October 25, 2021

By Paul Calabrese, Principal, GRF CPAs & Advisors

The issue of vaccines and the controversy around mandates has not spared the government contracting world. While those who work with the federal government are accustomed to occasional public policy mandates via clauses in their contract, this mandate is unprecedented because it involves an employee’s personal health decision. Employees have three choices: 1. Comply and receive the COVID-19 vaccination, 2. Obtain an “accommodation” based on medical or religious grounds, or 3. Refuse and face possible termination. If your organization does business with the federal government, you should review the required COVID safety protocols and take steps now to address compliance.

Executive Order 14042

On September 9, 2021, Executive Order (EO) 14042 “Ensuring Adequate COVID Safety Protocols for Federal Contractors” was promulgated through FAR 52.223-99 which refers to a 14-page document, “Class Deviation 21-13”. The purpose of the EO is to “ensure” that the “parties that contract with the Federal Government provide adequate COVID-19 safeguards to their workers performing on or in connection with a Federal Government contract or contract-like instrument”. In addition to government contractors, it states that all subcontractors must also incorporate the provisions (specifically the FAR clause) into their workplace operations. Exceptions to this requirement include those who work-from-home and vendors that do not support the direct effort on a “covered” contract.

The effective date is October 15, 2021 for new contracts, their extensions, renewal, or options that are greater than the simplified acquisition threshold which is currently $250,000. For all existing contracts as of the date of this order, contractors are “strongly encouraged {to comply} to the extent permitted by law”.

Compliance

According to the 14-page “Safer Federal Workforce Task Force” compliance document dated September 24, 2021, all “covered” contracts and thus contractors will benefit by decreasing workforce absenteeism, lower labor cost, and improve efficiency of contractor operations. This mandate requires:

  • COVID-19 vaccination of contractor personnel, except when an employee is legally entitled to “accommodation”,
  • Contractor personnel and visitors will have masking and social distancing at contractor workplaces, and
  • Establish individuals to manage and monitor workplace safety protocols.

The compliance requirements include the possibility of future updates from the Safer Federal Workforce Task Force based on changes from the Centers for Disease Control and Prevention.

Next Steps

Vaccine mandates are a sensitive issue and some in the government contractor community believe the requirement is unfair citing a laborious legal process for employees seeking an accommodation, among other issues. Addressing the mandate proactively and developing appropriate policies is your best bet for achieving compliance and avoiding unnecessary employee terminations. Consult an attorney versed in government contract compliance for more information on the vaccine mandate.

 

Contact

 

Paul H. Calabrese

Principal, Outsourced Accounting & Advisory Services

pcalabrese@grfcpa.com