with the current or predecessor contractor (as appropriate), of 
each service employee. The contracting officer in turn will provide the 
list to the successor contractor, and it will be provided on request to 
employees or their representatives.
    Except for the timing of submission of the list, this requirement 
is the same as the requirement under the SCA at 29 CFR 4.6(l)(2) that 
the predecessor furnish the names and anniversary dates at least ten 
days before contract termination. By providing the names of all service 
employees working on the contract 60 days in advance of termination, as 
required by the Executive Order, the predecessor contractor also 
fulfills its obligation under 29 CFR 4.6(l)(2). Thus the Executive 
Order does not create any new obligation on the predecessor, but simply 
moves forward the date the list must be submitted.
    Because the predecessor contractor cannot know with certainty, 60 
days in advance of termination, who will be performing on the contract 
in the final month, the regulations provide that the predecessor will 
provide the names of all service employees working on the contract at 
the time the list is submitted. The successor in turn must assume the 
employees listed will be working during the final month of the contract 
unless the facts demonstrate otherwise.
    No comments were received on this provision, but language was added 
to clarify that the list is to contain the names of all employees 
working for the contractor at the Federal location.
Notice to Employees (9.12)
    Service employees need to be advised of their right of first 
refusal in the event of contract transition. Various options were 
considered regarding how the employees should be so advised. Notice 
could easily be accomplished by the predecessor contractor, but it has 
no substantive obligations under the Order. The Department also 
considered placing the obligation on the successor contractor, but 
concluded that it would be more efficient to require notification by 
the contracting agency since the predecessor's employees are working 
regularly at the Federal building. Therefore, the proposed regulations 
required that the agency either post a notice or give individual notice 
to the predecessor contractor's employees. A prototype notice was 
included in an Appendix to the proposed regulations.
    SEIU and LIUNA urged the Department to require that the notice also 
be provided by the predecessor contractor. They also suggested that the 
notice be posted both in English and in other languages spoken by the 
employees, if they are not fluent in English.
    It remains the Department's view that the predecessor should have 
no obligation to provide notice. The Executive Order places no 
obligation on the predecessor contractor except providing a list of 
employees. The Department does not consider it appropriate to impose 
unnecessary notice obligations on predecessor contractors. The 
Executive Order clearly places the responsibility upon the successor 
contractor to ``make an express offer of employment'' to each service 
employee. Therefore, the Department continues to believe that notice to 
employees of their right of first refusal should be accomplished by 
placing the responsibility with the contracting agency. The Department 
expects the contracting agency to provide notice in English and in any 
other language that is understandable by a substantial portion of the 
service employees performing work under the predecessor contract. In 
response to comments, the Department expanded and clarified the 
prototype notice in the Appendix.
Enforcement (Subpart B)
    Section 5 of the Executive Order provides that the Secretary of 
Labor is responsible for investigating and obtaining compliance with 
the Executive Order. It further provides that the Secretary has the 
authority to issue

[[Page 28183]]

final orders prescribing appropriate sanctions and remedies, including 
but not limited to, orders requiring employment and payment of wages 
lost.
    The Executive Order also requires that alternative dispute 
mechanisms be utilized to the maximum extent possible in resolving 
enforcement issues. Thus, the thrust of the Executive Order is to keep 
the enforcement processes as simple and timely as possible, given the 
immediacy of both the employees' and the contractor's need for 
resolution.
Role of the Contracting Officer (9.100)
    The enforcement provisions of the regulations seek to provide a 
process that encourages resolution at the earliest possible stage with 
fairness and efficiency. For this reason, the proposed regulations 
provided that complaints alleging violations shall be filed with the 
contracting officer, who will provide the employee and the successor 
contractor with information about the requirements of the Executive 
Order. If this is not sufficient to resolve the matter, the proposed 
regulations provided that the contracting officer will obtain 
statements from the parties of their respective positions and submit a 
report to the Department of Labor.
    While SEIU is not opposed to DOL requiring that contracting 
officers attempt to resolve violations of the Executive Order as a 
first step, SEIU expressed concern that contracting officers not become 
an impediment to effective and quick resolution of disputes. SEIU 
contends the proposed regulations are seriously deficient because they 
permit contracting officers to block enforcement of employee rights by 
simply delaying completion of their responsibilities. SEIU and LIUNA 
suggest that this problem can be alleviated by placing a time limit on 
when the contracting officers must take action and recommend that the 
final regulations in Sec. 9.100(b) provide that the contracting officer 
must perform his or her duties within ten days of receiving a complaint 
from an employee of the predecessor contractor. LIUNA suggests that if 
the matter is not resolved within ten days, the contracting officer 
should have ten additional days to obtain the statements from the 
parties and prepare a report to submit to the Wage and Hour Division. 
SEIU recommends that where a contracting officer has failed to gather 
information and report to Wage and Hour within ten days, an employee 
may go directly to the Wage and Hour Division to file a complaint. SEIU 
also suggests that when the contracting officer files his/her report 
with Wage and Hour, the statements of position submitted by the parties 
should be included.
    The Department agrees with the thrust of these comments and has 
modified the regulations to establish a time frame of 30 days for the 
contracting officer to forward to Wage and Hour any unresolved 
complaints, together with the contracting officer's summary of the 
relevant facts and issues and the statements of the parties. In 
addition, the regulation is revised to permit an employee to file a 
complaint directly with Wage-Hour if the complaint has not been timely 
forwarded to Wage-Hour.
Role of the Department of Labor (9.101, 9.102)
    If the contracting officer cannot resolve the dispute, proposed 
Sec. 9.100(b) provided that the contracting officer will submit a 
report to the Wage and Hour Division. Based on the contracting 
officer's report, Wage and Hour could attempt to resolve the dispute 
through conciliation procedures; however, if that is not successful, 
Wage and Hour would investigate as necessary to determine the facts and 
issue a determination as to whether a violation occurred. The proposed 
regulations also provided that the Administrator has the authority to 
conduct an investigation on his or her own initiative, without a 
complaint.
    SEIU contends the proposed regulations regarding conciliation 
efforts are inadequate as they do not set a time limit on how long the 
conciliation efforts should continue. SEIU believes conciliation 
procedures should not drag on unnecessarily and recommends the final 
regulations place a ten day limitation on conciliations, with a caveat 
that this period can be extended by the mutual consent of the parties. 
LIUNA also favors a ten day limit.
    SEIU and LIUNA suggest that there ought to be a 30-day time limit 
from the date the conciliation effort is over for issuance of a written 
determination by the Administrator. LIUNA also states that if any time 
limits set forth in this section are not met, the complainant should 
have an automatic right to appeal to the next level of the complaint 
procedure and at the same time there should be an automatic employment 
offer to the employee who is the subject of the complaint. According to 
LIUNA, these revisions would ensure that the rights of employees are 
not rendered meaningless by a delay in the complaint procedures.
    The Department is committed to prompt resolution of complaints 
under the Executive Order because employees' jobs and livelihood are at 
issue. Therefore Secs. 9.101 and 9.102 are amended to provide that an 
investigation shall be commenced within 15 days of receipt of the 
contracting officer's report or the complaint unless the parties agree 
that the investigation should be delayed so that conciliation efforts 
can be completed.
    However, the Department believes that setting a 30-day limit from 
the date a conciliation effort is terminated for issuance of a written 
determination by the Administrator is not appropriate. Where the 
conciliation effort is unsuccessful and the Department undertakes an 
investigation, 30 days may not be sufficient to conduct a thorough 
investigation and issue the Administrator's determination. Finally, the 
Department cannot concur with the suggestion that the contractor be 
required to hire an employee if the government fails to meet regulatory 
deadlines. This section, therefore, remains as proposed with minor 
clarification.
    SEIU and LIUNA also suggest that Sec. 9.102(c) should state how an 
aggrieved party may appeal a decision of the Administrator, how the 
request is made, and how long an aggrieved party has to file that 
appeal. Both commenters also state that the last sentence of this 
section should be clarified to make sure that copies of the 
Administrator's determination are given by certified mail to the 
complainant's representative, as well as to the successor contractor 
and the successor contractor's representative. They assert that under 
the proposed regulations, it is unclear whether there is a requirement 
to give copies to the complainant's representative.
    The parties' concern in Sec. 9.102(c) regarding appeal procedures 
are addressed in Sec. 9.103. The Department concurs with the suggestion 
to clarify that copies of the Administrator's decision are to be sent 
to the complainant's representative(s) and the regulations are amended 
accordingly.
Hearing Procedures (9.103-9.107)
    The proposed regulations provided that the Administrator's 
determination becomes a final order of the Secretary unless a request 
for a hearing is filed within 20 days of the date of the determination 
or, where the Administrator determines that relevant facts are not in 
dispute, a petition for review is filed with the Board of Service 
Contract Appeals (BSCA). Section 9.103 provided the procedures and time 
frames for appeal to the BSCA.
    SEIU and LIUNA urge the Department to include clarifying language 
indicating that the Administrator will notify the

