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Good afternoon,

As I am sure everyone has heard or will hear, President Biden issued a statement today regarding the requirement of vaccination against COVID for Federal Contractors and Subcontractors. (EO linked below)

https://www.whitehouse.gov/briefing-room/presidential-actions/2021/09/09/executive-order-on-ensuring-adequate-covid-safety-protocols-for-federal-contractors/

It appears that per the EO, this has more to do with services than it does with product procurement. The order does have a small potential grey area however that I was hoping someone could help me with understanding. 

Under Section 5(a) it reads:

Sec. 5.  Applicability.  (a)  This order shall apply to any new contract; new contract-like instrument; new solicitation for a contract or contract-like instrument; extension or renewal of an existing contract or contract-like instrument; and exercise of an option on an existing contract or contract-like instrument, if:

          (i)    it is a procurement contract or contract-like instrument for services, construction, or a leasehold interest in real property;
          (ii)   it is a contract or contract-like instrument for services covered by the Service Contract Act, 41 U.S.C. 6701 et seq.;
          (iii)  it is a contract or contract-like instrument for concessions, including any concessions contract excluded by Department of Labor regulations at 29 C.F.R. 4.133(b); or
          (iv)   it is a contract or contract-like instrument 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;
     (b)  This order shall not apply to:
          (i)    grants;
          (ii)   contracts, contract-like instruments, or agreements with Indian Tribes under the Indian Self-Determination and Education Assistance Act (Public Law 93-638), as amended;
          (iii)  contracts or subcontracts whose value is equal to or less than the simplified acquisition threshold, as that term is defined in section 2.101 of the Federal Acquisition Regulation;
          (iv)   employees who perform work outside the United States or its outlying areas, as those terms are defined in section 2.101 of the Federal Acquisition Regulation; or
          (v)    subcontracts solely for the provision of products.

In my understanding, this effectively eliminates the vaccine requirement for those who sell only products under a subcontract or any order with a value under the SAT. (If anyone sees error with my understanding, please correct me). 

My questions is, if I had an agency that wanted to order something direct from my company and the order was over the SAT, would my company be subject to the vaccine requirement? (Ex: NSA wanted to order some widgets that I produce direct from me. It is a $360,000 order. Would this be considered a contract? If so, would my company then be required to be fully vaccinated in order to accept this sale?).

I am more than happy to offer explanation in greater detail if anything is unclear. My question really boils down to the difference between a contract and sub contract. In my understanding, a subcontract would be a Prime issuing an order on behalf of an agency rather than the agency buying directly from us. This would be A(agency)-->B(Prime)-->C(my company) The agency buying directly from us would be considered a contract if I am not mistaken since there is no other party and it goes from A(agency)-->B(my company). 

Thank you in advance!! Have a great day! 

RF-SA

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12 hours ago, RF-SA said:

My questions is, if I had an agency that wanted to order something direct from my company and the order was over the SAT, would my company be subject to the vaccine requirement? (Ex: NSA wanted to order some widgets that I produce direct from me. It is a $360,000 order. Would this be considered a contract? If so, would my company then be required to be fully vaccinated in order to accept this sale?).

Yes, the purchase ("order") of widgets would be a contract. See the definition of "contract" in FAR 2.101. But it probably will not be subject to the executive order.

The government generally distinguishes among contracts for "supplies "(products, goods), for "services", and for "construction". See the definitions of "supplies" and "construction" in FAR 2.101 and the definition of "service contract" in FAR 37.101.

The plain language of the executive order states that it applies to contracts for services, construction, and leaseholds of real property. It makes no mention of contracts for supplies (products, goods) and specifically states that it does not apply to subcontracts "solely" for "products". So it appears that it will not apply to a contract or subcontract for the purchase of anything other than services and construction and for leases of real property.

However, the executive order must be implemented through the Federal Register rule-making process. The agencies tasked with issuing implementing regulations will probably publish an "interim rule", which will take effect before the receipt of public comments, and ultimately issue a "final rule" after consideration of public comments. The rules will be drafted in haste. Until they are published, we cannot be sure what they will say and how they will implement the policy. There will be issues of interpretation and application. For instance, it's not clear whether it will apply to contracts for supplies that include installation and maintenance or that include on site repair warranties, although some people will insist or speculate that it certainly does or certainly doesn't. Will it apply to Other Transactions ("contract-like instruments")?

In short, don't hold your breath waiting for clarity and certainty. And there will almost certainly be litigation in Federal court to block the order, which could delay its implementation.

Stand by now, RF-SA, for insistent requests for more information and for rampant speculation and war stories. 

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6 hours ago, Vern Edwards said:

Yes, the purchase ("order") of widgets would be a contract. See the definition of "contract" in FAR 2.101. But it probably will not be subject to the executive order.

