Contracting experts had been critical of the lack of flexibility for managers under a rule requiring certain companies to hire employees from their predecessors.
To “promote economy and efficiency in federal government procurement,” the Trump administration on Thursday rolled back an Obama policy that had limited some contractors’ hiring options.
The Obama administration issued the “Nondisplacement of Qualified Workers Under Service Contracts” executive order less than two weeks after President Obama’s inauguration in 2009. The order required service contractors who were taking over government work from another company to offer jobs to nonmanagerial employees at the previous firm first before hiring others. “A carryover work force reduces disruption to the delivery of services during the period of transition between contractors and provides the federal government the benefits of an experienced and trained workforce,” Obama’s Labor Department stated. However, in the Trump administration's effort to deregulate the government, Trump’s executive order will rescind the Obama policy.
The Trump order halts the implementation of all rules, guidelines and programs related to the Obama-policy as well as terminates any investigations and compliance actions. The order is “straightforward for contractors, agencies and individuals to digest,” said Craig Smith, government contracts attorney at the law firm Wiley Rein LLP.
The Communications Workers of America, a union that represents 700,000 private and public sector workers, criticized the president for revoking Obama’s order. Trump’s move will make it “easier for federal contractors to fire people and force them to uproot their lives even when their job isn’t going anywhere,” said Chris Shelton, CWA president. “The leader of our government should be putting the rights of working people first in the government’s dealings—not selling out workers to appease corporate special interests.”
Alan Chvotkin, executive vice president and counsel for the Professional Services Council, said the executive order came “somewhat out of the blue to me.” Trump has already repealed several other federal contractor executive orders, but Chvotkin said he didn’t think this one was under consideration. However, “we welcome” the rollback of Obama’s policy, he said.
Contractor advocates had pushed back on the “carryover workforce plan” over the years. The Obama order “seemed like a solution in search of a problem because you had a practice that was well-established where many contractors did hire predecessor employees,” Smith said. But there are reasons to not hire some people, he noted.
Similarly, Stan Soloway, president and CEO of the consulting firm Celero Strategies LLC and a former top Defense Department acquisition official, said the problem with the Obama directive is that “it takes all of your flexibility away as a manager.” Even if contractors aren’t necessarily looking to get rid of the existing workforce, they need the ability to say certain people don’t fit the role, he said.
The Trump order is “not going to be market-moving” because this is “more of a philosophical question than a practical one,” Soloway said. “It’s not a surprise that a ‘pro-business’ administration repeals it when a Democratic administration” implemented the rule.