What To Do Now: Task Force Seeks Broad Coverage and Stringent COVID-19 Protocols for Contractors

On September 24, 2021, the Safer Federal Workforce Task Force (the “Task Force”) issued guidance (the “Guidance”) on President Biden’s Executive Order 14042 (the “Order”). Although the Guidance recognizes that the Order is limited to only certain types of contracts, the Task Force strongly encourages federal agencies to apply these requirements broadly to nearly all federal contracts entered into, modified, or extended on or after October 15, 2021. Covered contractors will face stringent COVID-19 requirements according to the Guidance, including:

• ensuring all covered contract employees (even employees who work from home) are fully vaccinated by December 8, 2021, subject only to limited exceptions;
• imposing strict masking and social distancing obligations tied to CDC guidelines for all individuals, including visitors, in contractors’ workplaces who are “likely” to have contact with covered employees; and
• Designating personnel to be responsible for implementing these requirements.

These requirements will be in addition to the requirements we previously discussed concerning obligations for federal contractor employees working at federal facilities or related to the soon to be released OSHA emergency rule. Contractors will still need to see how the Federal Acquisition Regulatory Council (the “FAR Council”) incorporates the Guidance into the FAR clause that will be inserted into covered contracts, and the Order will face legal challenges. Nevertheless, contractors should start preparing now for the legal and practical issues that undoubtedly will arise from complying with these requirements.

Covered Contracts

The Task Force defines “covered contract” as the types of contracts that were covered by the Order. Those contracts include: (1) procurement contracts for services or construction and leases in real property; (2) contracts covered by the Service Contract Act; (3) concession contracts; and (4) contracts entered into with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

Despite recognizing that the Order is limited to those contracts, the Task Force goes on to “strongly encourage” federal agencies to insert these requirements into:

• “[C]ontracts that are not covered or directly addressed by the order because the contract is under the Simplified Acquisition Threshold as defined in section 2.101 of the FAR or is a contract or subcontract for the manufacturing of products”; and
• “[E]xisting contracts and contract-like instruments prior to the date upon which the order requires inclusion of the clause.”

The Task Force also adopts the broad definition of “contract or contract-like instrument” from the Department of Labor’s proposed rule on increasing the minimum wage for certain federal contractors. Under that definition, the Order’s requirements could be inserted into many types of federal contracts, including “procurement actions, lease agreements, cooperative agreements, provider agreements, intergovernmental service agreements, service agreements, licenses, permits, or any other type of agreement, regardless of nomenclature, type, or particular form.”

The requirements of the Guidance and Order must “be flowed down to all lower-tier subcontractors,” except subcontracts “solely for the provision of products.” The Guidance indicates that prime contractors are responsible for flow-downs to first-tier subcontractors, and higher-tier subcontractors are responsible for flow downs to the next lower-tier subcontractor.

Covered Employees and Workplaces

The Task Force takes a very broad view of the contractor employees and workplaces that will be covered by these requirements.

• Covered Employees: The Guidance defines “covered contractor employee” as any full-time or part-time employees of covered contractors who work “on or in connection with” a covered contract or at covered contractor workplace. This includes employees who work from home, but it excludes any employees who work solely outside the United States. The Task Force appears to be interpreting the “in connection with” language consistently with Executive Order 14026, Increasing the Minimum Wage for Federal Contactors, to include employees who are necessary for the performance of a covered contract, such as “human resources, billing, and legal review.” The definition of “covered contractor employee,” however, goes beyond those workers to include any employees “who are not themselves working on or in connection with a covered contract.”
• Covered Workplaces: These requirements will apply to virtually all workplaces where covered employees work, other than an employee’s residence if the employee works from home. The Guidance defines “covered contractor workplace[s]” where covered contract employees work or is “likely to be present” during the period of performance of a covered contract, but it does not include the employee’s residence. This definition applies to both indoor and outdoor work areas.

This means that contractors that have the yet-to-be-drafted FAR clause incorporated into their contracts will have to apply the requirements of the Order to employees who are not working on or in connection with a covered contract merely because they work in the same workspace as employees who are covered by the Order. For example, the Task Force states that the requirements will apply to all contractor employees working in the same floor, site, or facility as employees covered by the Order unless the contractor “can affirmatively determine that none of its employees on another floor or in separate areas of the building will come into contact with a covered contractor employee during the period of performance of a covered contract.” This will require contractors to review interactions that covered contractor employees will have in any “common areas such as lobbies, security clearance areas, elevators, stairwells, meeting rooms, kitchens, dining areas, and parking garages.”

Considering the broad application of the Order and the difficulty that may come with trying to determine which employees and workplaces are covered, covered contractors should consider whether it is administratively easier to extend the Order’s requirements to all individuals in their workplaces.