The government generally distinguishes among contracts for "supplies "(products, goods), for "services", and for "construction". See the definitions of "supplies" and "construction" in FAR 2.101 and the definition of "service contract" in FAR 37.101.

The plain language of the executive order states that it applies to contracts for services, construction, and leaseholds of real property. It makes no mention of contracts for supplies (products, goods) and specifically states that it does not apply to subcontracts "solely" for "products". So it appears that it will not apply to a contract or subcontract for the purchase of anything other than services and construction and for leases of real property.

However, the executive order must be implemented through the Federal Register rule-making process. The agencies tasked with issuing implementing regulations will probably publish an "interim rule", which will take effect before the receipt of public comments, and ultimately issue a "final rule" after consideration of public comments. The rules will be drafted in haste. Until they are published, we cannot be sure what they will say and how they will implement the policy. There will be issues of interpretation and application. For instance, it's not clear whether it will apply to contracts for supplies that include installation and maintenance or that include on site repair warranties, although some people will insist or speculate that it certainly does or certainly doesn't. Will it apply to Other Transactions ("contract-like instruments")?

In short, don't hold your breath waiting for clarity and certainty. And there will almost certainly be litigation in Federal court to block the order, which could delay its implementation.

Stand by now, RF-SA, for insistent requests for more information and for rampant speculation and war stories. 

Good day Vern, 

Thanks for the detailed response! I was a little confused on the addition of "subcontract" being excluded in (b), but not a "contract" being excluded. If only subcontracts are excluded but not contracts, it will effect us eventually. If both subcontracts AND contracts are excluded then we are most likely out of scope for this, (depending on the actual final rule of course). I'm still fairly new in the field, so I really appreciate your insight and expertise in this. 

I'll stand by and wait for further information release. I am sure I will have more questions regarding this since it affects our business in a big way, (as it does with many others), but there will be no rampant speculation, no war stories, and no insistent requests! 

Thank you again!

RF-SA

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@RF-SAWhen you read the EO as a whole it clearly applies to contracts only for services and construction and "contract-like instruments" for the same. There is no need to expressly exempt contracts for products, since they are not among the contracts listed to which the EO expressly does apply.

I think the reason they expressly made mention of subcontracts solely for products is so that service and construction contractors will l know that the EO does not apply to all subs under a contract for services or construction, only subs for services or construction and subs for products that include services or construction, such as subs for the installation of elevators.

Contracts and subs solely for products (include no services) are in the clear. What's not certain is applicability to contracts products that include installation and onsite maintenance.

I discussed the EO at length with a colleague this morning, and we agree that it will not take effect before the implementing regulations are issued, and that it will take a while to get the regulations written and through the rulemaking process. A lot has to happen before the EO starts to have an impact. We'll all be in standby mode until the regs appear in the Federal Register.

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  • 3 weeks later...

I have not heard of any agencies that would like to, but I am keeping my ears open and would be happy to report back if I do hear anything.

I personally agree that people need to be vaccinated, but I do not think this is the way to do so. I know they've tried many other ways to increase vaccinations, but incorporating the clause into an out of scope (per the EO) contract seems to be the wrong way. If they wanted all contractors vaccinated, I wish they would have just not included exclusions and just made it a mandatory thing for all contractors to vaccinate. Including the exclusion and then the paragraph strongly encouraging agencies to include the FAR into contracts out of scope causes confusion and worry. I know all of my employees are worried about it since our response is in nexus because of this issue. 

RF-SA

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2 hours ago, styrene said:

Question:  Is anyone hearing that their agency wants to incorporate the clause into actions valued at less than the SAT or in actions that are not included as part of the EO?  If so, what are your opinions on this idea?  

You might want to also follow this thread that RF-SA started I think it will help answer your question.

 

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Thank you, RF-SA,

Para. (c) is very interesting (and very open-ended)--

Quote

(c) Compliance. The Contractor shall comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance) at https:/www.saferfederalworkforce.gov/contractors/.

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45 minutes ago, ji20874 said:

Thank you, RF-SA,

Para. (c) is very interesting (and very open-ended)--

Happy to help!! 

This whole situation seems open-ended. It appears as though Task Force Guidance will be binding too, so any updates given are binding. (I had a source for this, but I would have to find it again).

Here's more documentation from GSA regarding this. 

https://www.gsa.gov/cdnstatic/Class Deviation CD-2021-13_0.pdf

GSA is also hosting a webinar that looks like it will help to clarify some points of this order.
---> https://gsa.zoomgov.com/webinar/register/WN_uo6CAlWwTxmPvCmDW_cmEA

RF-SA

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The letter says: Agencies are reminded that FAR 1.404 requires agencies to furnish a copy of their approved class deviation (including direction to the workforce, prescription for use of clause, and clause text) to the FAR Secretariat, General Services Administration, by emailing the deviation to GSARegSec@gsa.gov. Agencies must submit their class deviations no later than October 15, 2021.

