The Biden administration’s recent initiatives to combat the Covid-19 pandemic have included new requirements specifically for the many companies and other entities that do business with the federal government.
Executive Order 14042, issued in September, directs federal agencies to begin including a clause in many federal contracts that will obligate the contract-holders, and many of their subcontractors, to meet requirements for employee vaccinations and related safety obligations.
The terms will start to appear in federal contracts and subcontracts in mid-October. Agencies are moving quickly to specify and clarify the obligations and associated guidance, which contractors are moving just as fast to understand and respond to. It’s a lot to take in.
To help, suggested below are four steps that federal contractors—and companies that might be federal contractors but aren’t sure—can take to start assessing whether they might be covered by the EO’s vaccine mandate and related requirements, and if so, what they must do to comply.
Think Broadly About the Types of Agreements Covered
EO 14042 covers “contracts and contract-like instruments” with the federal government that are (a) for services or construction or have certain connections with federal property; and (b) valued above the government’s “simplified acquisition threshold,” which is $250,000 in most cases. Subcontracts under covered prime contracts are covered if they meet these type and value criteria, too.
The term “contracts and contract-like instruments” covers agreements ranging from traditional defense contracts to cooperative agreements, leases, licenses, and permits, among others. (The rest of this article will use the term “contracts” to encompass all these agreements.)
And companies might see the EO’s obligations incorporated into other types of contracts beyond those required by the EO, too, because the administration has encouraged agencies and contractors to incorporate these terms into contracts and subcontracts not covered by the EO.
This encouragement creates uncertainty for companies with contract’s outside the EO’s scope, namely contracts selling products to the government (directly or as a subcontract), contracts under the $250,000 threshold, and existing contracts that under the EO’s terms will not have to be updated with the EO obligations right away.
Bottom line: Be overinclusive when seeking to identify which of the company’s agreements might become covered as prime contracts or subcontracts, along with which opportunities in the company’s pipeline might lead to receiving a new prime contract or subcontract that will include the EO’s obligations.
Remember the Full Scope of Requirements
Most attention on the EO understandably has focused on requirements for employees to be vaccinated and provide documentation to their employers. But EO-covered contracts also will be subject to workplace-safety requirements (namely, masking and physical distancing) and require contractors to designate compliance coordinators within the company. New and revised requirements might apply as the government updates its published guidance.
Bottom line: Ensure the in-person and coordination requirements receive appropriate attention within the company.
Understand the Broad Sweep of Vaccine Requirements
Once a company expects it will have a covered contract, it can start triaging which individuals likely must be vaccinated once the EO’s requirements apply.
This analysis starts with company employees who work “on” the covered contract, which means performing the work specifically called for by the contract, such as constructing the building, driving the trucks, building the widgets, etc.
Then add company employees who work “in connection with” the covered contract: personnel who work on billing, HR, legal, and other services necessary for companies to perform the contract being covered. Note also that employees in either of these groups must be vaccinated even if they are working remotely.
Then—for companies working in person—the guidance requires contractors to include employees who also work in the same company-controlled building, facility, worksite, or campus as the “on or in connection with” employees during performance of a covered contract, unless the company can in essence firewall these groups of employees.
As another note: Employees who fit into any of these groups are still subject to vaccination requirements even if they work outside or have already been through a Covid-19 infection (or both). To be sure, this coverage has nuances, limitations, and exceptions that don’t fit into an article of this length, such as religious and medical accommodations that the guidance tasks contractors with applying.
Bottom line: Those potential carve-outs should not distract from the key point that once a company has a covered contract, the vaccination obligations can reach further into the employee roster that might be expected.
Understand the Vaccination Timing
Covered employees must be fully vaccinated by Dec. 8, 2021, which per the guidance means being two weeks past the second/only vaccination shot. To meet that timing, employees need to have their terminal shots before Thanksgiving.
Many companies might not receive a covered contract (or contract modification) until close to Dec. 8, however, potentially leaving not enough time to have employees start and finish a full vaccination cycle by the deadline. Companies in this situation face a judgment call now on whether to require vaccinations preemptively for employees likely to be covered or instead wait to see when and if they receive a contract award/modification imposing the requirements.
And some companies might get to Dec. 8 without a covered contract but expect to have a covered contract later on. In those cases, the deadline for covered employees to be vaccinated is the first day of performing under the covered contract period—whether a new award, an extension of an existing contract, or a simply a date specified by a contract modification incorporating the EO’s obligations.
The same sort of judgment call—whether to require vaccinations preemptively or wait and see—applies here, too.
With this type of timing and judgment potentially required, companies that have, or think they might have, business relationships in the federal space should use the coming weeks to plan for compliance.
Getting operational, business, employment, and legal responsibilities aligned will go a long way toward being able to respond with speed and flexibility when—and if—these obligations apply to your company.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owner.
Craig Smith is a partner in Wiley’s Employment & Labor and Government Contracts practice. He counsels and represents government contractors and subcontractors on a broad range of government contracting issues.