UPDATE: VA Limits Application of Contractor Vaccine Mandate for VA-Administered FSS Contracts

As we previously reported, President Biden issued an Executive Order on September 9, 2021 (EO 14042) and the Safer Federal Workforce Task Force issued Guidance on September 24, 2021 imposing vaccine mandates and masking requirements on certain government contractors and subcontractors. Since that time, there have been several important developments:

1. The applicable FAR and DFARS clauses have been published as FAR 52.223-99 and DFARS 252-223-7999. The two clauses simply refer back to the Task Force Guidance and provide little additional insight for contractors. Contractors should look out for these clauses in their upcoming contract awards and modifications, and subcontractors should be on the lookout for flow-downs.

2. Class Deviation memos have been issued by the FAR Council, the Civilian Agency Acquisition Council (CAAC), the Department of Defense, and the General Services Administration, as well as most other federal agencies. Notably, the GSA is “strongly encouraging” inclusion of the FAR clause in smaller contracts/subcontracts as well as those solely for the manufacturing of products, and will be requiring the clause in all new and existing FSS contracts above the micro-purchase threshold, including contracts solely for products. While technically through bilateral modification, GSA urges contracting officers to strongly encourage agreement. On the other hand, while the DOD memo recognizes that contracting officers may include the deviation clause in contracts for the manufacturing of products or other contracts not specifically covered by the Executive Order, it does not contain the Task Force Guidance’s “strongly encouraging” language, and makes clear that existing agreements are only subject to bilateral modification.

We note that notwithstanding the ambiguously confusing guidance when it comes to prime contracts for the manufacture of products, the Executive Order explicitly excludes subcontracts solely for the manufacture of products. Other than GSA, federal agencies do not appear to be to requiring (or “encouraging”) prime contractors to flow down the clause to products subcontractors.

3. The Department of Veterans Affairs has just released an updated notification on how it plans to incorporate the FAR Clause into the FSS contracts that it administers. The VA has announced that it will only include the clause in schedules and contracts falling under Schedule 621 I (Professional and Allied Healthcare Staffing Services) and 621 II (Medical Laboratory Testing and Analysis Services). The VA has announced that it will not be applying the clause to any other VA-administered FSS schedules or contracts at this time, including FSS contracts for drugs, pharmaceuticals, and hematology related products falling under Schedule 65 I B.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.