 

So does that mean that agencies that adopt the suggest language still need to submit a copy of their class deviation to the FAR Secretariat or only those agencies that draft their own language?

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So if this impacts a contractor's workforce to the point they can't perform the contract they signed before the mandate,  I T4D them? 

Heck; I know of Feds who say they will quit rather than get vaccinated.  I predict this ends badly.

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Please, no histrionics.

The clause goes in new contracts for services awarded on or after November 14, 2021, from solicitations issued before October 15, 2021 -- neither of these dates have even arrived yet, and the parties to these future contracts may deal with any cost or other impacts before those contracts are awarded.  No problem.

The clause will have to be added (bilaterally?) to existing contracts for services only if both parties foresee future extensions of those contracts, or option exercises, or task/delivery order issuances (for indefinite-quantity contracts).  The parties to these contracts may deal with any cost or other impacts before those actions occur.  No problem.

From the CAAC letter:  "[a]gencies are encouraged, but are not required to include the clause" (emphasis in CAAC letter) in all other contracts.  I assume these will be bilateral modifications.  The parties to these contracts may deal with any cost or other impacts before the modifications occur.  No problem.

No contractor is being forced to accept the clause in any contract.  Any contractor who accepts the mandate will do so voluntarily, and will be able to deal with any cost or other impacts before award.  No problem, right?

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1 hour ago, ji20874 said:

No problem, right?

They have the choice to accept it or not. I know no CO that would T4D them in administration if they do not.

With that, several I have talked too in the construction realm, in which I currently reside as a CO, said they would lose most of their workforce if they enforced it. 

I do believe this is going to get interesting. We should all share the effects/trends we are seeing moving forward. 

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Cost impacts won't be known until after the contracts are modified.  My Department is requiring all service contracts be modified immediately, and I suspect that others will as well.  When I said "not end well" I was referring to cost impacts (and yes, the mods are supposed to be bilateral), not  dire mortal consequences that will doom us all to eternal oblivion.

As Constricting Officer points out, those of us who have awarded A&E contracts outside the major cities are fully expecting some level of impact on the workforce.  Saying "they don't have to accept it" ignores the simple fact that doing so places the requirement at risk for the government.  Cutting off your nose to spite your face sorta thing.

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1 hour ago, ji20874 said:

From the CAAC letter:  "[a]gencies are encouraged, but are not required to include the clause" (emphasis in CAAC letter) in all other contracts.  I assume these will be bilateral modifications.  The parties to these contracts may deal with any cost or other impacts before the modifications occur.  No problem.

ji, consider the situation where an option is exercised in 2022.  The contract is modified at that time to include the CAAC clause.  What is the date by which the contractor must come into compliance with the vaccination requirements in the clause?

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REA'n Maker, Do we obey the president, or do we substitute our better knowledge and disobey the president?  I have to suppose that the president considered risk to executive branch operations as part of his process.

If you are doing bilateral modifications, shouldn't you consider the cost impacts before issuing your modifications and include those impacts in the new negotiated agreements that are reflected in the bilateral modifications?

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Retreadfed,

You will need to direct questions like yours to your attorney.  Paragraph (c) of the clause says--

  • (c) Compliance. The Contractor shall comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance) at https:/www.saferfederalworkforce.gov/contractors/.
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ji, the Guidance currently states "Covered contractor employees must be fully vaccinated no later than December 8, 2021. After that date, all covered contractor employees must be fully vaccinated by the first day of the period of performance on a newly awarded covered contract, and by the first day of the period of performance on an exercised option or extended or renewed contract when the clause has been incorporated into the covered contract."  Do you see a problem for both the government and contractor in the scenario I posed?  Also, can the government exercise the option without including the clause in the contract?

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Retreaded,

It sounds like you already know the answer to the first question you asked me.  As for the new batch of questions, if they are really questions based on honest intellectual inquiry, you will want to direct those to your attorney.

If anyone doesn't like the mandate and the clause, don't be mad at me.  I wasn't involved in either.  However, I think I have faithfully represented what the clause actually says, for the benefit of those who haven't bothered to read it yet.  It says what it says.  Our discussion here should be based on what the clause actually says.

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If anyone doesn't like the mandate and the clause, or an agency's knee-jerk decision to include the clause in all existing contracts, don't be mad at me.  However, with the decision having been made by the president, I want to help contracting professionals faithfully implement the decision in the best way possible.

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