President Biden’s Sept. 9 executive order mandating COVID-19 vaccinations for federal contractors introduced questions about logistics and compliance that contractors continue to try to answer.
Here is a closer look at key issues shaping the compliance effort.
How will this work?
The order introduces a contract clause to new contracts; new contract-like instruments; new solicitations for contracts or contract-like instruments; extensions or renewals of existing contracts or contract-like instruments; and exercises of options on existing contracts or contract-like instruments, on or after Oct. 15, 2021.
Exempt are grants; contracts under the Simplified Acquisition Threshold (currently $250,000); employees who work outside of the United States; and subcontracts solely for the provision of products.
This clause shall apply to any U.S. workplace locations in which an individual is working on or in connection with a federal government contract or contract-like instrument. However, it has not been communicated whether employees working from home will be impacted.
How many people are affected?
The full scope of the executive order and the number of impacted contractors and their employees is still unclear. The Professional Services Council and other industry groups are waiting for clearer guidelines, but it is possible to get a general sense from recent data.
Per USAspending.gov, in fiscal year 2020, over 247,000 contracts were issued over the Simplified Acquisition Threshold for work performed within the United States. There were an estimated 5 million contractor employees in 2020, according to Brookings. Even if we conservatively assume 50% will be affected by the order, that means 2.5 million employees would need to be tracked and in compliance.
How should contractors prepare?
As contractors establish processes, consider the following steps and associated questions:
1. Identify and document covered workforce
a. Identify employees subject to these rules. The text of the executive order states that it applies to those “working on or in connection with a Federal Government contract.” However, it is unclear if it applies to indirect employees and/or corporate employees. The executive order states that the Safer Federal Workforce Task Force guidance shall provide additional guidance by Sept. 24.
b. Create policies and procedures and a mechanism to obtain employees’ vaccination status and keep the data secure.
i. Does the vaccination card need to be provided or is a certification enough?
ii. Can internal IT resources create the mechanism, or does it need to be outsourced?
c. Create communications for covered employees who are unvaccinated to help facilitate their vaccination.
2. Update paid time off policies
a. Update paid time off policies to reflect COVID-19 vaccination and recovery time.
i. Should time off be provided if the employee can get vaccinated on the weekend?
ii. Will time off be provided for those who experience a reaction to the vaccine?
b. If the executive order only applies to direct employees, consider charging the time direct, similar to COVID-19 leave costs. Otherwise, consider the fringe or other indirect pool to which leave is accumulated.
3. Consider policies for lack of compliance.
a. Update human resources policies and train HR staff to address employees that refuse vaccination.
i. Will those employees receive severance based on existing policies? Is the severance an allowable cost?
ii. Will those employees be offered a position at a commercial business unit if available?
b. Consider future strategies for when a key employee on a contract refuses to get vaccinated.
What is next?
The Safer Federal Workforce Task Force is set to publish additional details via a draft clause and related guidance by Sept. 24. According to the executive order, this clause will “provide definitions of relevant terms for contractors and subcontractors, explanations of protocols required of contractors and subcontractors to comply with workplace safety guidance, and any exceptions to Task Force Guidance that apply to contractor and subcontractor workplace locations and individuals in those locations working on or in connection with a Federal Government contract or contract-like instrument.”
RSM Government Contracting Consulting Manager Jay Shafir contributed.