A proposed contracting rule that requires new service contract winners to hire the outgoing firm’s employees is not consistent with other federal rules, a trade association said this week.
The Labor Department issued a similar rule in August, which was required by a 2009 executive order that seeks to reduce disruption during contract transitions and retain experienced workers. The rule being proposed by the Federal Acquisition Regulatory Council would require agencies to add the rule as a clause in contracts.
However, the proposed rule does not include some of the requirements in the Labor Department’s rule, the Professional Services Council said in comments about the rule.
For example, the Labor Department’s rule requires the successor company to offer jobs to the predecessor firm’s employees if there are openings within 90 days after the new contractor takes over. The proposed acquisition rule does not have that requirement.
In this example, contractors would prefer the proposed rule because it would give companies more flexibility to hire employees after work starts, PSC executive vice president Alan Chvotkin said in comments on the rule. But unless the differences between the Labor Department and proposed FAR rule are addressed, contractors will not know which to follow to be in compliance with federal regulations, he said.
PSC and other industry associations opposed the Labor Department’s rule last year because it limits a contractor’s ability to make sweeping changes that may be needed and potentially guarantees work for some poor-performing employees. The comment period for the FAR rule change ended July 2.
“Successor contractors already exercise business judgment as to when efficiencies will result from offering jobs to their predecessors’ employees—and exercise this judgment without the need for taxpayer dollars to be spent investigating and issuing rulings about who should have offered jobs to whom,” Chvotkin said in his comments to the proposed rule.