What Federal Contractors Need to Know About the New COVID-19 Workplace Safety Guidance

13 min

Earlier this month, Venable’s Government Contracts practice group summarized key aspects of President Biden’s Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors. The order requires executive departments and agencies to “include a clause” in certain federal contracts and subcontracts mandating compliance “with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force[.]”

Last Friday, the Task Force released its COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors. The final text of the contract clause remains to be determined (for example, the Department of Defense has offered an Early Engagement Opportunity regarding implementation of the executive order) and many issues remain unaddressed. Government contractors will need to evaluate their own circumstances to determine the extent to which they will need to comply and how quickly. Generally, however, the guidance establishes broad coverage that will, for most contractors, likely reach nearly every employee including those who do not work on any government contracts. Here are the major takeaways from the guidance.

What does the guidance generally say about vaccination, masking, and physical distancing?

Consistent with President Biden’s prior remarks on the order, the guidance requires covered contractors to “ensure that all covered contractor employees are fully vaccinated for COVID-19, unless the employee is legally entitled to an accommodation,” no later than December 8, 2021 or by the first day of the period of performance of a newly awarded contract or exercised option incorporating the new requirement.

The vaccine requirement applies to two categories of employees: (a) the prime contractor’s employees or the employees of its subcontractor at any tier working on or in connection with a covered contract, regardless of where they work; and (b) employees of the prime contractor and subcontractors working at a covered contractor workplace location, regardless of whether they are working on or in connection with a covered contract. Since the vaccine requirement applies even to those who may merely interact with employees who work on or in connection with a covered contract but do not personally have any connection to a covered contract, the scope is very broad, and for many contractors will encompass nearly all of their employees.

For example, employees working on or in connection with a covered contract are subject to the vaccine requirement even if they work entirely from home. Conversely, all of a covered prime contractor’s employees will be required to be vaccinated even if they are not working on or in connection with a covered contract, so long as just a single covered employee is likely to be present at their workplace location at one time during the contract’s period of performance.

The guidance also contains requirements related to masking and physical distancing, including that: “[c]overed contractors must ensure that all individuals, including covered contractor employees and visitors, comply with published CDC guidance for masking and physical distancing at a covered contractor workplace[.]” Unlike the vaccine requirement, which applies only to employees of the covered prime contractor or subcontractor, the masking and distancing requirement applies to anyone who is physically present at a covered workplace location, including visitors and employees of non-subcontractor vendors, such as food service, groundskeeping, and security.

What does it mean to work “in connection with” a covered contract, and how does that phrase affect the vaccine, masking, and physical distancing mandates?

The guidance defines “work performed ‘in connection with’ a covered contract” very broadly. It includes “[e]mployees who perform duties necessary to the performance of the covered contract, but who are not directly engaged in performing the specific work called for by the covered contract[.]” The guidance lists as examples: “human resources, billing, and legal review[.]”

The effect of this language is that in most cases, activities typically accounted for using indirect expenses (overhead and G&A) will be considered work “in connection with” a covered contract. This is because most contractors do not have separate human resources or payroll departments (for example) for their commercial and federal government contracting lines of business.

As a result, the likelihood that a single indirect employee will be present during performance of a covered contract at a given location will render that location a “covered workplace,” such that all a covered contractor’s employees at that workplace will have to be vaccinated, even if they do not work on or in connection with a covered contract. The masking and physical distancing requirements would then also apply to everyone at that location (not just employees).

In other words, to determine which locations will be subject to the various COVID-19 mandates, contractors will need to track not only where their direct labor assigned to federal contract works, but their indirect personnel whose work supports those contracts, too.

What do the potential accommodations or exceptions look like?

The guidance requires contractors to provide accommodation to employees when they are “legally entitled” to accommodation—namely, “because of a disability (which would include medical conditions) or because of a sincerely held religious belief, practice, or observance.” The guidance states, “[a] covered contractor should review and consider what, if any, accommodation it must offer.” The guidance does not provide any criteria to assist contractors in assessing and making accommodation determinations. Contractors will need to evaluate individual accommodation requests make a reasonable determination. Venable has provided relevant analysis on this issue in separate articles.

