Jump to content
The Wifcon Forums and Blogs

Vern Edwards

I wonder who wrote that clause.

Recommended Posts

Have you read the subject executive order, signed by President Obama? It is obviously a payoff to organized labor. What is interesting is the clause that it prescribes for use in service contracts. Since when did presidents write contract clauses? I thought that's what they have OFPP and the FAR councils for. President Obama didn't write it, of that I'm sure. So who did? If you haven't read it, take a look. Care to make a guess as to the origin? Do you think that the clause, as written, is legal?

http://edocket.access.gpo.gov/2009/E9-2484.htm

Share this post


Link to post
Share on other sites
Guest carl r culham

I have read it. Origin is from organized labor who undoubtedly wrote it based on how right of first refusal works under OMB Circular A-76. The clause is as legal as any other order stipulated in an Executive Order but it sure looks like it establishes a new privity of contract standard for the Federal government regarding subcontractors. Clearly aimed at big service contract operations I wonder if Obama's expert who wrote this gave any consideration to the "Mom/Pop" contractor who will be performing say a janitorial contract or road maintenance contract on a project in some outback location? Seems he has forgotten Main Street already. Not that it means a whole heck of a lot but Mr. Obama has received a letter on this subject from this acquisition professional.

Share this post


Link to post
Share on other sites

This is confusing to me and I can see lots of problems. For example, say I am a company who submitted the winning proposal based mostly on my technical and staffing approaches. It's unclear whether I can implement my staffing approach without consideration on using the incumbent's staff. Also if I am the incumbent and have plans to utilize my existing employees on another project, I don't want another company talking with them.

Share this post


Link to post
Share on other sites

If presidents are permitted to mandate substantive procedures like this, it would appear to make a sham of the requirement for public comment in regard to procurement rule making, which is intended to have the rule maker get and consider the views of those who would be affected by the rule. See. http://www.law.cornell.edu/uscode/html/usc...18---b000-.html

Share this post


Link to post
Share on other sites

What if the Government isn't totally happy with some of the incumbent employees on the contract? In the past I worked for a contractor submitting a proposal on a contract being re-competed. The incumbent contractor had earned a reputation of being somwhat sloppy in their workmanship, with some of their employees being lazy. Granted a lot of those types of problems can be fixed by strong management, but we (the outside company) wanted to bring in a largely fresh set of people so there would not be an impression, if we won, that it was status quo with the contractor employees merely putting on a different color company shirt when they came back to work on Monday working for a new company.

Share this post


Link to post
Share on other sites

Good question - why dont you ask the White House?

Share this post


Link to post
Share on other sites
Good question - why dont you ask the White House?

As a follow-on, how would this policy work in regard to situations like Blackwater not having its contract renewed?

Share this post


Link to post
Share on other sites
If presidents are permitted to mandate substantive procedures like this, it would appear to make a sham of the requirement for public comment in regard to procurement rule making, which is intended to have the rule maker get and consider the views of those who would be affected by the rule. See. http://www.law.cornell.edu/uscode/html/usc...18---b000-.html

Although the EO says that it is "effective immediately" it also states that:

The Federal Acquisition Regulatory Council shall issue, within 180 days of the date of this order, to the

extent permitted by law, regulations in the Federal Acquisition Regulation to provide for inclusion of the

contract clause in Federal solicitations and contracts subject to this order.

I wonder if the standard Federal Register notice including public comment period will be followed, although one wonders what the FAR Council would be able to do with the public comments since the decision has seemingly been made.

Share this post


Link to post
Share on other sites
What if the Government isn't totally happy with some of the incumbent employees on the contract? In the past I worked for a contractor submitting a proposal on a contract being re-competed. The incumbent contractor had earned a reputation of being somwhat sloppy in their workmanship, with some of their employees being lazy. Granted a lot of those types of problems can be fixed by strong management, but we (the outside company) wanted to bring in a largely fresh set of people so there would not be an impression, if we won, that it was status quo with the contractor employees merely putting on a different color company shirt when they came back to work on Monday working for a new company.

Some wiggle room appears to be provided for situations such as what you describe above, in that the EO states the contractor and subs:

... are not required to offer a right of first refusal to any employee(s) of the predecessor contractor whom

the contractor or any of its subcontractors reasonably believes, based on the particular employee's past

performance, has failed to perform suitably on the job.

Share this post


Link to post
Share on other sites
Some wiggle room appears to be provided for situations such as what you describe above, in that the EO states the contractor and subs:

... are not required to offer a right of first refusal to any employee(s) of the predecessor contractor whom

the contractor or any of its subcontractors reasonably believes, based on the particular employee's past

performance, has failed to perform suitably on the job.

Paragraph (a) of the clause begins, "Consistent with the efficient performance of this contract, . . . " I wonder if there isn't some additional wiggle room in that phrase. For example, if it isn't "consistent with the efficient performance of the contract," could one argue that there's some flexibility about which predecessor contract employees must be offered the right of first refusal?

Share this post


Link to post
Share on other sites

One thing that came to mind when I read this new Executive Order is that the new adminstration is giving with one hand in this case, but taking with the other hand.

An example is something President Obama said in his inaugural speech: "The question we ask today is not whether government is too big or too small, but whether it works."

The Washington Post had an article today titled "Federal Contracting System in Serious Disrepair", an article which says "The solution to fixing the broken system is not wholesale contractor cutbacks to reach numerical targets, but making sure we know what contractors should be doing and a transparent way of determining whether we are getting true value."

How does rewarding the contractors who did not win a competition, or may not have even submitted a bid or proposal, fit into that what the President or the author of the Washington Post article proposes?

