In late 2021, President Biden relied on the Procurement Act to sign an Executive Order effectively requiring every employee of any private company that contracts with the federal government to be fully vaccinated for COVID-19. While the mandate was ultimately rescinded less than two years later, it produced four inconsistent federal circuit court opinions that together expose the problems with existing judicial frameworks for analyzing executive authority under the Procurement Act.
This Note explores the growth of the federal procurement industry, the evolution of executive orders under the Procurement Act, and the existing jurisprudence for executive power under the Act. The dominant judicial test, the Kahn framework, contains no inherent limiting principle to the President’s authority and is outdated given the ever-increasing size of the federal procurement industry and the evolving nature of executive orders under the Act. Meanwhile, the circuits enjoining the contractor vaccine mandate reached the correct outcome given the text and legislative history of the statute, but erred in applying the major questions doctrine to a presidential delegation. This Note proposes that courts should first inquire into what extent an order imposes affirmative obligations on contractor employees beyond what is necessary for performance on the government contract. This inquiry will recenter Procurement Act jurisprudence back to the text and legislative history of the statute, offer a limiting principle to the Kahn framework, and avoid the interpretive pitfalls of applying the major questions doctrine to a presidential delegation. Furthermore, it will help to clarify public and private accountability by placing limits on the executive’s role in altering private employment relationships through government contracts.
Introduction
On September 9, 2021, President Biden relied on the Federal Property and Administrative Services Act of 1949 (“the Procurement Act”) to sign Executive Order 14042 (“the contractor vaccine mandate”),1 which effectively required every employee of any private company that contracts with the federal government to be fully vaccinated for COVID-19.2 The contractor vaccine mandate applied to all employees of current and future contractors, regardless of those employees’ connection to a specific government contract.3 While the mandate was ultimately rescinded in May 2023,4 it produced four conflicting federal circuit court opinions5 that together expose the problems with existing judicial frameworks for analyzing executive authority under the Procurement Act.
Enacted in 1949, the Procurement Act governs the federal government’s entry into contracts with private companies to procure certain goods and services.6 Washington’s “blended workforce” has contributed to many of our government’s most notable achievements, like the creation of the Interstate Highway System.7 Today, federal agencies contract with private companies to procure a wide variety of goods like food, aircrafts, and weaponry, and services such as IT specialists and nuclear scientists.8 Agencies also use contractors to fill a gap in specialized expertise for short-term projects for which hiring permanent government employees would not be logistically justifiable.9 Over the past few decades, the modern procurement industry has grown significantly in size, with Americans today being more likely than ever before to be employed by a private company with at least one government contract.10
The Procurement Act delegates authority to the President to prescribe policies and directives necessary to carry out the Act’s stated purpose11 of providing the government with a centralized “economical and efficient system” for its procurement activities.12 The broad textual language of the delegation has posed ongoing problems for judicial interpretation,13 as judges disagree about the precise limits of presidential authority.14 Before 1949, the legislative branch historically enjoyed the ability to fix the terms and conditions of government contracts in pursuit of policy-oriented goals.15 The massive purchasing power of the federal government16 and the nature of contractors as, effectively, hired administrators of government policy17 gives the government a vested interest in requiring certain standards of practice for private parties in its contracts.18 The important question is thus precisely how much control over a private contracting entity is warranted by the Procurement Act’s delegation to the President?
Courts typically apply the same principles of general private contract law to contracts with the federal government,19 which reflects a practical necessity: the government needs procurement contracts to be enforceable against private parties or else it risks constant claims of invalidation by coercion.20 The parties entering into these contracts are undoubtedly sophisticated; it would be absurd to purport that companies like Lockheed Martin or Pfizer are victims of coercive contracting, even in light of the government’s superior bargaining power as a bulk purchaser.21 When applied to contractual provisions imposing affirmative obligations on employees, however, this interpretative doctrine extends privity of contract from the government to the contractor’s employee through the employer’s government contract, thus allowing the government to alter relationships extraneous to the government contract itself.
While the contractor vaccine mandate’s scope may strike many as a sound policy choice given the contagious nature of the COVID-19 virus, the breadth of authority it necessarily implies under the Act poses a significant risk of abuse. In 2020, amidst right-wing political pushback directed toward “critical race theory” and “diversity, equity, and inclusion” initiatives, President Trump relied on the Procurement Act to issue Executive Order 13950, which prohibited federal contractors from promoting a list of “divisive concepts” in workplace trainings, namely discussing “privilege” and assigning “fault, blame, or bias” based on one’s race or sex.22 Although this Order ran into broader constitutional challenges beyond its statutory authority,23 the invocation of the Procurement Act supports the need for a more consistent judicial understanding of the Act’s limits to curb potential misuse of the Act as a statutory back door for presidential social policymaking lacking broader legislative support.
