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Broad Biden Vaccine Order Has Deep Reach Into Contractor Realm

Oct. 5, 2021, 9:47 AM

New Covid-19 vaccination mandates for federal contractors have tentacles long enough that they will cover even employees who aren’t directly involved in work with the government and those working from home.

The Biden administration requirements on vaccines, masking, and physical distancing detailed in guidance on Sept. 24 calls for federal contractor employees to be fully vaccinated against Covid-19 as early as Dec. 8 unless they’re granted an accommodation.

Although that guidance provided some clarity, attorneys said their contractor clients want to know just how far the vaccination mandate extends down through their workforces. Non-compliant businesses risk the cancellation of their contracts and False Claims Act prosecutions if they lie about compliance, attorneys told Bloomberg Law.

The new obligations cover companies with federal contracts for services, including construction, valued in most cases at more than $250,000, according to the guidance from the White House’s Safer Federal Workforce Task Force. The vaccination obligation also flows downward to the prime contractor’s subcontractors and any companies hired by the subcontractors.

But federal agencies are being encouraged to expand the requirements to companies with smaller contracts, said Laura Mitchell, a principal and contract attorney with Jackson Lewis P.C. in Denver.

“You don’t have to agree to it, but if you do not agree to the new terms that opens the door to the contract’s potential termination,” she said.

Am I Covered?

The guidance stems from President Joe Biden’s Sept. 9 executive order on coronavirus safety protocols for companies that have government contracts, separate from a call for OSHA to develop a regulation requiring vaccines or weekly testing for employees at businesses with more than 100 workers. Collectively, federal contractors employ about one-quarter of the U.S. workforce, according to the U.S. Labor Department.

While the Occupational Safety and Health Administration is prepping its standard, these contractor rules may be just as far-reaching.

And depending on how expansively federal agencies decide to write the requirement into contracts and apply those contract mandates, companies could start looking at physically and functionally separating business units into those working for commercial clients and those with federal contracts, attorneys told Bloomberg Law.

The guidance also says that any employee involved in a federal contract—including support staff, such as human resources—who work on multiple projects must be vaccinated to continue working. It also extends to employees who work at home and don’t come into the office.

Vaccination requirements also extend to employees not involved in federal contracts, said Christian Nagel, a partner and government contract attorney with Holland & Knight LLP in Tysons Corner, Va.

“Not only is it any employee working on or in a connection with a government contract, it’s an employee working at a location,” Nagel said.

That includes employees in the same building or campus who may encounter the federal contract workers. To avoid that requirement an employer would need to prove there was no chance of the federal contract workers meeting other co-workers—including sharing elevators, building lobbies, or on-site restaurants.

The wide coverage has led some employers to look at how they can split their federal contract functions from other parts of the company while still meeting federal mandates, Nagel said.

But there are some clear exemptions, said Dismas Locaria, a partner and contract attorney with Venable LLP in Washington.

The requirements don’t apply to organizations receiving federal grants since those aren’t considered acquisition contracts, he said. Projects partially funded by federal dollars, but contracted through state or local governments, such as highway or airport construction, also aren’t covered.

Expanding Reach

Agencies looking to go beyond the initial mandate also may try to apply the vaccination requirements to companies providing products, especially if there is a service contract that comes with providing the product, said Nagel.

Agencies are expected to release by Oct. 8 contract language to be included in pacts, according to the federal guidance for implementing the requirements. The clause will begin to appear in contract solicitations beginning Oct. 15 and in new contracts by Nov. 14.

How and when the clause will appear in existing contracts remains to be seen, Nagel said.

Many contracts were recently renewed with the Oct. 1 start of fiscal year 2022, he said. The unresolved question is whether agencies will seek to quickly modify contracts or wait until the contract is up for renewal or extension. In theory, it could be September 2022 before the clause appears in a company’s contract with a federal agency.

The attorneys said contractors must quickly determine who is fully vaccinated and encourage those who aren’t to complete the process before the vaccination mandate applies to their company.

The federal government defines fully vaccinated as two weeks after the last required shot. The math is simple for the one-dose Johnson & Johnson vaccine, according to the Centers for Disease Control and Prevention.

But for the Moderna inoculation, the span from first dose to fully vaccinated is at least six weeks, and for the Pfizer vaccine, it’s at least five weeks.

To contact the reporter on this story: Bruce Rolfsen in Washington at BRolfsen@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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