The New Vaccine Mandate for Federal Contractors

President Biden recently issued Executive Order No. 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, which mandates vaccinations for federal contractors as part of his administration’s plan to stop the spread of COVID-19 and its new emerging and more contagious cousin the Delta variant. The EO requires parties that contract with the federal government to provide adequate COVID-19 safeguards to its workers performing on or in connection with a federal government contract or contract-like instrument.

The COVID-19 safeguards are intended to decrease the spread of the virus, decrease worker absences, reduce labor costs, and improve efficiency of contractors and subcontractors at sites where they are performing work for the federal government. They are set out in a two-pronged directive: 1) the requirement that each covered federal contract include a mandatory contract clause attesting to implementation of COVID-19 safeguards and 2) each covered federal contractor comply with COVID-19 workplace safety measures by ensuring vaccinations. To date, some states have challenged the EO by filing lawsuits.
 
Guidance
The Safer Federal Workforce Task Force issued guidance on how to implement the federal contractor safety protocol contained in the EO.[1] The COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors (Guidance) clarified who were federal contractors and the scope of their responsibility for ensuring their contractor employees comply with the vaccine mandate. The Guidance was updated on Nov. 10, 2021.
 
Federal contractors are now responsible for ensuring that covered contractor employees conform to the following safety protocols:

• Fully vaccinated by Jan. 18, 2022, except in limited circumstances[2] where an employee is legally entitled to an accommodation;
• Comply with the Guidance related to masking and physical distancing while working in covered contractor workplaces; and,
• Designation of a Safety Officer by covered federal contractors of a person or persons to coordinate COVID-19 workplace safety efforts at covered contractor workplaces.

 
Both the Guidance and its update set out key definitions[3] and directives describing how the Order would be implemented. The latter focused on the mandatory contract clause for federal contracts while the former on specifics related to vaccinations, masking and physical distancing.
 
Definitions include:

• “Contract” and “contract-like instrument” has the meaning set forth in the Department of Labor’s (DOL) proposed rule, “Increasing the Minimum Wage for Federal Contractors,” 86 Fed. Reg. 38,816, 38,887 (July 22, 2021).
• “Covered contractor” means a prime contractor or subcontractor at any tier who is party to a covered contract.
• “Federal workplace” means any place, site, installation, building, room or facility in which any executive department or agency conducts official business, or is within an executive department or agency’s jurisdiction, custody or control.

 
The New Contract Clause
The covered federal contract, a term broadly interpreted by the White House, includes but is not limited to, any contract that may be covered under any federal procurement statute.[4] While the mandate appeared prospective, applying only to new contracts and solicitations, its reach also extends to contract options, new extensions of prior contracts and renewals. The covered contract clause would be phased in as dictated by its status and contract duration. Specifically:

• Contracts awarded prior to Oct. 1 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 Nov. 14. Between Oct. 15 and Nov. 14, agencies must include the clause in the solicitation 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 Oct.15.

 
Section 6, EO
The COVID-19 mandatory contract clause to be added to each federal contract should state that the contractor or subcontractor shall, for the duration of the contract, comply with all guidance for the contractor or subcontractor workforce locations published by the Guidance.
 
Which Subcontractor is Covered by the Vaccine Mandate?
The EO reach covered federal contractors and their subcontractors at all tiers except for federal contracts solely for products. Additionally, the vaccine mandate would not apply to service contracts or independent agencies and departments, such as the Securities and Exchange Commission, EPA, Consumer Financial Protection Board or the Federal Reserve. The federal contract or contract-like instrument must be 1) for services; 2) construction; 3) for a leasehold interest in real property; or 4) in connection with federal property or lands and related to offering services for federal employees, their dependents, or the public. Federal contractors can expect the FAR Council to conduct a rulemaking for FAR amendments, but agencies were authorized to implement the new policy through their subpart 1.4 authority.
 
Applicable federal contracts under the new Order include: 1) procurement contracts or contract-like instruments for services, construction or leasehold interests in real property; 2) contracts for services or contract-like instruments covered by the Service Contract Act; 3) contracts for concessions (including concessions contract otherwise excluded by DOL regulations at 29 C.F.R.§ 14.133(b)) or; 4) contracts entered with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents or the public.
 