[[Page 28184]]

employee representative, if any, of her determination if there is no 
relevant issue of fact. The language of the regulations was intended to 
provide such notice. However, for the sake of clarification, 
Sec. 9.103(b) of the regulations now expressly provides that the 
Administrator will notify the parties and their representatives, if 
any, ``where no relevant facts are in dispute.'' In addition, 
Sec. 9.102(c) is clarified by providing that the notice of 
determination of a violation will be given to the parties and their 
representatives, if any. Finally, Sec. 9.103(a) is clarified to provide 
that ``the Administrator shall advise the parties'' including their 
representatives, that the notice of determination shall become final 
unless a hearing is requested.
    Sections 9.103, 9.106 and 9.107 have been amended to provide for 
review by the Administrative Review Board (ARB). (Effective May 3, 
1996, the Administrative Review Board was established within the 
Department of Labor as a reorganization and consolidation of the 
functions of the former Board of Service Contract Appeals, the Wage 
Appeals Board, and the Office of Administrative Appeals, which prepared 
decisions for the Secretary in all other programs). See Secretary's 
Order 2-96, 61 FR 19,978 (May 3, 1996).
    Consistent with the Executive Order's directive to favor the 
resolution of disputes by efficient and informal alternative dispute 
methods, Sec. 9.104 encourages parties to utilize settlement judges to 
mediate settlement negotiations prior to an Administrative Law Judge 
(ALJ) hearing. The general ALJ regulations, 29 CFR part 18, Sec. 18.9, 
already provide settlement judge procedures, and these procedures have 
been expressly adopted for use under the Executive Order.
    Like the Department's ``whistleblower'' proceedings under 29 CFR 
part 24, it is anticipated that complainants may often appear pro se. 
Therefore Sec. 9.105(f)(1) has been amended to provide that the ALJ's 
Rules of Evidence shall not apply. See 29 CFR 24.5(e).
    If a complaint cannot be resolved informally through the 
conciliation or the settlement judge process, then Sec. 9.105 provides 
procedures for a hearing before an ALJ. In most cases it is envisioned 
that the parties to the proceeding will be the contractor and the 
complainant (if any). However, the Wage-Hour Administrator may appear 
in any proceeding as a party or as amicus curiae, and will appear as a 
party in all cases in which ineligibility sanctions have been sought. 
The contracting agency may also appear as amicus curiae.
    As provided in Sec. 9.106, the ALJ shall issue a decision within 60 
days after the proceeding at which evidence was submitted. If the ALJ 
determines that a violation has occurred, the ALJ may order appropriate 
relief (Sec. 9.106(c)). Section 9.107 provides the procedures for 
appealing an ALJ decision to the ARB.
    The proposed regulations provided for assessment of costs and 
stated in the preamble that the Department was considering providing 
for payment of attorney fees or costs where the complainant prevails.
    SEIU urged that Secs. 9.106(c) and 9.107(f) of the final 
regulations be amended to empower the ALJ and the ARB to award attorney 
fees to a prevailing complaining employee. The SEIU further suggests 
that an award of attorney fees should be mandatory where the employee 
prevails.
    LIUNA also commented that the ALJ should be expressly permitted to 
assess attorney fees, since it would be a permissible interpretation of 
the Executive Order's requirements and a reasonable means to enforce 
the Executive Order. LIUNA further states that Sec. 9.107(f) should 
contain a similar provision to allow an employee to pursue his or her 
appeal rights.
    Russell Willis commented that express statutory authority is 
necessary to provide for payment of attorney fees and costs.
    The Supreme Court has held that under the American Rule, which 
governs the award of attorney's fees in the United States, the 
prevailing party may not recover attorney's fees as costs or otherwise 
absent statute or enforceable contract. See Alyeska Pipeline Service 
Co. v. The Wilderness Society, 421 U.S. 240, 245-247 (1975). Because 
neither the Executive Order nor any statutes provide for the award of 
attorney fees, there is an insufficient legal basis to provide for 
attorney fees by regulation in disputes arising under the Executive 
Order. Sections 9.106(c) and 9.107(f) have been clarified by expressly 
excluding attorney fees from an assessment of costs by the 
Administrative Law Judge or the Administrative Review Board.
    Finally, the legislative history of the Equal Access to Justice Act 
(EAJA), 5 U.S.C. 504, indicates that the Act excludes from coverage 
those hearings which are not required by an underlying statute. 
Similarly, the EAJA regulations promulgated by the Department of Labor 
exclude from coverage those proceedings which are established by 
regulation, but are not required by the governing statute. See 29 CFR 
part 16. Neither the underlying statute, nor Executive Order 12933, 
require hearings. Accordingly, in any proceeding conducted pursuant to 
the provisions of Secs. 9.105-9.107, the Administrative Review Board 
shall have no power or authority to award attorney fees and/or other 
litigation expenses pursuant to the Equal Access to Justice Act. 
Appropriate language has been included in the regulations.
Remedies/Ineligibility Sanction (9.108-9.109)
    Section 5 of the Executive Order provides that the Secretary has 
the authority to prescribe appropriate remedies, including orders 
requiring employment and payment of wages lost. Proposed Sec. 9.108 
also set forth withholding procedures to obtain wages due, and a 
provision for suspension of payments if the predecessor fails to 
provide the contracting officer with a list of employees on the 
contract. Furthermore, where a contractor has failed to comply with any 
order of the Secretary or has committed willful violations of the 
Executive Order or its regulations, the contractor and its responsible 
officers, and any firm in which the contractor has a substantial 
interest, shall be ineligible to be awarded any contract or subcontract 
of the United States for a period of up to three years. Since debarment 
is only imposed for the most serious of violations--i.e., violations 
that are willful or failure to comply with an order of the Secretary, 
which in itself is a willful violation--the proposed regulations at 
Sec. 9.109 prescribed a three-year period for debarment in all cases.
    SEIU stated that the ineligibility sanctions should be mandatory 
whenever there are violations unless the contractor can show that it 
acted in good faith; LIUNA suggested that the regulation specify that 
all violations are presumed to be willful.
    The plain language of the Executive Order grants the Secretary the 
discretion to impose debarment where a contractor fails to comply with 
any order of the Secretary or has committed a willful violation. Thus, 
the standard proposed by the commenters is not consistent with that 
provided by the Executive Order and is not adopted in the final rule.
Definitions (9.200)
    The regulations include definitions of several important terms. The 
definition of ``service employee'' is based on the Service Contract 
Act, as the Executive Order provides. Coverage under the

[[Page 28185]]

Executive Order, however, applies only to those service employees 
performing recurring building services, and not to other employees on 
contracts subject to SCA.
    LIUNA suggested that the term ``contract'' and ``building service 
contract'' should include ``subcontracts.''
    Because the language of the Executive Order does not specifically 
refer to subcontracts, and because the requirements are not practical 
as applied to subcontracts, the regulations contain no ``flow-down'' 
requirements for subcontractors. No amendment is made to this 
provision.

