National contractor vaccine requirement: Georgia court enjoins mandate but contractors should be wary of change order risk

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A federal district court judge in Georgia on Dec. 7 enjoined the federal contractor vaccine mandate nationwide. This may be welcome relief to federal contractors and subcontractors that were scrambling to comply with the broad mandate by Jan. 4, 2022, lawyer Mark Stubley of Ogletree Deakins reported to the Carolinas Associated General Contractors (CAGC). 

The Georgia federal court order follows a Kentucky federal court injunction against the mandate  in a case involving Kentucky, Tennessee, and Ohio. The plaintiffs in the Georgia case include the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia, as well as several state governors and state agencies.

The states and agencies contend that the Biden administration does not have the authority to mandate vaccinations and that the mandate violates the U.S. Constitution. Finding that the parties would likely succeed in their claim, the federal court granted their request for a preliminary injunction.

While the most recent court ruling gives cause for some relief to contractors concerned about the mandate’s implementation, Nexsen Pruet lawyer David A. Senter says contractors still need to be cautious about the issue. Senter is based in Greensboro.

“Without regard to what happens in court or politics, contractors and subcontractors on federal projects may perhaps unwittingly agree to the incorporation of this FAR (Federal Acquisition Regulation) into existing contracts via a change order,” Senter wrote. “Contracting officers are being encouraged to implement this FAR into all federal contracts.”

Senter continued:

Contractors and subcontractors may not want this mandate to apply to existing contracts for whatever reason, economic or political.  It should be easy to identify and avoid a change order, the sole purpose of which is to incorporate this FAR.  However, the more difficult scenario involves a change order which in addition to adding scope, time, and/or additional money (“business terms”), might also attempt to incorporate this FAR.  The contractor or subcontractor is likely to pay more attention to the business terms of the change order and not the narrative, fine print or boilerplate language.  That is where contractors and subcontractors need to be careful and pay special attention.

Yes, every federal contract and related subcontract will have a changes clause allowing the government to make changes in the work which the contractor and subcontractor would generally be required to perform.  An argument can be made that a stand-alone change order that incorporates this FAR or a change order that addresses business points and has the FAR as a tag-along, might not fall within the ambit of a standard changes clause in the contract.  This means that the contractor/subcontractor could reject such change orders without breaching the underlying contract.  Thus, contractors and subcontractors should, as always, carefully review all of the language of change orders to confirm the business points and to confirm whether this FAR is being incorporated into the existing contract or subcontract.

It is true that failure to execute a change order which has this FAR language in it might lead to a black mark for contractors and subcontractors.  This could be a concern for contractors and subcontractors who want to continue working on federal projects.  Also, there is some risk that such failure could trigger a termination.  In this ever-changing and evolving field it is far too early to determine the government’s approach here or where these issues will come down.

As always, the best advice for contractors and subcontractors is to read carefully all change order language and specifically identify what changes are being made to the applicable contract or subcontract by virtue of the change order.  Agree to whatever you want but do not unwittingly agree to anything.

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