[Federal Register Volume 77, Number 86 (Thursday, May 3, 2012)]
[Proposed Rules]
[Pages 26232-26238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-10708]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 22, and 52

[FAR Case 2011-028; Docket 2011-0028; Sequence 1]
RIN 9000-AM21


Federal Acquisition Regulation; Nondisplacement of Qualified 
Workers Under Service Contracts

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement an Executive order for 
nondisplacement of qualified workers under service contracts, as 
implemented in Department of Labor regulations.

DATES: Interested parties should submit written comments to the 
Regulatory

[[Page 26233]]

Secretariat at one of the addressees shown below on or before July 2, 
2012 to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to FAR Case 2011-028 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching ``FAR Case 
2011-028''. Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2011-028.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2011-028'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street NE., 7th 
Floor, Washington, DC 20417.
    Instructions: Please submit comments only and cite FAR Case 2011-
028, in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Edward Loeb, Procurement Analyst, 
at 202-501-0650, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAR Case 2011-028.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
Executive Order (E.O.) 13495, Nondisplacement of Qualified Workers 
Under Service Contracts, dated January 30, 2009, published in the 
Federal Register at 74 FR 6103 on February 4, 2009, and the Department 
of Labor (DOL) implementing regulations, published in the Federal 
Register at 76 FR 53720, August 29, 2011, with an effective date to be 
established later. The E.O. revoked E.O. 13204 of February 17, 2001, 
which had resulted in the deletion of FAR subpart 22.12 in its 
entirety. This proposed rule would amend the FAR to add subpart 22.12 
and a new clause at FAR 52.222-XX, providing the policy of the Federal 
Government, as expressed in E.O. 13495, to require service contractors 
and their subcontractors under successor contracts to offer employees 
of the predecessor contractor and its subcontractors a right of first 
refusal of employment for positions for which they are qualified. The 
E.O. provides a clause for service contracts that will succeed service 
contracts for performance of the same or similar work at the same 
location.
    Executive Order 13495 specifically excludes service contracts and 
subcontracts in the following categories:
     Under the simplified acquisition threshold;
     Awarded through the AbilityOne Program pursuant to the 
rules of the Committee for Purchase From People Who Are Blind or 
Severely Disabled (41 U.S.C. chapter 85);
     Guard, elevator operator, messenger, or custodial services 
provided to the Federal Government by sheltered workshops employing the 
``severely handicapped'' as described in 40 U.S.C. 593;
     Vending facility agreements entered into under the 
Randolph-Sheppard Act; and
     Employees who were hired to work under a Federal service 
contract and one or more nonfederal service contracts as part of a 
single job, provided that the employees were not deployed in a manner 
that was designed to avoid the purposes of E.O. 13495.
    The E.O. and DOL regulations provide (see 29 CFR 9.1(b)) that 
nothing in either document can be used as a reason for failure to 
comply with any provision of law or other E.O. With this policy, the 
E.O. and the DOL implementing regulations allow for compliance with (a) 
the HUBZone Program (15 U.S.C. 657a and 632(p) and FAR subpart 19.13), 
(b) Executive Order 11246 (Equal Employment Opportunity), and (c) the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974 (38 U.S.C. 
4212). For these reasons, the FAR proposed rule includes a paragraph 
regarding such compliance, at FAR 22.1202(b), Policy, and paragraph 
(b)(2) of the clause at FAR 52.222-XX, to be used in procurements where 
one of the offerors for the successor contract may have been certified 
by the Small Business Administration as a HUBZone small business 
concern.
    In addition to the exemptions listed above, the E.O. provides, at 
section 4, the authority for the head of a contracting department or 
agency to waive the application of the E.O. to a contract, subcontract, 
or purchase order (or a class of contracts, subcontracts, or purchase 
orders) upon a determination that its application would impair the 
ability of the Government to procure services on an economical and 
efficient basis or would not serve the purposes of the E.O. (see also 
29 CFR 9.4(d)). A decision to exempt a procurement or class of 
procurements from one or more provisions of the E.O. is a requirements 
decision, and the associated analysis, documentation, and other 
requirements necessary for an exemption are subject to 29 CFR part 9. 
However, the FAR puts contracting officials on notice that any waiver 
that is not completed in accordance with 29 CFR part 9 prior to the 
contract solicitation date automatically makes the agency waiver 
determination inoperative. Failure to comply will require 
resolicitation.
    The E.O. tasked the Secretary of Labor with enforcement, authorized 
the Secretary of Labor, among other things, to issue final orders 
prescribing appropriate sanctions and remedies, and required the 
Secretary of Labor to issue regulations that implement the requirements 
of the E.O.
    The E.O. required FAR regulations 180 days after the date of the 
E.O. FAR Case 2009-001 was opened February 5, 2009. However, that FAR 
case was closed and a new FAR case opened upon publication of the final 
DOL rule, which occurred on August 29, 2011.