Dates of Applicability

    The clauses contained in Sec. 9.6 must be included in all contracts 
awarded after the effective date of these regulations. In addition, the 
regulations shall apply as of the effective date to all contracts 
awarded prior to the effective date which contain the clauses set forth 
in section 4 of the Executive Order (Sec. 9.6 (a), (b), (c), and (e) of 
the regulations), and those contracts should be amended where 
practicable to incorporate the additional clauses set forth in the 
regulations (Sec. 9.6 (d), (f), (g), and (h)).
    In order to provide successor contractors with the convenience of a 
list of names from the predecessor contractor earlier than the SCA 
requirement of 10 days before completion of the contract, all existing 
contracts (whether or not they contain the clauses of the Executive 
Order) should be amended to include the clause in Sec. 9.6(c).

Executive Order 12866/Sec. 202 of the Unfunded Mandates Reform Act of 
1995/Executive Order 12875/Small Business Regulatory Enforcement 
Fairness Act

    Because this rule provides the initial implementing regulations for 
an Executive Order issued by the President, it is being treated as a 
``significant regulatory action'' within the meaning of Executive Order 
12866. However, no economic analysis is required because the rule will 
not have a significant economic impact. For the same reason, the rule 
is not a major rule within the meaning of the Small Business Regulatory 
Enforcement Fairness Act. The total value of Federal contracts covered 
by Executive Order 12933 is less than $100 million, and only a small 
fraction of that total may involve terminations of predecessor 
employees. General Services Administration data for Fiscal Year 1994 
indicate that no more than 88 new building service contract actions 
were taken, with a value of $39.2 million. Since only a very small 
percentage of that dollar value involves terminations, the economic 
impact of the Executive Order is minimal.
    In addition, the rule does not require a Sec. 202 statement under 
the Unfunded Mandates Reform Act of 1995. Although State, local, and 
tribal governments are not precluded from receiving Federal contracts 
to provide building services at public buildings, the Department is not 
aware of any governmental entities that are performing public building 
service contracts within the purview of this rule. Thus this rule would 
not result in a mandate upon a State, local, or tribal government for 
purposes of Executive Order 12875. The Executive Order simply requires 
contractors to the Federal Government to follow the practice which is 
currently followed in most cases in any event as a good business 
practice, and will improve Government efficiency and economy in those 
few cases where the practice would not otherwise have been followed by 
decreasing or eliminating the loss of productivity that may occur when 
experienced employees are terminated.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (RFA) requires agencies to 
prepare regulatory flexibility analyses, and to develop alternatives, 
whenever possible, in drafting regulations that will have a 
``significant economic impact on a substantial number of small 
entities.'' The Department has determined that such an analysis is not 
required for this rulemaking. This conclusion is based on the fact that 
the Executive Order mandates a practice which is already followed in 
almost all cases. Accordingly, this regulation will not have a 
significant economic impact on a substantial number of small entities 
within the meaning of the RFA. The Administrator has certified to the 
Chief Counsel for Advocacy of the Small Business Administration to this 
effect. Therefore, no regulatory flexibility analysis is required.

Document Preparation

    This document was prepared under the direction and control of John 
R. Fraser, Acting Administrator, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor.

List of Subjects in 29 CFR Part 9

    Employment, Federal buildings and facilities, Government contracts, 
Labor, Law enforcement.

    Signed at Washington, DC, on this 16th day of May, 1997.
John R. Fraser,
Acting Administrator, Wage and Hour Division.

    Accordingly, for the reasons set out in the preamble, 29 CFR part 9 
is added as follows:

PART 9--NONDISPLACEMENT OF QUALIFIED WORKERS UNDER CERTAIN 
CONTRACTS

Subpart A--How is Executive Order 12933 Applied?

Covered Contracts Generally

Sec.
9.1  What is the purpose of Executive Order 12933?
9.2  Which contracts are covered by Executive Order 12933?
9.3  What is a ``building service contract?''
9.4  What is a ``public building?''
9.5  Which contracts are not covered by Executive Order 12933?

Contract Clauses

9.6  What contract clauses must be included in covered contracts?

Contractor Obligations

9.7  May a contractor employ persons other than the predecessor 
contractor's employees?
9.8  Must the successor contractor offer a right of first refusal to 
all employees of the predecessor contractor?
9.9  In what manner must the successor contractor offer employment?
9.10  What constitutes a bona fide offer of employment?
9.11  What are the obligations of the predecessor contractor?

Notice to Employees

9.12  How will employees learn of their rights?

Subpart B--What Enforcement Mechanisms does Executive Order 12933 
Provide?

Complaint Procedures

9.100  What may employees do if they believe that their rights under 
the Executive Order have been violated?
9.101  What action will the Wage and Hour Division take to try to 
resolve the complaint?
9.102  How are complaints resolved if conciliation is unsuccessful?
9.103  How are decisions of the Administrator appealed?

Administrative Law Judge Procedures

9.104  How may cases be settled without formal hearing?
9.105  What procedures are followed if a complaint cannot be 
resolved through conciliation or settlement agreement?
9.106  What rules apply to the decision of the administrative law 
judge?

[[Page 28186]]

Appeal Procedures

9.107  How may an administrative law judge's decision or the 
Administrator's determination be appealed?

Enforcement Remedies

9.108  What are the consequences to a contractor of not complying 
with the Executive Order?
9.109  Under what circumstances will ineligibility sanctions be 
imposed?

Subpart C--Definitions

9.200  Definitions

Appendix to Part 9--Notice to Building Service Contract Employees

    Authority: Secs. 4-6, Executive Order 12933; 5 U.S.C. 301.

Subpart A--How is Executive Order 12933 Applied?

Covered Contracts Generally


Sec. 9.1  What is the purpose of Executive Order 12933?

    The Government's procurement interests in both economy and 
efficiency are furthered when a successor contractor carries over an 
existing work force. A carryover work force minimizes disruption in the 
delivery of services during a period of transition and provides the 
Government the benefit of an experienced and trained work force. 
Executive Order 12933 therefore generally requires that successor 
contractors performing building service contracts for public buildings 
offer a right of first refusal to employment under the contract to 
those employees under the predecessor contract whose employment will be 
terminated as a result of the award of the successor contract.


Sec. 9.2  Which contracts are covered by Executive Order 12933?

    (a) The Executive Order and these rules apply to ``building service 
contracts'' for ``public buildings'' where the contract is entered into 
by the United States in an amount equal to or greater than the 
simplified acquisition threshold of $100,000, as set forth in section 
4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 
403(11)).
    (b)(1) Except as provided in paragraph (b)(2) of this section, a 
contract which includes a requirement for recurring building services 
is subject to the Executive Order and these regulations even if the 
contract also contains other non-covered services or non-service 
requirements, such as construction or supplies, and even if the 
contract is not subject to the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 351 et seq. However, the requirements of the Executive Order 
apply only to the building services portion of the contract, and only 
to those buildings for which services were provided under a predecessor 
contract.
    (2) The requirements of the Executive Order do not apply to 
building services which are only incidental to a contract for another 
purpose, such as incidental maintenance under a contract to operate a 
day-care center.
    (i) Building service requirements will not be considered 
incidental, and therefore will be subject to the Executive Order, where
    (A) the contract contains specific requirements for a substantial 
amount of building services or it is ascertainable that a substantial 
amount of building services will be necessary to the performance of the 
contract (the word ``substantial'' relates to the type and quantity of 
building services to be performed and not merely to the total value of 
such work, whether in absolute dollars or cost percentages as compared 
to the total value of the contract); and
    (B) the building services work is physically or functionally 
separate from, and as a practical matter is capable of being performed 
on a segregated basis from the other work called for by the contract.
    (ii) Building services performed on a building being leased to the 
Government pursuant to a lease-purchase contract are considered 
incidental and not covered unless the services are being performed 
under a contract directly with the Government.


