On September 9, 2021, President Biden issued an Executive Order (EO), entitled “Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors”, directing the Federal Acquisition Regulatory Council to amend the Federal Acquisition Regulation (FAR) to issue a new standard clause by October 8, 2021. According to the EO:
“[the] clause shall specify that the contractor or subcontractor shall, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force….”
The Safer Federal Workforce Task Force (Task Force) has already issued guidance for the mandatory vaccination of all executive-department employees, and it is anticipated that the Task Force will issue the same guidance for contractors by September 24, 2021. Assuming the guidance is approved by the Office of Management and Budget, the new clause will mandate Covid-19 vaccines for contractors and subcontractors performing work under certain government contracts.1
WHAT CONTRACTS ARE AT STAKE?
The EO applies to “any new contract; new contract-like instrument; new solicitation for a contract or contract-like instrument; extension or renewal of an existing contract or contract-like instrument; and exercise of an option on an existing contract or contract-like instrument.” “New” is defined as any contract, solicitation, etc. issued on or after October 15, 2021.2 Existing contracts, solicitations, etc., issued prior to the order appear unaffected, at least until the solicitor seeks to extend a contract or exercise an option. For existing contracts, solicitations, etc. issued between the date of the EO and October 15, 2021, the EO strongly encourages agencies “to the extent permitted by law, to ensure that the safety protocols required under those contracts and contract-like instruments are consistent with the requirements [contained in the new FAR clause]”, which are applicable to those issued on or after October 15, 2021.3
Although the EO promised to “decrease worker absence, reduce labor costs, and improve the efficiency of contractors and subcontractors at sites where they are performing work for the Federal Government. Accordingly, ensuring that Federal contractors and subcontractors are adequately protected from COVID-19 will bolster economy and efficiency in Federal procurement” 4, it is likely many small-business government contractors and subcontractors may be unwilling to comply with a mandatory vaccination requirement. With an ongoing worker shortage, government-contractor employees who oppose the Covid-19 vaccine have ample employment options and may turn to companies that do not require the vaccine. This EO may also discourage small businesses from bidding on “new” government contracts.
As for existing contracts, small-business contractors may rightfully fear a portion of their workforce will depart at crucial and potentially profitable junctures such as at the exercise of a contract option or an extension. If government contractors pivot to commercial contracts, government agencies will be forced to recompete an increased number of existing contracts in an environment of decreased price competition and far fewer vendor options.
WHAT SHOULD I DO NOW?
Those small businesses who currently have a government contract, need to know the available options, including if an existing contract and/or existing open solicitations are subject to the EO. In addition to applicability limited by timing, the EO applies to certain solicitations, existing contracts, and contract-type instruments based on subject matter and price, including exclusions for grants, agreements with Indian Tribes under the Indian Self-Determination and Education Assistance Act, and contracts under the Simplified Acquisition Threshold. Depending on the final guidance from the Task Force, contractors may also consider whether any employees who oppose the vaccination can seek an exemption based on medical or religious grounds.
Laws and regulations pertaining to Covid-19 can present complex legal issues for employers, especially for those working with the government. Please contact Whitcomb, Selinsky, P.C. for assistance preparing for the EO’s implementation.
1 Exec. Order No. 14043, Section 2, 3 C.F.R. (2021).
2 Exec. Order No. 14043, Section 5, 3 C.F.R. (2021).
3 Exec. Order No. 14043, Section 5, 3 C.F.R. (2021).
4 Exec. Order No. 14043, Section 1, 3 C.F.R. (2021).