As the Biden Administration continues to roll out a full court press against COVID and the Delta variant rages throughout the US, Foreclosurepedia had the opportunity to speak with Senior US government officials about how they were planning on implementing President Biden’s Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors. Signed 09 September 2021 and accompanied by an extremely pointed, nationally televised speech by the President, the Executive Order (EO) appears to compel COVID vaccination — without an option for those who prefer to be regularly tested instead — for all federal contractors and subcontractors alike. Most striking is the fact that the EO includes boots on the ground subcontractors — those subcontractors whom actually perform the services themselves.
This is what the National Law Review had to say,
The vaccine mandate is applicable to any contract or contract-like instrument that is entered into, extended, renewed, or has an option exercised on or after October 15, 2021. However, the Executive Order is effective immediately and agencies are “strongly encouraged, to the extent permitted by law” to extend the vaccine mandate to existing contracts not otherwise subject to the Executive Order.
Venable LLP appears to agree with the National Law Review,
As noted above, it is expected that the clause will include a vaccination requirement similar to the one issued in President Biden’s Executive Order on Requiring Coronavirus Disease 2019 Vaccination for Federal Employees, which states: “Each agency shall implement, to the extent consistent with applicable law, a program to require COVID-19 vaccination for all of its Federal employees, with exceptions only as required by law.”
According to the EO, the Safer Federal Workforce Task Force will issue its guidance by 24 September 2021. When combined with the President’s COVID-19 Action Plan, Path Out of the Pandemic, we are looking at nearly 100 million US workers being impacted — roughly two thirds of the entire US workforce. These actions build upon the President’s 29 July 2021 directive that required employees and onsite contractors to disclose their vaccination status and, if they were not vaccinated, to mask, socially distance, and undergo regular testing. The new orders eliminate the testing option for those who are not vaccinated unless they receive an approved exemption. Thus, federal employees may no longer “test out” of vaccination.
As many know, the Mortgage Field Services Industry is intertwined with other industries such as the Disaster Restoration Industry. By in large, the US Department of Housing and Urban Development (HUD) regulates the Industry when it comes to laws, rules, and regulations. HUD controls the Federal Housing Administration (FHA) and to a point Government Sponsored Entities (GSE) such as Fannie Mae and Freddie Mac which have been under HUD conservatorship since the 2008 Financial Crisis.
The legal communities are all abuzz with guidance on President Biden’s EO. Fisher Phillips had this to say,
As part of the Biden administration’s “Path Out of the Pandemic” plan released yesterday, President Biden issued an executive order adding COVID-19 vaccination requirements affecting nearly all federal contractors. The new mandates are significantly more aggressive than the federal employee COVID-19 safety protocols issued on July 29 that simply required vaccination certification or testing for “every federal government employee and onsite contractor.” Onsite contractors who cannot confirm they are fully vaccinated will still have to follow safety protocols (mask wearing, maintaining workplace social distancing, complying with weekly or twice weekly COVID-19 testing, and limiting official travel). But now most federal contractors – regardless of whether they have employees working on federal property – will soon be required to follow new vaccine mandate requirements, effective with contracts with pending solicitations or entered into on or after October 15.
Not surprisingly, the Mortgage Field Services Industry has remained deafeningly silent. Part of the difficulty in obtaining guidance or information in the Industry has dealt with the fact that National Association of Mortgage Field Services (NAMFS) members — generally the top tier whom are Prime Vendors to the US government — have been loathe to speak to Labor directly when it comes to COVID. Granted, NAMFS has promulgated a handful of documents which simply regurgitate that which the White House or the Centers For Disease Control (CDC) have to say, the problem is that no one has encouraged any input from Labor whom actually perform the services. For example, there is no reporting or backtracking of COVID infections in the Industry — it is Clinton’s Don’t Ask Don’t Tell à la NAMFS. The scandal ridden association has seen a dramatic decline in membership YOY and is currently in free fall after failing to file federally required non profit tax returns for the previous two years according to IRS records. The combination of lack of funding and staff have provided a fertile landscape for disinformation — and at many times simply no information — when it comes to COVID in the Industry.
To determine what provisions of President Biden’s EO pertained to our Industry, Foreclosurepedia spoke directly with a Senior HUD Official whom stated, referencing the the HUD Management and Marketing (M&M) Asset Manager (AM) and Field Service Management (FSM) contract,
The short answer is “Yes” that once developed the clause will apply to the M&M contracts. The “when” may vary depending on whether it’s a new award or an extension/option. However, eventually all active contracts will be covered. The flowdown provisions would apply to all tiers of subcontractors, so it would impact those performing services at the properties, regardless of at what level.
The above statement is the first time, in over a decade, that HUD has chosen to directly implicate boots on the ground by and through the term flowdown provisions. A flowdown provision, generally in accordance with the Federal Acquisition Regulations (FAR), provides that subcontractors will be bound to the Prime Vendor in the same fashion as the Prime Vendor is bound under its contract with the US government. COVID ironically appears to be the true equalizer. What I mean is that HUD has always side stepped authority outside the scope of the Prime Vendor shielding the agency behind an argument that there is no Doctrine of Privity between HUD and the subcontractors. It is the primary reason why HUD refused to ever engage in the tens of millions of dollars in fraud committed by firms like National Field Network whom had to file for bankruptcy protection.
Even more precarious is the simple and salient fact that on the HUD M&M AM side, this EO potentially will require the mandatory vaccination of Realtors. And while many may believe that the National Association of Realtors (NAR) is a lobby to contend with, the reality is they have their hands full with recent Department of Justice litigation and can hardly deal with another proverbial black eye.