The contractor vaccine mandate litigation produced four appellate decisions: the Fifth, Sixth, and Eleventh Circuits each enjoined enforcement of the mandate on the ground that it was outside the scope of authority delegated to the executive under the Procurement Act,24 while the Ninth Circuit rebuked those conclusions to uphold the mandate.25
Procurement Act precedents provide little guidance on the outer scope of the President’s power under the Act. The D.C. Circuit’s 1979 case, AFL-CIO v. Kahn, created the dominant judicial test, requiring that the President’s action has a “close nexus” to the statutory purpose of promoting “economy and efficiency.”26 Legal scholars criticized Kahn’s “close nexus” test for its broad deference to the executive and lack of a clearly articulated limiting principle.27 The issues inherent in the continued application of the Kahn framework are evident in the Ninth Circuit’s opinion upholding the mandate.28 At over four decades old, the Kahn test,29 as applied by the Ninth Circuit,30 does not contemplate executive action imposing affirmative obligations on employees of federal contractors, nor does it reflect the changing realities of the modern-day procurement industry, which has expanded significantly in size and scope since both 1949 and 1979.31
The circuits that invalidated the mandate relied to varying extents on the major questions doctrine32 to find that the vaccine mandate was an “enormous and transformative” expansion of delegated authority under the Procurement Act.33 That doctrine’s exclusive application to administrative agency delegation in prior case law complicates its applicability to a unilateral order by the President alone.34 But those courts were largely correct in viewing the contractor vaccine mandate as fundamentally distinct from previous exercises of Procurement Act authority—those examples offer no equivalent analog to the imposition of an affirmative obligation on the employees of federal contractors disconnected from what is required to perform under the contract.35
This Note proposes that the circuits enjoining the vaccine mandate reached the correct outcome given the text and legislative history of the Act, but erred in their reasoning.36 The application of the major questions doctrine in this context was improper,37 and its misguided presence drew attention away from important interpretive insights weaved throughout those decisions.38 Instead, the courts should have enjoined the mandate by categorizing the nature of Procurement Act authority being exercised. The fundamental inquiry must ask: who will bear the affirmative obligation of the contractual provision? Orders that direct government employees to prioritize certain considerations in the contracting process are explicitly authorized by the text of the Act and pose little problem for judicial interpretation.39 Contractual provisions that impose social policy obligations on the contracting firm, like antidiscriminatory hiring practices, are within the implicit power delegated to the President under the Act and have been broadly upheld since Kahn, as long as those goals can be reasonably connected to probable cost-savings for the government.40 However, contractual provisions that “reach through” the contracting firm to impose an affirmative obligation on that private firm’s employees as a whole are a more complicated matter for judicial interpretation, necessitating a stronger test than is currently offered by the Kahn framework.41
Part I of this Note begins with a description of the contractor vaccine mandate, the legislative history and relevant statutory language of the Procurement Act, and the stakes at issue in the modern federal procurement industry. Part I then provides a background on previous judicial interpretation of presidential power under the Procurement Act and goes on to explain how the four circuits that decided the vaccine mandate cases addressed the Kahn framework and the major questions doctrine. Part II critically analyzes the circuit court opinions, finding fault with both the applicability of the major questions doctrine and the undue deference of the Kahn framework in the context of these cases. Finally, Part III proposes an interpretative solution that requires judges to categorize Procurement Act executive orders into three distinct categories based upon whom the onus of the affirmative obligation falls.
I. Background
A. The Mandate
The federal contractor vaccine mandate at issue in the circuit split is an amalgam of multiple federal directives that together created the mandate,42 most important of which is President Biden’s Executive Order issued on September 9, 2021.43 In effect, the combination of directives created a mandatory government contract clause requiring full COVID-19 vaccination for all employees of federal contractors and subcontractors, including those working in covered contractor “workplaces,” regardless of whether those employees were working directly on a federal contract.44 The government justified the Order by asserting that the vaccine mandate would improve the economy and efficiency of procurement activities by reducing labor costs and mitigating workplace absenteeism within the contractor’s operations,45 thus invoking the language of the Procurement Act’s ‘purpose’ statement as codified in § 101.46
The Biden Administration ceased enforcement of the mandate in response to injunctions issued by the Eleventh and Fifth Circuits in August and December of 2022, respectively.47 On May 9, 2023, the President issued Executive Order 14099, which formally revoked 14042, citing significant declines in COVID-19 deaths and hospitalizations.48 Despite this, however, the four circuits that considered the constitutionality of the Order while it was still in effect created a muddled and conflicted body of Procurement Act case law. Such ambiguity demands clarification given the potential breadth of the President’s authority under the Act.
