Department of Labor rule will require contractors to offer employment to certain displaced service employees of predecessor contractors

On August 29, 2011, the Department of Labor (DOL) published a final rule, implementing Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts, which was the first major procurement policy initiative of President Obama's Administration, issued only ten days after he took office. The final rule adopts the Executive Order's policy that service contracts must include a clause requiring successor contractors and their subcontractors to offer the incumbent contractor's employees a right of first refusal of employment in positions for which they are qualified. The final rule, which includes limited changes from the proposed rule issued on March 19, 2010, also imposes other compliance and reporting burdens on contractors.

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