DOD, GSA, and NASA Require Successor Contractors to Offer Right of First Refusal to Predecessor Employees

January 18, 2013

On December 21, 2012, DOD, the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) issued a final rule amending the Federal Acquisition Regulation (FAR). The amendments require service contractors operating under a successor contract to grant predecessor contractor employees the right of first refusal for jobs they are qualified to perform. This requirement also applies to successor subcontractors. Under the final rule, successor contractors do not have to grant first refusal rights to all displaced employees. Successor contractors need only offer jobs to the number of employees needed to perform the successor contract. Further, successor contractors do not need to offer displaced workers the same job. The rule states that differences in employment terms and benefits (including compensation) are permissible. Lastly, the final rule grants the contracting agencies’ senior procurement executives the power to waive the rule. The final rule became effective January 18, 2013. (77 Fed. Reg. 75766, 12/21/2012.)

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