II. Discussion and Analysis

    This proposed rule would add FAR subpart 22.12, entitled 
Nondisplacement of Qualified Workers Under Service Contracts, and the 
associated clause at FAR 52.222-XX, entitled Nondisplacement of 
Qualified Workers. The requirements in FAR subpart 22.12 and the 
associated clause are taken directly from E.O. 13495 and the 
implementing regulations published August 29, 2011, by the Department 
of Labor at 29 CFR part 9 (see 76 FR 53720). However, the FAR does not 
repeat elements of the investigative methods, available reviews, or 
enforcement mechanisms established by the Department of Labor except as 
necessary to ensure that contracting officers and contractors, 
including subcontractors, are aware of their requirements and 
responsibilities.
    For the reasons listed above, FAR subpart 22.12 includes the 
following, using as its source both the text of E.O. 13495 and 29 CFR 
part 9:
    A. The definitions ``service contract'' and ``United States'' at 
FAR 22.1201 apply to the new subpart. The definition of ``service 
employee'' has been moved to FAR 22.001 to apply to all of part 22.
    B. Statement of policy: The sources for the coverage at FAR 
22.1202(a) are section 1 of E.O. 13495 and 29 CFR section 9.1. The 
coverage applies only to service contracts for performance of the same 
or similar services at the same location.
    C. Exemptions: The sources for this coverage are section 3 of E.O. 
13495 and

[[Page 26234]]

29 CFR 9.4. The five exemptions in the E.O. are repeated in FAR 
22.1203-2.
    D. Waiver authority and limitations: The sources of this coverage 
are section 4 of E.O. 13495 and 29 CFR section 9.4(d), both of which 
permit waiver, with certain limitations, of the E.O.'s requirements by 
the head of a contracting department or agency. By longstanding FAR 
convention, agencies would be able to delegate this authority pursuant 
to FAR 1.108(b). DoD, GSA, and NASA are evaluating the need for 
potential restrictions on the level to which the authority may be 
delegated. When an agency exercises its waiver authority, it must 
notify DOL of its decision in accordance with 29 CFR 9.4(d)(2) and 
provide the Department of Labor with a copy of its written analysis no 
later than 5 business days after the solicitation date which DOL will 
then post on its Web site. The waiver authority has specific penalties 
for agencies that do not comply. Contracting officers are impacted 
because the agency's failure to comply with DOL regulations regarding 
waivers makes the waiver inoperative and requires the contracting 
officer to insert the clause in the solicitation.
    E. Certified employee lists: The sources of this coverage are 
section 5 of E.O. 13495 and 29 CFR section 9.12(e). The predecessor 
contractor is required to provide a certified list of its employees who 
are qualified to work on the successor contract. The contracting 
officer must provide the list to the successor contractor in a timely 
manner.
    F. Required notifications to contractors and employees: The sources 
for this coverage are 29 CFR 9.11 and 9.12. 29 CFR 9.11(b) states that 
``the Contracting Officer will ensure that the predecessor contractor 
provides written notice to its service employees * * * of their 
possible right to an offer of employment.'' In addition, 29 CFR 9.12(e) 
states that ``the contractor shall, not less than 30 days before 
completion of the contactor's performance of services on a contract, 
furnish the Contracting Officer with a list of the names of all service 
employees working under the contract and its subcontracts at the time 
the list is submitted.'' The likelihood exists that, during the initial 
implementation of the E.O., service employees of the predecessor 
contractor may not receive written notice and Contracting Officers (and 
hence successor contractors) may not receive the list 30 days before 
the end of the contract. As a general matter, predecessor contractors 
will be operating under the existing notification clause set forth at 
FAR 52.222-41(n) (applicable to contracts subject to the Service 
Contract Act (SCA)). This clause does not address notification to 
service employees because there was not previously a right of first 
refusal. In addition, the clause permits submission of the list to the 
Contracting Officer as few as 10 days prior to completion of the 
contract. DoD, GSA, and NASA note that under 29 CFR 9.12(a)(2), a 
successor contractor's obligation to offer a right of first refusal 
exists even if the information is not provided by the incumbent within 
the 30-day window (i.e., ``even if the successor contractor was not 
provided a list of the predecessor contractor's employees or the list 
did not contain the names of all persons employed during the final 
month of contract performance.'') The FAR Council is considering 
possible steps that might be taken, as agencies transition to the new 
clause, to reduce instances where service employees of the predecessor 
contractor and successor contractors do not receive notice of their 
rights and successors receive lists less than 30 days before the end of 
the contract. One possible step the FAR Council is considering is to 
encourage agencies to enter into bilateral modifications (starting with 
the largest SCA-covered contracts) that obligate predecessor 
contractors to (1) inform their service employees of their right of 
first refusal and (2) provide the list to the Contracting Officer no 
less than 30 days before contract completion. DoD, GSA, and NASA invite 
the public to offer their views and ideas as part of their comments on 
this rulemaking.
    G. Remedies and sanctions: The sources of this coverage are section 
6 of E.O. 13495 and 29 CFR 9.24. This area is within the purview of the 
DOL. The FAR, at section 22.1206, addresses the contracting officer's 
role.
    H. Contract clause: The sources of this coverage are section 5 of 
E.O. 13495 and Appendix A of 29 CFR part 9. The paragraphs in the 
proposed FAR clause have been reordered by importance and in accordance 
with FAR drafting procedures.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    DOD, GSA, and NASA do not believe that this rule will have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601, et 
seq. Nonetheless, they are preparing an Initial Regulatory Flexibility 
Analysis (IRFA), in the interest of soliciting public comments, which 
is summarized as follows:

