Nondisplacement of Qualified Workers Under Service Contracts

The order directs every federal agency to include a "nondisplacement" clause in successor service contracts requiring new contractors to offer, in good faith, a right of first refusal to the employees of the outgoing contractor before filling positions with new hires. Contractors may set their own workforce size but must make express written job offers giving workers at least 10 business days to respond. Exceptions apply to small contracts below the simplified acquisition threshold, employees hired across federal and non-federal work as part of a single job, and cases where an agency senior official provides a written justification before the solicitation date. The order also directs agencies to consider requiring successor contracts to be performed in the same geographic location when doing so promotes efficiency.

The nondisplacement clause does not take binding contractual effect until the FAR Council updates the Federal Acquisition Regulation — agencies are only "strongly encouraged" to include the clause in solicitations issued before that update. The order revokes EO 13897 (2019), which had itself revoked the earlier nondisplacement order, but notes that the original EO 13495 (2009) remains revoked.

Federal service contractors and subcontractors who win successor contracts covered by the Service Contract Act of 1965, the service employees who work under those contracts and face potential displacement during contract transitions, and federal agencies that must revise their procurement solicitations and report exceptions to OMB.

Service workers employed on federal contracts — such as janitors, security guards, and food service workers — gain a formal right to be considered for their jobs before a new contractor hires anyone else. Contractors who ignore the requirement can be barred from federal contracts for up to three years.

The Secretary of Labor writes implementing regulations within 180 days; the FAR Council then has 60 days to embed the required contract clause in the Federal Acquisition Regulation. Only after the FAR Council acts does the clause become mandatory in new solicitations. The Secretary of Labor investigates violations and can order back pay, reinstatement, and debarment. Agencies may grant written exceptions before a solicitation date and must post those exceptions publicly and report them to OMB quarterly. A severability clause protects the rest of the order if any provision is struck down.