B. The Statute
1. Legislative History
The Procurement Act49 was first enacted by Congress in 1949 in response to inefficiencies discovered by the Hoover Commission in the federal procurement of goods and services during the Second World War.50 Congress determined that the Commission’s findings of rampant waste and ineffective management largely came as a result of the decentralized nature of the contracting process within the government itself. The lack of central standardization in the growing federal supply business resulted in duplicative processes and poor coordination, reflecting a need for improved and centralized methods and procedures for government procurement activities conducted by agencies.51 Thus, the Act consolidated previously disparate agency procurement functions into the General Services Administration (GSA) and delegated centralized supervisory authority to the President, granting him authority to “prescribe policies and directives” to carry out the duties explained in the Act.52 Prior to the 1949 presidential delegation, Congress had historically enjoyed the power to impose social policy obligations on government contractors, regulating labor conditions in contractor workplaces as early as 1840.53 Exercise of this power became increasingly common as the scale of federal procurement spending grew in the twentieth century.54
2. Statutory Language
The statutory provision most directly implicated in the contractor vaccine mandate cases is § 121(a), which grants the President oversight authority to prescribe policies that are necessary to carry out specifically enumerated provisions of the Act.55 Those specific provisions cover a lengthy amount of statutory language (nearly 170 code sections), including the entirety of subtitle I of Title 4056 as well as portions of division C of Title 41.57 Section 301 of Title 40 establishes the GSA, and § 501(b)(1)(A) tasks the Administrator with procurement and supplying duties.58 The Administrator of the GSA shares the authority of the President under Title 40 to “prescribe regulations to carry out this subtitle.”59 Title 40 also sets out the procurement authority of administrative agencies, subject to oversight by the President and the administrator of the GSA.60 Section 121, thus, grants the President oversight power to guide agencies in the exercise of their own statutorily granted procurement authority.61
In addition to delegating supervisory authority to the President and establishing the terms of the GSA, Title 40 covers specific terms relating to the management, procurement, use, and disposal of real property by government agencies.62 The connected subtitles of Title 41, meanwhile, provide explicit policies on public contracts for agencies.63 Numerous provisions peppered throughout Title 41 emphasize the promotion of competition between prospective contractors,64 along with a goal of making those competitive procedures compatible with small business concerns.65 These provisions connect directly to the legislative history of the Hoover Commission findings and add legislative muster to the stated purpose of the Act: to provide the government with an “economical and efficient system” for its procurement activities.66
C. The Modern Procurement Industry
The federal procurement industry today is significantly larger in both size and scope than at the time of the Procurement Act’s initial 1949 enactment,67 growing especially over the past few decades.68 Government contract spending saw a steady twelve percent year-over-year growth rate in the years 2000 to 2008,69 and grew by eighty-seven percent in inflation-adjusted terms between 2000 and 2012.70 In 2022, the U.S. Government Accountability Office estimated that approximately one-fourth of all federal discretionary spending was spent on service contractors.71
The government does not make publicly available the official number of federal contractor employees.72 The dearth of official data makes it exceedingly difficult to consider the macro impact of federal procurement policy on individual workers. In 2011, Professor Paul Light estimated the number of contract and grant workers at 7.5 million people, over three times the number of workers directly employed by the government.73 Organizations like the Professional Services Council dispute this estimate as “astronomically” inflated.74 However, even if these numbers are inflated, they remain hard to square with the Department of Labor’s assertion that workers employed by federal contractors amount to approximately one-fifth of the country’s entire labor force.75 The Department of Labor’s estimate is cited extensively throughout opinions invalidating the mandate,76 and this estimate is neither directly addressed nor disputed by the Ninth Circuit’s opinion upholding the mandate.77 The Bureau of Labor Statistics estimated the entire civilian labor force in October 2022 at approximately 164 million people.78 If we were to take the Department of Labor at its word in both instances, this would mean the true number of federal contractor employees could be close to thirty-two million people—a far cry from Light’s debatably inflated estimates.79 Regardless, since Americans today are more likely than ever to work for large employers,80 and the government contracting industry continues to grow,81 it can be reasonably inferred that the number of employees working for a company with at least one such government contract is similarly increasing. Thus, more Americans than ever are eligible to be roped into the growing dragnet of federal procurement policy.82
Numerous political circumstances, like delays in the presidential appointment process and public frustration toward bureaucratic sluggishness, incentivize the government’s increasing reliance on private contractors.83 The most frequent justification for privatization, however, is taxpayer cost-savings: federal agencies might save taxpayer money by contracting out to private firms who compete on cost-efficiency to win government bids.84 Although there is some debate over whether such cost-saving benefits are actually realized in practice,85 promoting competition among rival government contract bidders is an explicit goal peppered throughout the text of the Procurement Act.86
D. Judicial Interpretation and the Circuit Split
The primary issue in most Procurement Act cases is the extent to which a President may impose affirmative obligations on a contracting party to regulate that party’s internal efficiency in pursuit of social policy goals.87 Congressional policy exercises of this type have a long history in the United States, predating the Procurement Act’s presidential delegation.88 President Carter’s 1978 Executive Order mandating wage and price controls on contracting businesses for the purpose of reducing overall inflation levels in the economy serves as an important flashpoint in the evolving nature of Procurement Act power.89 That Order led to the seminal case interpreting presidential Procurement Act authority: AFL-CIO v. Kahn.90
1. The Kahn Framework