Vaccines Mandated (with Limited Exceptions) and No Testing Option

All covered contractor employees must be fully vaccinated for COVID-19 no later than December 8, 2021, except in “limited circumstances where an employee is legally entitled to an accommodation” for a disability or sincerely held religious belief. According to the Guidance, employees are “fully vaccinated” two weeks after receiving the second dose in a two-dose series (e.g., Pfizer or Moderna), or two weeks after receiving a single-dose vaccine (e.g., Johnson & Johnson/Janssen). Unlike the upcoming OSHA rule, contractors will not have the option of allowing employees to submit to regular COVID-19 testing as an alternative to being vaccinated.

If a covered employee is not fully vaccinated after December 8, 2021, those employees are barred from working on any covered contract, except in limited situations. The Guidance notes that federal agencies may make an exception for an “urgent, mission-critical need,” but the covered contractor must still ensure the covered employees are fully vaccinated within 60 days of beginning work on the contract.

Self-Attestation of Vaccination Status Is Not Sufficient

The Task Force is requiring contractors to obtain actual proof of vaccination status. Covered employees must “show or provide . . . one of the following documents:

• Record of immunization from a health care provider or pharmacy,
• COVID-19 Vaccination Record Card (CDC Form MLS-319813_r, published on September 3, 2020),
• Medical records documenting the vaccination,
• Immunization records from a public health or State immunization information system, or
• Any other official documentation verifying vaccination with information on the vaccine name, date(s) of administration, and the name of health care professional or clinic site administering vaccine.

The Guidance states that self “attestation of vaccination . . . is not an acceptable substitute.” In instances where an employee has lost their vaccination card, the Guidance instructs employees to contact the provider site where they received their vaccine or their State or local health department.

No Clear Guidance For Addressing Accommodation Requests

Beyond stating that contractors must review and consider requests for accommodation from vaccine or masking requirements due to a disability or sincerely held religious belief, the Task Force offers virtually no guidance on how contractors should consider or process such requests. Given the challenging issues that can arise when addressing accommodation requests, particularly considering the growing trend of online sites providing employees with template forms for requesting religious accommodations, contractors will need to closely review their accommodation processes to ensure they are legally compliant.

The Task Force also advises that both the federal agency and the covered contractor should review and consider accommodation requests from employees when the agency is “a ‘joint employer’ for purposes of compliance with the Rehabilitation Act and Title VII of the Civil Rights Act.”

Must Comply with CDC Masking and Social Distancing Guidance

Contractors must also require all individuals, including visitors, to comply with the CDC guidance for masking and physical distancing while at their workplaces. Under current CDC guidance, covered contractors will need to do the following:

• Fully vaccinated
  
  • In areas of substantial or high community transmission, fully vaccinated individuals must wear masks indoors (except for limited exceptions), but they do not need to socially distance.
  • In areas of low or moderate community transmission, fully vaccinated individuals do not need to wear masks or social distance.
• Not fully vaccinated
  
  • Regardless of the level of community transmission, individuals who are not fully vaccinated must wear masks indoors and in certain outdoor settings, and must also socially distance (to the extent practicable) regardless of the level of community transmission.

Contractors will be required to check the CDC COVID-19 Data Tracker for all covered contractor workplaces “at least weekly” to determine what workplace safety protocols must be in place. With nearly every county in the United States currently considered an area of high or substantial transmission, most covered contractors will have to comply with the more stringent masking requirements for fully vaccinated individuals at their workplaces.

The Task Force is also requiring covered contractors to adhere to strict masking guidelines:

• Types of Mask Permitted: Contractors must ensure that covered individuals use the types of masks recommended by the CDC. Under current CDC guidance, the following types of masks are prohibited: masks with exhalation valves, vents, or other openings; face shields only (without mask); or masks with single-layer fabric or thin fabric that does not block light.
• Proper Mask Use: Contractors must ensure covered individuals wear proper types of masks and use them consistently and correctly (e.g., covering the mouth and nose), subject to limited exceptions consistent with CDC guidelines, such as when an employee is eating or drinking, to verify their identity for security and safety requirements, or when alone in an office with the door shut.
• Accommodations Must be Documented: If contractors need to make exceptions from the masking requirements, they must be “approved in writing by a duly authorized representative” of the contactor.

The Task Force also will require contractors to take “reasonable steps” to ensure visitors to covered workplaces comply with the COVID-19 safety protocols in the Guidance, which could include informing visitors about the COVID-19 safety protocols by posting signs at entrances to covered workplaces or communicating those protocols to visitors before they arrive.

Must Designate Personnel to Implement These Requirements

Covered contractors will also be required to designate a person or persons to oversee compliance with the Guidance. The Guidance specifically will require this designated individual or individuals to:

• Ensure that COVID-19 workplace safety protocols are provided to all individuals, including visitors, “likely to be present” at all covered contractor workplaces; and
• Ensure that all covered contractor employees show proof of vaccination status, subject to accommodations.

