Daniel J. Kelly, McCarter & English, LLP
A day after his national address on September 8, 2021, President Biden issued two executive orders for federal employees and federal contractors, respectively, with the stated purpose of reducing or stopping the spread of COVID-19, including its Delta variant. : Executive Order on the 2019 Coronavirus Disease Vaccination Requirement for Federal Employees (Federal Employee EO) and Executive Order on Ensuring Adequate COVID Security Protocols for Federal Contractors (Federal Contractor EO or EO). The TO of the federal contract was followed, on September 10, 2021, by a clarification statement from the Deputy Director of Management of the Office of Management and Budget (OMB) (OMB statement). Here are some key takeaways from the two decrees with respect to the federal contracting community, including all businesses and other entities in the federal supply chain.
The decrees will mandate the immediate vaccination of âcoveredâ employees of federal contractors.
The Federal Employees EO explicitly calls for the âmandatoryâ vaccination of executive agency employees. Contrary to some reports, this includes employees of the United States Postal Service and other so-called independent government agencies and corporations, but does not include employees of other branches of government, including the United States Congress and the United States. federal courts. The Federal Employee EO calls on the Federal Workforce Safety Task Force (implemented by executive order of January 20, 2021) (task force) to issue guidance by September 16 on the implementation of these directives by the agency.
On the other hand, the federal contracting IB does not mention the word âvaccinationâ. On the contrary, it calls for “adequate COVID-19 safety protocols” in “the workplaces of contractors or subcontractors” to be included in the clauses of contracts and subcontracts “at any level” as defined and directed by the working group and approved by the Director of OMB. The working group in conjunction with the OMB is to do the following by September 24, 2021:
Â· Define the meaning of contractor and subcontractor.
Â· Explain the protocols required âto comply with occupational safety guidelinesâ.
Â· Identify exceptions to workplaces and individuals in those places.
While the federal contracting OE does not mention vaccination, the OMB’s statement does and deduces what will follow. It explicitly states that “if you want to do business with the federal government, you must vaccinate your workforce” and provides that the task force will issue protocols that include the “”[v]Accination of employee under federal covered contract. However, the word âcoveredâ is not defined. The OMB statement also provides that the protocols will include for contractor’s employees “covered” a requirement of “masking and physical distancing” and the designation by the contractor of a dedicated point of contact to “coordinate”. COVID-19 workplace safety efforts on covered construction sites. “It is not clear, and seems rather unlikely, whether weekly testing of covered employees will be permitted as an alternative to vaccination, as may be permitted by the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS). from the US Department of Labor, issued for all US companies with 100 or more employees, as noted by the President in his speech on September 8, 2021 and published in the White House Pandemic Release. general vaccination mandates for American companies, see this analysis from our Labor and Employment group.
For contractors, the âsafety protocolsâ for âcovered employeesâ will likely apply to workplaces where any employee works with a âconnectionâ to a non-exempt federal contract.
Despite speculation that President Biden would limit the government contractor’s COVID security measures to employees working on-site at U.S. government facilities, buildings, military bases, and ships, there is no such limitation. in this EO. Rather, the EO applies to the âworkplacesâ of the most important contractors and subcontractors; designated in the OMB declaration as âcovered work sitesâ. Although the IB provides that the task order will define these terms, the IB refers to places such as “where a person is working on or in connection with a federal government contract or contract-like instrument. . . . . âThe definition to come may say otherwise, but it could well include all of the subcontractor locations where back office and management functions take place.
Federal contract obligations could come into effect as early as next month.
The Federal Contracting IB defines measures to ensure that as of October 15, 2021, contracts governed by the Federal Acquisition Regulation (FAR) and “contract-type instruments” not governed by the FAR, such as other transaction and solicitations for such contracts, include a clause that embodies the definitions and mandates of the Working Group as blessed by the OMB. (Grants are specifically exempt from the Federal Contractor’s EO.) The clause will apply to new solicitations, renewals and extensions of existing contracts, as well as options exercised on existing contracts. Although the federal contractor OE does not specifically identify task orders under indefinite quantity indefinite delivery contracts, it is reasonable to conclude that regulators will consider and include new task orders and extensions, options and renewals of existing task orders will be included.