In the 1979 decision AFL-CIO v. Kahn, the D.C. Circuit held that the Procurement Act authorized the President to impose wage and price standards on federal contractors as part of a broader effort by the Carter Administration to reduce inflation in the economy.91 Kahn created the seminal “close nexus” test: executive orders relying upon the Procurement Act must bear a “close nexus” to “the values of ‘economy’ and ‘efficiency’” as outlined in the statute’s purpose statement in § 101.92 In other words, a contractual provision may be authorized by the Act as long as the government can prove that provision’s connection to likely savings for the government. The court found that wage and price standards on government contractors had a sufficiently close nexus to likely savings for the government on procurement contracts in the long term.93 Judge MacKinnon’s dissent denounced the majority’s test for offering far too much deference to the executive.94 Judge MacKinnon relied on the legislative history of the statute to conclude that the presidential delegation only granted the President authority to give centralized guidance on internal government contract process, bound by the specific provisions of the Procurement Act, not to be used as an external instrument in service of broader policy goals.95 Legal scholars lodged similar criticisms against the Kahn opinion for failing to articulate the outer limits of the President’s power under the test.96 This critique has re-emerged in the modern judicial debate over Kahn’s application to the contractor vaccine mandate.97
The Supreme Court has not directly addressed Kahn, nor has it provided much guidance on the Procurement Act except in limited dicta.98 The Ninth Circuit viewed the Court’s silence on Kahn and its certiorari denials in other Procurement Act cases as implicit judicial approval of the test, warranting its application in the contractor vaccine mandate context.99 Additionally, it found implied legislative branch approval for the Kahn framework by pointing to the 2002 congressional recodification of the Procurement Act.100
In upholding the mandate, the Ninth Circuit broadly adopted the Kahn test, relying almost exclusively on the President’s broadly delegated authority in § 121(a) combined with the Act’s purpose statement in § 101 of creating an “economical and efficient system” in procurement activities.101 The court found that the government’s purported justification of mitigating workplace absenteeism through vaccination bore an “axiomatic[ally]” close nexus to increased economy and efficiency for contractors.102
The circuits invalidating the mandate found different reasons to hold Kahn inapplicable.103 In Kentucky v. Biden, the Sixth Circuit refused to apply the “close nexus” test, emphasizing the fundamental dissimilarity between previous Procurement Act orders and the Biden Administration’s vaccination Order. It described the historical examples as being “work-anchored” measures each with an “inbuilt limiting principle,”104 meaning that those examples bound the conduct of the private entity itself as to its performance on the contract, as opposed to individual employees’ conduct disconnected from the contract’s purpose. The court viewed the historic examples, like antidiscrimination orders, as valid due to their close nexus to “the ordinary hiring, firing, and management of labor.”105 Comparatively, the vaccine mandate was categorized as a “medical procedure” imposed on individual employees, not connected to the ordinary management of labor. For the Sixth Circuit, the substance of the mandate (a medical procedure) removed it from the scope of the Kahn framework.106
In Georgia v. President of the United States, the Eleventh Circuit found fault with the government’s asserted reading of the Kahn framework on a fundamental level, finding that its excessive reliance on the “economy and efficiency” language in the Act’s preamble could allow for presidential orders that directly contravened other parts of the statutory text.107 The court cited language from the Kahn opinion and its concurrences which emphasized the narrowness of the holding and cautioned that executive power must maintain consistency with the Act’s other provisions.108 Specifically, the Eleventh Circuit rejected the idea that the Act’s preamble in § 101 should be embedded into the presidential delegation under § 121.109 Instead, it concluded that the “economy and efficiency” language in § 101 should act as a secondary restriction on the President’s authority, as opposed to an expansion like the government asserted.110 Thus, the President must point to specific provisions within Title 40 and division C of Title 41, which articulate “output-related standards” directly connected to the execution of contractual obligations, to invoke the “close nexus” test.111 In sum, the court found that a broad all-employee vaccine mandate could not fit cleanly within the type of project-specific restrictions that the Procurement Act contemplates.112
The Fifth Circuit’s December 2022 opinion in Louisiana v. Biden found that the government’s reading of the Kahn test would provide the President “with nearly unlimited authority” to add binding provisions in government contracts, given the ease by which such provisions can purport to promote “economy or efficiency.”113 To showcase the inherent lack of a limiting principle in the Kahn “close nexus” test, the court walked through absurdist hypotheticals like daily vitamin requirements or bans on second-hand smoke exposure for contractor employees.114 All such examples could conceivably be validated by the Kahn test as promoting efficiency in the contracting entity.115
2. The Major Questions Doctrine
Whether the major questions doctrine should apply to a presidential delegation is a recurring debate underlying this circuit split. The major questions doctrine is a modern canon of administrative law jurisprudence116 that instructs courts not to defer to an agency’s statutory interpretation where the relied-upon text is unclear and the challenged action involves a transformative expansion of regulatory authority that is of ‘vast’ economic and political significance.117 It was typically deployed as a means of precluding Chevron-deference118—which for forty years had instructed courts to broadly defer to agency interpretation of ambiguously worded enabling statutes.119 Derived from broad constitutional principles like the formalistic separation of powers, federalism, and the nondelegation doctrine,120 its most recent iteration essentially operates as a clear-statement rule:121 once triggered, the agency must be able to point to clear and explicit congressional authorization for the regulatory action in the statutory text.122
In 2022, the Supreme Court applied the doctrine to a different COVID-era mandate promulgated by the Secretary of Labor through OSHA, which sought to require employees of large companies (with over one hundred employees) to vaccinate or be subject to weekly test and masking requirements.123 In the per curiam opinion, the Court invoked the major questions doctrine on the grounds that the vax-or-test requirement was of “vast economic and political significance” because it was a “significant encroachment into the lives—and health—of a vast number of employees.”124 The Court thus struck down the mandate on the grounds that the explicit text of the agency’s enabling statute did not empower the Secretary to impose broad public health measures, but merely workplace safety measures.125
The OSHA mandate case dealt with an agency delegation, fitting cleanly in line with the Court’s prior applications of the major questions doctrine126—how easily the doctrine fits into the Procurement Act’s presidential delegation is less clear. The Ninth Circuit viewed the doctrine as inapplicable because it had never been applied to presidential actions and instead had been limited to the agency context,127 a claim also found in the Fifth Circuit dissent.128 That same argument was further expounded upon in the Eleventh Circuit dissent, which explained that the President does not suffer from the same lack of political accountability as agencies to warrant the doctrine’s application.129 But the Fifth Circuit majority disagreed, insisting in a footnote that the doctrine should not be limited to its prior applications because the Supreme Court had never explicitly confined the doctrine to agency actions, pointing to the President’s constitutional responsibility for the actions of the entire executive branch.130