    DoD, GSA, and NASA are issuing a proposed rule to amend the 
Federal Acquisition Regulation (FAR) to implement Executive Order 
(E.O.) 13495, entitled Nondisplacement of Qualified Workers Under 
Service Contracts (dated January 30, 2009) and the Department of 
Labor final rule implementing the E.O. (29 CFR part 9, published at 
76 FR 53720, dated August 29, 2011).
    It is the policy of the Federal Government to require service 
contractors and their subcontractors under successor contracts to 
offer employees of the predecessor contractor and its subcontractors 
a right of first refusal of employment for positions for which they 
are qualified. The E.O. provides a clause for service contracts that 
will succeed service contracts for performance of the same or 
similar work at the same location. The E.O. revoked E.O. 13204 of 
February 17, 2001, which resulted in the deletion of FAR subpart 
22.12 in its entirety. This FAR proposed rule would add subpart 
22.12 and a new clause at FAR 52.222-XX.
    Executive Order 13495 excludes service contracts and 
subcontracts in the following categories:
     Under the simplified acquisition threshold.
     Awarded through the AbilityOne Program pursuant to the 
rules of the Committee for Purchase From People Who Are Blind or 
Severely Disabled (41 U.S.C. chapter 85).
     Guard, elevator operator, messenger, or custodial 
services provided to the Federal Government by sheltered workshops 
employing the severely handicapped as described in 40 U.S.C. 593.
     Vending facility agreements entered into under the 
Randolph-Sheppard Act.
     Employees who were hired to work under a Federal 
service contract and one or more nonfederal service contracts as 
part of a single job, provided that the employees were not deployed 
in a manner that was designed to avoid the purposes of E.O. 13495.
    The FAR proposed rule adds coverage that allows for compliance 
with (a) the HUBZone Program (see FAR subpart 19.13),(b) Executive 
Order 11246 (Equal Employment Opportunity), and (c) the Vietnam Era 
Veterans' Readjustment Assistance Act of 1974.

[[Page 26235]]

    In addition to the exemptions above, the E.O. provides, at 
section 4, the authority for the head of a contracting department or 
agency to waive the application of the E.O. to a contract, 
subcontract, or purchase order (or a class of contracts, 
subcontracts, or purchase orders) upon a determination its 
application would impair the ability of the Government to procure 
services on an economical and efficient basis or would not serve the 
purposes of E.O. 13495 (see also 29 CFR 9.4(d)). A decision to 
exempt a procurement or class of procurements from one or more 
provisions of the E.O. is a requirements decision, and the 
associated analysis, documentation, and other requirements necessary 
for an exemption are subject to 29 CFR part 9. However, the FAR puts 
contracting officials on notice in this FAR proposed rule that any 
waiver that is not completed in accordance with 29 CFR part 9 prior 
to the contract solicitation date automatically makes the agency 
determination inoperative.
    The E.O. tasked the Secretary of Labor with enforcement 
authority that, among other things, authorizes the Secretary Labor 
to issue final orders prescribing appropriate sanctions and 
remedies, including but not limited to, orders requiring employment 
and payment of wages lost, and required the Secretary to develop 
implementing regulations. These matters are not addressed in the FAR 
because they are outside the contracting function.
    The estimated impact that follows is based entirely upon the DOL 
figures reported in the proposed and final rules that it published 
implementing E.O. 13495. Although DOL prepared an initial regulatory 
flexibility analysis, the agency, in the final rule, certified that 
29 CFR part 9 does not have a significant economic impact on a 
substantial number of small entities. There is no additional impact 
due to the implementation of the DOL regulations in the FAR. The 
requirements in the FAR are taken from the E.O. and 29 CFR part 9 
without addition.
    DOL estimated that 28,800 small entities will be subject to its 
regulation and the majority of these small entities will incur 
compliance costs of less than $100. The analysis offsets the actions 
that a successor contractor would already be taking, such as 
determining an individual's suitability for available positions and 
documentting employment decisions. Further, DOL assumed a time/cost 
savings on the part of small entities because the entities will not 
have to engage in recruiting and training an entirely new workforce.
    The predecessor contractor is required to provide a certified 
list of the names of all service employees working under that 
contract, and its subcontracts, to the contracting agency no later 
than 30 days before completion of performance of the predecessor 
contract. DOL notes, however, that there is little or no cost 
associated with this requirement because the certified list is the 
same list as the certified seniority list currently required to be 
provided under the Service Contract Act clause, FAR 52.222-41(n). 
The minimal new reporting requirements mandated by the DOL 
implementation of E.O. 13495 are addressed in the information 
collection justification submitted by DOL in connection with its 
final rule (see 76 FR 53720 dated August 29, 2011). No additional 
reporting requirements are imposed by the FAR rule, which merely 
relocates the contract clause from the E.O. into FAR part 52.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. The requirements of E.O. 13495 do not allow for any 
alternatives.

