Blogs

FAR Council Issues Memorandum on Agency Deviations Requiring Contractor COVID-19 Vaccinations; New FAR, DFARS, and Other Agency Deviation Clauses Follow

  

By G. Scott Walters of Smith, Currie & Hancock LLP
Published October 12, 2021


On September 30, 2021, the Federal Acquisition Regulation (FAR) Council issued its Memorandum on Issuance of Agency Deviations to Implement Executive Order 14042. In this memorandum the FAR Council provided initial direction for implementing the requirements of Executive Order 14042, which directs agencies to include a clause in certain contracts ensuring compliance with all guidance from the Safer Federal Workforce Task Force (the “Task Force Guidance”) requiring vaccinations and other measures at contractor and subcontractor workplace locations, into federal contracts subject to the FAR. In a previous legal alert, we discussed the September 24, 2021 Task Force Guidance.

Applicable Federal Procurements

The FAR Council directs agencies to apply the FAR deviation clause to the following federal procurements:

  • New contracts awarded on or after November 14, 2021, from solicitations issued before October 15, 2021, including new orders awarded on or after November 14, 2021, from solicitations issued before October 15, 2021, under existing indefinite-delivery contracts;
  • New solicitations issued on or after October 15, 2021, and contracts awarded pursuant to those solicitations, including new solicitations issued on or after October 15, 2021, for orders awarded pursuant to those solicitations under existing indefinite-delivery contracts;
  • Extensions or renewals of existing contracts and orders awarded after October 15, 2021; and
  • Options on existing contracts and orders exercised on or after October 15, 2021.


Additional Procurement Actions Where Application is Encouraged

The FAR Council also encourages, but does not require, covered federal agencies to incorporate these deviation clauses into federal contracts:

  • that have been or will be awarded before November 14, 2021, on solicitations issued before October 15, 2021; and
  • under the simplified acquisition threshold; or
  • for the manufacturing of products. 


Federal Agencies Quickly Act

One day later, on October 1, 2021, in response to this memorandum, federal agencies began implementing the recommended deviation clause. The Civilian Agency Acquisition Council issued CAAC Letter 2021-03, authorizing covered civilian agencies to include FAR 52.233-99 into certain federal civilian agency contracts. And, the Department of Defense issued DFARs 252.223-7999 to include in certain defense agency contracts. Both of these deviation clauses are entitled Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors.  These new deviation clauses will apply to all solicitations and contracts for services procured by these agencies, including construction. The deviation clauses are currently of indefinite duration and remain effective until the clause is amended “or the deviation is otherwise rescinded” by the applicable federal agency.

Potential Uncertainties Ahead

According to the Office of Management and Budget, compliance by Federal contractors and subcontractors with the Task Force Guidance “will improve economy and efficiency by reducing absenteeism and decreasing labor costs for contractors and subcontractors working on or in connection with a Federal Government contract.”  Yet, based on this guidance as well as the new deviation clauses, many questions and uncertainties still exist.  The remainder of this alert discusses a few potential uncertainties and offers some guidance on what steps federal contractors, particularly those performing construction work, should consider in hopes of overcoming these uncertainties.

First, a federal contractor and its subcontractors subject to the deviation clause must “comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance” of the subject contract. This compliance requirement seemingly forces covered contractors (and subcontractors) to comply with potentially unknown and, still to be answered questions that the Task Force may subsequently decide to answer. For example, if the Task Force were to subsequently indicate that full vaccination of covered contractors and subcontractors includes a COVID-19 booster vaccine, this would impose an additional obligation with significant potential cost and time impacts. As a general rule of contract law, a contract provision requiring a party to comply with an unknown, yet to be determined, obligation is typically considered illusory and unenforceable. While the government might argue that the contractor assumes the risk of such a regulatory change, contractors considering seeking any adjustment to address the impacts of such change should understand contractual notice requirements and carefully document and segregate all costs and time impacts associated with compliance.

Second, it is uncertain how far the vaccine mandate may extend under the deviation clause.  To be sure, the mandate covers all contractors and subcontractors performing work on federal installations. The guidelines also apply to all covered contractor employees and to all contractor and subcontractor workplace locations. This would include covered contractor employees working remotely. What is uncertain is what is meant by work performed by covered employees “in connection with” a federal government contract. The Task Force has provided limited information on what activities or functions this might cover, other than offering a few specific examples, “such as human resources, billing, and legal review ….” This uncertainty could lead to added cost and time impacts if the Task Force later decides to modify (or expand) the meaning of “in connection with” as applies to federal government contract work. In order to ease the administrative burden of compliance, the prudent covered contractor should consider requiring the vaccinations broadly unless it is able to exclude segments of its staff under the exception for “separate facilities.”

Third, federal contractors contracting directly with the government are responsible for ensuring that their subcontractors comply with the Task Force Guidance by incorporating the required deviation clause into their subcontracts.  The Task Force Guidance permits the prime contractor to assume that its subcontractor is complying with the deviation clause “unless the prime contractor has credible evidence otherwise.” The Task Force Guidance is silent on what constitutes credible evidence of non-compliance or what steps a federal contractor should take to determine if there is credible evidence of non-compliance. This uncertainty as to ensuring compliance could lead to added cost and time impacts for prime contractors. One possible solution would be for the prime contractor to obtain attestations, or sworn statements from their subcontractors that that they expressly acknowledge compliance with the variation clause, including the Task Force Guidance and are aware of no credible evidence that they are not in compliance.



Working in Smith Currie's Atlanta and Washington, DC offices, Scott Walters represents construction-industry clients in federal government construction contracting issues, construction claims and disputes, regulatory compliance, litigation and alternative dispute resolution, contract drafting and negotiations, and general business and corporate matters. He can be reached at gswalters@smithcurrie.com or 404.582.8062.

 

0 comments
10 views

Permalink