Helping individuals, companies, and organizations understand key legal and practical considerations for promoting compliance and making better business decisions in these types of federal, state, and local government contracting matters MORE

On September 9, 2021, President Biden rolled out his Path Out of the Pandemic plan (the “Plan”) to combat the spread of COVID-19. As reported in an earlier alert, this Plan contains a number of moving parts and coverage that remains to be finalized.  Of note to government contractors is the fact that the Plan includes (1) an instruction to the Department of Labor Occupational Safety and Health Administration (OSHA) to issue a directive that requires companies with 100 or more employees to ensure their workforces are either fully vaccinated or their workers test negative for COVID-19 on a weekly basis before coming to work, and (2) an Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors (EO) that requires contractors and subcontractors at any tier to comply with all guidance published by the Safer Federal Workforce Task Force, and determined to “promote economy and efficiency in Federal contracting” by the Director of the Office of Management and Budget, for those contractor or subcontractor workplace locations where individuals are “working on or in connection with a Federal Government contract or contract-like instrument.”  The Plan and, in particular, these two prongs leave much to be defined and implemented.  The devil truly will be in the details of the rules to be prepared and issued, as well as in whether and when the OMB, individual agencies, and contracting and agreements officers determine to roll them out to all, or a portion, of Federal government contractors.

For example, the EO states that it applies to new “contracts and contract-like instruments,” as defined by the Department of Labor proposed rule, “Increasing the Minimum Wage for Federal Contractors,” or any subsequently issued final rule. This rule has not been finalized and risks being a moving target as to which types of contracts and contract-like instruments will be covered.

For its part, though, the EO states that the contracts that it intends to cover will be those involving “services, construction, or a leasehold interest in real property,” “services covered by the Service Contract Act,” “concessions contracts,” and “Federal property or lands and related … services for Federal employees, their dependents, or the general public.” The EO also states that it does not include “grants,” “Indian Self-Determination and Education Assistance Act” contracts and agreements, “contracts or subcontracts … [at or below] the simplified acquisition threshold,” “work [performed] outside the United States or its outlying areas,” or “subcontracts solely for the provision of products.”  By its very language, the EO is not intended to cover all procurement contracts, just those contracts to provide services, leasing or construction.  Contracts for the provision of supplies are not included as within the express coverage of the EO.

Hence, companies that engage in manufacturing, as well as companies that provide supplies to those that do engage in services, construction or leasing, are not expressly included in the scope of the EO issued.  That said, the mandated FAR rule and non-FAR rule to be developed could be drafted to include coverage broader than the EO, e.g., covering those companies that manufacture or provide supplies at any tier.  However, the EO itself does not expressly include these companies.

Moreover, the EO does not define what is intended by “performing on or in connection with” a contract or contract-like instrument – words that are intended to trigger coverage for those contractors and subcontractors that provide services, leasing, or construction.  Is the language intended to include personnel performing overhead, home or intermediate office, financial accounting, budgeting, long-range planning, or business development functions within a government contractor?  Is it intended to include personnel only at particular points in time during contract performance?

The OSHA rule contemplated by the Plan is also not immune from ambiguity and uncertainty.  At what point in time must a company have 100 employees in order to trigger that rule? What if a contractor starts off below the 100 mark but then adds personnel to perform the contract, will it be subject to the rule and when? What if a contractor falls below the 100 employee level during the contract, does this then negate the applicability of the rule? What if there are personnel who are exempt from getting the vaccine, are they to be counted for purposes of determining whether a contractor meets or exceeds the 100 mark?

These and other questions need to be fleshed out as the rule is developed and rolled out, including whether any exceptions will apply under the rules and Safer Federal Workforce Task Force guidance being developed.

We can only hope that there will be an opportunity to comment on the proposed rulemaking and that any rules developed and implemented are capable of fair and proper administration.  Stay tuned to our blog, we will continue to monitor this situation and intend to provide follow up regarding further executive and regulatory actions as they emerge.