The Industry’s largest Prime Vendor performing on the HUD M&M FSM contract, Guardian Asset Management, had this to say with respect to HUD implementing the President’s EO,
We are having it reviewed now by Legal and will be addressing it as it is a very important issue. The health and safety of subcontracting partners is critical as they are the cornerstone of our business. — Guardian Asset Management
Well, at least someone is at the helm. Truth be told, when I made the rounds of the Cabinet level agencies whom are involved with either distressed assets or disaster related activities, getting an answer was akin to pulling teeth without anesthesia. I am not sure if I was more concerned over the press secretaries being oblivious or whether they were simply afraid to speak. The reality is that the implementation of this EO will most assuredly do two things: 1) it will cause a mass exodus of Labor; and 2) it will increase the administrative and financial burden upon the shoulders of what Labor remains as pushing regulations downward has always been the modus operandi of NAMFS members.
There are two components to President Biden’s EO. One is compliance and the other is enforcement. The former is quite simple and has already been implemented and the latter opens up a Wild West of audits triggered by the disgruntled.
Many are asking about how the Biden Administration’s newly enacted policies will be enforced? It is a good question. And while we are waiting for the Task Force’s final guidance to be issued this month, Foreclosurepedia had the opportunity to view OMB Form 3209-0277 which is currently being implemented by the Task Force for use at multiple US government agencies. It reads, in pertinent part,
I understand that if I decline to respond or am not fully vaccinated, I must comply with the following safety protocols […]:
• Wear a mask regardless of the level of community transmission;
• Physically distance; and
• Provide proof of having received a negative COVID-19 test from within the previous 3 days if I am a visitor or I am an onsite contractor who is not enrolled in an agency’s testing program.
I sign this document under penalty of perjury that the above is true and correct, and that I am the person named below. I understand that a knowing and willful false statement on this form can be punished by fine or imprisonment or both (18 U.S.C. 1001).
The form, spanning four pages in length, makes it very clear what is at stake,
I understand that if I am a Federal employee or contractor making a false statement on this form could result in additional administrative action, including an adverse personnel action up to and including removal from my position or removal from a contract.
Moreover, though, the US government will potentially assess a $14,000 fine per employee per occurrence for non compliance. And for those whom are questioning the authority under which the US government is collecting the information? It is set out clearly on the form itself,
We are authorized to collect the information requested on this form pursuant to Executive Order 13991, Protecting the Federal Workforce and Requiring Mask-Wearing (Jan. 20, 2021), Executive Order 12196, Occupational Safety and Health Program for Federal Employees (Feb. 26, 1980), and 5 U.S.C. chapters 11 and 79.
In addressing the enforcement piece of the EO, I relate to you Lao Tzu’s 6th Century Chinese finger trap. The form creates the innocuous reporting instrument and then stores the pertinent data to be culled at a date and time of the US government’s choosing. It also begs the question whether or not the US government is the only one whom may trigger the compliance audit? What I mean is when subcontractors or employees begin lodging complaints — to get even or otherwise — there is not a single agency whom will turn a blind eye. Far too much is at stake — both for combating COVID as well as documenting regulatory compliance.
There is no disputing the fact that COVID is an extremely virulent virus leaving nothing but death and destruction in its wake — no matter what the strain. And there is little doubt, in my mind at least, that vaccinations are the most efficient tool in our arsenal to combat COVID. Simply listen to this exclusive Foreclosurepedia Interview with a former Industry contractor and US Army veteran whom was unvaccinated, hospitalized, and to this day still suffers from COVID.
The reality is that if the Biden Administration is hoping for meaningful participation by both Cabinet level agencies and those contractors and subcontractors they deploy, they are in for a rude awakening. The EO rollout has been a complete debacle. The implementation of the Biden Administration’s five point Path Out of the Pandemic plan is an abysmal failure when it comes to messaging. For example, Foreclosurepedia reached out to Freddie Mac whose media office contact “Sarah” simply forwarded our request for comment to “Chris” and then turned around and said, “Hi Paul, Apologies, the previous message was sent in error. Thank you.” Follow up requests for comment went unanswered. It was similar with the United States Department of Agriculture (USDA) whom oversees nearly $235 million worth of loans including their Section 502 and 504 rural home loans of which include distressed assets serviced by contractors and subcontractors. USDA simply stated, “We are following up on this request.” In typical Biden fashion they included no answer, no documents, nothing.
Ditto for the Federal Emergency Management Agency (FEMA), an agency under the control of the Department of Homeland Security. Foreclosurepedia spoke with Mike Hart, FEMA’s Media Branch Chief, via telephone, after he inquired what our article was about. To date, FEMA has been unresponsive in their guidance for contractors or subcontractors as requested from Foreclosurepedia. As the EO impacts the HUD M&M AM and FSM contracts, Foreclosurepedia reached out to the National Association of Realtors (NAR) as potentially their Realtor members would appear to be subcontractors under the Asset Manager side. To date, they as well have been unresponsive. Ironically, the World Health Organization (WHO) at least replied by and through Carla Drysdale, WHO Communications Officer. It was a non-answer, but at least they were forthcoming,
We don’t comment specifically on member state policies.
Unfortunately, the Biden Administration’s rolling out of their COVID requirements has been disjointed and an almost knee jerk reaction — especially when it comes to messaging. When press secretaries and media contacts are either fearful of reprisal for or incapable of disseminating information, it sows the seeds for both disinformation and animosity. The distressed asset space, in conjunction with disaster remediation tops nearly a trillion dollars a year overall. And the subcontractors total in the hundreds of thousands. To date, only HUD has issued any meaningful guidance with respect to President Biden’s EO and its impact on contractors and subcontractors. With respect to the US government’s legal ability to require COVID vaccinations for federal contractors and subcontractors it is absolute. The jury is out as to whether the Biden Administration may force it upon the private sector.
We will publish upon comments from other US government agencies as they are received.