    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. A copy of 
the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA, and 
NASA invite comments from small business concerns and other interested 
parties on the expected impact of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2011-028), 
in correspondence.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; 
however these changes to the FAR do not imposed additional information 
collection requirements to the paperwork burden previously approved 
under the Office of Management and Budget Control Number 1235-0007 and 
1235-XXXX, titled: Labor Standards for Federal Service Contracts--
Regulations 29 CFR, Part 4 and Nondisplacement of Qualified Workers 
Under Service Contracts Executive Order 13495, respectively.

List of Subjects in 48 CFR Parts 2, 22, and 52

    Government procurement.

    Dated: April 30, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 22, 
and 52 as set forth below:
    1. The authority citation for 48 CFR parts 2, 22, and 52 continues 
to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101, in paragraph (a), in the definition 
``United States'' by redesignating paragraphs 4 through 10 as 
paragraphs 5 through 11, respectively; and adding a new paragraph 4 to 
read as follows:


2.101  Definitions.

* * * * *
    (a) * * *
    Unites States * * *
    (4) For use in subpart 22.13, see the definition at 22.1201.
* * * * *

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

    3. Amend section 22.001 by adding, in alphabetical order, the 
definition ``Service employee'' to read as follows:


22.001  Definitions.

* * * * *
    Service employee means any person engaged in the performance of a 
service contract other than any person employed in a bona fide 
executive, administrative, or professional capacity, as those terms are 
defined in 29 CFR part 541. The term ``service employee'' includes all 
such persons regardless of any contractual relationship that may be 
alleged to exist between a contractor or subcontractor and such 
persons.
* * * * *


22.1001  [Amended]

    4. Amend section 22.1001 by removing the definition ``Service 
employee''.
    5. Add subpart 22.12 to read as follows:
Subpart 22.12--Nondisplacement of Qualified Workers Under Service 
Contracts
22.1200 Scope of subpart.
22.1201 Definitions.
22.1202 Policy.
22.1203 Applicability.
22.1203-1 General.
22.1203-2 Exemptions.
22.1203-3 Waiver.
22.1204 Certified employee lists.
22.1205 Notification to contractors and employees.
22.1206 Remedies and sanctions for violations of this subpart.
22.1207 Contract clause.

Subpart 22.12--Nondisplacement of Qualified Workers Under Service 
Contracts


22.1200  Scope of subpart.

    This subpart prescribes policies and procedures for implementing 
Executive Order 13495 of January 30, 2009, Nondisplacement of Qualified 
Workers Under Service Contracts.


22.1201  Definitions.

    As used in this subpart--

[[Page 26236]]

    Service contract means any Government contract, the principal 
purpose of which is to furnish services in the United States through 
the use of service employees, except as exempted under the Service 
Contract Labor Standards (41 U.S.C. chapter 67; see 22.1003-3 and 
22.1003-4), or any subcontract at any tier thereunder. See 22.1003-5 
and 29 CFR 4.130 for a partial list of services covered by the Act.
    United States means the 50 States, the District of Columbia, Puerto 
Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. 
Virgin Islands, Johnston Island, Wake Island, and outer Continental 
Shelf as defined in the outer Continental Shelf Lands Act (43 U.S.C. 
1331, et seq.), but does not include any other place subject to United 
States jurisdiction or any United States base or possession in a 
foreign country (29 CFR 4.112).


