Business/Economy

From oil companies to Native corporations, vaccine mandate for federal contractors could have far-reaching impact in Alaska

The federal government’s extensive reach in Alaska means the Biden administration’s COVID-19 vaccine mandate for federal contractors and their employees could have widespread reach.

It will impact Alaska Native corporations that provide a host of services to the federal government, oil companies that hold federal oil and gas leases, and a variety of state agencies, among other sectors.

“The way they drafted the federal vaccine mandate was very broad, and they were trying to capture as many federal contacts as possible,” said Chris Slottee, an attorney with Schwabe, Williamson and Wyatt who specializes in government contracting and Alaska Native corporations.

The state of Alaska and nine other states sued last month to stop the mandate for contractors, arguing that it is unconstitutional. The lawsuit argues that several Alaska state departments, including Health and Human Services, Public Safety and Corrections, are federal government contractors that would be affected by the mandate. Other state entities such as the Alaska Railroad, which initially called on employees to be vaccinated, then rescinded that requirement, also could be impacted.

President Joe Biden issued the mandate in September as part of a broader policy to boost vaccinations, affecting as many 100 million Americans. Another Biden administration vaccine mandate, which would apply to private employers with more than 100 workers and require them to be vaccinated or tested weekly, has been stayed by a federal court. The Biden administration is challenging the decision and said businesses should still move ahead with the mandate.

The mandate for federal contractors gives them no option for a testing alternative and puts federal contracts at risk if employees aren’t vaccinated. It provides exemptions, such as for religious grounds. Contractors have until Jan. 4 to comply.

The requirement at this point affects contractors with new federal contracts, Slottee said. It will apply to other contracts in the future as they come up for for renewal or extension, he said.

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Slottee is leading workshops on the vaccine requirements for the Alaska Native Village Corporation Association.

Several Alaska Native corporations have a variety of questions and concerns, including about administrative costs they could face to ensure employees are vaccinated and what will happen with legal efforts to stop the mandate, he said.

“It is an evolving area that is definitely causing concern because things are changing in relatively short periods of time,” said Slottee.

Alaska Native village and regional corporations receive about 25% of their revenue from federal contracts, said Hallie Bissett, executive director of the Alaska Native Village Corporation Association.

Alaska Native entities, familiar with the devastation caused in villages by the influenza pandemic a century ago, have been very cautious when it comes to COVID-19, Bissett said.

Two of Alaska’s largest tribal health organizations, Southcentral Foundation and the Alaska Native Tribal Health Consortium, which operates the Alaska Native Medical Center, set in place their own vaccine mandates this summer. A small fraction of employees did not comply.

About 30 Alaska Native for-profit corporations, including 12 of the larger regional corporations, are involved in federal contracting, Bissett said. They have operations that extend to the Lower 48 and internationally, with multiple subsidiaries.

Many thousands of employees at the corporations and subsidiaries could be impacted by the vaccine requirement, she said.

The mandate also applies to subcontractors of federal contractors, such as a small electrical company involved in a construction project, Slottee said.

The federal government owns 60% of the land in Alaska, and is one of the state’s top employers.

It awarded more than 13,000 federal contracts above $100,000 in the state last year, with some businesses receiving multiple contracts, according to information from the Procurement Technical Assistance Center in Anchorage, a federally created program to help businesses navigate federal contracting procedures.

The vaccine requirement could exacerbate a labor shortage in Alaska for some employers, if employees who refuse to be vaccinated leave their positions, said Christi Bell, director of the Business Enterprise Institute at the University of Alaska Anchorage.

Kevin Berry, an associate professor of economics at the University of Alaska Anchorage, said vaccine mandates at companies and organizations nationally and in Alaska have been effective at getting vaccine compliance from most employees.

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When it comes down to it, most people want to keep their job, he said.

The mandate for federal contractors also applies to companies that hold leases with the federal government.

Several oil and gas companies in Alaska, including ConocoPhillips, hold leases in the National Petroleum Reserve-Alaska, a giant region of large new oil prospects.

Oil companies are continuing to review the regulations and will follow the law, said Kara Moriarty, head of the Alaska Oil and Gas Association.

ConocoPhillips believes vaccination is the strongest defense against COVID-19, said Rebecca Boys, a spokeswoman with the company in Alaska.

“We recently decided to mandate vaccines for several groups that have significant COVID-19 exposure risk, as well as for all U.S. new hires and new U.S. expats,” she said. “By December 8, these groups of employees and contractors will be required to provide proof of full vaccination, with limited exceptions.”

The company is also reviewing the vaccine mandates to determine where they apply within ConocoPhillips, Boys said.

“As always, we will comply with all applicable laws and regulations,” she said in an email.

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