The Eleventh Circuit’s invocation of the doctrine is perhaps the most nuanced with regard to the agency/presidency distinction, finding the doctrine applicable through a unique framing of the issue based on its own interpretation of the statute.131 The court viewed the Order as one directed at agencies to carry out, and read the Procurement Act as granting no additional power to the President beyond that granted to agencies.132 Therefore, it framed the issue as whether the Procurement Act gives the agencies themselves the ability to insert the vaccine-mandate clause; if not, the President cannot create such authority whole cloth through the Procurement Act.133 This reading of the statute and the Order thus seeks to justify the application of the major questions doctrine even if the doctrine is solely limited to agency actions.134
Another dispute over the applicability of the doctrine deals with whether the directive at issue can be categorized as regulatory or proprietary. By characterizing all procurement activities as falling under the President’s proprietary authority, the Ninth Circuit majority and the dissenting opinions in the Fifth and Eleventh Circuits found that the major questions doctrine could not apply because there was no transformative expansion of regulatory authority at issue.135 Meanwhile, the Fifth Circuit majority determined that this was a distinction without a difference, citing the vast scope of the mandate (including employees of covered contractors who are not themselves working on or in connection with a covered contract) as belying the contention that the government was acting in a merely proprietary manner.136
In the circuits’ varied applications of the doctrine, two fundamental considerations triggering its application werehe Order’s substance (vaccination) and the Order’s scope. On substance, the court’s applying major questions were seemingly influenced by the Supreme Court’s recent holding in the OSHA case, which viewed vaccination requirements themselves as a question of “vast economic and political significance.”137 The Fifth Circuit, for example, directly cites that case to support its application of the doctrine, glossing over the agency/presidency distinction.138 Further, the Supreme Court’s characterization of vaccination as a “medical procedure” set the stage for the Sixth Circuit to invoke that language in its argument that principles of federalism preclude the federal government from regulating public health through vaccination mandates.139 This federalism argument allowed the Sixth Circuit to more easily bring the major questions doctrine into the fold based on the doctrine’s purported justifications.140
With regard to the mandate’s scope, both the Fifth and Sixth Circuit repeatedly cite the questionable Department of Labor figure141 that workers employed by federal contractors amount to approximately one-fifth of the country’s entire labor force.142 The mandate’s scope extending beyond those directly working on government contracts143 led the Sixth Circuit to conclude that the reach of the mandate may actually affect even more than one-fifth of the workforce.144 This estimate is neither directly addressed nor disputed by the Ninth Circuit’s opinion upholding the mandate.145 The dissenting opinion in the Sixth Circuit was the only opinion that took issue with the oft-cited figure, but still accepted its premise in an exercise of judicial mathematics: deducing that the mandate could only affect about five percent of the workforce because of the high pre-existing vaccination rates, that dissent questioned whether the states even had standing to sue.146
Closely related is whether the contractor vaccine mandate is a “transformative expansion” of authority under the Procurement Act because the Order regulates the individual conduct of employees, as opposed to the higher-level conduct of the contracting entity itself.147 The Fifth Circuit characterized the use of procurement authority in the vaccine mandate as “reach[ing] through” contracting businesses to impose regulations on the business’ employees as opposed to regulating the employer itself, finding such an exercise of power to be unprecedented when compared with the historic examples.148 In the Fifth Circuit’s view, prior exercises of procurement authority (like antidiscrimination in employment,149 E-Verify for immigration status of employees,150 and mandatory sick leave for employees151) all govern the conduct of the employing entity itself as opposed to the conduct of individual employees.152 The Sixth Circuit similarly distinguished the historic examples, characterizing them as “work-anchored” measures with an “inbuilt limiting principle,” while the vaccine mandate, by comparison, required vaccination “everywhere and all the time” and was not anchored to the specific work of federal contractors.153 The Eleventh Circuit, meanwhile, took a slightly different stance by finding that none of the historic examples fell in the realm of public health except for the sick-leave order,154 determining that sole example insufficient to establish a longstanding practice justifying the vaccine mandate.155
The Ninth Circuit disputed the employer/employee distinction made by the Fifth and Sixth Circuits.156 Under that view, the employer/employee distinction framed the issue at the wrong level of generality—just like with E-Verify, the vaccination mandate was framed merely as a requirement for employers to verify the vaccination status of their employees, just as they must verify their employees’ immigration status under E-Verify.157 Thus, both Orders “touch” the employee in some sense, but the ultimate obligation is the employer’s verification of their employee’s compliance.158 The Fifth Circuit majority criticized this argument for overlooking the fact that the vaccine mandate imposed an affirmative obligation on employees to take a specific act, while E-Verify imposed no such obligation on the employee themselves.159 E-Verify additionally tracked with existing federal law that requires employees to adhere to immigration and work-authorization requirements.160 The Ninth Circuit did little to address these distinctions.161
II. Analysis
The primary disagreements that abound in the circuit split opinions largely revolve around a debate between a deferential application of the Kahn “close nexus” test versus the applicability of the major questions doctrine.162 Central to this debate is the scope and substance of the mandate compared with its historical analogs, and the proper weight to afford the broad language of the presidential delegation when combined with the ‘economy and efficiency’ language of the Procurement Act’s purpose statement.163
A. The Faulty Application of the Major Questions Doctrine
Existing judicial doctrines and frameworks do not adequately address the problems of private-public accountability and coercion that arise from the use of government contracts as a regulatory tool on individual conduct.164 Yet, the circuits enjoining the mandate unnecessarily complicated their analysis by misapplying the major questions doctrine in this context.165 The application of the doctrine in these cases rested on shaky doctrinal footing and did little to clarify the limits of presidential authority under the Procurement Act for future imponderable exercises of authority.