22.1202  Policy.

    (a) When a service contract succeeds a contract for performance of 
the same or similar services at the same location, the successor 
contractor and its subcontractors are required to offer those employees 
(other than managerial and supervisory employees) that are employed 
under the predecessor contract, and whose employment will be terminated 
as a result of the award of the successor contract, a right of first 
refusal of employment under the contract in positions for which they 
are qualified. Executive Order 13495 generally prohibits employment 
openings under the successor contract until such right of first refusal 
has been provided, when consistent with applicable law.
    (b) Nothing in Executive Order 13495 shall be construed to permit a 
contractor or subcontractor to fail to comply with any provision of any 
other Executive order or law. For example, the requirements of the 
HUBZone Program (see subpart 19.13), Executive Order 11246 (Equal 
Employment Opportunity), and the Vietnam Era Veterans' Readjustment 
Assistance Act of 1974 may conflict with the requirements of Executive 
Order 13495. Those laws and Executive orders must be satisfied in 
tandem with, and if necessary prior to, the requirements of Executive 
Order 13495 and this subpart.


22.1203  Applicability.


22.1203-1  General.

    This subpart applies to service contracts that succeed contracts 
for the same or similar services at the same location.


22.1203-2  Exemptions.

    (a) This subpart does not apply to--
    (1) Contracts and subcontracts under the simplified acquisition 
threshold;
    (2) Contracts or subcontracts awarded pursuant to 41 U.S.C. chapter 
85, Committee for Purchase from People Who Are Blind or Severely 
Disabled;
    (3) Guard, elevator operator, messenger, or custodial services 
provided to the Government under contracts or subcontracts with 
sheltered workshops employing the ``severely handicapped'' as described 
in 40 U.S.C. 593;
    (4) Agreements for vending facilities entered into pursuant to the 
preference regulations issued under the Randolph Sheppard Act, 20 
U.S.C. 107; or
    (5) Employees who were hired to work under a Federal service 
contract and one or more nonfederal service contracts as part of a 
single job, provided that the employees were not deployed in a manner 
that was designed to avoid the purposes of this subpart.
    (b) The exclusions in paragraphs (a)(2) through (a)(4) of this 
subsection apply when either the predecessor or successor contract has 
been awarded for services produced or provided by the ``severely 
handicapped.''


22.1203-3  Waiver.

    (a) If the head of the procuring agency determines in writing that 
the application of this subpart would not serve the purposes of 
Executive Order 13495 or would impair the ability of the Federal 
Government to procure services on an economical and efficient basis, 
the agency head may waive some or all of the provisions of this 
subpart. Such waivers may be made for a contract, subcontract, or 
purchase order, or with respect to a class of contracts, subcontracts, 
or purchase orders. See 29 CFR 9.4(d)(4) for regulatory provisions 
addressing circumstances in which a waiver could or would not be 
appropriate. The waiver must be reflected in a written analysis as 
described in 29 CFR 9.4(d)(4)(i) and must be completed prior to the 
contract solicitation date, or the waiver is inoperative.
    (b)(1) When an agency exercises its waiver authority with respect 
to any contract, subcontract, or purchase order, the contracting 
officer shall direct the contractor to notify affected workers and 
their collective bargaining representative in writing, no later than 
five business days after the solicitation issuance date, of the 
agency's determination. The notice shall include facts supporting the 
determination. The contracting officer's failure to direct that the 
contractor provide the notice as provided in this subparagraph shall 
render the waiver decision inoperative, and the contracting officer 
shall include the clause at 52.222-XX in the solicitation.
    (2) Where a contracting agency waives application to a class of 
contracts, subcontracts, or purchase orders, the contracting officer 
shall, with respect to each individual solicitation, direct the 
contractor to notify incumbent workers and their collective bargaining 
representatives in writing, no later than five business days after each 
solicitation issuance date, of the agency's determination. The notice 
shall include facts supporting the determination. The contracting 
officer's failure to direct that the contractor provide the notice 
provided in this subparagraph shall render the waiver decision 
inoperative, and the contracting officer shall include the clause at 
52.222-XX in the solicitation.
    (3) In addition, the agency shall notify the Department of Labor of 
its waiver decision and provide the Department of Labor with a copy of 
its written analysis no later than five business days after the 
solicitation issuance date. Failure to comply with this notification 
requirement shall render the waiver decision inoperative, and the 
contracting officer shall include the clause at 52.222-XX in the 
solicitation.


