On September 30, 2021, the Federal Acquisition Regulatory Council (FAR Council) issued a memo addressing agency implementation of the COVID-19 vaccine mandate, and other workplace safety protocols, set forth in Executive Order 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors” (Order), and the Safer Federal Workforce Task Force Guidance (“Task Force Guidance”). The FAR Council Memo provides agencies that award contracts under the Federal Acquisition Regulation (FAR) with “initial direction” for incorporating a clause into their solicitations and contracts in order to implement the Task Force Guidance. “[T]o support agencies in meeting the applicability requirements and deadlines set forth in the Order,” the FAR Council developed, and attached to its memo, the FAR Deviation Clause to be used. The FAR Council Memo further advised that contracting officers should follow the direction for use of the clause set forth in the deviations issued by their respective agencies.
Immediately following issuance of the FAR Council Memo, the Civilian Agency Acquisition Council (CAAC) issued a Class Deviation, expressly authorizing civilian agencies to issue their own deviations to implement the Order. Any agency that intends to use a deviation clause that differs from the text of the FAR Deviation Clause must consult with the CAAC chair, who will consult with the Office of Management and Budget and the Task Force to ensure consistency with the Biden Administration policy.
Correspondingly, on October 1, 2021, the Department of Defense (DoD) issued its Class Deviation, providing the DFARS clause that contracting officers will be required to insert into covered defense contracts.
Slight Variations In Guidance On Contracts Not Strictly Covered
The FAR Council Memo and CAAC and DoD Class Deviations each require agencies to include a new FAR or DFARS clause in “solicitations and contracts for services, including construction,” in accordance with the provisions and dates specified in the Order and Task Force Guidance. Once included, contractors will have to comply with the Task Force Guidance, including its vaccination requirement.
In addition, the FAR Council Memo follows the Task Force Guidance in “strongly encourag[ing]” agencies to incorporate the FAR clause in contracts and solicitations not strictly covered, namely: “contracts that have been or will be awarded prior to November 14 on solicitations issued before October 15; and contracts that are not covered or directly addressed by the order because the contractor or subcontract is under the simplified acquisition threshold or is a contract or subcontract for the manufacturing of products.”
The CAAC and DoD Class Deviations, however, adopt slightly different approaches. The CAAC Class Deviation states that agencies are “encouraged, but are not required” to include the deviation clause in existing contracts before compliance would otherwise be required, or in the specified contracts not covered or directly addressed by the Order.
For its part, the DoD Class Deviation delegates to each contracting officer the decision as to whether to incorporate the deviation clause when not otherwise required. It states only that “contracting officers may insert the deviation clause” but does not “encourage” its use. (Emphasis added.) Procedurally, the DoD Class Deviation requires the use of a bilateral modification to incorporate the deviation clause “[w]hen modifying existing contracts, task orders, or delivery orders in accordance with this deviation.”
Time Is Of The Essence In Implementation
The FAR Council Memo directs agencies to “act expeditiously to issue their deviations” so that contracting officers may begin to apply the clause on or before October 15, 2021. Agencies are also instructed to review, and update as necessary, any relevant guidance previously provided to contractors to ensure consistency with the deviation clause.
The FAR Council has opened a FAR case (FAR Case 2021-021) “to make appropriate amendments in the FAR” to reflect the requirements of the Order. Accordingly, the FAR Council “encourage[s]” and CAAC “recommend[s]” that agencies make the deviations “effective until the FAR is amended or the deviation is otherwise rescinded by the agency.” Likewise, the DoD Class Deviation “remains in effect until incorporated into the FAR or until otherwise rescinded.”
The FAR Council Memo, and CAAC and DoD Class Deviations, provide insights into whether, how, and when agencies will incorporate the Task Force Guidance into Federal contracts, subcontracts, and solicitations. However, Federal contractors and subcontractors likely still face uncertainty in their dealings with Federal agencies and contracting officers.
What Really Is Covered?
Individual agencies or contracting officers may differ in how they incorporate the deviation clause into contracts when not required but allowed or encouraged to do so. As the DoD Class Deviation reflects, contractors will need to consult with individual contracting officers to discuss whether a deviation clause will be included, and if so, when, in existing contracts for which inclusion is not required (i.e., those not up for renewal, extension or option exercise).
What Are the Penalties and Enforcement Processes?
As is true of the Order and Task Force Guidance, the FAR Council Memo, and CAAC and DoD Class Deviations, all fail to address the issue of enforcement and penalties for failure to comply. Thus, contractors are left wondering whether they are going to face assertions of breach of contract, suspension or debarment, false claims, or contract termination if they fail to fully and timely comply with all of the Task Force Guidance’s mandates.
What To Do If/When Legal Challenges Are Asserted?
Branches of Local, State and Federal government have responded to the COVID-19 pandemic in unprecedented and frequently inconsistent ways. As we have seen, these governmental actions and mandates often are the subject of legal challenges. We expect the implementation of the FAR and DFARS Deviation Clauses implementing the Task Force Guidance to be no exception and anticipate that its legality will be tested. But the outcomes of any legal actions are uncertain, and often slow to come. Accordingly, Federal contractors and subcontractors, and those seeking to do business with the Federal government, face unknown risk and the potential to complicate relations with contracting officers if they contest, or fail to comply with, a deviation clause inserted into their contracts.
Attorneys at RJO will continue to monitor and report on new developments and are here to help. If you have questions about the latest guidance, please contact one of the RJO attorneys with whom you regularly work, or the authors of this article.
The materials provided at this site are offered for informational and educational purposes only and are not offered as and do not constitute legal advice or legal opinions. The transmission or receipt of information through this website, or communications with Rogers Joseph O’Donnell via email through this website, does not constitute or create an attorney-client relationship between us and any recipient.