Winning a recompete is supposed to be good news. For the HR team, it marks the start of a compressed workforce transition that has to be executed correctly before the period of performance begins, typically within 30 to 60 days. And in 2025 the rules governing that transition changed more than they had in a decade. A large share of the guidance still circulating, including some published by reputable firms, describes obligations that no longer exist.
The Rule That No Longer Exists
For most of the last fifteen years, successor contractors on SCA-covered contracts operated under some version of a "nondisplacement" rule: before hiring anyone else, the incoming contractor had to offer employment to the qualified service employees working under the predecessor contract, and the outgoing contractor had to hand over a certified employee list within 10 days. The most recent version came from Executive Order 14055, implemented at 29 C.F.R. Part 9 and FAR 52.222-17.
That regime is gone. President Trump rescinded EO 14055 on January 20, 2025, and the Department of Labor formally removed the implementing regulations from the CFR effective December 22, 2025. For new contracts and newly exercised options, there is no federal right of first refusal, no certified-list requirement, and no 90-day retention period.
If your transition playbook still includes the 10-day certified employee list and documented right-of-first-refusal offers as legal requirements, it is following a rescinded rule. Check the playbook against the contract, not against articles written before 2025.
Some history is useful here, because this rule has flipped with every change of administration: President Obama created it (EO 13495, 2009), President Trump revoked it in 2019, President Biden reinstated a stronger version in 2021 (EO 14055), and President Trump revoked it again in 2025. Contractors building long-term transition processes should assume it can come back.
Nondisplacement obligations took effect for new contracts over $250,000, including a 90-day retention period for qualified predecessor employees.
President Trump rescinded EO 14055 along with a series of other executive orders governing federal contractors. Agencies were directed to stop enforcing it.
DOL's final rule rescinding the regulatory framework took effect. The right of first refusal and the certified-list requirement ceased to exist as regulatory obligations.
What Still Binds You
1. The clause that may still be in your contract
Rescission of the executive order did not rewrite existing contracts. A contract awarded while FAR 52.222-17 was being incorporated may still contain the nondisplacement clause, and clause obligations are contractual for as long as they remain in the contract. Before assuming you are free of the old rule, read the contract and ask the contracting officer whether the clause will be removed at the next modification. The same check belongs on the outgoing side: an incumbent losing a contract that carries the clause may still owe the certified employee list.
2. SCA Section 4(c): the wage successorship that never went away
The part of successor law that survives every administration is written into the statute itself. Under SCA Section 4(c), if the predecessor's service employees worked under a collective bargaining agreement, the successor must pay wages and fringe benefits at least equal to what that CBA provided, for the first year of the new contract. This applies whether or not you hire a single predecessor employee, and it is the provision that most often surprises successors who assumed a recompete resets compensation.
3. The new wage determination, from day one
Absent a CBA, the wage determination incorporated into the successor contract sets the floor for every classification from the first day of performance. The recurring errors here are mapping predecessor employees into classifications that undervalue the work being performed, and letting fringe benefits wait for the company's normal open-enrollment cycle. SCA fringe obligations attach to every covered hour from day one; a 30-day enrollment gap is 30 days of back-pay exposure per employee.
4. WARN and state law on the losing side
An incumbent losing a large contract may trigger federal WARN Act notice obligations (60 days, for mass layoffs at covered employers), and a handful of states and cities have their own displaced-worker retention laws for building services and similar contracts. Both are fact-specific. The point is that "we lost the recompete" starts a compliance clock on the way out, too.
The Business Case Outlived the Mandate
None of this means abandoning the incumbent workforce. Hiring experienced predecessor employees is still usually the right operational call: they hold the institutional knowledge, they are the fastest path to full staffing, and continuity protects your past performance rating. What changed is the frame. Absorbing the incumbent workforce is now a staffing strategy you choose and design, rather than a documented legal process the government audits. Written offers and a clean record remain worth keeping, partly because they are good hiring hygiene and partly because the rule's history says it may return.
The Obligations Run Both Ways
Incoming Successor
- Read the awarded contract for a lingering FAR 52.222-17 clause before designing the hiring process
- Check whether predecessor employees worked under a CBA; if so, price Section 4(c) wage and fringe floors into year one
- Map every position against the new wage determination's labor categories before making offers
- Provide wage-determination-level fringe benefits from the first day of performance
- Document offers and hiring decisions even where no rule requires it
Outgoing Predecessor
- Review the expiring contract for clause obligations that survive the rescission
- Run a WARN Act analysis before the contract end date, not after
- Check state and local displaced-worker laws for each work location
- Maintain payroll and classification records through close-out; SCA records must be kept three years
- Coordinate transition timing with the successor; your conduct is visible to the contracting officer
Where Transitions Break Down Now
- Following the rescinded rule. Teams re-run the 2023 playbook, wait on a certified list that never arrives, and build their schedule around offer obligations that no longer exist, burning transition weeks they needed for classification and benefits work.
- Missing a live clause. The opposite failure: the contract still carries FAR 52.222-17, nobody reads it, and a contractual nondisplacement obligation goes unmet.
- Misclassification at transition. Predecessor employees get mapped into categories that don't match the new wage determination, creating wage liability and misclassification exposure at once.
- Delayed fringe benefits. Benefits wait for the normal onboarding cycle while back-pay exposure accrues daily.
- Skipping the CBA check. Section 4(c) floors get discovered after pricing, when they are hardest to absorb.
Planning the Transition Before Award
By the time an award is announced, the timeline is already running. Contractors who build transition planning into the proposal phase, including a workforce absorption model, a day-one wage determination analysis, the CBA check, and a draft offer letter, execute cleaner transitions than those who treat it as a post-award HR project. Incumbents defending a recompete should do the mirror-image work for the losing scenario while it is still hypothetical.
Sources
- Nondisplacement of Qualified Workers Under Service Contracts; Rescission of Regulations — Federal Register (Dec 22, 2025)
- DOL rescinds prior administration's final rule on displacement of federal contractors — U.S. Department of Labor (2025)
- Executive Order Underpinning SCA Contractors' Right of First Refusal Rescinded — Crowell & Moring (2025)
- Incoming Administration Rescinds "Right of First Refusal" Requirements — Littler (2025)
- Service Contract Act FAQ — U.S. Department of Labor WHD
- Trump Administration Rescinds Executive Orders on Government Contracts — PilieroMazza (2025)