22.1204  Certified employee lists.

    (a) The predecessor contractor is required to furnish to the 
contracting officer, not less than 30 days before completion of the 
predecessor contract, a certified list of the names of all service 
employees working under the contract and its subcontracts at the time 
the list is submitted. The certified list must also contain anniversary 
dates of employment of each service employee under the contract and 
subcontracts for services. This list is the same as the seniority list 
required by paragraph (n) of the clause at 52.222-41, Service Contract 
Act of 1965. If there are no changes to the workforce before the 
predecessor contract is completed, then the predecessor contractor is 
not required to submit a revised list 10 days prior to completion of 
performance and the requirements of 52.222-41(n) are met. When there 
are changes to the workforce after submission of the 30-day list, the 
predecessor contractor shall submit a revised certified list not less 
than 10 days prior to performance completion.
    (b) The contracting officer shall provide the seniority list to the 
successor contractor and, if requested, to employees of the predecessor

[[Page 26237]]

contractor or subcontractors or their authorized representatives.


22.1205  Notification to contractors and employees.

    (a) The contracting officer shall ensure that the predecessor 
contractor provides written notice to service employees of their 
possible right to an offer of employment with the successor contractor. 
The written notice shall be--
    (1) Posted in a conspicuous place at the worksite; or
    (2) Delivered to the employees individually. If such delivery is 
via email, the notification must result in an electronic delivery 
receipt or some other reliable confirmation that the intended recipient 
received the notice.
    (b) Contracting officers may advise contractors to provide the 
notice in Appendix B to 29 CFR chapter 9. Where a significant portion 
of the predecessor contractor's workforce is not fluent in English, the 
notice shall be provided in English and language(s) with which 
employees are more familiar. English and Spanish versions of the notice 
are available on the Department of Labor Web site at http://www.dol.gov/whd.


22.1206  Remedies and sanctions for violations of this subpart.

    (a) The Secretary of Labor has the authority to issue orders 
prescribing appropriate remedies, including, but not limited to, 
requiring the successor contractor to offer employment, in positions 
for which the employees are qualified, to employees from the 
predecessor contract and payment of wages lost.
    (b) After an investigation and a determination by the 
Administrator, Wage and Hour Division, Department of Labor, that lost 
wages or other monetary relief is due, the Administrator may direct 
that so much of the accrued payments due on either the contract or any 
other contract between the contractor and the Government shall be 
withheld as are necessary to pay the monies due. Upon the final order 
of the Secretary of Labor that such monies are due, the Administrator 
may direct that such withheld funds be transferred to the Department of 
Labor for disbursement.
    (c) If the contracting officer or the Administrator, Wage and Hour 
Division, Department of Labor, finds that the predecessor contractor 
has failed to provide the list required by 22.1204, the contracting 
officer may in his or her discretion, or on request by the 
Administrator, suspend contract payment until such time as the list is 
provided to the contracting officer.
    (d) The Secretary of Labor may also suspend or debar a contractor 
or subcontractor for a period of up to three years.


22.1207  Contract clause.

    The contracting officer shall insert the clause at 52.222-XX, 
Nondisplacement of Qualified Workers, in solicitations and contracts 
for services (1) defined at 22.1201, (2) that succeed contracts for 
performance of the same or similar work at the same location, and (3) 
that are not exempted by 22.1203-2 or waived in accordance with 
22.1203-3.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    6. Amend section 52.212-5 by--
    a. Revising the date of the clause;
    b. Redesignating paragraphs (c)(7) and (c)(8) as paragraphs (c)(8) 
and (c)(9), respectively;
    c. Adding a new paragraph (c)(7);
    d. Redesignating paragraphs (e)(1)(xiii) and (e)(1)(xiv) as 
paragraphs (e)(1)(xiv) and (e)(1)(xv), respectively; and
    e. Adding a new paragraph (e)(1)(xiii) to read as follows.


52.212-5  Contract Terms and Conditions Required To Implement Statutes 
of Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes of 
Executive Orders--Commercial Items (DATE)

* * * * *
    (c) * * *
    ----(7) 52.222-XX, Nondisplacement of Qualified Workers (DATE) 
(E.O. 13495).
* * * * *
    (e)(1) * * *
    (i) * * *
    (xiii) 52.222-XX, Nondisplacement of Qualified Workers (DATE) 
(E.O. 13495).
* * * * *

    7. Add section 52.222-XX to read as follows:


52.222-XX  Nondisplacement of Qualified Workers.