First, it is unclear why the major questions doctrine should apply to presidential delegations, given the doctrine’s contextual development as an alternative to Chevron deference for agency interpretation of their own enabling statute.166 In the contractor vaccine mandate cases, there is no question of Chevron deference at issue. Thus, the application of the doctrine in this context seems to be rather haphazard. The Eleventh Circuit comes the closest to making the case for the application of major questions due to its unique reading of the statute and characterization of the Order,167 but that framing still does nothing to address the fact that the doctrine has historically been deployed solely as an alternative to Chevron and solely in the context of agency delegations. The Eleventh Circuit’s analysis also elides the preexisting case law for presidential delegations—namely, the Youngstown framework.168
Second, when considering the scope of the contractor vaccine mandate169 in conjunction with the modern growth of the procurement industry,170 a continued application of the major questions doctrine risks a de facto judicial invalidation of the entire statute. On its face, imposing a regulation on the oft-cited “one-fifth of the workforce” figure seems enough to trigger the major questions doctrine’s clear statement rule for regulations affecting a large sect of the nation’s economy.171 But that number is disputed, and there is no publicly available government data on the percentage of the workforce actually employed by government contractors.172 Most importantly, even if the number was accurate, allowing the application of the major questions doctrine here might enable a future where all Procurement Act executive orders might be deemed a major questions issue, due to the sheer magnitude of today’s procurement industry. Even an order solely binding government employees might as well affect an equally large sect of the nation’s economy.
Lastly, the application of the doctrine is potentially underinclusive with regard to the substance of the Order because it does little to signal toward future judicial outcomes. The Supreme Court’s recent application of the major questions doctrine in the OSHA case provided the lower courts with immediate grounds to view vaccination mandates in general as major questions.173 But the contractor vaccine mandate is a mandatory provision on a contract entered into by private parties, fundamentally different in nature from the legal question of whether a workplace safety agency was delegated authority to regulate public health in its enabling statute.174 Future exercises of power under the Procurement Act are unlikely to have such a clear-cut analog on substance to prompt an application of the doctrine, thus leaving the door open to future varied applications among the circuits.
Despite these issues, the courts applying major questions were largely correct in viewing the contractor vaccine mandate as “transformative”—the examples of Procurement Act authority that have received the deference of the Kahn test since 1949 are not analogous to an order that imposes affirmative obligations on the employees of federal contractors.175 But this conclusion, while prescient and undoubtedly relevant, does not necessitate such a shaky application of the major questions doctrine—consideration of statutory text, historic analogs, and congressional acquiescence can serve as sufficient grounds on their own.
B. Categorizing the Historical Examples
Jurists have criticized the vaccine mandate for improperly expanding authority under the Procurement Act to regulate the individual conduct of employees, as opposed to the higher-level conduct of the contractor itself.176 The Fifth Circuit characterized the use of procurement authority in the vaccine mandate as “reach[ing] through” contracting businesses to impose regulations directly upon the business’ employees, finding such an exercise of power to be unprecedented.177
The text of the statute, standing alone, supports a conclusion that the President’s authority to impose Procurement Act obligations is limited solely to government actors.178 The purpose statement of the Act itself underwent some judicial remodeling to become the basis of the Kahn test: the explicit statutory wording says “the purpose of this subtitle is to provide the government with an economical and efficient system” for its procurement activities.179 Under the Kahn test, however, “system” is typically dropped, and the tense of the adjectives is altered, morphing the stated purpose into merely providing the government with more “economy and efficiency.”180 By de-emphasizing the word “system,” the Kahn test thus shifts the statute’s focus beyond internal government affairs and opens the door to orders promoting the efficiency of the contractor itself.181
Historical practice preceding the 1949 presidential delegation, and subsequent congressional acquiescence to the Kahn test,182 lend credence to the idea that some amount of control over the prospective contractor must be statutorily authorized. But the language of the Kahn test itself fails to articulate any limiting principle to the President’s authority to promote “economy and efficiency” beyond government process and into the contracting party, risking its misuse as a mere Trojan horse to pursue social policy goals via executive orders.183 As the federal procurement industry continues to grow,184 locating this elusive limit is vital to determining the proper scope of executive Procurement Act authority. Directives binding internal government processes pose little issue for judicial interpretation.185 The primary area of dispute lies in the sometimes ambiguous line between directives binding contractors and directives binding employees of contractors.
Government procurement policies seeking to increase efficiency within private contractors have less direct statutory support than those binding internal government processes, yet both have been broadly upheld in judicial challenges.186 This type of exercise of procurement policy can be understood as leveraging the terms and conditions of government contracts to enact social policy-oriented goals.187 Antidiscrimination requirements in contractor hiring practices are an example of a prominent use of the President’s Procurement Act authority in the decades immediately following the statute’s enactment.188 While the earliest court cases on this issue were unclear as to the precise source of the President’s authority,189 later cases found affirmative action hiring directives for contractors to be squarely within the delegation of the Procurement Act.190 In upholding a 1961 Executive Order by President Kennedy that directed contractors to hire more minority workers, the Third Circuit found that the Procurement Act authorized such an order given the government’s interest in ensuring long-run procurement costs were not increased by the exclusion of minority workers.191
Carter’s 1978 anti-inflationary provisions at issue in Kahn bore a sufficient nexus to promoting economy and efficiency in government procurement by passing potential savings to the government through its contracts.192 This Order fits cleanly with other orders regulating contracting businesses in a top-down manner, since controls on wages and prices impose obligations on the business entity itself, as opposed to its employees. Given the significant history of courts approving exercises of procurement policy that impose conditions on contracting businesses and Congress’s subsequent recodification of the Act,193 this category is not inherently problematic under the Procurement Act, as long as it is connected back to likely cost-savings for the government.194 Thus, Kahn merely considers effect on government costs; it does not inherently contain any inquiry regarding scope.
