Contractor advocates criticize administration’s ‘carry-over workforce’ plan

Groups say draft rule implementing executive order eliminates hiring flexibility for companies.

Some industry groups strongly oppose a March 19 proposed rule that implements a January executive order requiring vendors that win follow-on service contracts to offer jobs to employees who worked on the original contract.

The executive order states no jobs can be advertised until former employees under the contract have been granted the right of first refusal. But Stan Soloway, president of the Professional Services Council, a contractor association, said it is the Labor Department's proposed rule that will be excessively burdensome for contractors.

"While the 2009 executive order implied some reasonable hiring flexibility, [Labor's] proposed rule eviscerates those flexibilities and effectively places the government in charge of selecting and managing a contractor's workforce," Soloway said. "There are far more effective ways to ensure the fair treatment of workers, including fairly simple, worker-friendly, changes to the [Service Contract Act]."

The executive order stated a "carry-over workforce" reduces disruption to the delivery of services and provides the government with an experienced, trained workforce familiar with its personnel, facilities and requirements. Most contractors already retain incumbent employees because it is more efficient and effective, Soloway said, adding contractors must have the ability to make their own decisions on which employees best meet the contract needs.

"The proposed rule does precisely the opposite," he said.

Larry Allen, president of the Coalition for Government Procurement, said the draft rule could be "extremely disruptive" for contractors and would discourage companies from competing for work, particularly work previously performed by federal employees.

"The larger issue in play is discouraging the government from contracting things out and discouraging competition. That's really what this type of thing is aimed at -- curtailing any contracting-out operations that the government might decide it wants to undertake," Allen said. "At the heart, it's another impediment that makes contracting out that much more difficult."

Allen said there are elements of the rule that did not make logistical sense or could discourage efficiency.

"If there are 25 people doing the work today, and I think I can get it done with 18, how do you offer right of first refusal to all 25 when you know you won't have that many slots?" Allen asked.

According to PSC, the proposed rule also might encourage the violation of employee privacy and improper access to proprietary corporate personnel information. The rule states the winning contractor could use personnel performance evaluations of incumbent employees to determine their suitability for employment with the winning firm, but also acknowledges that such information might not be provided by the outgoing contractor.

"Indeed, making those employee evaluations available is highly unusual and raises substantial privacy and liability issues," Soloway said.

Stakeholders can submit comments on the proposed rule until May 18 at