Biden’s Vaccine Mandate
Key Details: On Thursday, September 9th, 2021, President Joe Biden signed a new Executive Order (EO) that requires executive branch employees and federal contractors to be vaccinated. This follows the recent vaccine mandate for federal employees in an attempt to curb the worsening Delta variant. This EO will affect around 100 million Americans. Biden also made an announcement that requires large employers (employers with over 100 employees) to ensure their employees are either fully vaccinated or can present a negative test once a week.
President Biden also announced requirements for health care providers (who accept Medicare and Medicaid), staff of Head Start programs, and DOD Schools to be vaccinated. These new mandates follow a six-pronged approach to lower COVID-19 cases. The six prongs include:
- Vaccinating the unvaccinated
- Further protecting the vaccinated
- Keeping schools safely open
- Increasing testing and requiring masking
- Protecting our economic recovery
- Improving care for those with COVID-19
With the new EO and six-pronged plan in mind, government contractors need to start looking towards implementing these vaccination requirements. Important dates to consider:
- By September 4th, 2021, definitions of relevant terms for contractors and subcontractors will be provided by the Safer Federal Workforce Task Force. This will include explanations of protocols contractors and subcontractors will be required to comply with for workplace safety.
- By October 8th, 2021, agencies are required to take steps (to the extent permitted by law) to implement vaccination programs. This is to pertain to contracts and contract-like agreements as described in section 5(a) of the EO.
DOD’s Proposed Rule – Aligning with Trump’s EO
Key Details: On August 30th, 2021, a proposed rule was issued by the Department of Defense (DOD) to amend the Defense Federal Acquisition Regulation Supplement (DFARS). Specifically, the amendment plans to align the Buy American Act (BAA) of DFARS with the Federal Acquisition Regulation (FAR).
The FAR Council published a final rule on January 19th, 2021, that revises FAR Part 25, domestic content requirements. This revision falls in line with the Trump Administration Executive Order 13881, “Maximizing use of American-Made Goods, Products, and Materials”. It also follows Executive Order 14005 titled “Ensuring the Future is Made in All of America by All of America’s Workers”. More information regarding this EO can be found here. The EO highlighted that for a product to be a domestic end product:
- Over 55% of the cost of components must be mined, produced, or manufactured in the U.S.
- Over 95% of the cost of components must be mined, produced, or manufactured in the U.S. for products that consist mainly of iron or steel.
The FAR Council’s final rule also noted the following for businesses offering domestic end products:
- 6% to 20% increased price evaluation preferences for large businesses
- 12% to 30% increased price evaluation preferences for small businesses
With these changes made earlier this year, the BAA requirements per FAR Part 25 have not yet been applied to DFARS. Thus, the DOD’s proposed rule aims to implement the EO to be aligned with the revised FAR requirements. However, this alignment may be short-lived as changes to domestic content thresholds are expected to occur again. President Biden’s EO 14005 “Ensuring the Future is Made in All of America by All of America’s Workers” required an increase of the threshold. The FAR released a proposed rule regarding this on July 30th, 2021. Should this proposed rule become final, the DOD may need to play catchup with amendments to the DFARS.
For contractors, familiarization costs should be low per the DOD. Many contractors may already be able to meet this more stringent threshold if they are able to identify and reduce risks in their supply chains. In addition, contractors who adjust their supply chains for the new requirement may benefit from a larger price preference which will offset increased costs.
Interested parties can submit comments on the DOD’s proposed rule until October 29th, 2021. For more information, please click this link.
Government Contractors, Are You FAR Compliant? A Guide to SF 1408 Pre-Award Survey
Key Details: DCAA compliant accounting systems are essential for small business government contractors and is necessary for the award of any cost type contract. Solicitation responses often require independent verification of an adequate accounting system. Or the awarding agencies will request DCAA to perform a pre-award survey of the awardees to confirm if the contractor’s accounting system meets the requirements for cost type awards. This follows FAR 16.301-3 which requires accounting system adequacy. Either way, a CPA firm can help by verifying system adequacy well in advance of the solicitations due date or provide consulting services regarding critical aspects of the system in preparation for a DCAA pre-award survey.
Today’s Government Contracting Thought Leaders
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About Peter Ryan
Partner, Co-founder, & CPA
Peter T. Ryan co-founded Ryan & Wetmore in 1988 with business partner Michael J. Wetmore. Peter provides clients with the best strategies for success. His expertise extends across various industries, including government contracting. Peter obtained a Master of Business Administration in Finance from the University of Baltimore and a Bachelor of Arts in Accounting from the Catholic University of America.
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About Rosie Cheng
Rosie Cheng is a Finance Consultant at Ryan & Wetmore. She focuses on government contracting services and produces many of the firm’s government contracting newsletters. Rosie graduated from Georgetown University with a Master of Science in Management and from William and Mary with a Bachelor of Business Administration.