Sec. 9.3  What is a ``building service contract?''

    (a) A building service contract is a contract for recurring 
services related to the maintenance of a public building. Recurring 
services are services which are required to be performed regularly or 
periodically throughout the course of a contract, and throughout the 
course of the succeeding or follow-on contract(s) at one or more of the 
same buildings. Examples of building services contracts include, but 
are not limited to, contracts for the recurring provision of custodial 
or janitorial services; window washing; laundry; food services; guard 
or other protective services; landscaping and groundskeeping services; 
and inspection, maintenance, and repair of fixed equipment such as 
elevators, air conditioning, and heating systems.
    (b)(1) Contracts which provide maintenance services only on a non-
recurring basis are not ``building service contracts'' within the 
meaning of the Executive Order and are not subject to its provisions. 
For example, a contract to perform servicing of fixed equipment once a 
year, or to mulch a garden on a one-time or annual basis, is a non-
recurring maintenance contract that is not covered by the Executive 
Order.
    (2) Contracts for the provision of services which may be performed 
in a public building but are not ``building service contracts'' as 
defined in paragraph (a) of this section are not covered by the 
Executive Order and these rules. For example, a contract for day care 
services in a Federal office building would not be subject to the 
Executive Order.


Sec. 9.4  What is a ``public building?''

    (a) A public building is any building owned by the United States 
which is generally suitable for office or storage space or both for the 
use of one or more Federal agencies or mixed ownership corporations, 
together with its grounds, approaches, and appurtenances. Public 
buildings shall include:
    (1) Federal office buildings;
    (2) Customhouses;
    (3) Courthouses;
    (4) Border inspection facilities;
    (5) Warehouses;
    (6) Records centers;
    (7) Appraiser stores;
    (8) Relocation facilities; and
    (9) Similar Federal facilities.
    (b)(1) Public buildings do not include any building on the public 
domain. The public domain includes only: those public lands owned by 
the United States and administered by the Department of Interior, 
Bureau of Land Management; and the National Forest System administered 
by the Department of Agriculture, U.S. Forest Service. The public 
domain does not include Federal buildings, such as office buildings in 
cities or towns, which are occupied by the Bureau of Land Management or 
U.S. Forest Service where such buildings are not on lands administered 
by those agencies.
    (2) Also not covered are any buildings:
    (i) On properties of the United States in foreign countries;
    (ii) On Native American and Native Eskimo properties held in trust 
by the United States;
    (iii) On lands used in connection with Federal programs for 
agricultural, recreational, and conservation purposes, including 
research in connection therewith;
    (iv) On or used in connection with river, harbor, flood control, 
reclamation, or power projects; or for chemical manufacturing or 
development projects; or for nuclear production, research, or 
development projects;
    (v) On or used in connection with housing and residential projects;
    (vi) On properties of the United States Postal Service;

[[Page 28187]]

    (vii) On military installations (including any fort, camp, post, 
naval training station, airfield, proving ground, military supply 
depot, military school, or any similar facility of the Department of 
Defense, but not including the Pentagon);
    (viii) On installations of the National Aeronautic and Space 
Administration, except regular office buildings; and
    (ix) On Department of Veterans Affairs installations used for 
hospital or domiciliary purposes.
    (3) Buildings leased to the Government are not public buildings 
unless the building is leased pursuant to a lease-purchase contract.


Sec. 9.5  Which contracts are not covered by Executive Order 12933?

    (a) A contract is not covered by the Executive Order unless it 
requires the provision of recurring building services, and unless the 
contract succeeds a contract for similar work at one or more of the 
same public building(s).
    (b) The Executive Order expressly excludes:
    (1) Contracts for services under the simplified acquisition 
threshold ($100,000);
    (2) Contracts for commodities or services produced or provided by 
the blind or severely handicapped, awarded pursuant to the Javits-
Wagner-O'Day Act, 41 U.S.C. 46-48a, and any future enacted law creating 
an employment preference for some group of workers under building 
service contracts;
    (3) Guard, elevator operator, messenger, or custodial services 
provided to the Government under contracts with sheltered workshops 
employing the severely handicapped as outlined in the Edgar Amendment, 
section 505 of the Treasury, Postal Services and General Government 
Appropriations Act, 1995, Pub. L.103-329;
    (4) Agreements for vending facilities operated by the blind, 
entered into under the preference provisions of the Randolph-Sheppard 
Act, 20 U.S.C. 107; and
    (5)(i) As explained in paragraph (b)(5) (ii) of this section, 
services where the contractor's employees perform work at the public 
building and at other locations under contracts not subject to the 
Executive Order and these regulations, provided that the employees are 
not deployed in a manner that is designed to avoid the purposes of the 
Order.
    (ii) The successor contractor is not required to offer a right of 
first refusal for employment where a majority of the successor 
contractor's employees performing the particular service under the 
contract work at the public building and at other locations under 
contracts not subject to the Executive Order and these regulations. 
Examples include, but are not limited to, pest control or trash removal 
services where the employees periodically visit various Government and 
non-Government sites, and make service calls to repair equipment at 
various Government and non-Government buildings. This exclusion does 
not apply, however, where the service employees' work on non-covered 
contracts is not performed as a part of the same job as their work on 
the Federal contract in question, or where they separately apply for 
work on the non-Federal contracts. This exclusion also does not apply 
where the employees are deployed in a manner that is designed to avoid 
the purposes of the Executive Order. In making this determination, all 
the facts and circumstances are examined, including particularly the 
manner in which the predecessor contractor deployed its workforce to 
perform the services, the manner in which the work force is typically 
deployed to perform such services, and the manner in which the contract 
is structured.

Contract Clauses


Sec. 9.6  What contract clauses must be included in covered contracts?

    The clauses set forth in paragraphs (a) through (h) of this section 
shall be included in full by the contracting agency in every 
solicitation and contract entered into by the United States equal to or 
in excess of the simplified acquisition threshold of $100,000, where 
the contract requires the provision of building services and succeeds a 
contract for the performance of similar services at one or more of the 
same public building(s), except that such clauses need not be included 
in any contract which is excluded from coverage of the Executive Order 
pursuant to paragraph (b) (2), (3) or (4) of Sec. 9.5 of this part.
    (a) Consistent with the efficient performance of this contract, the 
contractor shall, except as otherwise provided herein, in good faith 
offer those employees (other than managerial and supervisory employees) 
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 employees were hired, a right of first refusal to 
employment under the contract in positions for which the employees are 
qualified. The contractor shall determine the number of 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. Except as provided in 
paragraph (b) of this section, there shall be no employment opening 
under the contract, and the contractor shall not offer employment under 
the contract, to any person prior to having complied fully with this 
obligation. The contractor shall make an express offer of employment to 
each employee as provided herein and shall state the time within which 
the employee must accept such offer, but in no case shall the period 
within which the employee must accept such offer be less than 10 days.
    (b) Notwithstanding the contractor's obligation under paragraph (a) 
of this section, the contractor:
    (1) May employ on the contract any employee who has worked for the 
contractor for at least 3 months immediately preceding the commencement 
of this contract and who would otherwise face lay-off or discharge, and
    (2) Is not required to offer a right of first refusal to any 
employee(s) of the predecessor contractor who are not service employees 
within the meaning of the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 357(b), and
    (3) Is not required to offer a right of first refusal to any 
employee(s) of the predecessor contractor who the contractor reasonably 
believes, based on the particular employee's past performance, has 
failed to perform suitably on the job.
    (c) In accordance with paragraph (n) of the clause of this contract 
entitled ``Service Contract Act of 1965, as Amended'' and 29 CFR 
4.6(l)(2), the contractor shall, no less than 60 days before completion 
of this contract, furnish the Contracting Officer with a certified list 
of the names of all service employees working at the Federal facility 
at the time the list is submitted. The list shall also contain 
anniversary dates of employment on the contract either with the current 
or predecessor contractors of each service employee, as appropriate. 
The Contracting Officer will provide the list to the successor 
contractor and the list shall be provided on request to employees or 
their representatives. Compliance with this paragraph shall constitute 
compliance with paragraph (n) of the clause entitled ``Service Contract 
Act of 1965, as Amended'' and 29 CFR 4.6(l)(2).

