FAQs on the Displacement of Qualified Workers Under SCA

On January 18, 2013, Executive Order (EO) 13495, Non Displacement of Qualified Workers under Service Contracts went into effect. If you aren't familiar, this requires federal service contract workers the right of first refusal for employment with the successor contractor, who would otherwise lose their jobs as a result of the competition or expiration of a contract.

Who Does This Regulation Apply To?

The regulations apply to both prime and subcontractors above the simplified acquisition threshold (currently $150,000) and their solicitations, except those excluded that succeed contracts for the same or similar services at the same location. The regulations also excludes certain types of contracts and employees, as well as giving the head of a contracting department or agency the flexibility to exempt contracts from the regulations if it finds the requirements would not serve the purposes of the EO or would impair the government's ability to procure services economically or efficiently.

Here are the most common questions — and more importantly, answers — about the Service Contract Act:

Q: What is the purpose of EO 13495?

A: The Federal government has determined there is less disruption to the delivery of services during a transition period from one contractor to another by utilizing the current experienced and trained workforce for that service.

Q: What does EO 13495 mean for Government Contractors?

A: As a successor contractor or subcontractor, no employment openings under the contract can be filled without first making good faith offers of employment to those who are qualified and who were employed under the predecessor contract and whose employment will be terminated as a result of the contract award. A bona fide offer of employment must be made to each qualified employee before offering employment to any other person on the contract.

Q: How do I determine who is qualified?

A: A successor contractor should be provided a list of all employees on the predecessor contract however even if you are not provided a list, as the contract awardee you would still be required to make an offer of employment.

Q: What constitutes a bona fide offer of employment?

A: The regulations indicate that job offers can be made either orally or in writing and the affected individuals should have no less than 10 days in which to respond to the offer. An HR best practice would be to ensure all offers are made in writing and have the incumbent employees sign the documentation in order to keep a record of all accepted offers as well as declinations.

Q: What are the record-keeping requirements?

A: Contractors need to maintain copies of any written employment offers or a written record of any oral offers of employment. In the record, include the date, location and attendance roster of any employee meetings at which offers are 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.

Q: Is there a complaint process?

A: Any employee of the predecessor contract who believes EO 13495 has been violated may file a complaint with the Wage and Hour Division within 120 days from the first day of contract performance.

Have additional questions? Please contact Helios at 703-860-3882 and we will get you the help that you need with your SCA requirements.