As contractors and agencies scramble to comply with the government contractor vaccine mandate, there seems to be growing confusion over whether contractors or federal agencies are responsible for evaluating whether contractor employees working at government sites are entitled to medical or religious accommodations. In some cases, agencies tell contractors that the government, not the contractor, is responsible for adjudicating accommodation requests.  In others, agencies are demanding to see the justification for accommodation determinations and independently evaluate those determinations.

This confusion is unfortunate because it is clear that the contractor, not the government, is responsible as the employer. To the extent agencies are usurping contractors’ obligation to make these determinations, the government is increasing the likelihood it will be viewed as a joint employer, needlessly exposing both the government and contractors to potential liability.

Employers are Responsible for Making Accommodation Determinations

For decades, employees have had the right to request medical accommodations under the Americans with Disabilities Act (ADA) and religious accommodations under Title VII of the Civil Rights Act of 1964. Those requests have always been submitted to their “employer,” even when those employees work at an off-site location.

Continue Reading Who is Responsible for Granting Medical/Religious Accommodations to the COVID-19 Vaccination Mandate?

On October 12, the U.S. Commerce Department, Bureau of Industry and Security (BIS) announced that it imposed a civil penalty fine against VTA Telecom Corporation (VTA) for the unauthorized export of controlled commodities to Vietnam.  Additionally, BIS is requiring VTA to improve its export control compliance efforts and retain a Director of Trade Compliance.  Alternatively, VTA can dissolve or cease operations.

VTA, located in Milpitas, California, was established in 2013 as a subsidiary of a Vietnamese state-owned telecommunications company.  BIS is the primary U.S. government agency responsible for administering and enforcing export controls on commercial items that could support weapons proliferation and other threats to U.S. national security.

According to BIS, VTA procured and exported items from the United States to its parent company in Vietnam with knowledge that certain of those exports were intended to support a Vietnamese defense program. To settle the matter, VTA agreed to the following:

  1. A penalty of $1,869,372.
  2. Expenditure of $25,000 to fund its internal export compliance program (ICP).
  3. Hiring and retention of a Director of Trade Compliance to oversee VTA’s export activities for at least two years.

Continue Reading BIS Imposes Civil Fine and Compels Hiring of Compliance Official or Cease Operations

On September 28, the U.S. Commerce Department, Bureau of Industry and Security (BIS) announced that it has imposed a civil penalty fine and denial of export privileges against Vorago Technologies (Vorago) for the unauthorized export of controlled commodities to Russia.

Vorago is a U.S. manufacturer of integrated circuits for use in environments with high radiation levels and extreme temperatures.  The company’s products are particularly well suited for use in space.  BIS is the primary U.S. government agency that administers and enforces U.S. export controls on commercial items, including particularly strict licensing requirements on items that can be used with weapons of mass destruction or conventional weapons.

According to BIS, Vorago engaged in a conspiracy with a Russian company, Cosmos Complect (Cosmos), to circumvent U.S. export controls.  To settle the matter, Vorago agreed to the following:

  1. A penalty of $497,000, and
  2. Denial of export privileges until September 2023.

The denial of export privileges, and roughly half of the penalty, will be suspended as long as Vorago complies with the terms of the settlement.

Continue Reading U.S. Technology Company Pays for Unauthorized Exports to Russia

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 two categories be vaccinated by December 8, 2021, among other requirements.

Since the guidance was issued, FAR and DFARS deviations have been issued. Those provisions will start appearing in government contracts soon, and similar provisions will be included in contract-link instruments.

These requirements have raised a host of questions, including:

  • Do these rules apply to my company?
  • Do my employees need to get vaccinated? Which ones?
  • What records do companies need to prove employees are vaccinated?
  • Besides trying to vaccinate everyone, what else do I need to do?
  • Does this need to be flowed down in all of my subcontracts?
  • Do these requirements apply to prime contracts solely for goods?
  • Do companies have to grant religious and medical accommodations? How should that be documented?

Please join us for a webinar on October 19, 2021 at 1:00 p.m. ET / 12:00 p.m. CT, as we address these questions and much more. To register, please click here.

Who Should Attend?

  • In-house legal counsel.
  • Human resources professionals.
  • Compliance officers
  • C-level executives, consultants and principals in companies that are working to bring employees back to the workplace.