And for that matter, the Post had an article titled "The Federal Gov's Broken Hiring Process" published on December 9th. If the Government cannot hire its own employees properly and efficiently, how will it handle contractors any better?

At what point do we just trash the whole Federal system and start over again?

Share this post


Link to post
Share on other sites

A few things to ponder on this subject:


The EO does not cover managerial or supervisory positions, and does not require job offers at the same level as the incumbent contractor.


No indication in the EO that new contractor must keep predecessor employees "whole" -- same rate, same benefits, etc. So in order to remain competitive, you must bid minimum hours, bid minimum SCA rates and employees (new or old) may have to accept cuts in pay to support your proposal price. Perhaps not many predecessor employees would want to stay with the new contractor at a reduced rate. Guess that depends on whether or not they have a job at all when incumbent leaves and new contractor takes over.


What happens to your existing employees when you win the contract but are forced to offer positions to the predecessor contractor to comply with this EO?? Do you lay off your own people because you had to hire your predecessor's employees? That's sad.


What does this do regarding Organizational Conflicts of Interest and non-hire clauses?


There is some "wiggle room" in the fact that the new contractor does not have to offer jobs to predecessor employees that did not "perform suitably" -- but since new contractor will not have access to employee records of the predecessor contractor, how will that determination be made as to who was or was not "suitable"? And how many lawsuits will result before that is resolved? Is the fact that you were on the proposal team that lost the follow-on contract going to make you "not suitable"?


Exercising an option to extend will be an exemption to this EO, so I guess we'd better be sure to include lots of options in any contracts we issue before the FAR is updated.


Check the NCMA website -- they may have a transcript or information posted regarding their recent Webinar on 2-10-09 entitled "New Executive Order for Employment Under Federal Service Contracts"

Just a thought....

Share this post


Link to post
Share on other sites

You all seem to have missed the fact that the EO would take disputes over the clause out of the jurisdiction of the boards of contract appeals, the Court of Federal Claims, and the Federal Circuit, and throw them to the administrative jurisdiction of the Department of Labor, which is sympathetic to organized labor, and thence to the D.C. district court and the D.C. Circuit Court of Appeals. The Secretary of Labor gets jurisdictional primacy under the various labor statutes (Service Contract Act, Davis-Bacon Act), but I question whether the president has the authority to exempt such disputes from Contract Disputes Act coverage via an executive order.

Share this post


Link to post
Share on other sites

I know this is an old discussion, but I have a question.

I work for a contractor that will be subject to Executive Order 13945 regarding Nondisplacement of Workers of a prior contractor under the Service Contract Act. We are trying to prepare to comply. So far, to our knowledge, no regs have been published.

Our question is how does location affect this requirement? In other words, if we operate all of our contracts remotely from one site and the prior contractor's employees are in a different location, would we still be required to offer right of first refusal?

Or what if we have many employees telecommuting from a variety of locations (which in fact, we do) - do we have to offer telecommuting as part of the right of first refusal?

Any insights or thoughts would be welcome.

Share this post


Link to post
Share on other sites

After receiving a question regarding "Right of First Refusal" from a customer, I decided to look into this topic at Wifcon. The situation raised in the linked Wifcon thread also sums up my situation. After doing some research, I noticed Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts, January 30, 2009 has yet to be incorporated into the FAR and is still an outstanding FAR case (see link 2). Are there reasons why it takes 3 plus years for an EO/NDAA section to be incorporated into the FAR? Are there political reasons or is it really that difficult to implement? What is the typical timeline to get an EO and/or NDAA section implemented into the FAR?

1. http://www.wifcon.com/discussion/index.php?showtopic=199

2. http://www.acq.osd.mil/dpap/dars/opencases/farcasenum/far.pdf

Share this post


Link to post
Share on other sites

It is getting closer to being a final rule:

Subject: FAR Case 2011-028, Nondisplacement of Qualified Workers Under Service Contracts

MEMORANDUM FOR CIVILIAN AGENCY ACQUISITION COUNCIL (CAAC)

Subject: FAR Case 2011-028, Nondisplacement of Qualified Workers Under Service Contracts

The subject FAR case is presented to the CAAC for consideration as a Final Rule.

This rule proposes to amend the Federal Acquisition Regulation (FAR) to implement Executive Order 13495, which provides for nondisplacement

of qualified workers under service contracts. The Department of Labor was assigned responsibility by the E.O.for developing implementing regulations, upon

which the FAR rule is based.

Team Report

TAB A – FAR Text

TAB B – Federal Register Notice

TAB C -- Federal Acquisition Circular

TAB D – Final Regulatory Flexibility Analysis

TAB E – Training Form

TAB F – Data Collection Checklist

TAB G – Matrix of Public Comments

TAB H -- DOL implementing Regulation

TAB I -- FAR Proposed rule

TAB J -- FAR Case checklist

TAB K -- E.O. 13495

TAB L -- Clause Matrix

This case is an Administration priority and is being handled under expedited procedures. This case will be overviewed at the Wednesday, August 15, 2012 CAAC meeting.

Comments from the CAAC are due by COB,August 23, 2012 and the case will be discussed at the August 29th, 2012 CAAC meeting.

Share this post


Link to post
Share on other sites

To answer Vern's original question (several years late):

Since when did presidents write contract clauses?

Since at least 1994 when Clinton signed an extremely similar EO, including the exemption of disputes from Contract Disputes Act coverage and a contract clause. It was more limited in scope, and it was later revoked by Bush.

http://www.archives....s/pdf/12933.pdf

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×