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The Biden Administration is facing numerous lawsuits – including at least three separate suits filed by Republican state attorneys general – challenging the legality of its vaccine mandate for federal contractors. It’s still unclear whether courts will intervene before the Dec. 8 vaccination deadline. But whether they do or not, contractors have some big concerns of their own about how the mandate is supposed to work in practice. Stephanie Kostro is executive vice president for policy at the Professional Services Council, and she joined Federal Drive with Tom Temin to talk about some of the issues vendors are flagging for federal policymakers.

Interview transcript:

Jared Serbu: And Stephanie, I think the place to start is to really make clear what PSC is position on this given that there is so much litigation going on at the moment, from states in particular who are just outright opposed to a vaccine mandate. That’s that’s really not PSC’s position at this point, you’re mainly just asking for a delay. Is that about right?

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Stephanie Kostro: That’s true, Jared, and thanks for making that distinction. We at the Professional Services Council have more than 400 members. And these member companies range in position, some are very pro vaccine mandate, they’ve already instituted them within their their own companies, and others are really concerned about the timeline and the specificity of who needs to be vaccinated. And so as a trade association, we do represent the broad swath of our companies. I would say that as an organization PSC appreciates what the government is trying to do in terms of of a vaccine mandate, but it’s got to be as part of a broader approach to stopping the spread of COVID. And that includes testing, treatment options, exemptions for medical disability and for religious reasons, and reasonable accommodations. And so it’s part of a larger picture that we we often have to remind people that they don’t need to lose sight of, it’s not just about the vaccine.

Jared Serbu: To stick with the vaccine mandate itself for a minute, though, talk about some of the concerns that you have and that you’re talking about with your members around timing, because as it stands now, everybody really does need to be fully vaccinated by December 8. What are some of the challenges that that’s creating for companies in terms of the timeline?

Stephanie Kostro: One of the interesting pieces or talking points that we’ve heard out of the White House is that lots of commercial entities, and they’ll quote or they’ll cite airlines and other large companies that have had vaccine mandates, and they cite the success rate. And we’d like to remind folks that it’s taken them nine months to get to those high vaccination rates, high vaccination of 95 or 97 maybe even 99% of their workforce, took them nine months from the beginning of vaccine availability to get to those rates. And what the government is asking federal contractors to do is get there in nine weeks. And that is a challenge. December 8 is very, very close. If you do the backwards math, if you have to be fully vaccinated, then that means two weeks after your last dose of a vaccine, by December 8, you really need to get that first dose this week. That is what they’re asking people to do is to get vaccinated for a two dose vaccine this week, wait a few weeks, get their second dose, wait two weeks for full efficacy. That really isn’t possible in many places in terms of dealing with contractor employees who don’t want to get vaccinated. You need to have a more deliberate thoughtful approach to getting folks vaccinated or to deal with medical disability or religious exemptions for that.

Jared Serbu: I guess my sort of devil’s advocate push back on that a little bit would be, yeah it’s a tight timeline now, but going all the way back to I guess it was July, when the masking slash vaccine policies first went into place, the administration even then was pretty clear that this is only step one, and we’re going to go further. And considering the administration’s prior messaging on the importance of vaccination, it seems to me a vaccine mandate for contractors is kind of unsurprising. So I guess putting that in the form of a question, are there companies that were more proactive and are further along and better postured to do this at this point and does that vary by size?

Stephanie Kostro: You’re absolutely right, Jared, in that the President had some indications that he would like to see the vaccination rates across the board for all Americans to be higher than it was certainly in July. And we’re getting there. Some companies that are federal contractors have instituted their own vaccine mandates, but it wasn’t going to be a requirement until the President released statements, executive orders in early September. That was September 9, and we weren’t getting guidance until September 24, which was when the safer Federal Workforce Task Force was set to come out with their guidance. It’s not flowing down into contract clauses until just the last couple of weeks. And so for that, if you’re a contractor, you’re not going to do something necessarily that’s not required, particularly something that is potentially as divisive as vaccination. There are lots of covered contractor employees who might have legitimate reasons under the American with Disabilities Act, under Civil Rights Act, to have exemptions, but companies weren’t necessarily going down that path until it was required for them to do so. So I take your point that some companies took that indication in mid-summer that they should have a vaccine mandate, but other companies were waiting to see how far it would go. And now we are in that crunch time.