Accreditation

Tennessee CLE
This program is approved for 1.5 hours General Tennessee CLE credit. Please provide your BPR number upon registration in order for Bass, Berry & Sims to report your participation to the Tennessee CLE Commission.

Other State CLE
Bass, Berry & Sims does not seek direct accreditation from states outside of Tennessee, but some states allow attorneys to earn credit through reciprocity or self-submission. Certificates of completion and other common supporting documents will be provided for use in jurisdictions outside of Tennessee.

HRCI
This program is approved for 1.5 hours HRCI credit. Please provide the email address associated with your HRCI account upon registration in order for Bass, Berry & Sims to report your participation to HRCI.

Questions?

Submit your questions for presenters upon registration or email questions to Brandy Bea.

While most federal procurements are conducted using the onerous regulations set forth in the Federal Acquisition Regulation (FAR) and agency supplements, agencies are increasingly relying on the more flexible, but lesser-known, Other Transaction Agreements (OTAs) to meet developmental requirements.  Congress has authorized only a limited number of agencies to use this authority, which was first included in NASA’s enabling legislation to ensure NASA had the flexibility to meets its unique needs.  The authority is further limited to use by “non-traditional” government contractors. It is generally restricted to prototype/development work, although agencies are authorized to enter into follow-on production contracts with OTA prototype participants.

Despite these limitations, the ability to customize intellectual property terms, among others, has led to a significant increase in the use of OTAs over the past decade.  In FY20 alone, the federal government entered into OTAs worth over $16 billion, including approximately $9 billion on COVID-19-related purchases.

But before a company pursues an OTA opportunity, it is essential to understand that ability to challenge OTA awards is limited.  In addition, jurisdictional questions have created considerable uncertainty for aggrieved contractors who wish to file a protest in connection with these agreements.  Although pre-and post-award protests challenging FAR-based procurements can only be heard at the Government Accountability Office (GAO) or the Court of Federal Claims (COFC), recent decisions indicate that jurisdiction to hear OTA challenges at both is extremely limited.  And in the past year, U.S. district courts have held that they too have limited jurisdiction that hinges on whether the issue involves a procurement contract—either current or future.

Continue Reading The Black Hole of Protest Jurisdiction: Can I Challenge the Award of an “Other Transaction Agreement”?

I recently authored an article for Law360 offering an inside look at two U.S. Department of Commerce committees responsible for interpreting how national security and foreign policy should be applied to transactions involving the export, re-export and transfer of U.S. technology. I served on both committees – the Export Administration Operating Committee (OC) and the Advisory Committee on Export Policy (ACEP); I was chair of the OC and executive secretary of the ACEP until joining Bass, Berry & Sims. The article lends important insight to the closed-door processes each body uses and provides clarity on how national security decisions are reached.

While the chair of the OC has decision-making authority (with certain exceptions where decisions are made by interagency vote), the ACEP is the body that reviews cases where a government agency does not agree with the OC chair’s decision. “The decisions of these bodies are where the rubber meets the road in export control implementation,” I explained in the article. “Export control is a key feature in determining whether the U.S. will continue to maintain its technological supremacy, or China or another country will catch up or surpass the U.S.”

In addition to a neutral chair of the OC, who also serves as executive secretary of the ACEP by law, and the politically appointed ACEP chair, representatives from the Department of Commerce, Defense, Energy and State sit on the OC and ACEP. At the OC level, the chair makes a decision based on recommendations from the four agencies (again, with certain exceptions). At the ACEP, decisions are based on a majority vote and where the vote is a tie, the decision reverts to the OC Chair’s decision. The goal of the balanced interagency structure at the OC level is to prevent a single agency from dominating the process. The ACEP’s process aims to resolve situations where the regulatory standards and policy are not clear and have led to disagreements among agencies at the OC, including giving policy guidance for OC members to apply in similar situations going forward.

Continue Reading Key Department of Commerce Entities Related to National Security Decision-Making Processes

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.

Continue Reading And … They’re Off! Contractors Race to Comply Now that the COVID-19 Vaccination Deviations Have Arrived

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.

Continue Reading Compliance Obligations for Government Contractors

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.

Continue Reading Contractors, You Will Get the Jab!

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.”

Continue Reading Selling Assets During a Protest?  Careful You Don’t Jump the Shark