FAR 52.207-3—Right of First Refusal of Employment.
Plain-English Summary
FAR 52.207-3, Right of First Refusal of Employment, requires a contractor to give certain Government personnel priority consideration for jobs created under the contract when those employees are adversely affected or separated because the contract was awarded. The clause covers four main topics: the contractor’s obligation to offer first refusal for qualified openings, the condition that the hiring must comply with post-Government employment conflict-of-interest rules, the contracting officer’s duty to provide the contractor a list of affected personnel within 10 days after award, and the contractor’s reporting duty for hires made from that list within the first 90 days of contract performance. In practice, this clause is intended to reduce disruption to federal employees displaced by a contract award, while also helping agencies manage workforce transitions during outsourcing or follow-on contract actions. It does not require the contractor to hire anyone unqualified, and it does not override ethics restrictions that would make the employment improper. For contractors, the clause creates a short-term hiring and reporting obligation that must be built into onboarding and compliance processes. For contracting officers, it requires timely identification of affected personnel so the contractor can comply with the first-refusal requirement.
Key Rules
First refusal for openings
The contractor must give affected or separated Government personnel the right of first refusal for employment openings under the contract. This applies only to positions for which the individuals are qualified.
Ethics compliance required
The hiring opportunity must be consistent with post-Government employment conflict-of-interest standards. If ethics rules prohibit the employment relationship or specific duties, the contractor cannot use the clause to override those restrictions.
CO provides affected-person list
Within 10 days after contract award, the contracting officer must give the contractor a list of Government personnel who have been or will be adversely affected or separated because of the award. This list is the trigger for the contractor’s hiring and reporting obligations.
Report hires from list
The contractor must report to the contracting officer the names of listed individuals who are hired within 90 days after contract performance begins. The report must be forwarded within 120 days after performance begins.
Applies to contract openings only
The clause covers employment openings under the contract, not all jobs the contractor may have elsewhere. The right of first refusal is tied to positions within the contract effort.
Responsibilities
Contracting Officer
Provide the contractor, within 10 days after award, a list of Government personnel who have been or will be adversely affected or separated because of the contract award. The contracting officer also receives the contractor’s hire report and uses it to monitor compliance.
Contractor
Offer qualified affected or separated Government personnel the right of first refusal for openings under the contract, ensure any hiring is consistent with post-Government employment conflict-of-interest standards, and report the names of listed individuals hired within 90 days after performance begins no later than 120 days after performance begins.
Government personnel affected by award
May seek employment under the contract and, if qualified and not barred by ethics restrictions, are entitled to first refusal for openings covered by the clause.
Agency
Support the transition of personnel affected by the contract award and ensure the contracting officer can identify and communicate the list of impacted employees in a timely manner.
Practical Implications
Contractors should build a fast intake process for the affected-person list because the 10-day and 120-day deadlines are short and easy to miss.
Hiring managers need to screen both qualifications and ethics issues; a candidate may be qualified for the job but still not eligible if post-employment conflict rules apply.
The clause is limited to openings under the contract, so contractors should not treat it as a general hiring preference for all company vacancies.
Contracting officers should coordinate early with the program office and incumbent workforce to identify who is actually adversely affected or separated, since incomplete lists can undermine compliance.
Contractors should keep documentation showing when openings were offered, who was considered, who was hired, and why any listed individual was not selected, in case of audit or dispute.
Official Regulatory Text
As prescribed in 7.305 (c) , insert the following clause: Right of First Refusal of Employment (May 2006) (a) The Contractor shall give Government personnel who have been or will be adversely affected or separated as a result of award of this contract the right of first refusal for employment openings under the contract in positions for which they are qualified, if that employment is consistent with post-Government employment conflict of interest standards. (b) Within 10 days after contract award, the Contracting Officer will provide to the Contractor a list of all Government personnel who have been or will be adversely affected or separated as a result of award of this contract. (c) The Contractor shall report to the Contracting Officer the names of individuals identified on the list who are hired within 90 days after contract performance begins. This report shall be forwarded within 120 days after contract performance begins. (End of clause)