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PSC Submits Comments on Proposed Rule to Impose Nondisplacement Requirements on Services Contractors 

Arlington, Va. (Aug. 29, 2022) The Professional Services Council (PSC) submitted on August 15, 2022, detailed comments raising concerns regarding a proposed Labor Department rule to implement Executive Order (EO) 14055, Nondisplacement of Qualified Workers under Service Contracts. The EO’s stated goals are to reduce disruptions as companies transition work between incumbent and successor contractors and to provide the Government with the benefits of an experienced, well-trained contract workforce. Because this proposed rule and its underlying EO are similar to earlier EOs and implementing rules that have since been revoked, PSC comments note the absence of data or analysis from those prior efforts and suggests that this proposed rule is “a solution in search of a problem that does not exist.” 

“This practice has led to a similar rule twice before, and the Government has provided no data that illuminate a need to reinstitute burdensome nondisplacement obligations,” said David J. Berteau, PSC’s President and CEO. “Neither the EO nor the proposed rule cite any study showing that this rule would generate any efficiencies or benefits other than those that already occur because such hiring is commonplace in many instances. In addition, there is no analysis offered or study cited that concludes that any potential benefits would outweigh the cost of administrative burdens that the proposed rule would impose on contractors and contracting agencies.” 

Berteau continued, “Additionally, this proposed rule treats contractor employees as though they are a Government asset. It fails to recognize that companies invest in these talented individuals—by hiring them, providing compensation and benefits, and training and promoting them—and that these individuals are in turn integral to company culture and morale.”

“Absent any data to support the Government’s belief that requiring successor contractors to offer employment to their predecessor’s employees offers any improvements in the existing efficient, economical, seamless transitions of work,” Berteau concluded, “PSC strongly recommends that the Government withdraw this proposed rule and revoke, or rework, the underlying Executive Order.”