President Biden’s September 9, 2021 COVID speech on fighting the COVID19 Pandemic, together with the publication of the Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors, have contractors asking how to prepare for the September 24, 2021 publication of the new COVID Safety Protocols (CSPs). In addition to reviewing our previous blog on the new COVID Executive Order, we suggest some practical steps you can take now to position your company for the road ahead. Read on!
The Safer Federal Workforce Task Force updated its Model Safety Principles on September 13th, and Guidance for Vaccinations on September 16th. The Task Force stated the President “has announced that Federal contractors will be required to be vaccinated.” However, until vaccinations are contractually required, Agencies should address the Task Force’s model safety principle – i.e. that onsite contractor employees who are neither vaccinated nor part of an agency testing program can still get on site, but (1) must provide proof of a negative COVID-19 test (of the Agency’s choosing), from no later than the previous 3 days prior to entry to a federal building, and (2) must wear an approved mask over their nose and mouth. The Task Force published FAQ guidance for Federal Contractors and Visitors, encouraging Agencies to incorporate vaccine requirements into contracts not covered by Executive Order 14042, and for Agencies to comply with the Privacy Act and Paperwork Reduction Act as they ask about contractor employees’ vaccination status via use of a Certification of Vaccination Form. The Task Force has not issued any guidance on what changes, if any, will be required at Federal Contractors’ corporate worksites.
For new contracts (including contract-like instruments) solicited and awarded after October 15, 2021, the potential for immediate inclusion of the new CSPs means contractors need to be thinking ahead. Though we do not yet know exactly what the CSP will entail or what the proposed contract requirements will be (and we will not know until September 24), now is the time to contemplate preparing your business for potential uncertainty and disruption. Many contractors have expressed concern over the inclusion of a vaccine mandate in particular, and the difficulties that could come along with enforcement of such a mandate. Though I am hopeful that the ultimate guidance will reflect an understanding of practical realities, balanced with appropriate safety measures, we cannot know exactly what is forthcoming. Unfortunately, there is always the possibility that CSPs will make government contracting a comparatively unattractive revenue stream, at least for now. Alternatively, it might take time for contractors to adjust their SOP or policies to meet the CSP requirements. Can you pivot quickly enough to meet the CSPs’ requirements in time to submit a proposal? If, by the middle of next month, you need to make CSP-mandated adjustments on all of your contracts, or if you conclude that the CSPs are so onerous that you no longer wish to compete for Federal jobs, what financial arrangements do you need in order to keep your company going?
As for adding CSP requirements to existing contracts –
For Commercial Item contracts, per FAR 52.212-4(c), generally speaking, only those written modifications agreed to between the government and the contractor can change the terms and conditions of the contract. Whatever changes the government proposes for Commercial Item contracts, only those the Contractor agrees to can be added to the contract. Commercial Item contractors would do well to consider now what types of changes they’re willing to make, what resources they would need to make those changes, and how much they’re going to charge the government for those changes.
For existing non-commercial item contracts, per the Changes clauses (check which version is in your contract!), as a general rule, the government can unilaterally make changes to the method and manner of performance of the work. In such case, the contractor has the right to equitable adjustment to account for increases in time and money for performance of the changes. The government can only order change for that work which is the subject of the contract, and the rest of the contractor’s work goes on as the contractor chooses. Expenses related to planning, purchases of safety equipment, hours spent taking medical tests, construction of onsite testing facilities, physical space safety modifications, impacts on hours of operation, productivity impacts, disruptions to the contractor’s workforce, creation of a compliance and reporting program, subcontractor and supplier flow-down management, and other such consequences should be tracked for each contract under a separate charge code dedicated to compliance with the CSPs Change Order. By clearly delineating in real time the expenses incurred due to compliance with the new CSPs, Government Contractors will best track expenditures and increase the likelihood of repayment under the contract.
An interesting opportunity arises for those contractors who were already considering whether or not to make changes to their existing COVID policies. Why not wait until the Contract Officer orders and the government is arguably on the hook, financially speaking, for such changes? Why not implement the federally required changes at the government’s expense, and then see if you want to upgrade anything else at your own expense?
Many contractors are concerned with unplanned manning shortages and involuntary loss of employees due to potentially unpopular requirements of the upcoming CSPs, or the prospect of being sued by their employees for mandating employee compliance with CSPs requirements. Savvy contractors will not wait until September 24 (or they get sued) to see whether they need to retain experienced counsel: They’ll already have representation with experience in Government Contracting, Regulatory Compliance and Labor/Employment.
Moreover, if you are not already a member of a federal contractor organization, now is the time to think about joining. As the lawsuits over the CSPs start rolling in between contractors and the federal government, prime contractors and subcontractors, and employees and employers, such organizations aggregate individuals into a powerful association that can lobby lawmakers, contact media, and provide supportive amicus briefs to agencies and judges on your behalf.
We will keep you posted as the effects of this Executive Order unfold.