Many federal contractors and subcontractors are now, or soon will be, required to comply with broad new whistleblower protections as part of their federal contracts and subcontracts. On September 30, 2013, the federal government issued two new interim rules, effective immediately, which implement the whistleblower protections passed in the National Defense Authorization Act (Pub. L. 112-239, enacted Jan. 2, 2013), as codified in amendments to 41 U.S.C. § 4712 and 10 U.S.C. § 2409. The new whistleblower protections apply to all solicitations and contracts that exceed the simplified acquisition threshold, including contracts for the purchase of commercial items and commercially available off-the-shelf (COTS) items. See 48 C.F.R. § 3.908-9. The provisions are implemented through new Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) flowdowns which reach to the subcontractor level. See 48 C.F.R. § 52.203-17 ("Contractor Employee Whistleblower Rights and Requirement to Inform Employees of Whistleblower Rights"); 48 C.F.R. § 252.203-7002 ("Requirement to Inform Employees of Whistleblower Rights"). The government has already begun inserting these whistleblower protection clauses into new and modified federal contracts and task orders.

The new interim rules are part of a temporary pilot program that is in effect through January 1, 2017. They supplant similar whistleblower protections in 41 U.S.C. § 4705 and 48 C.F.R. §§ 3.901-3.906; those provisions are suspended until the new provisions sunset. While the twin rules apply to different agencies – the DFARS provisions apply only to the Department of Defense, NASA and the Coast Guard, while the FAR provisions cover all other federal agencies except the intelligence community – their terms are virtually identical. The rules amend FAR Subpart 3.9 and DFARS Subpart 203.9 to add protections for contractor or subcontractor employees against reprisal for certain whistleblowing activities. In summary, the new whistleblower protection regulations: (1) provide protections to whistleblowers disclosing certain sorts of information; (2) set out the entities to whom whistleblowers may disclose information; (3) provide a process for whistleblowers to file complaints if they believe they were discriminated against for their disclosure of information, and set out the remedies available to whistleblowers found to have been discriminated against; and (4) require employers to notify their employees of these protections and remedies.

First, under the new interim rules, contractors cannot discriminate against whistleblowers as a reprisal for disclosing information that the employee reasonably believes is evidence of any of the following:

  • a gross mismanagement of a federal contract;
  • a gross waste of federal funds;
  • an abuse of authority relating to a federal contract (where "abuse of authority" is defined as an "arbitrary and capricious exercise of authority that is inconsistent with the mission of the executive agency . . . or the successful performance of a[n agency] contract [or grant]");
  • a substantial and specific danger to public health or safety; or
  • a violation of a law, rule, or regulation related to a federal contract (including competition for or negotiation of a contract).

48 C.F.R. § 3.908-3(a); 48 C.F.R. § 203.903(1). In particular, the last category – violations of a law, rule, or regulation related to a federal contract – is broad enough to cover all manner of activities. Prohibited reprisals include discharge, demotion or other discrimination against the employee. Under these clauses, a contractor may not take action against an employee even if that reprisal is undertaken at the request of an executive branch official, unless the request takes the form of a non-discretionary directive that is within the authority of the executive branch official making the request. The new regulations do not, however, provide any rights to disclose classified information not otherwise already provided by law.

Second, the new interim rules set out the entities to whom whistleblowers may disclose the above-listed types of information. Contractors may be somewhat heartened to learn that their own management employees are on the list of individuals to whom a potential whistleblower may choose to disclose; the list of other entities who can receive information is robust, however. Whistleblowers may disclose evidence to any of the following entities:

  • A member of Congress or a representative of a committee of Congress;
  • An Inspector General;
  • The Government Accountability Office;
  • A federal employee responsible for contract oversight or management at the relevant agency;
  • An authorized official of the Department of Justice or other law enforcement agency;
  • A court or grand jury; or
  • A management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover or address misconduct.

48 C.F.R. § 3.908-3(b); 48 C.F.R. § 203.903(2).

Third, the interim rules revise the process and remedies for whistleblowers who believe they have been discriminated against due to their whistleblowing activity. Whistleblowers who believe they were discharged, demoted or otherwise discriminated against in violation of the regulations may file a complaint with the Office of the Inspector General of the relevant agency within three years of the date of the alleged reprisal. 48 C.F.R. § 3.908-4; 48 C.F.R. § 203.904. Investigations are generally performed by the Inspector General of the relevant agency, who at the completion of his or her investigation will submit a report determining the validity of the complaint and the employee's remedy, if any. The relevant agency may then order the company to reverse the reprisal, reinstate the employee with compensatory damages and pay the employee's costs and expenses (including attorneys' fees and expert witness fees) incurred in filing the complaint. 48 C.F.R. § 3.908-6(a)(2); 48 C.F.R. § 203.906(1). Contractors may appeal an agency order to an appropriate U.S. circuit court, but only within 60 days of its issuance. 48 C.F.R. § 3.908-7(b); 48 C.F.R. § 203.906(5).

Fourth, the new regulations require an employer to "inform its employees in writing, in the predominant language of the workforce [e.g., English], of employee whistleblower rights and protections" as described in FAR 3.908 and/or DFARS 203.900. No grace period is given to employers to comply with the written notification requirement, so employers should act expeditiously to provide written notice to their employees after the implementation of either clause. For many employers, best practice will likely be to incorporate references to the new FAR and DFAR provisions into their existing employee code or policy, particularly as part of their existing Non-Retaliation Policies.

In summary, if your business is a federal contractor or subcontractor, you should prepare to comply with the new whistleblower protection provisions. In addition to knowing your employees' rights and remedies under the new interim rules, you should be prepared to move expeditiously to provide written notice and update company employment policies once implementation of the new rules has begun.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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