Jared Serbu: There are a lot of issues that are raised in some of these state lawsuits about the vaccine mandates pertaining to contractors. We can’t get into all the issues here. But some of them I suspect that PSC might actually agree with. One of them being one of the lawsuits that was filed on Friday points out that it’s kind of unprecedented to change government wide procurement policy through just a series of class deviations, and that’s probably not the way to go about this. Are there precedents that are going to come out of these lawsuits that are going to be important for the broader procurement landscape over time?

Stephanie Kostro: To that question, there are at least three state lawsuits that are finding their way into US district courts around the country. And last I saw there were nearly 20 states that are party to those lawsuits. They cite things like the way the procurement procedure usually runs is that a new contract clause or classification would go out for comment, minimum 30 days, likely 60 days or longer for the public to provide feedback. I think the what the White House has done is tried to not necessarily circumvent that process, we have gotten information from the White House that they do plan on opening it up for public comment, but that is not impacting the current contract clauses that are being incorporated both in new contracts, and through bilateral modification through to existing contracts. This is part of what is driving this lawsuit. We’ve been talking to folks in the Office of Management and Budget who say, obviously, federal law does supersede state law. But these court cases are being filed to talk about the process. It is unprecedented, and there are always going to be some growing pains with that. But the White House is adamant their goal is to increase vaccination rates across the board. For federal contractors, they can put it into contracts. For the broader public, we’re still waiting on emergency temporary standards coming out of the Department of Labor to impact the rest of businesses throughout the country.

Jared Serbu: And another issue that’s raised in the litigation is that the substance of the the class deviation is pretty thin, it really just points to the Safer Federal Workforce Task Force FAQ. And the point they raise is, guys an FAQ on a website is really not a regulation, as we typically understand regulations. Is that a problem for the contracting community as well?

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Stephanie Kostro: It is definitely a cause for concern. I’m a process wonk. I’m a policy wonk, and a process wonk. And I go back to what is on the written paper, or in this case, written paper that’s electronically uploaded, I would say it is a cause for concern when you have a clause that refers back to a website that can change at any time. And when you’re a contractor dealing with your government counterpart, and talking about what are the requirements for that contracting officer from the government to say, well, just check out this website and see what’s new and updated. That website was updated just this week, with new frequently asked questions, with guidance about what are the recourses for reasonable accommodations? What should your processes look like for exemptions? It is a moving target, and that is a cause for concern. Again, contracts come down to what people sign up for and are legally obligated to, and when it refers back to a website that is ever changing, that can be a real cause for concern.

Jared Serbu: And I know another thing that PSC is looking for here is identification in the courts. What exactly would that look like and what’s sort of the legal minefield that companies are going to need to walk through here that would even raise that as a need?

Stephanie Kostro: So for your listeners, indemnification really is critical for lots of government contractors. When you have a federal requirement with which you’ve got to comply, that is going to make you face lawsuits from your employees. And there are several junctures where an employee could choose to sue their employer, and that is the legality of requiring somebody to get a vaccine if they apply for a religious or medical disability exemption and are denied. If the reasonable accommodations that they have, say that they do get an exemption, but the reasonable accommodations makes working difficult, that is a problem. And just generally speaking, our companies are going to be facing some lawsuits from employees who do not want to comply with this mandate. And the government should at least give due consideration to indemnifying those companies because they have to comply with federal contract law and what is in their contract. And so their hands are tied, but they do face lawsuits that can put many of them it’s an existential crisis, they could put them out of business. One issue with the Office of Management and Budget, or one comment that was made was you can always apply for an adjustment or reimbursement, if you will, for lawsuits, but lawsuits can drag on for years. And there’s how do you how do you apply for reimbursement for a lawsuit if you’re out of business? And so it really is an existential question, particularly for some of the small and midsize companies that are facing potential lawsuits.

Jared Serbu: And what would that look like in a practical sense, instead of applying for some kind of equitable adjustment, would the government actually stand in for the company and mount a legal defense or how would it work in practice?

Stephanie Kostro: In practice, it could be such that cases are immediately dismissed and therefore not an issue, or it could be that the government can stand in. The government has limited authority to indemnify. And it really depends on what form that takes, but it would be the government’s choice, hopefully, with feedback from industry about what it should look like.

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