Other examples of orders binding the contracting entity exist in a more complicated gray area for judicial comparison—take President Bush’s E-Verify Executive Order, which mandated that contracting businesses utilize electronic verification in hiring practices to determine employment eligibility based on immigration status.195 The Ninth Circuit deployed this example to argue that distinctions between “reaching through” are essentially meaningless, because E-Verify necessarily “touched” the employees just as much as it did the employer.196 However, this argument skirts over the important issue of who actually bears the affirmative obligation: under E-Verify, the contractor bore the obligation to affirmatively verify its employees’ pre-existing work authorization status. E-Verify did not, by comparison, require employees to themselves take an affirmative step or else forgo their interest in continued employment.197
The Fifth and Sixth Circuits are thus correct in characterizing procurement policy that imposes obligations on individual employees, rather than the business itself, as fundamentally dissimilar to previous exercises of Procurement Act authority.198 Imposing affirmative obligations on individual employees is the most extreme instance of “reaching through” the government contract to regulate the relationship between employer and employee. Orders of this type pose the largest risk of blurring the distinction between public and private accountability,199 obviating consensus for conditions imposed on contracting parties,200 and undermining competition among firms in the procurement process.201
Orders that “reach through” the government contract to impose obligations on employee conduct, not connected to contractual performance and in pursuit of social policy goals, are a novel phenomenon. There are only two exercises of Procurement Act power that arguably fit into this category: President Trump’s now-defunct 2020 Executive Order regulating discussions of race in the workplace202 and President Biden’s vaccine mandate.203
President Trump relied on the Procurement Act in an attempt to prohibit federal contractors from discussing certain “divisive concepts” in the contractor workplace.204 The Order “reached through” contracting entities to regulate their internal management of employees beyond the scope of contractual performance, prohibiting workplace trainings involving “stereotyping” or “scapegoating” based on sex or race and outright banning discussions of white privilege or critical race theory.205 The lack of clarity in the Order led to a chilling effect in covered workplaces as employees became unsure about what they could and could not say under the rule.206 The Order’s purported effect of promoting economy and efficiency207 was tenuous at best and pretextual at worst, yet its cookie-cutter insertion showcases the inherent lack of teeth offered by the Kahn test.208 This level of “reaching through” the government contract to regulate conduct between individual contractor employees tramples a bidding contractor’s freedom to manage its internal affairs in a way they believe will allow them to provide goods and services to the government at the lowest possible cost.209 In this manner, it undermines the statute’s explicit commitment to promoting competition between prospective bidders by foreclosing variability in workplace culture.210
III. Proposal
The circuit courts invalidating the mandate erred by applying the major questions doctrine to a presidential delegation; that doctrine was designed as a means of moderating the deference typically afforded to agency interpretation of their own enabling statutes under Chevron, and simply does not fit in the context of the Procurement Act.211 The courts missed a crucial opportunity to elaborate on the statutory and historical analyses underlying their decisions to articulate a clear limit on the scope of presidential authority under the Act. At its most basic level, the fundamental judicial inquiry must ask: who will bear the affirmative obligation of this contractual provision? This inquiry will allow a court to determine the extent to which a Procurement Act executive order is seeking to “reach through” the government contract to regulate the individual conduct of a private firm’s employees beyond what is necessary for that firm’s performance on the contract.212
Distinguishing between levels of “reaching through” is important because courts typically construe and interpret contracts with the federal government in accordance with the same principles of contract law as applied between private individuals.213 This ignores the unique superior bargaining position of the federal government, whose sheer volume of purchases allow it to regulate the contracting entity by imposing particular terms and conditions that might not otherwise be accepted by parties to a standard private contract.214 Thus, a government contract bears little resemblance to the consensual contract relationship formed between bargaining parties; the mandatory terms and conditions of the contract itself become an instrument of power over the contracting business.215 The dissenting opinion in the Fifth Circuit ignores this power dynamic in justifying the vaccine mandate, stating that “no company has a right to a federal contract,”216 reiterating a similar argument from the Kahn opinion.217
Ignoring the extent to which a government contract “reaches through” the contracting entity does a disservice to those employees whose connection with a contract is merely circumstantial and can obscure the traditional lines of political and corporate accountability.218 Extensive “reaching through” may also threaten the cost-saving benefits of private contracting by removing a layer of competition between bidding firms, contravening the statute’s textual emphasis on promoting competition.219
The vast majority of a contractor’s employees are not themselves a party to contract negotiations with the government, nor are they necessarily employed for the purposes of performing a government contract. For many employees, their relation to the government contract is merely circumstantial; yet, under an order like the contractor vaccine mandate, such employees become subject to extra-statutory regulation on their personal conduct despite having no connection to the performance of the government contract.220 Thus the employee is put in a position where they must either comply with the obligation or risk losing access to their financial livelihood. Such a dilemma brings to mind the language of Chief Justice John Roberts when considering the constitutionality of the Affordable Care Act’s Medicaid expansion provisions in National Federation of Independent Business v. Sebelius.221 The false choice on offer to the states in that case was to either adopt the ACA’s newly increased minimum coverage provisions or else forego access to federal Medicaid funds entirely.222 Thus, Roberts characterized the all-or-nothing “choice” as a “a gun to the head” of the states—far more coercive than a mild financial inducement, specifically because the latter option would consequently gut that state’s entire Medicaid program.223 Like the states in Sebelius, the “take-it-or-leave-it” nature of federal contracts224 means employees of contractors are left with an even more extreme false choice—either comply with a potentially invalid exercise of power, or lose their jobs.225
