What Government Contractors Need to Know About Executive Order 13495 “Nondisplacement of Qualified...

Hogge Law

What Government Contractors Need to Know About Executive Order 13495

“Nondisplacement of Qualified Workers Under Service Contracts”

Raymond L. Hogge, Jr.Hogge Law

Attorneys and Counselors at Law500 E. Plume Street, Suite 800

Norfolk, Virginia, 23510(757) 961-5400

[email protected]

This presentation is intended solely for informational purposes and is not offered as legal advice

VirginiaLaborLaw.com

Hogge Law

Overview of E.O. 13495

When a service contract succeeds a contract for performance of the same or similar services at the same location, the successor contractor is required to offer the predecessor contractor’s

qualified service employees, whose employment will be terminated by the

predecessor contractor, a right of first refusal of employment.


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Definitions

A “service contract” is a contract or subcontract for services entered into by the Federal

Government or its contractors that is covered by the Service Contracts Act of 1965.


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Definitions

“Contractor” means a prime contractor and all of its first or lower tier subcontractors.


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Definitions

“Service employee” means a person engaged in performance of a service contract other than a person employed in a bona fide executive,

administrative or professional capacity as defined in 29 CFR Part 541.

Therefore, E.O. 13495 does not protect “managerial” and “supervisory” employees.


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Applicability

E.O. 13495 applies to service contracts that succeed contracts for the same or similar

service at the same location (other than those exempted

or subject to a waiver).


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Exemption: Contracts Below Simplified Acquisition Threshold

Contracts and subcontracts under the simplified acquisition threshold are exempt from E.O. 13495.


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If prime contract meets the simplified acquisition threshold but subcontract does not, then prime contractor is required to comply with E.O. 13495 but subcontractor is not.


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If prime contractor above threshold terminates subcontractor below threshold and takes over performance of subcontractor’s services, then prime contractor must offer employment to subcontractor’s service employees who would otherwise be displaced.


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Exemption: Contracts Under Programs for Disabled

Contracts awarded under certain programs for handicapped are exempt from E.O. 13495.• Javits-Wagner-O’Day Act • Sheltered workshop employing severely

disabled• Randolph-Sheppard Act


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Exemption: Federal and Nonfederal Service Contract as Part of Single Job

Employees hired to work under federal and one or more nonfederal service contracts as part of single job are exempt from E.O. 13495 “provided the employees were not deployed in manner designed to avoid the purposes of” E.O. 13495.


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Agency Waivers

Agency may waive some or all requirements of E.O. 13495.• Agency must make waiver determination no

later than the contract solicitation date.• Agency must ensure that contractor notifies

affected workers and their bargaining representatives in writing no later than 5 business days after solicitation date.


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Job Offers to Predecessor Employees

“A successor contractor of subcontractor shall fill no employment openings under the contract

prior to making good faith offers of employment in positions for which the employees are

qualified, to those employees employed under the predecessor contract whose employment will

be terminated as a result of the award of the contract or the expiration of the contract.” 29

CFR 9.12(a).


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Must offer “right of first refusal to employment on the contract.”


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Job offer may be oral or written.


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Job offer must state time within which offer must be accepted.

Deadline for acceptance of offer cannot be less than 10 days from date of offer.


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Job offer must be for position for which employee is qualified.


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Job offer need not be for job previously held by employee at predecessor contractor.


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Job offer may be under different terms and conditions, including pay and benefits, as job

held with predecessor contracts, provided reasons for difference is not related to a desire

that the employee refuse the offer or that other employees be hired for the job.


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Determinations of predecessor employee qualification for job offer must be based on employee’s educational and employment

history, with particular emphasis on experience on predecessor contract.


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Determinations of predecessor employee qualification for job offer must be based on

credible information provided by a knowledgeable source such as the predecessor contractor, the local supervisor, the employee,

or the contracting agency.


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Determinations of predecessor employee qualification for job offer may be based on pre-employment screening processes such as drug

tests, background checks, and security clearance checks only if the processes are

(1) provided for by the contracting agency , (2) conditions of the service contract, and

(3) “consistent with” E.O. 13495.


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Predecessor employee’s eligibility for job offer usually will be based on the predecessor

contractor’s certified list of service employees working under predecessor contract and

subcontracts during last month (30 days) of contract performance.


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In determining successor employee eligibility for job offer, successor contracts must accept credible evidence other than predecessor contractor’s

certified list of service employees.

