On September 9, President Biden issued Executive Order 14042 requiring that federal contractors comply with forthcoming COVID-19 workplace safety guidance. That guidance, which was issued on September 24, is remarkably broad, requiring that employees working directly on government contracts, in connection with government contracts, or in the same facility as an employee in the first
Well, that was quick. In four memos dated September 30 and October 1, contractors learned the terms of the contract provisions implementing the COVID-19 vaccine and masking requirements mandated by President Biden’s Executive Order (EO) 14042, discussed here, and the implementing guidance issued by the Safer Federal Workforce Task Force (Task Force) on September 24. In the next 10 days we expect to see most other agencies issue deviation memos similar to the General Services Administration (GSA) and Department of Defense (DoD) memos discussed below.
As discussed in this post, while the contract provisions, along with updated guidance from the Task Force, answer some of the open questions, contractors are still in the unfortunate position of rushing to ensure they are compliant with these requirements when the contract provisions apply to them without knowing the answers to some fundamental questions. Despite these open questions, companies have little time, for example, to ensure that covered employees are vaccinated by the December 8, 2021 deadline. After that deadline, any contractor that becomes subject to these requirements will have to ensure that on new contracts or options/extensions that incorporate the new clause, covered employees are fully vaccinated by the first day of performance, which of course is impossible unless contractors enforce these vaccine mandates in advance. That said, the memos do seem to clarify that compliance with the Task Force guidance will not be required for prime contracts solely for the manufacturing of products.
The FAR Clause
On September 30, the Federal Acquisition Regulation (FAR) Council issued a memo providing agencies with “initial direction” requiring the implementation of the Task Force guidance. It includes FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors (OCT 2021) (Deviation), along with directions that agencies “expeditiously” issue class deviations to ensure that contracting officers can begin using the clause on or before October 15, 2021.…
On September 24, following President Biden’s September 9 Executive Order, Ensuring Adequate COVID Safety Protocols for Federal Contractors, the Safer Federal Workforce Task Force (Task Force) issued new guidance on COVID-19 safety protocols applicable to federal contractors and subcontractors. It is notable that the guidance does not apply to grants.
Before the guidance was released, the Director of the Office of Management and Budget determined, as required by the Federal Property and Administrative Services Act that compliance with those measures laid out in the guidance will promote economy and efficiency in federal contracting. This determination was met because decreasing the spread of COVID-19 “will decrease worker absence, reduce labor costs, and improve the efficiency of contractors and subcontractors performing work for the Federal Government.” There is no indication that the director considered the impacts of attrition or costs on businesses to administer these requirements.
Breakdown of Requirements under New Executive Order
These requirements, in addition to any requirements applicable in a federal workplace, apply to contractors and subcontractors with a “covered contract.” The obligations that the guidelines require to be part of a soon-to-be draft contract clause include:
- By December 8, 2021, “covered contractor employees,” regardless of prior COVID-19 infection and associated immunity must be “fully vaccinated” for COVID-19. This means that at least two weeks have passed after they have received the last required dose of an approved vaccine, except in limited circumstances where an employee is legally entitled to an accommodation.
Many contractors have questions regarding when an employee may be legally entitled to an accommodation. The guidance provides that this may be the case “because of a disability (which would include medical conditions) or because of a sincerely held religious belief, practice, or observance.” It continues, “[r]equests for ‘medical accommodation’ or ‘medical exceptions’ should be treated as required for a disability accommodation.”
After December, all covered contractor employees must be fully vaccinated by the first day of the period of performance on a newly awarded contract and by the first day of the performance period on an exercised option or extended or renewed contract when the clause has been incorporated into the covered contract. This also applies to contractor employees working from home on a covered contract.
- Compliance by covered contractor employees and visitors with published CDC guidance for masking and physical distancing is required while in a “covered contractor workplace.” This does not apply to covered contractor employees working from home. It does, however, require that in areas of “high or substantial community transmission,” even fully vaccinated individuals wear a mask in indoor settings. To determine the level of community spread, covered contractors must check the CDC COVID-19 Data Tracker County View website.
- Designation by covered contractors of a COVID-19 workplace safety coordinator at covered contractors’ workplaces whose primary duties appear to be communicating the required safety protocols to all covered employees and visitors and confirming compliance by reviewing the required vaccine documentation. COVID-19 workplace safety protocols may comprise some or all of this person’s regular duties.
On September 9, among other measures, President Biden issued an Executive Order that will result in a mandate that contractor employees “performing on or in connection with a Federal Government contract or contract-like instrument” be vaccinated against COVID-19. The procedural steps, culminating in the issuance of a new contract clause that must occur before that mandate is effective are outlined below, along with another mandate to be implemented by the Department of Labor’s Occupational Safety and Health Administration (OHSA) that will apply to all companies in the U.S. with more than 100 employees. While neither are immediately effective and both will almost certainly face significant legal challenges, contractors must be aware of these requirements and start preparing now for their implementation.
New Executive Order Requires Government Contractors to Be Vaccinated for COVID-19
Unlike some Executive Orders that rely on the president’s own determination to direct a change to government contract requirements, the September 9, 2021 “Executive Order on Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors” requires first that by September 24, 2021, the Safer Federal Workforce Task Force issue protocols for contractors and subcontractors to comply with workplace safety guidance. This guidance must include any exceptions that apply to contractor workplace locations and individuals.
