On January 18, 2013, the Federal Acquisition Regulatory (“FAR”) Council implemented Executive Order (“E.O.”) 13495 (“Nondisplacement of Qualified Workers Under Service Contracts”) into regulation at FAR Subpart 22.12. FAR Subpart 22.12 requires successor service contractors and subcontractors (whose contracts are above the simplified acquisition threshold) to offer “service employees,” who were employed under predecessor contracts, “a right of first refusal of employment” when the successor contract is for the “same or similar service[s]” and at the “same location” as the predecessor contract. As we outlined in our recent client advisory, service contractors and subcontractors must carefully review this regulation to understand its impact on hiring processes, especially in light of the ambiguities, loopholes, and strong enforcement provisions contained in the regulation. For example, FAR Subpart 22.12 does not define the phrase “same location,” leaving it open to various interpretations: the “same location” could be limited to the same building or expanded to include all services performed in the same city. As one can imagine, such interpretations could dramatically affect the reach of this regulation. On the enforcement side, this regulation allows the contracting officer to suspend payment on a contract or suspend or debar a contractor, in certain instances. Further, disputes arising from FAR Subpart 22.12 will not be subject to the Contract Disputes Act; they will be resolved in accordance with Department of Labor procedures set forth at 29 C.F.R. part 9. Please contact us if you have any questions about the impact of this subpart and how it may affect your business.