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An Obama Executive Order Limits Contractors' Hiring Options

An Obama Executive Order Limits Contractors' Hiring Options

By Robert Brodsky | Government Executive Magazine

He adds that the order does not serve “the interests of industry or government well.” Others say the order would make the contract workforce more like the civil service, with built-in unionlike protections.

There are several caveats to the directive. It applies only to jobs covered by the 1965 Service Contract Act, such as building maintenance and processing services, and agency heads can issue exemptions. The incoming contractor reserves the right to perform the work with fewer employees. And the new service provider would not be obligated to hire its predecessor’s workers if doing so would require layoffs.

In what might be the murkiest and most controversial language, contractors would be allowed to disregard the order if they believed that, based on “past performance, [he or she has] failed to perform suitably on the job.” Making such a determination could require the incumbent contract holder to turn over years of employee performance evaluations to its successor – essentially a competitor.

Robert Burton, a partner at the Washington law firm of Venable LLP, calls that language vague and suspects it will be interpreted broadly by contractors and challenged frequently by employees. “Any time you have mandatory re-quirements and people’s jobs are on the line, it can result in disputes of some fashion,” says Burton, who was deputy administrator of the Office of Management and Budget’s Office of Federal Procurement Policy during the Bush administration. “The language of the order will lend itself to debates about what ‘suitably’ means.”

In a statement, the Labor Department said, “A belief that an employee failed to perform suitably on the job would have to be reasonable and based upon credible information. This would be a fact-based inquiry that would have to be resolved based upon the circumstances present in individual cases. Until further regulatory guidance is developed and finalized, we are not able to comment on additional factors that might be considered in reaching these factual determinations.”

This ambiguity might not be re-solved until the end of August – the deadline for the Labor Department and the Federal Acquisition Regulatory Council to develop guidelines for interpreting the order. But the administration’s over-riding tone on acquisition policy already is becoming clear, observers say.

“This is part of a larger trend line toward more oversight and more mandatory requirements of government contractors,” Burton says. “We have seen that with some of the mandatory reporting of fraud and significant overpayments. And I think we’ll see more of it.”


©2009 Yellowbrix, Inc.

Related Article:
Top Ten Federal Contractors in 2009


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