Additional Action Required

Additional action is required before these requirements can be included in federal contracts and subcontracts. The Task Force confirms that the FAR Council will be conducting a rulemaking to amend the FAR to include these requirements. Although the timing of the formal rulemaking process is unclear, the Guidance mandates the following deadlines for immediate implementation of these requirements:

• By October 8, 2021:
  
  • FAR Council will issue a clause for the requirements in the Order and Guidance to be inserted into covered contracts (the “FAR Clause”); and
  • Federal agencies that oversee contracts that are not subject to the FAR, such as concession contracts, will be responsible for developing appropriate guidance.
• On or after October 15, 2021:
  
  • The FAR Clause must be incorporated into existing covered contracts that are extended or an option is exercised on or after October 15, 2021; and
  • New solicitations must include the FAR Clause.
• On or after November 14, 2021
  
  • New awards for covered contracts must include the FAR Clause.

Enforcement and Penalties Remain Unclear

The Guidance does not specify what penalties or enforcement mechanisms contractors would face for non-compliance. Although Contractors will likely have to wait for the FAR Council to issue the FAR Clause before they know the enforcement regime and remedies for the Order, current practices with respect to violations of other FAR clauses may offer some clues. Financial penalties and poor performance evaluations are typical consequences for violations that an agency considers important but not central to the purpose of the contract. Penalties for more egregious violations of key contract provisions can include termination of the contract for default, suspension or debarment of the contractor and its principals, and/or liability under the False Claims Act.

Interaction with the Upcoming OSHA Rule and State Laws

The Task Force makes clear that contractors must adhere to these requirements regardless of other COVID-19 workplace safety laws. The Guidance explicitly states that the requirements under the Order are in addition to the upcoming OSHA emergency rule, which is expected to require employers with 100-plus employees to mandate vaccines or negative COVID-19 testing for their employees. The Task Force also states that the requirements will “supersede any contrary State or local law or ordinance.” The Task Force, however, allows States to pass “more protective workplace safety protocols” than required by the Guidance.

Practical Implications

The Guidance is not final until the FAR Council issues the FAR Clause, which should occur by October 8, 2021. We will have to wait to see whether the FAR Clause provides further limits or clarity on the coverage and requirements in the Guidance. Nevertheless, with the Task Force strongly encouraging federal agencies to broadly apply these requirements to nearly all federal contracts, all contractors (even those not explicitly covered by the Order) should ensure that their employees who handle federal contracts and subcontracts are informed about the Order and Guidance, and are ready to scrutinize all contracts issued, modified, or extended after October 15, 2021 to see whether the government is trying to subject them to these requirements.

The Order and Guidance will almost certainly face legal challenges. Indeed, there have been several cases filed already, including a suit filed last week in D.C. federal court concerning the Order and Executive Order 14043 (requiring vaccine mandates for federal employees) and a suit filed by the Arizona Attorney General claiming President Biden’s vaccine mandates are unconstitutional. There will likely be others. It is unclear whether the Order will survive such legal challenges. The Order may be vulnerable under the Administrative Procedure Act, given the expansive scope and coverage the Task Force is urging, even prior to a formal rulemaking by the FAR Council.

In the meantime, contractors should start preparing for these rules and the many legal and practical issues they will face with rolling this out. A few items to consider doing now:

• Recognizing that coverage issues remain murky and difficult, start:
  
  • Compiling a list of the contracts that are anticipated to be entered, modified, or extended after October 15, 2021 that could be covered by the Order;
  • Assessing which employees work on or in connection with those contracts; and
  • Tracking where those employees work to understand the work locations that may be covered by the Order's requirements.
• Create plans for ensuring covered contract employees are fully vaccinated by December 8, 2021, which includes:
  
  • Determining which covered employees are fully vaccinated and not fully vaccinated;
  • Creating systems for obtaining and maintaining actual proof of vaccination status and processes for employees to obtain proof of vaccination if they have lost their vaccine documentation; and
  • Developing contingency plans for ensuring covered employees who are not fully vaccinated either become fully vaccinated by December 8, 2021 (unless eligible for an accommodation), or, if possible, transferred to work on contracts not covered by the Order.
• Review and, if needed, update procedures for addressing accommodation requests for disabilities and sincerely held religious beliefs.
• Create plans for masking and social distancing in accordance with CDC guidance for all individuals in contractor workplaces where covered employees work.
• Devise plans for complying with confidentiality and privacy protections when implementing these requirements.
• Designate a person or persons to oversee implementation and compliance with these requirements.
• Create plans for training human resource personnel and managers who will be responsible for implementing these requirements.
• Ensure records of cost increases related to complying with the Order are appropriately tracked and maintained, in order to support requests for cost reimbursements or equitable adjustments.
• Monitor other federal and state laws that may impose additional requirements, including the rules for contractor employees working at federal facilities and the upcoming OSHA ETS for employers with 100-plus employees.