Recently, the Department of Energy (DOE) released a Federal Register notice proposing an amendment to the DOE Acquisition Regulation (DEAR) to clarify Federal Acquisition Regulation (FAR) Subpart 22.12, Nondisplacement of Qualified Workers Under Service Contracts. The proposed amendment explains that FAR Subpart 22.12 shall apply to DOE’s management and operating (M&O) subcontracts.
FAR Subpart 22.12
FAR 22.1202(a) establishes that:
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 service 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.
This means that a successor contractor may be limited to using existing service workers on the location and project until the right of first refusal has been extended and expired. Each express offer of employment under the rule is required to stay open for a minimum of 10 days.
Application to DOE M&O Subcontracts
The DEAR does not currently address the applicability of Executive Order 13495, as implemented by FAR Subpart 22.12, to subcontracts under DOE’s M&O contracts. The proposed amendment provides that:
This proposed rule clarifies that FAR Subpart 22.12 applies to subcontracts under the Department’s management and operating contracts. A management and operating contract requires a contractor to operate, maintain, and support a Government-owned or -controlled research, development, special production, or testing establishment which is devoted to a major program(s) of the contracting agency.
A number of exemptions and exceptions apply to the proposed rule. For example, the proposed rule does not apply to contracts and subcontracts below the simplified acquisition threshold of $150,000 (41 U.S.C. 134) and it does not apply to contracts and subcontracts awarded pursuant to the Javits-Wagner-O’Day Act (which provides protections for employees who are blind or severely disabled). Additionally, the head of a contracting department or agency may exempt its department or agency from the requirements of the rule if it finds that the application of the requirements of the rule would not service the purposes of the rule or would impair the ability of the federal government to procure services on an economical and efficient basis.