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Job Corps Centers: Widespread Contract Terminations due to Agency’s “Pause”

What You Need to Know

  • Key takeaway #1

    DOL’s decision to close approximately 100 Job Corps centers and terminate for convenience Job Corps contracts has the potential to adversely impact government contractors running those sites.

  • Key takeaway #2

    Contractors facing a termination should consult with counsel experienced in the preparation of settlement proposals to ensure they are not “leaving money on the table.” Generally, the costs of these legal services are reimbursable by the government in connection with the final settlement.

Client Alert | 1 min read | 06.02.25

On May 29, 2025, the Department of Labor (DOL) announced that it will begin a “phased pause in operations at contractor-operated Job Corps centers nationwide.” The pause is anticipated to occur within a month—by June 30, 2025. To effectuate this pause, DOL has suspended operations at approximately one hundred contractor-operated Job Corps centers.  DOL instructed centers to suspend program activities, transition students home, and implement other transition plans. According to DOL’s Frequently Asked Questions, the Department anticipates that  students will transition to “state and local workforce partners” including American Job Centers and the Labor Exchange system in their home state.

In addition, contracts for the operation of Job Corps centers will be terminated for convenience. Contractors generally have one year in which to submit their settlement proposals seeking reimbursement of expenses associated with the termination. Contractors should be aware that there are many types of potentially recoverable costs, including lawyer fees incurred in preparing the settlement proposal, in-house time spent, ongoing leases/licenses or early termination costs from ending leases/licenses, upfront costs incurred that were spread (amortized) into monthly prices, storage costs, and certain pre-award costs.

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