March 7, 2014
The Department of Defense (“DOD”) recently adopted as final an interim rule that amended the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement whistleblower protections for prime and subcontractor employees. The final rule is found at DFARS subpart 203.9 and became effective on February 28, 2014.
The final rule made minor, non-substantive changes to the interim rule, first published in the Federal Register on September 30, 2013. The rule changes resulted from statutory amendments found in the National Defense Authorization Act for Fiscal Year 2013. Section 827 of the Act, entitled “Enhancement of Whistleblower Protections for Contractor Employees,” created provisions unique to DOD that are independent of FAR coverage. The primary provisions of the DFARS amendments are found in sections 203.903 through 203.906. Those provisions apply to DOD contractors, regardless of size, at the prime and subcontract levels, in lieu of the policies at FAR 3.903 and 3.905. There is an exception, however – subpart 203.9 does not apply to any element of the intelligence community.
DFARS subpart 203.9 addresses the policy for protecting contractor employee whistleblowers, the procedure for handling complaints, remedies, and the requirement to include the clause found at DFARS 252.203-8002, concerning informing employees of whistleblower rights, in all solicitations and contracts. This subpart does not address underlying liability for the alleged mismanagement, waste, abuse, or violation.
Specifically, Section 203.903 provides that contractors and subcontracts are prohibited from “discharging, demoting, or otherwise discriminating against” any employee in retaliation for the employee's disclosure of:
- “information that the employee reasonably believes is evidence of gross mismanagement of a DOD contract,”
- “a gross waste of DOD funds,”
- “an abuse of authority relating to a DOD contract,”
- “a violation of law, rule, or regulation related to a DOD contract (including the competition for or negotiation of a contract), or”
- “a substantial and specific danger to public health or safety.”
Notably, for the protections in 203.903 to apply, the disclosure must be to one of the entities listed in this section, which includes: (1) a member of Congress; (2) an Inspector General that receives funding from or has oversight over contracts awarded for or on behalf of DOD; (3) the Government Accountability Office; (4) a DOD employee responsible for contract oversight or management; (5) an authorized official of the Department of Justice or other law enforcement agency; (6) a court or grand jury; or (7) a management official or other employee of the contractor or subcontractor who is responsible for investigating, discovery, or addressing misconduct. Contractors should attempt to discover to whom the complaint was made to develop possible defenses that the protections of this subpart do not protect the particular disclosure at issue.
Section 203.904 describes the procedures for filing complaints with the Inspector General, which may not be filed more than three years after the alleged reprisal. It also details the information that must be contained in such complaints.
Section 203.905 contains the procedures for the Inspector General to investigate complaints under this subpart, including notice and reporting requirements. Although the Inspector General must notify the contractor of an investigation, the identity of the complainant generally may not be disclosed, except under limited circumstances – (1) with the consent of the complainant, (2) in accordance with FOIA or other Federal law, and (3) as necessary to conduct an investigation of the alleged reprisal. This anonymity requirement may put the contractor at a distinct disadvantage in defending itself in any investigation. Contractors would be wise, therefore, to consider requesting that the Inspector General obtain the complainant's approval for disclosure, submitting prompt and targeted FOIA requests, and demonstrating that the nature of the investigation requires the contractor to have information from or about the allegedly aggrieved individual.
Section 203.906 sets forth the remedies that the agency may issue under this subpart. Among other things, the agency head may order the contractor to reinstate the allegedly aggrieved party or to pay damages, such as back pay, employment benefits, and costs the complaining party incurred by bringing the complaint. Either party may seek judicial review of the agency order. Moreover, if the agency head denies relief or fails to issue an order within the deadlines set forth in this section, the complainant is deemed to have exhausted his or her administrative remedies and may bring an action against the contractor in a United States District Court. Such action may not be brought more than two years after the complainant has exhausted his or her administrative remedies. Because of the numerous deadlines in this subpart, contractors must closely track them for potential statute of limitations defenses.