(Approved by the Office of Management and Budget under control 
numbers 1215-0150 and 1215-0190)


[[Page 28188]]


    (d) The requirements of this clause do not apply to services where 
a majority of the contractor's employees performing the particular 
services under the contract work at the public building and at other 
locations under contracts not subject to Executive Order 12933, 
provided that the employees are not deployed in a manner that is 
designed to avoid the purposes of the Executive Order.
    (e) If it is determined, pursuant to regulations issued by the 
Secretary of Labor, that the contractor is 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, as provided in Executive Order No. 12933, the 
regulations of the Secretary of Labor at 29 CFR part 9, and relevant 
orders of the Secretary of Labor, or as otherwise provided by law.
    (f) The Contracting Officer shall 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 the prime contractor failed to comply with the terms 
of this clause, and that wages lost as a result of the violations are 
due to employees or that other monetary relief is appropriate.
    (g) The contractor shall cooperate in any investigation by the 
contracting agency or the Department of Labor into possible violations 
of the provisions of this clause and shall make records requested by 
such official(s) available for inspection, copying, or transcription 
upon request.
    (h) Disputes concerning the requirements of this clause shall not 
be subject to the general disputes clause 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 employees under the contract or its predecessor 
contract.

Contractor Obligations


Sec. 9.7  May a contractor employ persons other than the predecessor 
contractor's employees?

    (a) There shall be no employment openings under a contract subject 
to the Executive Order and the successor contractor shall not offer 
employment under the contract until it fully complies with its 
obligation to offer a right of first refusal, except as provided under 
paragraph (b) of this section and Sec. 9.8.
    (b) A successor contractor may employ on the contract any employee 
who the contractor demonstrates has worked for that contractor for at 
least 3 months immediately preceding the commencement of the contract 
and would face lay-off or discharge if not employed on the subject 
contract.


Sec. 9.8  Must the successor contractor offer a right of first refusal 
to all employees of the predecessor contractor?

    (a)(1) Except as provided in this section, a successor contractor 
shall offer employment under the contract (i.e., a ``right of first 
refusal'') to those employees of the predecessor contractor who, in the 
final month of the contract, provided recurring building services 
similar to the services to be performed at one or more of the same 
public building(s) under the successor contract, and whose employment 
will be terminated as a result of the award of the successor contract 
or expiration of the contract under which the employees were hired.
    (2) Unless the predecessor contractor (either directly or through 
the contracting agency) or the individual employee in question provides 
evidence to the contrary, the successor contractor must presume that 
all service employees of the predecessor contractor who are working at 
the same public building during the final month of contract performance 
will be terminated when the contract ends.
    (b)(1) A successor contractor is not required to offer a right of 
first refusal to any managerial or supervisory employee or to any 
employee of the predecessor contractor who is not a service employee 
within the meaning of the McNamara-O'Hara Service Contract Act, 41 
U.S.C. 357(b). ``Managerial and supervisory'' employees and employees 
who are not ``service employees'' are those persons engaged in the 
performance of services under the contract who are employed in a bona 
fide executive, administrative, or professional capacity, as those 
terms are defined in the Fair Labor Standards Act regulations, 29 CFR 
part 541.
    (2) The successor contractor must presume that all employees 
working under the predecessor contract in the last month of performance 
performed suitable work on the contract. However, a successor 
contractor is not required to offer a right of first refusal to an 
employee of the predecessor contractor if the successor contractor is 
able to demonstrate its reasonable belief that the employee in fact 
failed to perform suitably on the predecessor contract--for example, 
through evidence of disciplinary action taken for poor performance or 
evidence directly from the contracting agency that the particular 
employee did not perform suitably. The successor contractor must 
demonstrate that its belief that an employee has failed to perform 
suitably on the predecessor contract is reasonable and based upon 
credible information provided by a knowledgeable source such as the 
predecessor contractor, the employee's supervisor, or the contracting 
agency. Information regarding the general performance of the 
predecessor contractor is not sufficient.
    (3) The successor contractor is not required to offer a right of 
first refusal for employment where a majority of the contractor's 
employees performing the service in question under the contract work 
both at the public building and at other locations under contracts not 
subject to the Executive Order and these regulations. See 
Sec. 9.5(b)(5)(ii) of this part.
    (c) The successor contractor shall determine the number of 
employees necessary for the efficient performance of the contract. The 
contractor may, for bona fide staffing or work assignment reasons, 
employ fewer employees than the predecessor contractor. Thus, the 
successor contractor need not extend the right of first refusal to all 
employees of the predecessor contractor, but must offer employment only 
to the number of eligible employees it believes necessary to meet its 
anticipated staffing pattern, except that:
    (1) Where a successor contractor offers a right of first refusal to 
fewer employees than were employed by the predecessor contractor, its 
obligation to offer employment under the contract to the predecessor's 
employees continues for three months after commencement of the contract 
to fill vacancies created by employee termination, either voluntarily 
or for cause. For example, a contractor with eighteen (18) employment 
openings and a list of twenty (20) predecessor contractor's employees 
must continue to offer a right of first refusal to individuals on the 
list until eighteen (18) of the employees accept the contractor's 
employment offer, or until all of the employees have either accepted or 
refused the job offer. Further, if an employee quits or is terminated 
within three months of contract commencement and the contractor 
determines that it must hire an additional employee to sufficiently 
perform the contract requirements, the contractor must first offer a 
right of first

[[Page 28189]]

refusal to an eligible employee of the predecessor contractor and must 
continue to offer a right of first refusal to the predecessor's 
employees until one of the employees accepts the contractor's 
employment offer, or, except as otherwise provided in this Section, 
until all of the employees have refused a job offer.
    (2) If a successor contractor raises its staffing level within 
three months of the commencement of contract performance, its 
obligation to offer employment under the contract to eligible employees 
continues until the higher staffing level is reached. For example, if a 
contractor determines two months into the contract period that it must 
hire an additional ten (10) employees to sufficiently perform the 
contract requirements, the contractor must first offer a right of first 
refusal to ten (10) eligible employees of the predecessor contractor 
(or to all of the employees of the predecessor contractor who have not 
previously been offered a right of first refusal if less than ten 
remain), and must continue to offer a right of first refusal to the 
predecessor's employees until ten (10) of the employees accept the 
contractor's employment offer, or, except as otherwise provided in this 
Section, until all of the employees have refused a job offer.


Sec. 9.9  In what manner must the successor contractor offer 
employment?

