If proposals of agency Inspectors General (IGs) are adopted by Congress, IGs could have expanded subpoena authority to compel contractor or subcontractor employees to appear for interviews in investigations related to any federal contract. This was one of the recommendations presented at a recent Senate hearing.
Sen. Claire McCaskill, who was a state auditor in Missouri, chairs a subcommittee on Contracting Oversight. In its first hearing (April 21, 2009), the subcommittee heard from several agency IGs who presented recommendations for tools to help IGs prevent, detect and prosecute contracting fraud. Among these recommendations was a proposal to expand IG subpoena authority to compel interviews of contractor and subcontractor employees. This was one of several proposals the Procurement Fraud Task Force Legislative Committee submitted to the Department of Justice in a June 2008 white paper.
Agency IGs have long had authority to subpoena information under the Inspector General Act of 1978, and recently IG subpoena authority was clarified to include tangible things and electronic evidence. But IGs have never previously had authority to compel witnesses to appear for interviews. J. Anthony Ogden, IG for the U.S. Government Printing Office, noted at the hearing that the proposed subpoena authority would not include the power to compel witness testimony. Brian Miller, IG for the General Services Administration, also recommended that IG subpoenas be treated the same as grand jury subpoenas by making them confidential to avoid letting the subjects know they are being investigated.
The IGs proposal to expand subpoena authority for interviews is similar to access authority recently provided to the General Accountability Office (GAO) under Section 871 of the Defense Authorization Act of 2009 (P.L. 110-417). Section 871 allows the GAO to interview current employees during an audit of the contractor's records. FAR clauses 52.215-2 and 52.214-26 were amended by Federal Register notice with an interim rule on March 31, 2009, to reflect this statutory language.
Sections 902 and 1515 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) also give the GAO and the IGs authority to review any records of the contractor or subcontractor related to Recovery Act transactions. These sections also provide authority to interview employees concerning Recovery Act transactions. While the GAO has authority to interview contractor and subcontractor employees, the IGs' authority does not reach subcontractors. FAR clauses were amended to reflect these new Recovery Act authorities in March 2009. At the hearing, the IGs recommended Congress give IGs similar access to subcontractors in all transactions within their purview.
Department of Homeland Security (DHS) IG Richard Skinner asserted, "having the right to interview contractor and grantee employees or other witnesses during investigations, audits, and inspections, would be invaluable in detecting fraud, waste, and abuse." Skinner cited as an example a situation where the IG was thwarted in trying to gain access to employees in an audit of the acquisition of the National Security Cutter by the U.S. Coast Guard (DHS-OIG-07-23). Skinner complained that "burdensome procedures" and contractors' refusal to allow the IG "unsupervised access to contractor employees" in the audit were "unacceptable."
The bottom line is that increased oversight efforts are here to stay, and companies need to protect themselves and plan for such oversight. We are likely to see efforts by McCaskill's subcommittee to expand the access of authorities—which could include expanding IG subpoena authority to compel contractor or subcontractor employees to appear for interviews. Contractors and subcontractors and their employees should be prepared for this increased access—especially "unsupervised access" by IGs to their employees. Such access could present difficult legal and practical issues, including, for example, consideration of rights to counsel and against self-incrimination.