If an employee is exempt from the vaccine requirement due to a permissible accommodation, the employee must still comply with masking and distancing guidelines unless he or she receives a separate accommodation from those requirements. Fully-vaccinated employees or individuals in a covered workplace are generally not required to wear masks, and are not required to maintain physical distancing.

Notably, the guidance does not provide any exception for those providing evidence of a negative COVID test or prior COVID infection.

Are there any other exceptions to the vaccination and masking requirements?

Yes, several exceptions for masking may apply (e.g., “when an individual is alone in an office with floor to ceiling walls and a closed door, or for a limited time when eating or drinking and maintaining appropriate distancing.”). There may also be exceptions for vaccination where “a Federal agency [has] an urgent, mission-critical need for a covered contractor to have covered contractor employees begin work on a covered contract or at a covered workplace before becoming fully vaccinated.”

Which categories of contracts will be “covered” (i.e., have the clause requiring compliance with the Task Force guidance)?

The executive order stated it would apply to procurement contracts or contract-like instruments: (1) for “services, construction, or a leasehold interest in real property,” (2) for “services covered by the Service Contract Act,” (3) “concessions, including any concessions contract excluded by Department of Labor regulations at 29 C.F.R. 4.133(b),” or (4) “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[.]”

We predicted earlier this month that the clause likely would not apply to procurement contracts for services that are not subject to the SCA because the executive order would likely apply to the same extent as prior executive orders establishing and increasing the minimum wage for federal contractors, as interpreted by the Department of Labor in 2014 and again in its proposed rule from July 2021. The Task Force guidance appears to confirm this: “Contract and contract-like instrument – has the meaning set forth in the Department of Labor’s proposed rule, ‘Increasing the Minimum Wage for Federal Contractors,’ 86 Fed. Reg. 38,816, 38,887 (July 22, 2021).” If the new FAR clause’s prescription follows this same meaning, it would not be required in contracts that are not principally for services. In other words, inclusion of the new COVID-19 FAR clause in contracts that contain some incidental services does not appear to be required.

However, when discussing the subcontractor flow-down requirement, the guidance states that the new clause should be included in every subcontract at every tier until the subcontract is “solely for the provision of products.” This language is more expansive than the prescription in the Executive Order and therefore suggests that the new FAR clause may be imposed on more contracts than required by the Executive Order.

If my company does not perform under any covered contracts, is it possible the clause will be added to one of my federal contracts?

Yes, the guidance states: “Consistent with applicable law, agencies are strongly encouraged to incorporate a clause requiring compliance with this Guidance into contracts that are not covered or directly addressed by the order,” including “existing contracts and contract-like instruments prior to the date upon which the order requires inclusion of the clause.” Accordingly, while your contract may not fall under the term “covered contracts,” contractors should be prepared to receive contract modifications or solicitations including the new FAR clause, especially given the broad policy objectives of the Executive Order.

Does the term “covered contractor workplace” always include an entire building?

No, the presumption is that the entire location is covered, but a contractor can exclude portions of a building or campus if it 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,” including “interactions through use of common areas such as lobbies, security clearance areas, elevators, stairwells, meeting rooms, kitchens, dining areas, and parking garages.” Since any employee interactions, including those in parking garages, are enough to negate this exception, we anticipate that most contractors will not be able to make this affirmative determination so long as at least one employee is likely to be present at the workplace location at least once during the contract’s period of performance.

Who implements the vaccination and masking requirements, and how?

“Covered contractors must ensure that all covered contractor employees are fully vaccinated for COVID-19, unless the employee is legally entitled to an accommodation.” The same is true of compliance with the mask requirement for individuals in covered contractor workplaces. According to the guidance, “[t]he contractor is responsible for considering, and dispositioning, such requests for accommodations regardless of the covered contractor employee’s place of performance.” Covered contractors are also responsible for enforcing the applicable masking requirement, including that “appropriate masks” are worn “consistently and correctly[.]”

Do covered employees have to provide proof of their vaccination status?

Yes. A “covered contractor must review its covered employees’ documentation to prove vaccination status,” and the contractor must further “require covered contractor employees to show or provide their employer with one of the following documents:”

  • A copy of the record of immunization from a health care provider or pharmacy;,
  • A copy of the COVID-19 Vaccination Record Card (CDC Form MLS-319813_r, published on September 3, 2020);,
  • A copy of medical records documenting the vaccination;
  • A copy of immunization records from a public health or State immunization information system; or
  • A copy of 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.

