On Friday, October 1, 2021, a full week ahead of its October 8 deadline, the Federal Acquisition Regulatory Council (“FAR Council” or “Council”) issued a Federal Acquisitions Regulation (“FAR”) deviation contract clause that is to be inserted into covered federal contracts. A “deviation” is a procedure for directing action during the federal acquisition process that is either inconsistent with existing FAR rules or not yet set out as a permanent FAR rule. This guidance and clause concern COVID-19 federal contractor safety, as required by Executive Order 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors” (“EO 14042” or “EO”).
Rather than issuing a deviation or interim rule directing when the clause (“Clause”) is to be inserted into covered federal contracts, the FAR Council delegated this responsibility to each individual covered agency to develop and implement its own class deviation. Further, the Council - aligned with the broad September 24, 2021 Safer Federal Workforce Task Force Guidance (“Task Force Guidance”) - recommended including the Clause in contracts beyond the scope of EO 14042 (including supply contracts and contracts under the simplified acquisition threshold (“SAT”) of $250,000). Each Civilian Agency will provide deviations and will be required to have their class deviations approved by the General Services Administration.
Once inserted into a contract, the Clause - FAR 52.223-99 - will require that contractors comply with the September 24 Task Force Guidance for federal contractor vaccinations (as well as future amendments to the guidance). The FAR Council has indicated that it will begin the process for permanent rulemaking, engaging in the notice-and-comment process to issue a final regulation. However, there is no deadline set for this undertaking and will not delay the current implementation plan and schedule. The FAR Council could publish a proposed rule in a matter of days, or could wait an extended period of time to evaluate how cases under the class deviation(s) proceed.
The FAR Council pointed to sections 5 and 6 of the EO in advising that:
agencies are required to include an implementing clause in solicitations and contracts for services, including construction in accordance with the following dates specified in section 6 of the order:
new contracts awarded on or after November 14 from solicitations issued before October 15 (this includes new orders awarded on or after November 14 from solicitations issued before October 15 under existing indefinite-delivery contracts);
new solicitations issued on or after October 15 and contracts awarded pursuant to those solicitations (this includes new solicitations issued on or after October 15 for orders awarded pursuant to those solicitations under existing indefinite-delivery contracts);
extensions or renewals of existing contracts and orders awarded on or after October 15, 2021; and
options on existing contracts and orders exercised on or after October 15, 2021.
On the same day, Friday, October 1, 2021, both the GSA, the Department of Defense (DoD), and the VA published their class deviations. These agencies appear to ignore the Executive Order by allowing (or in some cases requiring) the Clause to be added for prime supply contracts. The Clause itself, however, seems to still exclude subcontracts for supply, though it is now unclear whether a contract primarily for supply which includes some small amount of services would need to have the Clause flowed down. The VA’s Class Deviation generally tracks the Council’s requirements and recommendations, but the DoD and GSA Deviations have additional nuances.
The DoD Class Deviation requires inclusion of the Clause in all contracts that were specified by EO 14042 (with the notable exception of leasehold interests in real property, which were included in the EO). The DoD Deviation permits contracting officers to include the Clause in the following additional contracts that were either omitted or expressly excluded by the EO:
Solicitations issued prior to October 15, 2021;
Contracts, task orders, or delivery orders awarded before November 14, 2021, resulting from solicitations issued before October 15, 2021;
Solicitations, contracts, task orders, and delivery orders that are valued at or below the SAT and are for services (including construction) performed in whole or in part within the United States and its outlying areas; or
Solicitations, contracts, task orders, and delivery orders for the manufacturing of products.
The DoD Class Deviation effectively gives hundreds of individual contracting officers the independent discretion to insert the vaccination clause into virtually any sort of contract (except apparently leases) including those not included in the EO. For DoD contractors and other government contractors whose contracts primarily involve the provision of products, this broad permission slip is alarming.
The GSA Class Deviation is much more detailed, and has different guidance for different contract types. It requires inclusion of the Clause in all contracts types required by the EO (including leases). The GSA Deviation strongly encourages contracting officers to include the Clause in all other contracts or subcontracts, including those under the SAT and for supplies. As to supplies, there is some very specific guidance that applies to GSA Federal Supply Schedules (“FSS”), Blanket Purchase Agreements (“BPA”), Multi-Agency Contracts (“MAC”), Government-Wide Acquisition Contracts (“GWAC”), Agency-specific Indefinite Delivery Vehicles (“IDV”), and Indefinite Delivery Indefinite Quantity (“IDIQ”) contracts. For FSSs and BPAs, GSA is requiring the Clause’s inclusion, even in supply contracts. For GWACs, MACs, and IDV/IDIQ contracts, GSA is requiring inclusion of the Clause in contracts solely for supplies, except in a few limited contract types (e.g., non-FSS automotive), where it will only be strongly encouraged.
The GSA Class Deviation explicitly precludes inclusion of the Clause in contracts:
Under the Micro-Purchase Threshold ($10,000);
For site acquisition;
Concerning sales of surplus real and personal property;
Regarding solicitations and contracts if performance is outside the United States or its outlying areas (the exclusion is limited to employees who are performing work only outside the U.S. or its outlying areas); or
With Indian Tribes under the Indian Self Determination and Education Assistance Act (Public Law 93-638) (the exclusion would not apply to a procurement contract or subcontract under the FAR to an Indian-owned or tribally-owned business entity.
As to subcontracts, the clause remains pretty consistent with the EO, but for subcontracts that are a mixture of supplies and services, it remains unclear at what point a supply contract would really be considered a contract for services. As a result, subcontractors will largely be subject to whatever their prime contractor chooses to do with respect to flowing down the vaccine clause. Accordingly, subcontractors will want to reach out to the prime contractors to understand and possibly negotiate the way to proceed.
The FAR, GSA and DoD class deviations include relevant timelines for when their requirements go into effect, including dates by which contracts must be modified. For the GSA class deviation, the requirements are especially detailed and contract-type specific. More agencies are expected to issue class deviations throughout the week, and it appears that the agencies are paying little heed to the limits of the EO, but instead are pushing to get the vaccine mandate into as many contracts as possible; the FAR Council explicitly stated “the goal of getting more people vaccinated and decreas[ing] the spread of COVID-19.” We anticipate seeing legal challenges and pushback against the agencies this week based upon the inconsistencies with the EO. If that happens, we may see an amendment of the EO to reconcile the conflicting language and reduce the chances for a successful legal challenge.
We recommend reaching out to your Seyfarth attorney to discuss relevant timelines, the contract-specific nuances of GSA’s Class Deviation, and any other concerns. As you can see, this is a complicated analysis and process. You can also consult our revised Vaccine Playbook, and reach out to your Seyfarth attorney with any questions. The Playbook is an organic document that provides valuable information to employers who are considering implementing, or who are now required to impose, vaccine mandates