On September 9, 2021, President Biden issued Executive Order 14042 (“Order”) which mandated that federal contractors provide adequate COVID-19 safeguards to their workers performing on or in connection with a federal government contract or contract-like instrument (“Contract”). The Order went into immediate effect. Covered employees must be fully vaccinated, subject to medical and religious exemption, by no later than December 8, 2021.
Federal departments and agencies were directed to ensure that covered Contracts include a specific clause (discussed below) for contractors and subcontractors at any tier to incorporate into lower-tier subcontracts. Covered contractor employees must also comply with agency COVID-19 workplace safety requirements while in Federal workplaces. Covered contractors and subcontractors are required to validate vaccine status, address requested vaccine exemptions and maintain documentation of vaccine status in accord with the Order and current federal guidance.
Not surprisingly, the Order resulted in questions by federal contractors attempting to assure that they understood and complied with the new requirements. Promised Guidance related to this Order was issued on September 24, 2021.
Within the health care industry, it was clear that the order applied broadly, including to service contractors pursuant to Medicare or Medicaid contracts with CMS or states. Many hospitals and health systems receiving federal funds were already requiring vaccination by staff and contractors, so the Order supported these organizations’ internal policies. However, the number of contractors subject to this Order extends well beyond health care organizations including many organizations found in the GSA’s SAM.gov database of federal contractors.
The SAM.gov website provides a link to the Guidance to assist contractors who must navigate these new requirements. SAM.gov is maintained by the General Services Administration and includes a central contractor registry for all federal contractors as well as data repository for all individuals and entities who are prohibited from contracting with or bidding on federal procurements. More information about SAM.gov is available here.
The media attention has focused primarily on the vaccine mandate. However, there were aspects of the Order that were not widely discussed but can significantly impact contractor compliance expectations. For example:
- The Order includes more than the vaccination requirement.
The required workplace safety protocols include:
- COVID-19 vaccination of covered contractor employees, except in limited circumstances where an employee is legally entitled to an accommodation;
- Compliance by individuals, including covered contractor employees and visitors, with the Guidance related to masking and physical distancing while in covered contractor workplaces; and
- Designation by covered contractors of a person or persons to coordinate COVID-19 workplace safety efforts at covered contractor workplaces.
- Not all federal contractors and their subcontractors are subject to the new requirements.
The Order applies to:
- procurement contracts for services, construction, or a leasehold in interest in real property;
- contracts covered by the Service Contract Act*;
- contracts for concessions; and
- contracts in connection with federal property or lands and related to offering services to federal employees, their dependents or the general public.
*It should be noted that the Services Contract Act provides many exemptions which include service contracts related to public utility services and Postal Service contract offices.
The Order specifically exempts:
- contracts or agreements with Indian Tribes;
- contracts and subcontracts which fall below a contract value of $250,000 (the current Simplified Acquisition Threshold for federal contracts);
- subcontracts for the provision of products; and
- employees who work outside the United States or its outlying areas.
Theexemption for the provision of products applies solely to subcontractors. Therefore, contractors who provide products under a federal contract are currently subject to the Order.
- Workplace safety protocols address specific employee/workplace location scenarios. As described below, these protocols apply very broadly – not only to covered contractor employees working on a federal contract but all covered contractor employees and subcontractors of a primary contractor with few exceptions.
- A “covered contractor” includes prime contractor or subcontractor at any tier who is party to a covered contract.
- A “covered contractor employee” is defined as “any full-time or part-time employee of a covered contractor working on or in connection with a covered contract or working at a covered contractor workplace.” This includes employees of covered contractors who are not themselves working on or in connection with a covered contract.
The Guidance offers significant detail to assist contractors:
- Workplaces with a mix of covered and non-covered employees. If a covered contractor employee works at a location where non-covered employees work, the entire building and/or site is considered a covered contractor workplace. Therefore, all the employees in that workplace are subject to the vaccination requirement and distancing requirements. A very narrow exception is offered by the Guidance.
- Work “in connection with” a covered Contract. An employee is subject to the vaccination requirement, even if not working on a covered Contract when that person performs “duties necessary to the performance of the covered Contract, but [is] not directly engaged in performing the specific work called for by the covered Contract”.
- Remote workers. Employees who work from home must meet the vaccination standards.
- Work performed outside.The safety protocols apply to employees whose work locations are outside of an office or enclosed area.
- Required contract language. Federal agencies and executive departments will enforce contractor compliance through the inclusion of a mandatory contract clause, which prime contractors and higher-tiered subcontractors must flow down to all tiers of subcontractors. The Order directed the Federal Acquisition Regulatory Council (“FAR Council”) to amend the FAR to include this clause for inclusion in FAR-based contracts starting on October 15, 2021, which requires contractors to comply with all safety protocol guidance for “covered work place locations.”
The FAR Council developed the following clause for use, and also recommended that federal agencies use their deviation authority under the FAR to include this clause in non-FAR based contracts entered into on or after October 15, 2021. So far three agencies (the GSA, VA, and Department of Defense) have all published deviations providing guidance to their contracting officers on when they should insert the COVID Clause.
52.223-99 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors.
ENSURING ADEQUATE COVID-19 SAFETY PROTOCOLS FOR FEDERAL CONTRACTORS (OCT 2021) (DEVIATION)
(a) Definition. As used in this clause-
United States or its outlying areas means—
(1) The fifty States;
(2) The District of Columbia;
(3) The Commonwealth of Puerto Rico and the Northern Mariana Islands;
(4) The territories of American Samoa, Guam, and the United States Virgin Islands; and
(5) The minor outlying islands of Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Atoll.
(b) Authority. This clause implements Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, dated September 9, 2021 (published in the Federal Register on September 14, 2021, 86 FR 50985).
(c) Compliance. The Contractor shall comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance) at https:/www.saferfederalworkforce.gov/contractors/
(d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d), in subcontracts at any tier that exceed the simplified acquisition threshold, as defined in Federal Acquisition Regulation 2.101 on the date of subcontract award, and are for services, including construction, performed in whole or in part within the United States or its outlying areas.
Note: The COVID Clause requires covered contractors to comply with Executive Order 14042 and all guidance issued by the Safer Federal Workforce Task Forced “as amended during the performance of the contract,” which requires the contractor be aware of and comply with changing guidance throughout performance.
- Phase-In of Order requirements. While the deadline to meet the vaccination mandate is clearly set as Dec 8, 2021, there are other aspects to the Order that are being phased in:
- Contracts awarded prior to October 15 where performance is ongoing – the requirements must be incorporated at the point at which an option is exercised or an extension is made.
- New contracts – the requirements must be incorporated into contracts awarded on or after November 14. Between October 15 and November 14, agencies must include the clause in the solicitation and are encouraged to include the clause in contracts awarded during this time period but are not required to do so unless the solicitation for such contract was issued on or after October 15.
Covered contractors and subcontractors face significant challenges to comply with both the technical requirements of the Order as well as the tight timeline. It remains unclear what may be the ramifications for failure to implement the requirements. Technically, failure to implement could result in a finding of contract breach, as a cause for contract debarment or could be used by a whistleblower against an employer who fails to comply or misrepresents compliance status. Also, the Guidance specified that as these requirements evolve, contractors must make the necessary modifications to remain in compliance. Another gray area is whether a contractor who has not achieved vaccination compliance within its workforce will be allowed to even bid on federal contracts after December 8, 2021. Therefore, while the Order currently applies to existing contractors, organizations interested in future federal work should consider the cost for failure to enforce these federal standards. Therefore, contractors and subcontractors will face ongoing challenges well beyond the Dec 8 vaccination deadline.