The Federal Contractors EO and the CAMO declaration provide that the clause to be published containing the recommendations of the working group will apply to federal contractors and sub-contractors. Section 2 of the EO states that federal agencies include the clause “that the contractor and all sub-contractors (at any level) must incorporate into lower-level sub-contracts”. Therefore, unless exempted, all contractors across the government supply chain will be subject to these requirements.
The Federal Contractor’s EO, as well as the OMB’s statement, include some gaping exemptions, including contracts for the âsupply of productsâ.
The EO applies specifically to agreements based on FAR and not based on FAR for:
Â· “[S]services, construction or a leasehold interest in real estate ‘
Services covered by the law on service contracts
Services for federal employees, their dependents or the general public in connection with federal property or lands
While the OE excludes subcontracts “only for products”, the OMB statement appears to include all contracts within this broad exclusion. Using awkward and somewhat repetitive language, the OMB’s statement excludes “[c]contracts, instruments similar to contracts, or contracts, instruments similar to contracts or sub-contracts only for the supply of products. It remains unclear whether regulators will include in the clause published in October the broader language in the OMB statement, or the narrower language (limiting the exclusion to subcontracts) in the contractor’s OE. federal.
The use of the word âproductâ in the Federal Entrepreneur EO creates a term that regulators will need to define. FAR 2.101 provides that the terms “products” and “supplies” are synonymous, and defines the latter as “any property except land or interest in land”. The FAR provides that the term may include, but is not limited to, public works, buildings, ships, aircraft, equipment, parts, accessories, machine tools and the installation and modification of one of those elements. The Federal Contractor EO does not limit this exemption to off-the-shelf commercial items (COTS) or commercial items (as defined by FAR 2.101). In addition, with the use of the word âonlyâ, contracts for services and products are unlikely to be exempt. We will review the FAR clause and updated guidance on the applicability of the exclusion to service and product contracts when the âservicesâ component is delegated to a lower level contractor.
In addition, the federal EO contract does not apply to contracts equal to or below the Simplified Acquisition Threshold (SAT), currently set at $ 250,000 under FAR 2.101. It also exempts work done outside the United States and its outlying areas, and agreements with Indian tribes under the Indian Self-Determination and Educational Aid Act.
All contractors with 100 or more employees must prepare NOW, even if they are considered exempt under the federal contractor EO.
For prime contractors and sub-contractors resistant to implementing likely vaccination and / or testing requirements, perceived exemptions can be cold comfort if contractors have 100 or more employees. As noted, unless required to do so by a court order, OSHA will issue an ETS requiring these companies to implement the same requirements. If they have not already done so, senior managers as well as experienced human resources and lawyer staff should plan to:
Measures to determine the immunization status of their employees
Measures allowing employees to have paid time off to obtain initial vaccines and possibly reminders
A verifiable COVID-19 testing regime for all employees who can resist vaccination, if allowed
Disciplinary actions that may need to be imposed if an employee refuses to cooperate in providing information about the employee’s immunization status or willingness to undergo testing
A review of local, state and federal laws and regulations protecting the privacy rights of employees and limiting the grounds for imposing disciplinary action for a variety of reasons, including, but not limited to religious or medical objections .
For non-exempt contractors in the federal supply chain, mandatory vaccination of employees with a âconnectionâ to a federal contract, along with other workplace protocols, is imminent. Immediate preparation, including the acquisition of knowledge about the legal constraints surrounding the imposition of such protocols, is essential for those concerned. We will continue to provide our readers with updates as more information becomes available.
Daniel J. Kelly is a partner in the Boston office of McCarter & English, LLP and a member of the firm’s Government Markets and Global Trade group. It provides advice and guidance to clients who are part of the government supply chain, as prime contractors, subcontractors or suppliers. He can be contacted at [email protected].
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