The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) have issued a series of interim rules amending the Federal Acquisition Regulation (FAR) to implement portions of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 that boosts whistleblower protections for certain federal contractors and subcontractors, and establishes a four-year pilot program enhancing whistleblower protections applicable to all civilian federal agency contractors.

Generally, Section 827 of the NDAA – Enhancement of Whistleblower Protections for Contractor Employees – prohibits retaliation against contractor or subcontractor employees who report instances of gross mismanagement of a DoD or NASA contract or grant; a gross waste of DoD or NASA funds; an abuse of authority relating to a DoD or NASA contract or grant; or a violation of law, rule, or regulation related to a DoD or NASA contract (including the competition for or negotiation of a contract) or grant. Information regarding “a substantial and specific danger to public health or safety” would also be covered. Whistleblowers have three years in which to file a retaliation complaint.

Remedies include reasonable attorneys’ fees, as well as compensatory and exemplary damages. Certain intelligence community contractors are excluded from coverage.

Contractors and subcontractors are required to inform their employees in writing of the rights and remedies provided by these whistleblower provisions. The interim rule implementing section 827 can be found here.

Pilot Program

The whistleblower pilot program – created by Section 828 of the NDAA – enhances whistleblower protections for other federal contractor employees who blow the whistle on waste, fraud, and abuse of federal contracts. The pilot program under Section 828 does not apply to DOD, NASA and the Coast Guard. This four-year pilot program stipulates that:

An employee of a contractor, subcontractor, or grantee may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing to a person or body described in paragraph (2) information that the employee reasonably believes is evidence of gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, an abuse of authority relating to a Federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract (including the competition for or negotiation of a contract) or grant.

Disclosures could be made to a member of Congress or congressional committee representative; an inspector general; the Government Accountability Office (GAO); a federal employee responsible for contract or grant oversight or management at the relevant agency; an authorized official of the Department of Justice (DOJ) or other law enforcement agency; a court or grand jury; or a management official or other employee of the contractor, subcontractor, or grantee who has the responsibility to investigate, discover, or address misconduct.

Employees who believe they have been retaliated against for whistleblowing would have three years to submit a complaint to the Inspector General of the executive agency involved.

According to the interim rule, the agency head “may decide that the report of the Inspector General does not provide sufficient basis to conclude that the contractor employee has been subjected to reprisal.” If, however, a sufficient basis for the whistleblower claim exists, the agency head must either issue an order denying relief or order the contractor to take one or more of the following actions:

  1. Take affirmative action to abate the reprisal.
  2. Reinstate the complainant-employee to the position that the person held before the reprisal, together with compensatory damages (including back pay), employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.
  3. Pay the complainant-employee an amount equal to the aggregate amount of all costs and expenses (including attorneys’ fees and expert witnesses’ fees) that were reasonably incurred for, or in connection with, bringing the complaint regarding the reprisal. The law also provides that complainants, after they are deemed to have exhausted all administrative remedies, may bring an action at law or equity against the contractor.

The interim rule establishing this pilot program can be found here. The rule urges contracting officers to include the changes in these rules in major modifications to contracts and orders awarded prior to the effective date of this interim rule.

Another interim rule addresses the allowance of legal costs incurred by a contractor or subcontractor related to a whistleblower proceeding resulting from a contractor or subcontractor retaliation complaint.

Comments on these rules must be made within 60 days of their publication in the Federal Register, which is scheduled for September 30, 2013.