Federal Agency Exemption (Waiver) Procedures
Federal Agency Exemption (“Waiver” ProceduresE.O. § 4 Authority to Exempt Contracts; 29 C.F.R. § 9.4 Contracts Exempted by Federal agency; and FAR 48 C.F.R. § 22.1203-3 Waiver.
- The head of a contracting department or agency, or, under the FAR, the senior procurement executive, without delegation, may waive the application of some or all of the provisions of E.O. 13495 and its implementing regulations:
- if, he/she finds that the application of any of the requirements of the E.O and its implementing regulations:
- would not serve the purposes of E.O. 13495, or
- would impair the ability of the Federal Government to procure services on an economical and efficient basis. FAR 48 C.F.R. § 22.1203-3(a).
- Such executive waivers, exempting specified procurement actions from the E.O. and related regulatory requirements, may be made for:
- a contract, subcontract, or purchase order, or
- with respect to a class of contracts, subcontracts, or purchase orders.
- E.O. § 4; 29 C.F.R. § 9.4(d)(1); and FAR 48 C.F.R. § 22.1203-3(a).
- The senior procurement executive shall not redelegate this waiver authority. FAR 48 C.F.R. § 22.1203-3(a).
- In order for such a federal agency waiver to be operative, a written analysis supporting the waiver determination must be completed by the solicitation date.
- If the written analysis supporting exemption by an agency waiver is not completed by the contract solicitation date, the waiver is inoperative.
- In such a circumstance the nondisplacement contract clause shall be included in, or added to, the covered service contract(s) and their solicitation(s).
- 29 C.F.R. §§ 9.4(d)(1) and 9.4(d)(4)(i); 48 C.F.R. § 22.1203-3(b)(1) and (2).
- The written analysis must be retained in accordance with FAR 48 C.F.R. § 4.805.
Content of the written analysis
- The FAR directs the federal agency that "[t]he waiver must be reflected in a written analysis as described in 29 C.F.R. 9.4(d)(4)(i) …." FAR 48 C.F.R. § 22.1203-3(a).
- The DOL regulation at 29 C.F.R. § 9.4(d)(4)(i) requires that:
- The written analysis must compare the anticipated outcomes of hiring predecessor contract employees with those of hiring a new workforce.
- The agency's consideration of cost and other factors in exercising its exemption (waiver) authority, and in the required written analysis, shall reflect the general finding made by E.O.13495 that the government's procurement interests in economy and efficiency are normally served when the successor contractor hires the predecessor's employees.
- The written analysis must also specify how the particular circumstances support a contrary conclusion. See 29 C.F.R. § 9.4(d)(4)(i) for more detailed requirements.
- The FAR also directs the federal agency to "See 29 C.F.R. § 9.4(d)(4) for regulatory provisions addressing circumstances in which a waiver could or would not be appropriate." 48 C.F.R. § 22.1203-3(a). Pursuant to § 9.4(d)(4):
- The head of a contracting department or agency/senior procurement executive of the procuring agency must not consider wage rates and fringe benefits of service employees in making an exemption/waiver determination except in the specific exceptional circumstances stated at 29 C.F.R. § 9.4(d)(4)(iii).
- Also, the head of a contracting department or agency/senior procurement executive of the procuring agency shall not consider certain other factors in making a waiver determination, because they would contravene the E.O.'s purposes and findings. Such factors are identified at 29 C.F.R. § 9.4(d)(4)(iii).
Notification to workers and DOL
- In order for the federal agency exemption by a waiver issued under FAR 48 C.F.R. § 22.1203-3 to be operative, certain notification requirements must be met.
- If the following notification requirements are not met within no later than five business days after the solicitation issuance date, the agency exercise of its exemption/waiver authority shall be inoperative:
- 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, of the agency's determination.
- 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 of the agency's determination.
- The agency shall notify the DOL of its waiver decision and provide the DOL with a copy of its written analysis. The waiver decision and related written analysis shall be sent to the following address: U.S. Department of Labor, Wage and Hour Division, Branch of Government Contracts Enforcement, 200 Constitution Avenue, N.W., Room S-3006, Washington, D.C. 20210, or by email to: Displaced@dol.gov
- If these notification requirements are not met, the contracting officer shall include the nondisplacement clause in the solicitation and contract.
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