    (a) Except as provided in Sec. 9.7 and 9.8 of this part, a 
successor contractor must make a bona-fide express offer of employment 
to each of the predecessor contractor's employees before offering 
employment on the contract to any other person. The successor 
contractor must offer employment to each employee, either individually 
in writing or orally at a meeting attended by a group of the 
predecessor contractor's employees. In order to ensure that the offer 
is effectively communicated, the successor contractor should take 
reasonable efforts to make the offer in a language that each worker 
understands, for example, by having a co-worker or other person fluent 
in the worker's language at the meeting to translate or otherwise 
assist an employee who is not fluent in English.
    (b) For a period of one year, the contractor must maintain 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 employee meeting(s) at which the offers were 
extended, a summary of each meeting and a copy of any written notice 
which may have been distributed, and the names of the predecessor 
contractor's employees to whom an offer was made. The contractor must 
provide copies of such documentation upon request of any authorized 
representative of the contracting agency or Department of Labor.

(Approved by the Office of Management and Budget under control 
number 1215-0190)

    (c) The contractor shall state the time within which an employee 
must accept an employment offer, but in no case may the period in which 
the employee has to accept the offer be less than 10 days.
    (d) The successor contractor's obligation to offer a right of first 
refusal exists even if the successor contractor has not been provided a 
list of the predecessor contractor's employees, or the list does not 
contain the names of all persons employed during the final month of 
contract performance.


Sec. 9.10  What constitutes a bona fide offer of employment?

    (a) As a general matter, an offer of employment will be presumed to 
be a bona fide offer of employment. An offer of employment need not be 
to a position similar to that which the employee previously held, but 
the employee must be qualified for the position. Information regarding 
an employee's qualifications shall ordinarily come directly from the 
employee. If a question arises concerning an employee's qualifications, 
that question shall be decided based upon the employee's education and 
employment history with particular emphasis on the employee's 
experience on the predecessor contract.
    (b) An offer of employment to a position providing lower pay or 
benefits than the employee held with the predecessor contractor will be 
considered bona fide if the contractor shows valid business reasons 
(not related to a desire that the employee refuse the offer, or that 
other employees be hired). Where the timing of an employee's 
termination suggests that the offer of employment may not have been 
bona fide, the facts and circumstances of the offer and the termination 
will be closely examined to be sure the offer was bona fide.


Sec. 9.11  What are the obligations of the predecessor contractor?

    (a) Not less than 60 days before completion of its contract, the 
predecessor contractor must furnish the contracting officer with a 
certified list of the names of all service employees working for the 
contractor at the Federal facility at the time the list is submitted, 
together with their anniversary dates of employment. The contracting 
officer in turn shall provide the list to the successor contractor and, 
if requested, to employees of the predecessor contractor or their 
representatives.
    (b) Unless the predecessor contractor (either directly or through 
the contracting agency) or the individual employee in question provides 
evidence to the contrary, the successor contractor must presume that 
all service employees of the predecessor contractor who are working at 
the same public building during the final month of contract performance 
will be terminated when the contract ends.

(Approved by the Office of Management and Budget under control 
numbers 1215-0150 and 1215-0190)

Notice to Employees


Sec. 9.12  How will employees learn of their rights?

    Where the successor contract is a contract subject to the Executive 
Order and these regulations, the contracting officer (or designee) will 
provide written notice to service employees of the predecessor 
contractor who are engaged in building services of their possible right 
to an offer of employment. Such notice may either be posted in a 
conspicuous place at the worksite or may be delivered to the employees 
individually. Contracting officers may either use the notice set forth 
in Appendix A to this part or another form with the same information.

Subpart B--What Enforcement Mechanisms does Executive Order 12933 
Provide?

Complaint Procedures


Sec. 9.100  What may employees do if they believe that their rights 
under the Executive Order have been violated?

    (a) Any employee of the predecessor contractor who believes he or 
she was not offered employment by the successor contractor as required 
by the Executive Order and these regulations may file a complaint with 
the contracting officer of the appropriate Federal agency.
    (b) Upon receipt of a complaint, the contracting officer (or 
designee) shall provide information to the employee(s) and the 
successor contractor about their rights and responsibilities under the 
Executive Order. If the matter is not resolved through such actions, 
the contracting officer shall, within 30 days from receipt of the 
complaint, obtain statements of the positions of the parties and 
forward the complaint and statements, together with a summary of the 
issues and any relevant facts known to the contracting officer, to the 
nearest District Office of the Wage and Hour

[[Page 28190]]

Division, Employment Standards Administration, U.S. Department of 
Labor, with copies to the contractor and the complaining employee(s).
    (c) If the contracting officer has not forwarded the complaint to 
the Wage and Hour Division within 30 days of receipt of the complaint, 
as required by paragraph (b) of this section, the complainant may 
refile the complaint directly with the nearest District Office of the 
Wage and Hour Division.


Sec. 9.101  What action will the Wage and Hour Division take to try to 
resolve the complaint?

    After obtaining the necessary information from the contracting 
officer regarding the alleged violations, the Wage and Hour Division 
may promptly contact the successor contractor and attempt, through 
conciliation procedures, to obtain a resolution to the matter which is 
satisfactory to both the complainant(s) and the successor contractor 
and consistent with the requirements of the Executive Order and these 
regulations. The Wage and Hour Division will commence an investigation 
in accordance with Sec. 9.102 of this part if the dispute has not been 
satisfactorily resolved within 15 days of receipt of the contracting 
officer's report or the complaint, unless the successor contractor and 
the complainant(s) agree to a delay in the commencement of the 
investigation.


Sec. 9.102  How are complaints resolved if conciliation is 
unsuccessful?

    (a) Upon receipt of a contracting officer's report or a complaint 
filed in accordance with Sec. 9.100(c) of this part, the Wage and Hour 
Division, U.S. Department of Labor, will investigate as necessary to 
gather sufficient data concerning such case unless the dispute has been 
resolved through conciliation between the parties. Such an 
investigation will be commenced within 15 days of receipt of the 
contracting officer's report or the complaint unless conciliation 
efforts are still underway and the complainant(s) and the successor 
contractor have agreed to a delay in the investigation so that 
conciliation efforts may be completed. The Administrator may also 
initiate an investigation at any time on his or her own initiative. As 
part of the investigation, the Administrator may inspect the records of 
the predecessor and successor contractors (and make copies thereof), 
may question the predecessor and successor contractors and any 
employees of these contractors, and may require the production of any 
documentary or other evidence deemed necessary to determine whether a 
violation of the Executive Order (including conduct warranting 
imposition of ineligibility sanctions pursuant to Sec. 9.109 of this 
part) has been committed.
    (b) The contractor and the predecessor contractor shall cooperate 
in any investigation conducted pursuant to this subpart, and shall not 
interfere with the investigation or intimidate, blacklist, discharge, 
or in any other manner discriminate against any person because such 
person has cooperated in an investigation or proceeding under this 
subpart or has attempted to exercise any rights afforded under this 
part.
    (c) Upon completion of the investigation, the Administrator shall 
issue a written determination of whether a violation has occurred which 
shall contain a statement of findings and conclusions. A determination 
that a violation occurred shall address appropriate relief and the 
issue of ineligibility sanctions where appropriate. Notice of the 
determination shall be given by certified mail to the complainant (if 
any) and his/her representatives (if any), and to the successor 
contractor and their representatives (if any).
    (d) The Administrator may conduct a new investigation or issue a 
new determination if the Administrator concludes circumstances warrant, 
such as where the proceedings before an Administrative Law Judge reveal 
that there may have been violations with respect to other employees of 
the predecessor contractor, where imposition of ineligibility sanctions 
is appropriate, or where the contractor has failed to comply with an 
order of the Secretary.


Sec. 9.103  How are decisions of the Administrator appealed?

