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.
I recently outlined the ever-growing list of compliance obligations for businesses that sell goods and services to the federal government in an article for Risk Management. “Some of the new regulatory requirements – such as obligations relating to cybersecurity and counterfeit parts – address challenges posed by an increasingly global, networked economy,” I explained in the article. “Others, such as the mandatory disclosure requirement, continue the trend of the government relying on third parties, whether it be whistleblowers or contractors themselves, to police the procurement system.”
To address the rising risk these complications pose, businesses should first ensure they have established an underlying compliance structure required by federal procurement regulations, as well as design effective training programs, translate the obligations into actionable policies, and effectively monitor adherence with those policies.
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.
In the past, we have cautioned readers about the potential impact of transactions on pending awards, particularly on the ability of a contractor to protest. A recent decision from the Court of Federal Claims (COFC) shows that transactions during a protest may also pose risks to a contractor’s standing.
On September 9, COFC dismissed a protest filed by Lank Shark Shredding LLC after Land Shark sold assets after the protest had been filed. Land Shark had filed a May 2019 complaint challenging the Department of Veterans Affairs’ (VA) cancellation of a service-disabled veteran-owned small business (SDVOSB) set-aside contract for shredding services. The solicitation had been canceled because only Land Shark had submitted a timely proposal and the VA determined that Land Shark’s proposal suffered from pricing and technical defects.
Background: Company Sold Assets After Protest Was Filed
During oral argument in June 2021, it was revealed for the first time that Land Shark had sold “its name, assets, and business interest, and that these transactions raised questions regarding whether the case caption should be amended to reflect Land Shark’s new name, Disabled Veterans Security, LLC, … and whether any entity had standing to bring this case.”
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.
The FAR Council recently published its proposed rule to implement a part of President Biden’s January 28, 2021 Executive Order No. 14005 (EO 14005), which dictated certain revisions to the Buy American Act (BAA) regulations. As discussed in our previous blog post, Section 8 of EO 14005 directed the FAR Council to consider the following:
- Replacing the “component test” at FAR Part 25.
- Increasing the threshold for domestic content.
- Increasing price preferences for domestic end products.
The proposed rule addresses Section 8 of EO 14005 by proposing to do the following:
- Increase the domestic content threshold instead of replacing the domestic content test (at least for the time being), with scheduled increases.
- Permit a limited period during which U.S.-made end products meeting the current domestic content threshold (greater than 55%) will be considered “domestic end products” under certain circumstances.
- Establish a list of critical products and critical components subject to additional price preferences and post-award reporting requirements.
As we previously discussed in a 2019 blog post, since 2018 Bass, Berry & Sims Government Contracts and Litigation attorneys have successfully defended B&O JV in a host of challenges to an 8(a) small business set-aside award by the Federal Law Enforcement Training Center (FLETC). On May 20, 2021, the Federal Circuit gave our client and team yet another win when it denied a request for a rehearing filed by Safeguard Base Operation, LLC, a disappointed offeror that included in the joint venture the prior incumbent.
Over the past three years, we have successfully defended B&O JV against over half a dozen challenges to the award filed by Safeguard. Our team’s undefeated record includes:
- A Small Business Administration size protest.
- Five GAO protests, the last of which resulted in a decision.
- A challenge at the Court of Federal Claims (COFC) to FLETC’s override of Competition in Contracting Act (CICA) stay of the contract award and subsequent appeal to the Federal Circuit.
- A collateral attack on the award in Georgia state court.
- A COFC bid protest that was also appealed to the Federal Circuit.
Safeguard’s primary complaint was that it had been improperly excluded from the competition for failure to include plug numbers provided by FLETC for service work request Contract Line Item Numbers (CLINs). When multiple potential offerors submitted questions about a potential ambiguity, FLETC included the plug numbers in its answers that were incorporated into the RFP in an amendment and instructed offerors to include those amounts in the applicable CLINs. Safeguard, however, did not follow this instruction. Safeguard also alleged that FLETC had breached an implied-in-fact contract to fairly and honestly consider its proposal.
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.
We are looking forward to participating in Solvability’s GovCon Summit 2021 of which the firm also serves as a sponsor. This year’s GovCon Summit will provide tactics and strategies from the nation’s top GovCon professionals that have helped thousands of companies win government contracts.
Attendees of GovCon Summit 2021 will learn how to increase revenue…