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Federal Contract Staff to Get Job Protections Under Biden Order

Nov. 18, 2021, 8:32 PM

Workers who would otherwise lose their jobs when their employer’s federal contract ends would be at the front of the line for jobs on the next one, under an executive order President Joe Biden signed Thursday.

The order directs federal agencies to include a clause in re-issued services contracts to give a predecessor’s employees right of first refusal to maintain their employment. The U.S. Labor Department will finalize details of the policy by spring 2022.

Companies that defy the order could be forced to pay the former contractor’s workers lost wages or offer them a job, according to the order. For instance, a contractor could defy the order by bidding on recompetition of a contract at a lower cost than the incumbent contractor and planning to hire lower-paid workers to accommodate that proposal.

Workers must be qualified to be eligible for the new jobs, and employment on the new contract must be similar to the jobs on the predecessor’s contract.

The order provides added stability for workers, and their unions, in performing services for federal agencies when contracts change hands, while adding compliance requirements for the companies awarded the bids.

The Labor Department also is expected imminently to issue a final rule raising the minimum wage on federal contracts to $15 an hour.

The president’s directive comes as federal spending on contracts is increasing and federal agencies are gearing up to implement the new infrastructure law.

Because of Covid-19 response needs, federal spending on contracts reached a record high of $686 billion in fiscal year 2020, up 14% from the previous year, according to Bloomberg Government’s federal contracting data.

Defense contractors Lockheed Martin Corp., Raytheon Technologies Corp., and General Dynamics Corp. received a combined $129.5 billion of that spending.

—With assistance from Ben Penn

To contact the reporter on this story: Courtney Rozen in Washington at crozen@bgov.com

To contact the editors responsible for this story: Amanda H. Allen at aallen@bloombergindustry.com; John Lauinger at jlauinger@bloomberglaw.com

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