Which Federal Contractors are Exempt?
The Order does not apply to:

• Grants[5]
• Contracts or agreements under the Self-Determination and Education Assistance Act (Public Law § 3-638), as amended
• Contracts or subcontractors for less than the “simplified acquisition threshold” as defined in Federal Acquisition Regulations (FAR § 2.101)
• Employees performing work outside of the United States or outlying areas (FAR § 2.101)
• Subcontracts solely to provide products

 
Are There Exemptions to the Vaccine Mandate?
Yes. There are exemptions to the COVID-19 safeguards requiring vaccinations, masking and physical distancing. Federal contractors can provide an accommodation to an employee who communicates that they are not vaccinated because of a disability or sincerely held religious belief, practice or observance. The employer, however, is required to evaluate and decide the viability of the exemption request and document the circumstances the exemption was provided. Medical exemptions are also possible where documentation is provided. The employer’s review of medical exception requests would be like disability accommodation pursuant to the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. § 12101). Masks and physical distancing would be required for workers who are not fully vaccinated. In limited cases, a 60-day waiver may be possible. Employees who perform work outside the United States or its outlying areas pursuant to FAR are excluded from the mandate. Additionally, while a remote worker’s home is not a federally covered workplace despite work performance on a covered federal contract, that individual would still be required to follow the vaccination requirement even if they never work at the covered workplace. Several questions about the mandate’s applicability and specific factual descriptions can be found in the FAQs.
 
The updated Guidance contains a more robust description of masking and physical distancing than its earlier version. However, some protocols were dropped entirely because the EO did not call for vaccine testing as an option for employees who chose to forgo vaccination. The newly designated Safety Officer, as required by the EO, will need to establish a protocol.
 
Federal contractors are required to ensure compliance by its workers. Enforcement options include employee discipline. The Office of Personnel Management contemplated discipline[6] for federal employees who are in violation of the mandate by adding language sanctioning advice actions. Employers should review and update personnel policies to reflect the possibility of adverse personnel action associated with the vaccine mandates.
 
The EO contained a compliance with the law provision acknowledging the existence of restrictive federal, state or local COVID-19 regulations. In the current state of overlapping laws addressing COVID-19 and safeguards, the President’s order in this instance is intended to focus on the federal government’s service providers. Specifically, it expressly states that “nothing in this order shall excuse noncompliance with any applicable state law or municipal ordinance establishing more protective safety protocols than those established under this order.” (cites omitted).
 
Moving Forward
All executive orders create a level of uncertainty in the process of implementation. The administration will need to issue more guidelines to ensure employers can meet their obligations, but it would be prudent for federal contractors to consider these areas:
 
1. Worksite Confusion – compliance with the Order could produce unforeseen effects. For instance, there are circumstances where remote workers are required to be vaccinated although they do not encounter co-workers or the worksite. Similarly, the guidelines appear to require employees in large bullpen areas to wear masks though physically distancing. Employers will need to evaluate eligibility status as to job sites, individual workers and exemptions (or temporary waivers).
 
2. Recordkeeping – storage and maintenance of confidential vaccine information and collection. An independent segregated personnel filing system is recommended.
 
3. Notification Method – a timely and nimble process to inform employees, document, update requirements and keep track of compliance.
 
4. Accommodation Policies and Practices – update internal personnel and contracting procedures.
 
5. Enforcement – monitoring compliance, documentation and employee discipline.
 
6. Human Resources – training, specialized staff.
 
Several states are currently challenging this EO, so it will be important to keep track of updates.

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_{[1] Sept. 24, 2021
[2] In limited circumstances, an agency may also seek an exception to the EO for work to begin on a covered contract where the covered employees are not fully vaccinated in the case of urgent critical mission need. In this instance, the covered contractor has 60 days from beginning work to bring the covered workplace in to compliance. Masking and physical distancing for those not fully vaccinated are still required.
[3] For instance, ‘covered contractor’ employee means any full-time or part-time employee working for “or in connection with” a government contract meets the ‘covered employee’.  This term includes employees of covered contractors who ae not themselves working on or in connection with a covered contract.
[4] In this alert we have included information about covered contracts and the EO’s applicability in general terms. We encourage readers to take a close look at their contracts, agreements and grants with the federal government in conjunction with the Guidance and FAQs.
[5] The Guidance included ‘cooperative agreements’ as a covered federal contract. Given that grants and cooperative agreements are governed by the same federal statute, grant recipients and employers should seek further legal analysis to determine applicability.
[6] Employees who refuse to be vaccinated or provide proof of vaccination are subject to disciplinary measures, up to and including removal or termination from federal service. (cites omitted.)}