• E.g.: Employee’s claim of assignment to work on contract, verified by contracting agency staff.

• E.g.: Employee pay stub showing date and location of work.


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Successor contractor must make job offers even if successor contractor has not been provided a list of the predecessor contractor’s employees, and even if the list does not contain the names

of all persons employed by predecessor contractor during the final month of contract

performance.


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Job offers must be “good faith” and “bona fide.”


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Offer presumed to be bona fide• even if it is not for a position similar to one

employee previously held • even if subject to different pay and benefits


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Exception for Jobs Held By Successor Employees

Successor contractor may employ any of its current service employees who

(1) have worked for successor for at least 3 months immediately preceding

commencement of successor contract; and (2) would otherwise face layoff or discharge.


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Exception for Employee Retained by Predecessor

Nor required to make job offer to predecessor service employee who will be retained by the

predecessor contractor.


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Successor contractor must presume all predecessor service employees working on

contract will be terminated unless successor contractor can demonstrate reasonable belief to the contrary based on credible information

from a knowledgeable source such as the predecessor or the employee.


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Successor contractor must presume all predecessor employees working on contract are service employees

unless successor contractor can demonstrate reasonable belief to the contrary based on credible

information from a knowledgeable source such as the predecessor, the employee, or the contracting agency.

• Knowledge of general business practices of predecessor or industry not sufficient.


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Exception for EmployeeWith Unsuitable Performance Record

Not required to make job offer to predecessor employee who successor contractor

reasonably believes, based on employee’s past performance, has failed to perform suitably on the job.


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Successor must presume that all predecessor employees working on last month of contract

performed suitable work.


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To deny offer based on unsuitable performance, successor must be able to demonstrate a

reasonable belief of unsuitable performance by the employee based on written credible

information provided by a knowledgable source such as predecessor contractor and

subcontractors, local supervisor, the employee, or the contracting agency.


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Reduced Staffing

Successor contractor may employ fewer service employees than predecessor for the contract.


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Reduced Staffing

Successor contractor must offer employment only to number of predecessor employees

which success reasonably believes necessary to meet anticipated staffing pattern.


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Reduced Staffing

Where successor contractor does not initially offer employment to all predecessor

employees, the obligation to offer employment to the remaining predecessor employees

continues for 90 days after successor begins performance of contract.


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Certified Service Employee Lists

Not less than 30 days before predecessor contractor completes contract, predecessor

must provide contracting officer a certified list of names and anniversary dates of all service

employees working under contract and subcontracts (same as seniority list info under Service Contract Act regs 48 CFR 52.222-46).


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If predecessor workforce changes after 30 day list submitted, then predecessor must submit

to contracting office a revised service employee list not less than 10 days before completing

performance on contract.


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Upon receipt of 30/10 day service employee list from predecessor, contracting officer provides

list to successor contractor and, if requested, to predecessor employees or their representative.


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Notification to Predecessor Contractor and Employees

Contracting officer directs predecessor contractor to provide written notice to

predecessor employees of possible right to offer of employment from successor contractor.

A form notice is provided in 29 CFR Chapter 9 Appendix B.


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Notice must be • posted in a conspicuous place at worksite;

or• delivered to employees individually.


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If notice is delivered to employees by e-mail, it must result in electronic delivery receipt or

some other reliable conformation of delivery.


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Where a significant portion of predecessor workforce is not fluent in English, the notice

must be provided in English and the language(s) spoken by the employees.


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Multiple foreign language notices are required where significant portions of the workforce

speak different foreign languages and there is no common language.


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Recordkeeping

No particular form of records required, i.e., paper or electronic.


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Recordkeeping

Contractor must maintain copies of all written job offers.


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Recordkeeping

Contractor must maintain contemporaneous written record of all oral job offers, including:• Date, location, and attendance roster of any

employee meetings at which offers were made• Summary of each meeting

• Copy of any written notice of the meeting• Names of all employees to whom offers made


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Recordkeeping

Contractor must maintain copy of any record that forms basis for any claimed

exclusion or exemption.


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Recordkeeping

Contractor must maintain copy of the employee list received from

the contracting agency.


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Recordkeeping

Contractor must retain required records for not less than 3 years

from date records were created.


Hogge Law

To obtain a complementary copy of this presentation, or for assistance in complying

with Executive Order 13495, please contact Ray Hogge

at (757) 961-5400 or at [email protected]


What Government Contractors Need to Know About Executive Order 13495 “Nondisplacement of Qualified...

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