    (a) Except as provided in paragraph (b) of this section, the 
determination of the Administrator shall advise the parties (ordinarily 
the complainant (if any), the successor contractor, and their 
representatives (if any)), that the notice of determination shall 
become the final order of the Secretary and shall not be appealable in 
any administrative or judicial proceeding unless, within 20 days of the 
date of the determination of the Administrator, the Chief 
Administrative Law Judge receives a request for a hearing. Any 
aggrieved party may file a request for a hearing. The request for a 
hearing shall be accompanied by a copy of the Administrator's 
determination and may be filed by U.S. mail, facsimile (FAX), telegram, 
hand delivery, or next-day delivery service. At the same time, a copy 
of any request for a hearing shall be sent to the complainant(s) or 
successor contractor, and their representatives, if any, as 
appropriate; the Administrator of the Wage and Hour Division; and the 
Associate Solicitor, Division of Fair Labor Standards, U.S. Department 
of Labor, Washington, DC 20210. The Administrator's failure or refusal 
to seek ineligibility sanctions shall not be appealable.
    (b) If the Administrator concludes that no relevant facts are in 
dispute, the parties and their representatives, if any, will be so 
advised and will be further advised that the determination shall become 
the final order of the Secretary and shall not be appealable in any 
administrative or judicial proceeding unless, within 20 days of the 
date of the determination of the Administrator, a petition for review 
is filed with the Administrative Review Board pursuant to Sec. 9.107 of 
this part. The determination will further advise that if an aggrieved 
party disagrees with the factual findings or believes there are 
relevant facts in dispute, the aggrieved party may advise the 
Administrator of the disputed facts and request a hearing by letter, 
which must be received within 20 days of the date of the determination. 
The Administrator will either refer the request for a hearing to the 
Chief Administrative Law Judge, or notify the parties and their 
representatives, if any, of the Administrator's determination that 
there is no relevant issue of fact and that a petition for review may 
be filed with the Administrative Review Board within 20 days of the 
date of the notice, in accordance with the procedures at Sec. 9.107 of 
this part.
    (c) If any party desires review of the determination of the 
Administrator, including judicial review, a request for an 
administrative law judge hearing (or petition for review by the 
Administrative Review Board) must first be filed in accordance with 
paragraph (a) (or (b)) of this section. If a timely request for hearing 
(or petition for review) is filed, the determination of the 
Administrator shall be inoperative unless and until the administrative 
law judge or the Administrative Review Board issues an order affirming 
the determination.

Administrative Law Judge Procedures


Sec. 9.104  How may cases be settled without formal hearing?

    (a) In accordance with the Executive Order's directive to favor the 
resolution of disputes by efficient and informal alternative dispute 
resolution methods, the parties are encouraged to resolve disputes in 
accordance with the conciliation procedures set forth in

[[Page 28191]]

Sec. Sec. 9.100 and 9.101 of this subpart, or, where such efforts have 
failed, to utilize settlement judges to mediate settlement negotiations 
pursuant to 29 CFR part 18, Sec. 18.9. At any time after commencement 
of a proceeding, the parties jointly may move to defer the hearing for 
a reasonable time to permit negotiation of a settlement or an agreement 
containing findings and an order disposing of the whole or any part of 
the proceeding.
    (b) A settlement judge may be appointed by the Chief Administrative 
Law Judge upon a request by a party or the presiding administrative law 
judge. The Chief Administrative Law Judge has sole discretion to decide 
whether to appoint a settlement judge, except that a settlement judge 
shall not be appointed when a party objects to referral of the matter 
to a settlement judge.


Sec. 9.105  What procedures are followed if a complaint cannot be 
resolved through conciliation or settlement agreement?

    (a) If the case is not stayed to attempt settlement, the 
administrative law judge to whom the case is assigned shall within 
fifteen (15) calendar days following receipt of the request for 
hearing, notify the parties and their representatives, if any, of the 
day, time and place for hearing. The date of the hearing shall not be 
more than 60 days from the date of receipt of the request for hearing.
    (b) The administrative law judge may, at the request of a party, or 
on his/her own motion, dismiss a challenge to a determination of the 
Administrator upon the failure of the party requesting a hearing or 
his/her representative to attend a hearing without good cause; or upon 
the failure of said party to comply with a lawful order of the 
administrative law judge.
    (c) At the Administrator's discretion, the Administrator has the 
right to participate as a party or as amicus curiae at any time in the 
proceedings, including the right to petition for review of a decision 
of an administrative law judge in a case in which the Administrator has 
not previously participated. The Administrator shall participate as a 
party in any proceeding in which the Administrator's determination has 
sought imposition of ineligibility sanctions.
    (d) Copies of the request for hearing and documents filed in all 
cases, whether or not the Administrator is participating in the 
proceeding, shall be sent to the Administrator, Wage and Hour Division, 
and to the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, DC 20210.
    (e) A Federal agency which is interested in a proceeding may 
participate as amicus curiae at any time in the proceedings, at the 
agency's discretion. At the request of a Federal agency which is 
interested in a proceeding, copies of all pleadings in a case shall be 
served on the Federal agency, whether or not the agency is 
participating in the proceeding.
    (f)(1) The rules of practice and procedure for administrative 
hearings before the Office of Administrative Law Judges at 29 CFR part 
18 shall be applicable to the proceedings provided by this section, 
except that the Rules of Evidence at 29 CFR part 18, subpart B shall 
not apply. Rules or principles designed to assure production of the 
most probative evidence available shall be applied. The administrative 
law judge may exclude evidence which is immaterial, irrelevant, or 
unduly repetitive.
    (2) To the extent the rules in 29 CFR part 18 are inconsistent with 
a rule of special application provided by these regulations or the 
Executive Order, these regulations and the Executive Order are 
controlling.


Sec. 9.106  What rules apply to the decision of the administrative law 
judge?

    (a) The administrative law judge shall issue a decision within 60 
days after completion of the proceeding at which evidence was 
submitted. The decision shall contain appropriate findings, 
conclusions, and an order and be served upon all parties to the 
proceeding.
    (b) Upon the conclusion of the hearing and the issuance of a 
decision that a violation has occurred, the administrative law judge 
shall issue an order that the successor contractor take appropriate 
action to abate the violation, which may include hiring the affected 
employee(s) in the same or a substantially equivalent position(s) to 
that which the employee(s) held under the predecessor contract, 
together with compensation (including lost wages), terms, conditions, 
and privileges of that employment. Where ineligibility sanctions have 
been sought by the Administrator, the order shall also address whether 
such sanctions are appropriate.
    (c) If an order is issued finding that the contractor violated the 
Executive Order and these regulations, the administrative law judge may 
assess a sum equal to the aggregate amount of all costs (not including 
attorney fees) and expenses reasonably incurred by the aggrieved 
employee(s) in the proceeding.
    (d) A proceeding under subpart B of this part is not subject to the 
Equal Access to Justice Act, as amended, 5 U.S.C. 504. In such a 
proceeding, the administrative law judge shall have no authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.
    (e) The decision of the administrative law judge shall become the 
final order of the Secretary unless a petition for review is timely 
filed with the Administrative Review Board.

Appeal Procedures


Sec. 9.107  How may an administrative law judge's decision or the 
Administrator's determination be appealed?

