Exceptions To The Requirement That The Successor Contractor & Subcontractors Offer A Right Of First Refusal

  • The E.O. contract clause at § 5(b) states specific exceptions to the general requirement that the successor contractors offer a right of first refusal of employment.
  • The successor contractor bears the responsibility of demonstrating the appropriateness of claiming any of the five exceptions discussed below, from the otherwise applicable obligation to offer a right of first refusal of employment to the predecessor contractor's service employees.
  • Under the successor contract, a successor contractor or its subcontractors may employ any of its current service employees who:
  • Have worked for the successor contractor or its subcontractors for at least three months immediately preceding the commencement of the successor contract, and
  • Would otherwise face lay-off or discharge.
  • A successor contractor or its subcontractors are not required to offer employment to any service employee of the predecessor contractor who will be retained by the predecessor contractor.
  • The successor contractor must presume that all service employees hired to work under a predecessor's federal service contract will be terminated as a result of the award of the successor contract, absent an ability to demonstrate a reasonable belief to the contrary that is based upon credible information provided by a knowledgeable source such as the predecessor contractor or the employee.
  • A contractor or subcontractor is not required to offer employment to any employee of the predecessor contractor for whom the successor contractor or any of its subcontractors reasonably believes, based on the particular service employee's past performance, has failed to perform suitably on the job.
  • The contractor must presume that all employees working under the predecessor contract in the last month of performance performed suitable work on the contract, absent an ability to demonstrate a reasonable belief to the contrary. that is:
  • Based upon written credible information provided by a knowledgeable source such as the predecessor contractor and its subcontractors, the local supervisor, the employee, or the contracting agency. (See examples at 29 C.F.R. § 9.12(c)(4)(ii)(B).
  • The performance determination must be made on an individual basis for each employee. Information regarding the general performance of the predecessor contractor is not sufficient to claim this exception.

FAR 48 C.F.R. § 22.1203-5(a)(2) and 29 C.F.R. § 9.12(c)(4).

  • A contractor or subcontractor is not required to offer employment to any employee hired to work under a predecessor's federal service contract and one or more nonfederal service contracts as part of a single job, provided that the employee was not deployed in a manner that was designed to avoid the purposes of the E.O. or 29 C.F.R. Part 9. However, the successor contractor must presume that no employees hired to work under a predecessor's Federal service contract worked on one or more nonfederal service contracts as part of a single job, unless the successor can demonstrate a reasonable belief to the contrary. See 29 C.F.R. § 9.12(c)(5) and FAR 48 C.F.R. § 22.1203-2(a)(5).
  • Compliance with any other E.O., regulation, or law of the United States E.O. § 1; 29 C.F.R. § 9.1(b)(2); 48 C.F.R. § 22.1202(b).
  • As stated in E.O. 13495, § 1, and reiterated at 29 C.F.R. § 9.1(b):
  • "Nothing in this order shall be construed to permit a contractor or subcontractor to fail to comply with any provision of any other Executive Order or law of the United States."
  • As further explained at FAR 48 C.F.R. § 22.1202(b):
  • In certain circumstances, certain other legal requirements may conflict with the requirements of E.O. 13495. For example:
  • The requirements of the HUBZone Program (see FAR 48 C.F.R. § 19.13),
  • E.O. 11246 (Equal Employment Opportunity), and
  • The Vietnam Era Veterans' Readjustment Assistance Act of 1974.
  • All applicable laws and executive orders must be satisfied in tandem with, and if necessary prior to, the requirements of E.O. 13495 and its implementing regulations. 48 C.F.R. § 22.1202(b).


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