    As prescribed in 22.1207, insert the following clause:

Nondisplacement of Qualified Workers (DATE)

    (a) Consistent with the efficient performance of this contract, 
the Contractor and its subcontractors shall, except as otherwise 
provided herein, in good faith offer those employees (other than 
managerial and supervisory employees) employed under the predecessor 
contract whose employment will be terminated as a result of award of 
this contract or the expiration of the contract under which the 
employees were hired, a right of first refusal of employment under 
this contract in positions for which employees are qualified. The 
Contractor and its subcontractors 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 clause, there shall be no 
employment opening under this contract, and the Contractor and any 
subcontractors shall not offer employment under this contract, to 
any person prior to having complied fully with this obligation. The 
Contractor and its subcontractors shall make a bona fide 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 
the offer of employment be less than 10 days.
    (b)(1) Notwithstanding the obligation under paragraph (a) of 
this clause, the Contractor and any subcontractors (i) may employ 
under this contract any employee who has worked for the Contractor 
or subcontractor for at least three months immediately preceding the 
commencement of this contract and who would otherwise face lay-off 
or discharge, (ii) are not required to offer a right of first 
refusal to any employee(s) of the predecessor Contractor who are not 
service employees within the meaning of the Service Contract Act of 
1965, as amended, 41 U.S.C. 6701(3), and (iii) are not required to 
offer a right of first refusal to any employee(s) of the predecessor 
Contractor whom the Contractor or any of its subcontractors 
reasonably believes, based on the particular employee's past 
performance, has failed to perform suitably on the job.
    (2) In addition, any Contractor or subcontractor that has been 
certified by the U.S. Small Business Administration as a HUBZone 
small business concern must ensure that it complies with the 
statutory and regulatory requirements of the HUBZone Program (e.g., 
it must ensure that at least 35 percent of all of its employees 
reside within a HUBZone). The HUBZone small business Contractor or 
subcontractor must consider whether it can meet the requirements of 
this clause and Executive Order 13495 while also ensuring it meets 
the HUBZone Program's requirements.
    (3) Nothing in this clause shall be construed to permit a 
Contractor or subcontractor to fail to comply with any provision of 
any other Executive order or law. For example, the requirements of 
the HUBZone Program (see FAR subpart 19.13), Executive Order 11246 
(Equal Employment Opportunity), and the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974 may conflict with the 
requirements of Executive Order 13495. Those laws and Executive 
orders must be satisfied in tandem with, and if necessary prior to, 
the requirements of Executive Order 13495, 29 CFR part 9, and this 
clause.
    (c)(1) The Contractor shall, not less than 30 days before 
completion of the Contractor's performance of services on a 
contract, furnish the Contracting Officer with a certified list of 
the names of all service employees working under this contract and 
its subcontracts at the

[[Page 26238]]