Before the publication of the new guidance, the director of the Task Force, under a delegation of the president’s authority under the Federal Property and Administrative Services Act, must determine whether the guidance will “promote economy and efficiency in Federal contracting if adhered to by Government contractor and subcontractors.” Given that any vaccine mandate will almost certainly result in a significant number of contractor employees leaving the workforce, it is not clear whether the guidance would meet that standard.…
We are excited for this year’s complimentary CLE program, which will provide the same caliber of practical advice, insight into government developments, and thoughtful discussion from industry panelists you have come to expect from this seminar. This year’s topics include:
- Inside Scoop: Top Issues In-House Counsel Currently Face
- Update on International Trade Regulations and Enforcement
- SEC Update: Key Enforcement and Regulatory Priorities
- Running an Investigation
- Antitrust Is Back: DOJ and FTC Signal Significant Increase in Antitrust Enforcement
- Data Privacy Update
- Healthcare Fraud Enforcement Updates
- Hot Topics in Procurement Fraud in 2021 and Beyond
- COVID-19 Funding Fallout: Preparation for Government Scrutiny
This year’s seminar will be held from 8:30 a.m.–3:45 p.m. CDT on Tuesday, September 28. To register, please click here.
Click here to view the agenda.…
On April 27, President Biden issued an Executive Order (EO) on Increasing the Minimum Wage for Federal Contractors raising the minimum wage for federal contractors, covered subcontractors, and lower-tier subcontractors by 27% from $10.95 to $15.00.
President Biden perhaps signaled his intent to make this increase on his first day in office, directing the Office of Personnel Management (OPM) in one of his first EOs to provide a report with recommendations to promote a $15.00 an hour minimum wage for federal employees. After the changes directed by this EO go into effect, the minimum wage applicable to government contractor employees will be more than double the generally applicable federal minimum wage rate.
While the federal minimum wage is $7.25 an hour, in 2014 President Obama issued an EO that increased the rate required for employees of federal contractors to $10.10 and indexed it to inflation (it is currently $10.95). The $15.00 minimum wage is a rate widely discussed by members both of Congress and the Biden Administration as a potential floor for the generally applicable minimum wage, but that proposal does not appear to have sufficient congressional support to make that legislative change. It was initially included in the recent $1.9 trillion COVID-19 relief legislation, but it was not included in the final package.…
This is a continuation of our series addressing ways companies can protect themselves during government enforcement actions related to COVID-19. For more information, see our previous articles focused on general corporate best practices, the health care industry and public companies.
The economic disruptions wrought by the COVID-19 pandemic have been particularly acute for government contractors. State quarantine measures and the closure of both contractor and government worksites meant many contractors were unable to perform ongoing contracts, thus risking a lapse in payment and the need to lay off or furlough workers. To mitigate this risk, Congress passed §3610 as part of the March 27, 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act). That brief provision gives federal agencies authority to reimburse contractors for paid leave to employees who are unable to work due to the pandemic. The Department of Defense (DoD)—which obligated by far the most funds pursuant to §3610—has issued guidance, instructions, and regulations clarifying eligibility for relief and the procedures contractors must follow in order to be reimbursed. Eligible contractors should be mindful of this guidance, summarized below, and carefully monitor ongoing developments.
Section 3610: the Legislative Language
Section 3610 of the CARES Act gives agencies discretion (which they are not required to exercise) to “reimburse, at the minimum applicable contract rates (not to exceed an average of 40 hours per week) any paid leave, including sick leave, a contractor provides to keep its employees or contractors in a ready state” between January 31, 2020 through Sept. 30, 2020—which Congress recently extended to Dec. 11, 2020. Importantly, the maximum reimbursement authorized under §3610 must be reduced by the amount of credit a contractor is allowed under the Family and Medical Leave Act or any applicable credits a contractor already receives under the CARES Act. Beyond these general principles, the legislative language leaves much of the detail to be worked out by individual agencies. For example, the legislation authorizes agencies to reimburse at the “minimum applicable contract billing rates,” a term that is not defined, but only if the employees cannot perform work at a site that has been “approved by the Federal Government” without guidance on what such approval entails.…
As states and cities begin to ease COVID-19 restrictions and organizations return their employees to the workplace, employers are forced to navigate an unprecedented and fluid landscape of post-pandemic compliance issues.
This virtual seminar will address the difficult issues facing employers as they return their employees to the workplace and provide practical guidance for understanding…
On Wednesday, June 24, Bass, Berry & Sims continued its COVID-19 M&A Environment: Dealmaker Perspectives Webinar series with leading professionals in the government contracts services industry. The panelists included Bass, Berry & Sims members Jason Northcutt and Todd Overman, who were joined by Craig Reed, Chief Growth Officer and Senior Vice President at Serco; Kate Troendle, Director at KippsDeSanto & Company; and Eric Wolking, Operating Partner at Bluestone Investment Partners. A recording of the webinar can be found here.
The panelists’ discussion focused on market considerations for deal professionals in the new and evolving era of COVID-19. Some of the key takeaways from this installment are listed below.
- Market Improvement Observations. As with other sectors, the government contracts services industry experienced a slowdown in deal flow as participants assessed the uncertainty surrounding the pandemic and endured the chilling effects of the implementation of quarantine procedures. However, the government contracts services industry was impacted less severely than other industries as smaller, quality transactions continued to close over the past few months. Notably, the indexed share price performance for government services continued to trade above the S&P 500 and recently rebounded to near-record highs achieved in February.…
Continue Reading Key Takeaways from the COVID-19 M&A Environment: Government Contracts Dealmaker Perspectives Webinar
Join Bass, Berry & Sims attorneys and leading industry dealmakers for a series of lively panel discussions focused on the nuts and bolts of executing a buy- or sell-side deal in a post-pandemic environment. Each discussion in this series will focus on industry-specific guidance, including food and beverage, retail and healthcare, among others. The June 24 installment of the series will focus on the government contracts services industry.
With social distancing and travel limitations, regulatory changes and approvals, COVID-19-specific diligence, and financing considerations top of mind, our panelists from within the government contracts industry will share their experiences and perspectives on what deal professionals should consider in a new and evolving market.…