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COVID-19: New GSA Lease Clause Requires Landlords and Subcontractors to Comply with Federal Health Guidance
Practical Law Legal Update w-033-0942 (Approx. 5 pages)
COVID-19: New GSA Lease Clause Requires Landlords and Subcontractors to Comply with Federal Health Guidance
by Practical Law Real Estate
| Published on 26 Oct 2021 • USA (National/Federal) |
The General Services Administration has mandated the incorporation of a clause into federal government leases requiring landlords and their subcontractors to comply with federal COVID-19 requirements.
On September 9, 2021, President Biden signed Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors requiring, among other things, that federal contractors and their subcontractors comply with federal COVID-19 requirements. On September 30, 2021, to implement the executive order, the General Services Administration (GSA) approved the text of a new clause required to be included in certain federal leases.
Background
The General Services Administration
The GSA owns and rents real estate at thousands of sites across the country as part of its mission to procure and manage federal resources, including employee workspace. The GSA contracts with commercial landlords (GSA Landlords) to lease properties (GSA Leases) ranging from individual units to entire buildings as needs dictate. GSA Landlords are, therefore, federal contractors and third parties contracting with GSA Landlords for the management, operation, and maintenance of the property are considered federal subcontractors.
GSA Leases often include a provision that permits the GSA to unilaterally make certain changes to the lease without the GSA Landlord's consent. Typically, the government must make an equitable adjustment to compensate the GSA Landlord for any increased costs or other adverse impacts caused by a unilateral lease modification. Despite having this unilateral right, the GSA usually seeks the GSA Landlord's agreement to any changes.
For more information on GSA Leases, see Practice Note, GSA Leases: Overview.
Executive Order
On January 20, 2021 President Biden created the Safer Federal Workforce Task Force (Task Force) to coordinate the federal administrative response to the COVID-19 pandemic.
On September 9, 2021, President Biden signed Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors requiring, among other things, that federal contractors, including GSA Landlords and their subcontractors, comply with the Task Force's COVID-19 guidance.
Guidance
On September 24, 2021, the Task Force issued Guidance for Federal Contractors and Subcontractors and Frequently Asked Questions for Federal Contractors, as they may be updated from time to time (collectively, Guidance). The Guidance requires, among other things, that:
- GSA Landlords, subcontractors, and their covered employees (see Covered Contractor Employees) must be fully vaccinated by December 8, 2021, absent a valid medical or religious exemption. For more information on vaccination requirements, see Practice Note, COVID-19: Employment Law and Development Tracker: Vaccine Mandates and Prohibitions.
- GSA Landlords, subcontractors, their covered employees, and visitors must wear masks indoors and comply with physical distancing policies, regardless of vaccination status.
- GSA Landlords and subcontractors must designate one or more individuals to coordinate COVID-19 safety protocols.
- All federal agencies must include a clause (Safety Protocol Clause) requiring compliance with the Guidance in specified GSA Leases and related subcontracts (see Covered Contracts).
The Guidance supersedes any contrary state or local laws or orders except to the extent state or local requirements are more stringent.
Safety Protocol Clause
On September 30, 2021, the Federal Acquisition Regulatory Council released the text of the Safety Protocol Clause, which was concurrently approved by the GSA. On October 5, 2021, the GSA issued a leasing alert to federal agencies providing instructions for the incorporation of the Safety Protocol Clause into their solicitations and contracts.
The Safety Protocol Clause requires GSA Landlords and their subcontractors of any tier to:
- Comply with the Guidance including all additional workplace safety policies published by the Task Force during the term of a GSA Lease.
- Include in all subcontracts of any tier (but excluding subcontracts solely for the provision of products) a clause substantively similar to the Safety Protocol Clause.
Covered Contracts
GSA Leases and subcontracts of any tier are considered covered contracts if they fall within one of the following categories:
- New GSA Leases and related subcontracts awarded on or after November 14, 2021 from solicitations issued before October 15, 2021.
- New solicitations issued on or after October 15, 2021 and GSA Leases and related subcontracts awarded pursuant to those solicitations.
- Extensions or renewals of existing GSA Leases and related subcontracts awarded on or after October 15, 2021.
- Options on existing GSA Leases and related subcontracts exercised on or after October 15, 2021.
In addition, the Task Force has instructed federal agencies to apply the Guidance broadly by strongly encouraging GSA Landlords to include the Safety Protocol Clause in GSA Leases and related subcontracts, even those that may not meet the foregoing time deadlines. This may include urging GSA Landlords to agree to:
- Amend existing GSA Leases to incorporate the Safety Protocol Clause even where not in connection with an extension, renewal, or exercise of an option.
- Include the Safety Protocol Clause in GSA Leases entered into before November 14, 2021.
Covered Contractor Employees
Covered contractor employees must comply with the Guidance regardless of whether they are subject to and in compliance with other workplace safety standards (for example OSHA requirements or the requirements of any other federal, state, or local authority). Full or part-time employees of GSA Landlords and of all tiers of subcontractors are considered covered contractor employees if they are:
- Working at a contractor's workplace regardless of whether their work is related to a GSA Lease or related subcontracts (for example, a property manager's employees who work at the property manager's off-site office, but whose work is not related to the GSA Lease, would still be considered covered contractor employees).
- Performing work in any location if the work is related, directly or indirectly, to a GSA Lease or related subcontracts, including:
- those whose work is indirectly or only tangentially related to a GSA Lease or related subcontracts (such as human resources, billing, and legal review); and
- employees who work remotely.
Employees who perform work exclusively outside of the United States are not considered covered contractor employees.
Practical Implications
The severity of the COVID-19 pandemic has driven the Federal Government to implement new and broad measures to contain the disease. This has placed an increased burden on businesses of all types to understand and comply with new and evolving requirements.
Counsel can assist their clients by:
- Providing advice and strategy regarding the Guidance, including:
- advising GSA Landlords whether to voluntarily amend their existing GSA Leases to incorporate the Safety Protocol Clause and negotiate for the GSA to reimburse the direct and indirect costs of compliance, as those costs may be determined and revised in the future;
- reviewing existing GSA Leases to determine whether there is a mechanism for equitable adjustment or another method of offsetting potential additional expenses; and
- helping to estimate the initial and continuing costs of compliance.
- Developing company compliance protocols and safeguards.
- Tracking new and updated Guidance.
- Monitoring compliance deadlines.
For a continuously updated collection of real estate resources addressing COVID-19, see Practical Law's Real Estate Global Coronavirus Toolkit.