April 18, 2021

Volume XI, Number 108

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Authorized Government Contractors Now Covered Persons Under the PREP Act

The Secretary of the U.S. Department of Health and Human Services recently added government contractors to the list of entities eligible for immunity from liability under the Secretary’s March 17, 2020, Public Readiness and Emergency Preparedness Act (“PREP Act”) declaration.  The PREP Act protects individuals and companies from liability for death or other tort-like harm in connection with the pandemic response, except for cases involving “willful misconduct.”  Under the recent amendment, government contractors acting with authorization from an executive department or agency—or who could be so authorized—are protected from liability when they prescribe, administer, deliver, distribute, or dispense Covered Countermeasures, as long as they meet the other requirements of the Act.  Covered Countermeasures could include the COVID-19 vaccine or personal protective equipment like respirators.  We wrote previously about the evolving list of masks and respirators qualifying as Covered Countermeasures herehere, and here.

This is the second amendment to the PREP Act declaration that the Secretary has published in the past month.  In recognition of the massive vaccination effort underway across the country, both amendments expanded the definition of “qualified persons” who in turn are “Covered Persons” eligible for liability immunity.  The sixth and most recent amendment, published February 10, 2021, added contractors, employees, and volunteers for the federal government to the list of qualified persons.  On January 28, 2021, the fifth amendment added individuals, health professionals or otherwise, who prescribe or administer the COVID-19 vaccine outside the state or jurisdiction where they are licensed or certified to do so.  The fifth amendment also added physicians and nurses whose licenses have recently gone inactive, expired, or lapsed as long as the license or certification was active and in good standing prior.  People whose licenses have been revoked, suspended, or restricted, or who have been placed on HHS OIG’s List of Excluded Individuals/Entities do not qualify for the PREP Act protections.  The vaccinations must be in connection with efforts by a federal, State, local, Tribal, or territorial authority or by an institution in the State in which the COVID-19 vaccine covered countermeasure is administered, among other requirements.

These amendments are the latest in a series that continues to expand the reach of the PREP Act protections.  Though some government contractors may have received PREP Act coverage before the latest amendment – for example, in their roles as PPE manufacturers – others now can enjoy some piece of mind when participating in the pandemic response, at least in connection with a government contract.  However, it is important for government contractors to keep two things in mind.

First, assuming they qualify as Covered Persons, the PREP Act only shields contractors from tort liability, such as liability for injuring someone while administering a COVID-19 vaccination.  Contractors still can face other legal consequences under their government contracts for problems arising during performance, such as termination or even suspension or debarment.  Contractors who are considering entering a new line of business during the pandemic, therefore, should conduct a risk assessment with assistance from counsel before making the move.

Second, the PREP Act shields certain contractors from liability, but not from lawsuits.  Injured parties still may bring lawsuits (indeed, some already have).  It is therefore vital that defendant contractors retain counsel who understand the PREP Act and its implications, as well as government contracts law and industry more generally.  If the PREP Act applies, it will affect what court may hear the case and must factor into the defense from day one.  Further, counsel can help identify any resulting obligations or impacts on the underlying contracts with the government.

The latest amendment to the PREP Act declaration is effective as of February 10, 2021, and is only the most recent development in PREP Act coverage for the COVID-19 response.  As it is important for companies, particularly government contractors, to stay apprised of these changes, we will continue to provide updates regarding PREP Act coverage as they become available.

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Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 55
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About this Author

Keeley A. McCarty, Sheppard Mullin, Government Investigations Lawyer, International Trade Attorney
Associate

Keeley McCarty is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Ms. McCarty’s practice focuses on government contracts litigation and counseling, including contract termination appeals, litigation and arbitration of subcontractor disputes, and internal investigations.  Ms. McCarty has counseled clients on a broad range of legal topics, including FAR mandatory disclosure rules, title passage under government contracts, and corporate compliance with the FCPA...

202-747-2186
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