Full disclosure: I’ve raised a skeptical eyebrow at the Biden Administration’s policies as it relates to COVID-19 and getting us to a level where we can safely venture into the “new normal” many times since the Spring. I thought the vaccine rollout was masterful — a thing of beauty! But my general opinion has been that there’s been way too much carrot and not enough stick since about May of this year. YMMV, and I respect that, but that’s where I’ve been at until recently.
“Recently” would qualify as on or around September 9th of this year when the Administration — led by Biden’s own public statements — started the walls closing in on the anti-vaxx crowd. Broadly, he issued three executive orders on that date that promised a crackdown by attrition. The first was the requirement that all Federal employees have to be fully vaccinated by November 22nd 2021. The second, still pending, is the emergency temporary standard (ETS) to be issued by OSHA applying to all employers with 100+ employees to implement either vaccines as a condition of employment or a minimum of weekly testing for employees.
The third area has received less attention, but it’s vital: the Biden Administration is requiring that all Federal contractors also be vaccinated to continue to do business with the Federal government. The language around this requirement is broad an unambiguous. Here is a summary of those requirements for Federal contractors:
- Employees working directly OR indirectly with covered federal contracts, including work-from-home employees;
- Employees working directly OR indirectly with customers that are federal contractors;
- All employees working at a covered contractor workplace with common facilities, even if only a few employees at that site directly or indirectly work on covered contracts; and
- Employees who interact with covered employees or work at or visit a covered site.
For context, let me give you the top 20 Federal contractors and their employee counts:
Top Federal Contractors with employee count
| Lockheed Martin |
114K |
| boeing |
141K |
| general dynamics |
100K |
| raytheon |
180K |
| northrop grumman |
90K |
| mckesson |
80K |
| united technologies |
180K* |
| huntington ingalls |
40K |
| leidos |
42K |
| l3-harris |
50K |
| humana |
49K |
| honeywell |
103K |
| bae systems |
89K |
| fluor |
53K |
| booz allen hamilton |
27K |
| aecom |
87K |
| saic |
23K |
| general electric |
205K |
| general atomic |
15K |
| triad national security |
14K |
*Raytheon purchased/merged with United Technologies so the figure is duplicative of Raytheon’s number.
While these 20 are the largest by dollar value, there are approximately 5,300 Federal contractors ranging in size from single-person on up to behemoth to whom this guidance now applies. The size restriction does not apply to this group. One person company with a Federal contract? That one person has to be fully vaxxed by December 8th.
But let me pick apart the language and start connecting why this is SO big by providing a statistic. As of 2017 (the most recent date for which I could find data), 4.1 million people are employed as Federal contractors across those 5,300 companies.
To try to explain why these requirements are likely to force companies with ANY Federal business to make vaccination a condition of employment, let me use Microsoft as an example, simply because the data is relatively easy to access and because I don’t work for Microsoft.
Via USASpending.gov, Microsoft had just under $2B in obligated funding for Federal government prime contracts (I won’t even go into their subcontractor engagements as I think their prime contract awards alone help make the point) in FFY 2020 (the most recent Federal contract year with complete data — the Feds are on an October 1 — September 30 FY). Microsoft’s US-based net income in 2020 was $41B, and its US-based employee count in 2020 was about 103K. So about 5% of of all of Microsoft’s US-based net income came from Federal contracts. Applying that figure to its 103K employee count, they are looking at 5,150 employees that work as direct Federal contractors.
But see — that’s where the language of the EO gets super awesome. It’s not just those estimated 5,150 employees that are subject to the EO. If there’s ONE employee that works in an office of 30 employees, all 30 employees are subject to the requirements of the EO. If there are 100 employees that work at Microsoft headquarters, which houses 50K employees, all 50K are subject to the requirements of the EO. So while the overall figure of direct Federally contracted employees is 4.1M, the number covered by this EO is exponentially larger.
Let me put it this way: my employer recently did an analysis of how many employees would need to be vaccinated in our entire company to meet the requirements of the EO. My company has 45K-ish employees. 500-ish are directly in the Federal vertical. But a host of other employees not technically in Federal do support Federal contract service delivery and are subject to the requirements. If those employees are designated as work-from-work OR hybrid (divided up between work-from-home and some office presence), which is the overwhelming majority of our company, they are subject to the requirements of the EO. At the end of the day, my company found that in excess of 90% of employees would fall under the requirements, and they decided — wisely — that vaccination as a condition of employment was the only logical way to handle this. Federal contracts are a not insubstantial part of our revenue.
So could Microsoft try to slice and dice its employee base, determining who is a direct Federal contract employee, who is working in a shared environment with a direct Federal contract employee etc.? Yep. They can. But why? Keeping track of that and reporting back not just at the OMB and OPM levels but also at the individual prime contract level is a huge investment in time, money and productivity.
Even being a subcontractor doesn’t exempt companies from sorting this all out to meet the requirements. If you are a prime Federal government contract holder and you use subcontractors to deliver services, the requirement applies to any/all subcontractors and is certified through binding contract language modification through the prime contractor. Again — any subcontractor could try to divide this stuff up, but the sheer amount of tracking and paperwork required to meet the terms of their subcontracting agreement would be onerous.
It should go without saying, but I’ll say it anyway: this is completely outside of the Administration’s directive to OSHA to issue revised emergency temporary standards (ETS) where companies with 100 or more employees have to either make vaccination a condition of employment OR institute a minimum of weekly COVID testing at their own expense (to include the cost of tests, administering and tracking those tests, etc.). That’s still coming — and for the Federal contractors who are still holding out for the ETS (many are because of concerns about union contracts, which almost all of them have), it introduces an even stickier level of implementation tracking and reporting. It just doesn’t make business sense.
I see the general clutching of pearls, gnashing of teeth and rending of garments on social media around these requirements. Loud cries of “F your vaccine because freedom!” won’t matter. It’s going to come down to simple dollars and cents. It’s by far less costly to require vaccination as a condition of employment than it is to institute some complicated and bifurcated Federal/not Federal construct, and the same holds true for companies with 100+ employees who will be subject to the OSHA ETS. Vaccination as a condition of employment is an up-front push and investment in setting the policy, administering the policy, and then tracking the policy. It’s not a constant ongoing investment for not making it required and constantly having to buy tests, administer tests, update information on test results etc. ongoing on a weekly basis.
The walls are closing in on the willfully unvaccinated (those who are legally and medically able to receive a vaccine), and I am here for it. It can’t happen soon enough.