    (a) The Administrative Review Board has jurisdiction to hear and 
decide in its discretion appeals concerning questions of law and fact 
from determinations of the Administrator pursuant to Sec. 9.103(b) of 
this part and from decisions of administrative law judges pursuant to 
Sec. 9.106 of this part.
    (b) Any aggrieved party desiring review of a decision of the 
administrative law judge (or of the Administrator, pursuant to 
Sec. 9.103(b)) shall file a petition for review, in writing, with the 
Administrative Review Board. No administrative or judicial review shall 
be available unless a timely petition for review to the Administrative 
Review Board is first filed. To be effective, such a petition for 
review must be received within 20 days of the date of the decision of 
the administrative law judge (or Administrator), and shall be served on 
all parties and the Chief Administrative Law Judge (where the case 
involves an appeal from an administrative law judge's decision). If a 
timely petition for review is filed, the decision of the administrative 
law judge (or Administrator) shall be inoperative unless and until the 
Administrative Review Board issues an order affirming the decision or 
declining review of the matter. If a petition for review concerns only 
the imposition of ineligibility sanctions, however, the remainder of 
the decision shall be effective immediately.
    (c)(1) A petition for review shall refer to the specific findings 
of fact, conclusions of law, or order at issue.
    (2) Copies of the petition and all briefs shall be served on the 
Administrator, Wage and Hour Division, and on the Associate Solicitor, 
Division of Fair Labor Standards, U.S. Department of Labor, Washington, 
DC 20210.
    (d) The Board's final decision shall be issued within 90 days of 
the receipt of the petition for review and shall be served upon all 
parties by mail to the last known address, and on the Chief

[[Page 28192]]

Administrative Law Judge (in cases involving an appeal from an 
administrative law judge's decision).
    (e) If the Board concludes that the contractor has violated the 
Executive Order, the final order shall order action to abate the 
violation, which may include hiring the affected employee(s) in the 
same or a substantially equivalent position(s) to that which the 
employee(s) held under the predecessor contract, together with 
compensation (including lost wages), terms, conditions, and privileges 
of that employment. Where the Administrator has sought imposition of 
ineligibility sanctions, the Board shall also determine whether an 
order imposing ineligibility sanctions is appropriate.
    (f) If a final order finding violations of the Executive Order is 
issued, the Board may assess against the successor contractor a sum 
equal to the aggregate amount of all costs (not including attorney 
fees) and expenses reasonably incurred by the employee(s) in the 
proceeding.
    (g) In considering the matters within the scope of its jurisdiction 
the Board shall act as the authorized representative of the Secretary 
and shall act fully and finally on behalf of the Secretary concerning 
such matters. The Board shall not have jurisdiction to pass on the 
validity of any provision of this part. The Board is an appellate body 
and shall decide cases properly before it on the basis of all relevant 
matter contained in the entire record before it. The Board shall not 
hear cases de novo or receive new evidence into the record.
    (h) Proceedings under Executive Order 12933 are not subject to the 
Equal Access to Justice Act (Pub. L. 96-481). Accordingly, in any 
proceeding conducted pursuant to the provisions of Secs. 9.105-9.107, 
the Administrative Review Board shall have no power or authority to 
award attorney fees and/or other litigation expenses pursuant to the 
Equal Access to Justice Act.

Enforcement Remedies


Sec. 9.108  What are the consequences to a contractor of not complying 
with the Executive Order?

    (a) The Executive Order provides that the Secretary shall have the 
authority to issue orders prescribing appropriate remedies, including, 
but not limited to, requiring employment of the predecessor 
contractor's employees and payment of wages lost.
    (b) After an investigation and a determination by the Administrator 
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 in a deposit fund as are necessary to pay the moneys due. 
Upon the final order of the Secretary that such moneys are due, the 
Administrator may direct that such withheld funds be transferred to the 
Department of Labor for disbursement.
    (c) If the contracting officer or the Secretary finds that the 
predecessor contractor has failed to provide a list of the names of 
employees working under the contract in accordance with Sec. 9.6(c), 
the contracting officer may take such action as may be necessary to 
cause the suspension of the payment of funds until such time as the 
list is provided to the contracting officer.


Sec. 9.109  Under what circumstances will ineligibility sanctions be 
imposed?

    (a) Where the Secretary finds that a contractor has failed to 
comply with any order of the Secretary or has committed willful 
violations of the Executive Order or these regulations, the Secretary 
may order that the contractor and its responsible officers, and any 
firm in which the contractor has a substantial interest, shall be 
ineligible to be awarded any contract or subcontract of the United 
States for a period of three years.
    (b) Upon order of the Secretary, the names of persons or firms 
found to be ineligible for contracts in accordance with this section 
shall be added to the ``List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs,'' compiled, maintained and 
distributed by the General Services Administration in accordance with 
48 CFR 9.404. No contract of the United States shall be awarded to the 
persons or firms appearing on this list or to any firm, corporation, 
partnership, or association in which such persons or firms have a 
substantial interest until three years have elapsed from the date the 
persons' or firms' name was entered on the electronic version of the 
list.

Subpart C--Definitions


Sec. 9.200  Definitions.

    For purposes of this part:
    Administrator means the Administrator of the Wage and Hour 
Division, Employment Standards Administration, U.S. Department of 
Labor, and includes any official of the Wage and Hour Division 
authorized to perform any of the functions of the Administrator under 
this part.
    Contract means any prime contract subject wholly or in part to the 
provisions of the Executive Order.
    Contracting officer means the individual, a duly appointed 
successor, or authorized representative who is designated and 
authorized to enter into contracts on behalf of the Federal agency.
    Executive Order or Order means Executive Order 12933 (59 FR 53559, 
October 24, 1994).
    Federal Government means an agency or instrumentality of the United 
States which enters into a contract pursuant to authority derived from 
the Constitution and the laws of the United States.
    Secretary means the Secretary of Labor or his/her authorized 
representative.
    Service employee means any person engaged in the performance of 
recurring building services other than a person 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, and shall 
include all such persons regardless of any contractual relationship 
that may be alleged to exist between a contractor and such person.
    United States means the United States and all executive 
departments, independent establishments, administrative agencies, and 
instrumentalities of the United States, including corporations, all or 
substantially all of the stock of which is owned by the United States, 
by the foregoing departments, establishments, agencies, 
instrumentalities, and including non-appropriated fund 
instrumentalities.

Appendix to Part 9--Notice to Building Service Contract Employees

    The contract for (type of service) services currently performed 
by (predecessor contractor) has been awarded to a new contractor. 
(successor contractor) will begin performance on (date successor 
contract begins) .
    As a condition of the new contract(successor contractor) is 
required to offer employment to the employees of (predecessor 
contractor) working at (the contract worksite or worksites) except 
in the following situations:
     Managerial or supervisory employees on the current 
contract are not entitled to an offer of employment.
     (successor contractor) may reduce the size of the 
current work force. Therefore, only a portion of the existing work 
force may receive employment offers. However, (successor contractor) 
must offer employment to the employees of (predecessor contractor) 
if any vacancies occur in the first three months of the new 
contract.
    (successor contractor) may employ a current employee on the new 
contract before offering employment to (predecessor contractor's) 
employees only if the current employee has worked for (successor 
contractor) for at least three months immediately preceding the 
commencement of the new contract and would face layoff or

[[Page 28193]]

discharge if not employed under the new contract.
     Where (successor contractor) has reason to believe, 
based on credible information from a knowledgeable source, that an 
employee's performance has been unsuitable on the current contract, 
the employee is not entitled to employment with the new contractor.
     If you are offered employment on the new contract, you 
will have at least ten (10) days to accept the offer.
    Any employee of (predecessor contractor) who believes that he or 
she is entitled to an offer of employment with (successor 
contractor) and has not received an offer, may file a complaint with 
(contracting officer or representative), the contracting officer 
handling this contract at: (address and telephone number of 
contracting officer). If the contracting officer is unable to 
resolve the complaint, the contracting officer shall promptly 
forward a report to the U.S. Department of Labor, Wage and Hour 
Division.
    If you have any questions about your right to employment on the 
new contract, contact: (Name, address, and telephone # for the 
contracting officer or the contracting officer's representative)

[FR Doc. 97-13336 Filed 5-21-97; 8:45 am]
BILLING CODE 4510-27-P