time the list is submitted. The list shall also contain anniversary 
dates of employment of each service employee under this contract and 
its predecessor contracts with either the current or predecessor 
contractors or their subcontractors. Where changes to the workforce 
are made after the submission of the certified list described in 
this paragraph, the Contractor shall, in accordance with paragraph 
(d) of this clause, not less than 10 days before completion of the 
services on a contract, furnish the Contracting Officer with an 
updated certified list of the names of all service employees 
employed within the last month of contract performance. The updated 
list shall also contain anniversary dates of employment, and, where 
applicable, dates of separation of each service employee under the 
contract and its predecessor contracts with either the current or 
predecessor Contractors or their subcontractors. Only Contractors 
experiencing a change in their workforce between the 30- and 10-day 
periods will have to submit a list in accordance with paragraph (d) 
of this clause.
    (2) The Contracting Officer will provide the list to the 
successor Contractor, and the list shall be provided on request to 
employees or their representatives.
    (3) The Contracting Officer will direct the predecessor 
Contractor to provide written notice (Appendix B to 29 CFR chapter 
9) to service employees of their possible right to an offer of 
employment with the successor Contractor. Where a significant 
portion of the predecessor Contractor's workforce is not fluent in 
English, the notice shall be provided in English and language(s) 
with which employees are more familiar. The written notice shall 
be--
    (i) Posted in a conspicuous place at the worksite; or
    (ii) Delivered to the employees individually. If such delivery 
is via email, the notification must result in an electronic delivery 
receipt or some other reliable confirmation that the intended 
recipient received the notice.
    (d)(1) If required in accordance with 52.222-41(n), the 
Contractor shall, not less than 10 days before completion of this 
contract, furnish the Contracting Officer a certified list of the 
names of all service employees working under this contract and its 
subcontracts during the last month of contract performance. The list 
shall also contain anniversary dates of employment of each service 
employee under this contract and its predecessor contracts either 
with the current or predecessor Contractors or their subcontractors. 
If there are no changes to the workforce before the predecessor 
contract is completed, then the predecessor Contractor is not 
required to submit a revised list 10 days prior to completion of 
performance and the requirements of 52.222-41(n) are met. When there 
are changes to the workforce after submission of the 30-day list, 
the predecessor Contractor shall submit a revised certified list not 
less than 10 days prior to performance completion.
    (2) The Contracting Officer will provide the list to the 
successor Contractor, and the list shall be provided on request to 
employees or their authorized representatives.
    (e) The Contractor and subcontractor shall maintain the 
following records (regardless of format, e.g., paper or electronic) 
of its compliance with this clause for not less than a period of 
three years from the date the records were created.
    (1) Copies of any written offers of employment or a 
contemporaneous written record of any oral offers of employment, 
including the date, location, and attendance roster of any employee 
meeting(s) at which the offers were extended, a summary of each 
meeting, a copy of any written notice that may have been 
distributed, and the names of the employees from the predecessor 
contract to whom an offer was made.
    (2) A copy of any record that forms the basis for any exemption 
claimed under this part.
    (3) A copy of the employee list provided to or received from the 
contracting agency.
    (4) An entry on the pay records of the amount of any retroactive 
payment of wages or compensation under the supervision of the 
Administrator of the Wage and Hour Division to each employee, the 
period covered by such payment, and the date of payment, and a copy 
of any receipt form provided by or authorized by the Wage and Hour 
Division. The Contractor shall also deliver a copy of the receipt to 
the employee and file the original, as evidence of payment by the 
Contractor and receipt by the employee, with the Administrator or an 
authorized representative within 10 days after payment is made.
    (f) Disputes concerning the requirements of this clause shall 
not be subject to the general disputes clause (52.233-1) of this 
contract. Such disputes shall be resolved in accordance with the 
procedures of the Department of Labor set forth in 29 CFR part 9. 
Disputes within the meaning of this clause include disputes between 
or among any of the following: The Contractor, the contracting 
agency, the U.S. Department of Labor, and the employees under the 
contract or its predecessor contract. The Contracting Officer will 
refer any employee who wishes to file a complaint, or ask questions 
concerning this contract clause, to the Branch of Government 
Contracts Enforcement, Wage and Hour Division, U.S. Department of 
Labor, Washington, DC 20210. Contact email: [email protected].
    (g) The Contractor shall cooperate in any review or 
investigation by the Department of Labor into possible violations of 
the provisions of this clause and shall make such records requested 
by such official(s) available for inspection, copying, or 
transcription upon request.
    (h) If it is determined, pursuant to regulations issued by the 
Secretary of Labor (Secretary), that the Contractor or its 
subcontractors are not in compliance with the requirements of this 
clause or any regulation or order of the Secretary, appropriate 
sanctions may be imposed and remedies invoked against the Contractor 
or its subcontractors, as provided in Executive Order 13495, the 
regulations, and relevant orders of the Secretary, or as otherwise 
provided by law.
    (i) The Contractor shall take such action with respect to any 
such subcontract as may be directed by the Secretary as a means of 
enforcing such provisions, including the imposition of sanctions for 
noncompliance. However, if the Contractor, as a result of such 
direction, becomes involved in litigation with a subcontractor, or 
is threatened with such involvement, the Contractor may request that 
the United States, through the Secretary of Labor, enter into such 
litigation to protect the interests of the United States.
    (j) The Contracting Officer will withhold, or cause to be 
withheld, from the prime Contractor under this or any other 
Government contract with the same prime Contractor, such sums as an 
authorized official of the Department of Labor requests, upon a 
determination by the Administrator, the Administrative Law Judge, or 
the Administrative Review Board, that there has been a failure to 
comply with the terms of this clause and that wages lost as a result 
of the violations are due to employees or that other monetary relief 
is appropriate. If the Contracting Officer or the Administrator, 
upon final order of the Secretary, finds that the Contractor has 
failed to provide a list of the names of employees working under the 
contract, the Contracting Officer may, in his or her discretion, or 
upon request by the Administrator, take such action as may be 
necessary to cause the suspension of the payment of contract funds 
until such time as the list is provided to the Contracting Officer.
    (k) Subcontracts. In every subcontract over the simplified 
acquisition threshold entered into in order to perform services 
under this contract, the Contractor shall include a provision that 
ensures--
    (1) That each subcontractor will honor the requirements of 
paragraphs (a) through (b) of this clause with respect to the 
employees of a predecessor subcontractor or subcontractors working 
under this contract, as well as of a predecessor Contractor and its 
subcontractors;
    (2) That the subcontractor will provide the Contractor with the 
information about the employees of the subcontractor needed by the 
Contractor to comply with paragraphs (c) and (d) of this clause; and
    (3) The recordkeeping requirements of paragraph (e) of this 
clause.
    (End of clause)

[FR Doc. 2012-10708 Filed 5-2-12; 8:45 am]
BILLING CODE 6820-EP-P