48 CFR § 22.1203-5 - Exceptions.
(a) A successor contractor or its subcontractors are not required to offer employment to any service employee of the predecessor contractor who -
(1) Will be retained by the predecessor contractor.
(2) The successor contractor or any of its subcontractors reasonably believes, based on the particular service employee's past performance, has failed to perform suitably on the job. (See 29 CFR 9.12(c)(4) for regulatory provisions addressing circumstances in which this exception would or would not be appropriate.)
(b) A successor contractor or its subcontractors may employ under the contract any of its current service employees who (1) have worked for the successor contractor or its subcontractors for at least three months immediately preceding the commencement of the successor contract, and (2) would otherwise face lay-off or discharge.
(c) The successor contractor bears the responsibility of demonstrating the appropriateness of claiming any of the preceding exceptions and the exemption listed at 22.1203-2(a)(5) involving nonfederal work.