• The U.S. District Court for the Southern District of Georgia told the Biden administration to halt enforcement "in all covered contracts in any state or territory of the United States of America."
• The court said President Joe Biden likely exceeded his authority under the Procurement Act when he issued the mandate.
• The requirements cover millions of workers across the U.S. economy.

A U.S. district court in Georgia halted the Biden administration's vaccine mandate for federal contractors on Tuesday, writing that the president likely exceeded his authority.

The U.S. District Court for the Southern District of Georgia said the Associated Builders and Contractors, a national trade group that represents the construction industry, are likely correct that President Joe Biden exceeded his authority under the Procurement Act when he issued the mandate.

"In its practical application, it operates as a regulation of public health," District Judge R. Stan Baker wrote in the order. "It will also have a major impact on the economy at large, as it limits contractors' and members of the workforce's ability to perform work on federal contracts. Accordingly, it appears to have vast economic and political significance," Baker wrote.

The court said the mandate is "costly, laborious and likely to result in a reduction in available members of the workforce."

White House press secretary Jen Psaki said the Justice Department will "vigorously defend" the mandate in court.

"The reason that we proposed these requirements is that we now they work and we are confident in our ability legally to make these happen across the country," Psaki told reporters during an update Tuesday.

Biden issued an executive order on Sept. 9 requiring contractors to ensure their workers are vaccinated against Covid and follow masking and social distancing policies. The White House originally gave contractors until Dec. 8 to comply but later pushed back the deadline until Jan. 4. The requirements cover millions of workers across the U.S. economy.

The court told the Biden administration to halt enforcement of the mandate "in all covered contracts in any state or territory of the United States of America." The court's decision to issue a nationwide injunction comes a week after another federal district court in Kentucky halted enforcement in Kentucky, Ohio and Tennessee.

Baker wrote in Tuesday's order that "limiting the relief to only those before the Court would prove unwieldy and would only cause more confusion." It would also not provide relief to the builders association for contracts in other states, he wrote.

The preliminary injunction by the court is the latest blow to the Biden administration's efforts to push companies to make sure their employees are vaccinated, as public health officials warn about a winter surge of Covid cases and the arrival of the highly mutated omicron variant of the virus on U.S. shores.

The Biden administration was forced to halt enforcement of its vaccine and testing requirements for businesses with 100 or more employees last month. The U.S. Court of Appeals for the 5th Circuit in New Orleans ordered the administration to refrain from enforcing the requirements until further notice, citing "serious constitutional concerns."

The federal contractor mandate is stricter than the business requirements issued by the Occupational Safety and Health Administration. However, it allows companies to put in place additional safety measures for unvaccinated employees who have religious or medical exemptions, including mask requirements or regular testing for Covid.

Despite Tuesday's order, some federal contractors, like major airlines, have been working toward fulfilling the requirements for months. Southwest Airlines told staff on Saturday that 93% of its more than 50,000 employees have either uploaded vaccine cards or requested exemptions.

Staff with exemptions may have to test regularly or wear masks at work, the Dallas-based airline said. United Airlines, for its part, implemented a company vaccine mandate in August and by early fall more than 96% of its 67,000 employees had been vaccinated.

Lockheed Martin CEO Jim Taiclet told CNBC on Friday the company's 115,000 employees are on track for more than 95% compliance with the vaccine mandate.

"We are well on our way to being able to maintain our operations," Taiclet said.

-- CNBC's Leslie Josephs contributed to this report.