Yesterday afternoon, President Biden issued an Executive Order which appeared to directly impact the US Department of Housing and Urban Development‘s (HUD) Management and Marketing (M&M) Asset Manager (AM) and Field Service Manager (FSM) contracts. Entitled, Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors, it came directly on the heels of the introduction of a Six Point Plan to combat COVID which is, by far, the most far reaching requirements for COVID vaccination. More on the Six Point Plan in a moment. First, though, lets take a look at whom the Executive Order directly impacts,
(a) Executive departments and agencies, including independent establishments subject to the Federal Property and Administrative Services Act, 40 U.S.C. 102(4)(A) (agencies), shall, to the extent permitted by law, ensure that contracts and contract-like instruments (as described in section 5(a) of this order) include a clause that the contractor and any subcontractors (at any tier) shall incorporate into lower-tier subcontracts. This clause shall specify that the contractor or subcontractor shall, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance or Guidance), provided that the Director of the Office of Management and Budget (Director) approves the Task Force Guidance and determines that the Guidance, if adhered to by contractors or subcontractors, will promote economy and efficiency in Federal contracting.
The implication here is that the Executive Order directly applies to all boots on the ground contractors in the Mortgage Field Services Industry. In essence, this Executive Order will have the standing of law by and through the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and section 301 of title 3, United States Code. And while the Executive Order is more prose than not, the Six Point Plan clearly lays out the fact that each and every employee at Altisource, Mortgage Contracting Services, Safeguard Properties and potentially dozens of other Industry firms will be required to submit to the COVID vaccination. Here is the language used,
The Department of Labor’s Occupational Safety and Health Administration (OSHA) is developing a rule that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. OSHA will issue an Emergency Temporary Standard (ETS) to implement this requirement. This requirement will impact over 80 million workers in private sector businesses with 100+ employees.
Now, private sector employers are allowed to require either COVID vaccination or perform COVID testing. The kicker here is that should a company refuse to do either, DoL will kick in fines of $14,000 per employee per violation. And while many are preaching the gospel of an economy and housing market on fire — inferring absorption of the fines are an easy task — the reality is that nothing could be further from the truth. Wall Street On Parade has a great graphic which documents the 41% drop in GDP just in August alone as seen below.
We will follow up on this article with comments from a HUD Senior Official with respect to how the Executive Order applies to the HUD Prime Vendors as well as boots on the ground.