Digital copies of such records are acceptable, but “[a]n attestation of vaccination by the covered contractor employee is not an acceptable substitute for documentation of proof of vaccination.”

Do employees who only work remotely need to be vaccinated?

Only employees working on or in connection with a covered contract must be vaccinated, even if they work exclusively from home or another remote location.

If an employee is not working on or in connection with a covered contract, the employee does not need to be vaccinated if that employee is working exclusively from home or another non-covered remote location. The vaccine requirement extends to employees who do not work on or in connection with a covered contract only when that employee works at a location where covered employees are likely to be present during the contract’s period of performance.

When will the clause start appearing in contracts?

The guidance summarizes the timeline specified in the executive order:

  • Contracts awarded prior to October 15 where performance is ongoing – the requirements must be incorporated at the point at which an option is exercised or an extension is made.”
  • New contracts – the requirements must be incorporated into contracts awarded on or after November 14. Between October 15 and November 14, agencies must include the clause in the solicitation and are encouraged to include the clause in contracts awarded during this time period but are not required to do so unless the solicitation for such contract was issued on or after October 15.”

The guidance also reiterates the executive order’s requirement that the FAR Council and federal agencies develop the clause and appropriate guidance, respectively, by October 8, 2021.

Will covered contractors have to designate specific employees to ensure compliance?

Yes, covered contractors must “designate a person or persons to coordinate implementation of and compliance with this Guidance and the workplace safety protocols detailed herein at covered contractor workplaces.” It can be the same person already implementing other COVID-19 safety protocols. This individual “must ensure that information on required COVID-19 workplace safety protocols is provided to covered contractor employees and all other individuals likely to be present at covered contractor workplaces,” and “must also ensure that covered contractor employees comply with the requirements in this guidance related to the showing or provision of proper vaccination documentation.”

What about subcontractors and small businesses?

The executive order “appl[ies] to subcontractors at all tiers, except for subcontracts solely for the provision of products,” according to the guidance. “The prime contractor must flow the clause down to first-tier subcontractors; higher-tier subcontractors must flow the clause down to the next lower-tier subcontractor, to the point at which subcontract requirements are solely for the provision of products.” The guidance also confirms that it “applies equally to covered contractors regardless of whether they are a small business.”

Will covered contractors have to ensure employees receive “booster shots,” too?

The guidance leaves open this possibility: “There is currently no post-vaccination time limit on fully vaccinated status; should such a limit be determined by the Centers for Disease Control and Prevention, that limit will be considered by the Task Force and OMB [Office of Management and Budget] for possible updating of this Guidance.”

Can a covered contractor seek reimbursement from the federal government for any costs of complying with the new clause when it is added to an existing contract?

OMB has indicated the “executive order would have no impact on costs and revenues to the Federal Government” and “[i]mplementing this executive order would have no impact on mandatory and discretionary obligations and outlays, as well as on revenues to the Federal Government, in the 5-year fiscal period beginning in fiscal year 2021.” OMB’s statement arguably shows that the federal government does not anticipate paying contractors any costs associated with compliance, but OMB’s views are not dispositive. If the new clause is incorporated into a contract and the contractor’s costs increase as a result, the contractor may be entitled to an equitable adjustment to the price and/or schedule. Any such determination, however, will be fact specific and would require evidence demonstrating that the new clause directly resulted in increased costs or delays.

Contractors should review the terms of their covered contracts and consult with legal counsel on this issue.

Has anyone challenged the executive order or the guidance in court yet?

Yes, at least one lawsuit has already been filed in the U.S. District Court for the District of Columbia (No. 21-cv-2484), challenging President Biden’s executive orders related to vaccination of both federal employees and contractor employees.

Where else can I go for guidance?

OMB’s Deputy Director for Management published a blog post on the executive order on September 10, 2021. That post states: “Put simply, if you want to work for the Federal Government, you need to be vaccinated. And if you want to do business with the Federal Government, you must vaccinate your workforce.” OMB released another blog post to accompany the new guidance on September 24, 2021, as well.