Incumbent employees on federal government services contracts frequently are offered positions by successor contractors on follow-on contracts, but proposed rule changes would significantly limit the new contractor's discretion in making hiring decisions. On May 3, 2012, DoD, GSA and NASA finally issued a proposed rule for the implementation of a 2009 Executive Order protecting service employees from termination by successor contractors and subcontractors.1 This proposed rule seeks public comments on new Federal Acquisition Regulation (“FAR”) subpart 22.12 and its associated contract clause, which will serve to align the FAR with the Department of Labor (“DOL”) Final Rule issued on August 29, 2011.2 Subject to only a small number of exceptions and a strict waiver process, the DOL regulations and proposed FAR require that successor contractors and subcontractors offer service employees (as defined in the Service Contract Act of 1965 (the “SCA”)) a right of first refusal of employment for positions for which they are qualified. Consistent with the remedies for other violations of the SCA, those that fail (or worse refuse) to comply with the requirements could face withholding of contract payments and even suspension and debarment. Accordingly, all services contractors and subcontractors should ensure that their compliance and contract administration policies and procedures take these new employment requirements into account.