Whistleblower claims are on the rise with alleged violations of health and safety laws as well as fraud and abuse under the CARES Act due to the pandemic. Employers need to ensure they are familiar with the whistleblower laws and their responsibilities under government contracts.
The Department of Justice (DOJ) Inspector General (IG) memo to DOJ contracting activities disclosed several IG audits have found DOJ contracts have not complied with the FAR requirements – specifically ensuring the whistleblower clauses were in the solicitation and/or contract, the contractor disseminated the whistleblower rights and protections in writing to employees and included the required information in non-disclosure/confidentiality statements to employees/subcontractors. We would not be surprised to see the DoD IG pick up on this area and review DoD contractors.
NDAA 2021 also addresses this area by prohibiting DoD from awarding a contract to a contractor that requires its employees to sign a confidentiality agreement that would prohibit or otherwise restrict employees from lawfully reporting waste, fraud, or abuse related to the performance of a DoD contract.
What Does the Law Require?
The whistleblower protection laws protect federal employees and contractor employees from reprisal from their employer for disclosing information that the employee reasonably believes is evidence of:
- Gross mismanagement of a Federal contract.
- Gross waste of Federal Funds.
- Abuse of authority relating to a Federal contract.
- Substantial and specific danger to public health or safety.
- Violation of a law, rule, or regulation related to a Federal contract.
The law covers individuals performing work on a government contract or grant, including personal services contractors and employees of a contractor, subcontractor, grantee or subgrantee.
What are the Federal Acquisition Regulation (FAR) Requirements?
FAR clause 52.203-17, Contractor Employee Whistleblower Rights and Requirement to Inform Employees of Whistleblower Rights, is included in all solicitations and contracts that exceed the Simplified Acquisition Threshold (SAT) $250,000.
Additionally, there are two other contract clauses on confidentially agreements for employees or subcontractors (FAR 52.203-18 Prohibition on Contracting with Entities that Require Certain Internal Confidentiality Agreements or Statements-Representation and FAR 52.203-19 Prohibition on Requiring Certain Internal Confidentiality Agreements or Statements). Contractors cannot prohibit or restrict employees or subcontractors who sign non-disclosure or confidentiality agreements from reporting waste, fraud, or abuse related to the performance of a government contract.
What do Contractors Need to do?
Contractors are required to inform employees in writing of employee whistleblower rights and protections under the laws. The notification should be made in the predominant language of the workforce. That being said, contractors should make sure they have a formal written policy on how employees and contract workers will be informed of the whistleblower rights and protections, and how to document that this has occurred. Contractors should review any internal confidentiality, non-disclosure, or confidentiality agreements with subcontractors or contract workers and make sure there are no prohibitions or restrictions on reporting waste, fraud, or abuse and consider modifying any agreements that do contain a restriction.
Whistleblower statutes contain strong protections against retaliation and punishing of whistleblowers by firing or taking adverse actions against them. Contractors should also prevent harassment or discrimination against whistleblowers. Some potential remedies for whistleblowers include but are not limited to reinstatement, back pay, uncapped compensatory damages (emotional distress damages), and attorneys’ fees and costs.
Redstone GCI is available to assist contractor’s in assessing their current policies and practices to ensure they meet the FAR whistleblower requirements. Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s expectations in applying FAR requirements.