This interpretative problem can be mitigated by categorizing executive orders relying on the Procurement Act into three distinct categories, based on the level of “reaching through”: (1) directives binding government employees; (2) contractual provisions binding contractors; and (3) contractual provisions binding employees of contractors. For example, a category (1) order could direct government actors to prioritize certain considerations when granting government contracts, like paying special attention to small business concerns or prioritizing American-made goods and services.226 Directives in categories (2) and (3), meanwhile, act as an external condition to the granting of a government contract. Category (2) provisions, for example, might require an employer to adhere to certain wage and price controls, as in Kahn, or to adopt antidiscriminatory hiring practices.227 Category (3) provisions, which “reach through” the contractor to its employees, are more complicated. Contractually imposing an obligation on a private contractor’s employee may be necessary to ensure their proper performance of the contract; this power might fall into the implicit authority of government as proprietor if appropriately limited.228 On the other hand, contractual obligations on employees extending beyond what is necessary to perform the contract are more regulatory in nature by unduly meddling in a private company’s internal affairs and putting the employee in a precarious position with only an illusion of choice.
Under this framework, the Kahn test’s application should be limited to categories (1) and (2). When regulating the government’s own internal contracting systems under category (1), an order can be upheld by a simple showing that directives imposed on government employees bear a close nexus to providing the government “with an economical and efficient system” for its procurement activities.229 A deferential judicial framework is justifiable in this category because directives binding agencies and government officials are directly supported by the text and legislative history of the Procurement Act.230 Category (2) contractual provisions that impose obligations on the contracting firm in pursuit of policy goals have less explicit support in the statutory text;231 however, legislative practice prior to the presidential delegation,232 subsequent judicial treatment of Procurement Act cases since 1949,233 and congressional acquiescence in 2002234 all support the validity of such orders as long as they satisfy the Kahn test.
Category (3) directives that explicitly “reach through” the government contract to impose affirmative obligations on non-consenting employees beyond what is necessary for performance on the contract should be treated with the highest degree of skepticism. Such orders cannot be facially supported by the text of the statute nor by the historical exercises of power since the enactment of the Procurement Act.235 From a public policy standpoint, category (3) provisions may obscure political and corporate accountability,236 offend traditional notions of consensual contracting principles,237 and can even undermine the concept of competition in the procurement process that the statutory text purports to foster.238 To be authorized under the Act, any such provisions must be directly connected to an employee’s specific work on a government contract.
The contractor vaccine mandate is problematically distinct from category (2) orders because of the sheer scope of its reach.239 The Order applied to all employees of federal contractors, regardless of whether those employees were even employed to work on a government contract.240 It is this wide-reaching scope, where a government regulation “reaches through” to an employee merely by virtue of the company that employs them, which would thus place the Order into the inherently problematic category (3). While casting such a wide net might make logical sense when considering the contagious nature of the COVID-19 virus, the Order couched its authority for the mandate solely in the Procurement Act without relying on any other public health or emergency authority; it is clear the drafters of the Procurement Act never contemplated such authority.241 The statutory responsibility of the President to promote efficient performance of government contracts cannot logically extend to a mandate that reaches beyond the private employees actually performing on the government contract.242 It bears reiterating that the government keeps no official numbers on the actual amount of federal contractor employees,243 making the potential impact of such orders impossible to reliably quantify. Regardless of the sheer number of people potentially affected, however, it is clear that no prior executive procurement order has attempted to impose affirmative efficiency obligations on individuals, wholly disconnected from one’s specific contractual relation to the government contract.
Conclusion
The Kahn framework has been flawed since its inception.244 The Ninth Circuit’s application of Kahn’s “close nexus” test to uphold the novel contractor vaccine mandate showcases the continued inadequacies of that framework,245 specifically given the new realities of the modern procurement industry.246 However, the three circuits that enjoined the mandate further muddied the waters of Procurement Act jurisprudence by invoking the major questions doctrine on shaky doctrinal footing.247 These circuits missed a crucial opportunity to articulate a clear limiting principle to the Kahn framework in a way that would benefit future judicial analyses of executive orders under the Procurement Act. Courts should distinguish between different types of Procurement Act executive orders by determining who will bear the affirmative obligation under the given order, and limiting the application of the deferential Kahn framework accordingly.248 Where the affirmative obligation falls on employees generally, in a manner wholly disconnected from a private firm’s ability to perform on a specific contract, such orders should be considered outside the scope of the President’s statutory authority.249 This examination will recenter Procurement Act jurisprudence closer to the original text and legislative intent of the statute. Furthermore, it will help to clarify the line between public and private power by placing limits on the executive’s authority to alter private employment relationships through government contracts.