Federal Acquisition Regulation; Whistleblower Protections for Contractor Employees (Ethics)

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 3

[FAR Case 94-803]

Federal Acquisition Regulation; Whistleblower Protections for

Contractor Employees (Ethics)

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule is issued pursuant to the Federal

Acquisition Streamlining Act of 1994, Public Law 103-355 (the Act). The

FAR Council is considering the addition of a new subpart 3.9, entitled

``Whistleblower Protections for Contractor Employees.'' This new

subpart is the result of the enactment of Sections 6005 and 6006 of the

Act. This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993.

DATES: Comments should be submitted on or before January 30, 1995 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: -

General Services Administration, FAR Secretariat (VRS),-18th & F

Streets, NW, Room 4037, Washington, DC 20405.

Please cite FAR case 94-803 in all correspondence related to this

case.

FOR FURTHER INFORMATION CONTACT: Mr. Julius Rothlein, Ethics Team

Leader, at (703) 697-4349 in reference to this FAR case. For general

information, contact the FAR Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501-4755. Please cite FAR case 94-803.

SUPPLEMENTARY INFORMATION:

A. Background

The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355,

provides authorities that streamline the acquisition process and

minimize burdensome government-unique requirements. Major changes that

can be expected in the acquisition process as a result of the Federal

Acquisition Streamlining Act implementation include changes in the

areas of Commercial Item Acquisition, Simplified Acquisition

Procedures, the Truth in Negotiations Act, and introduction of the

Federal Acquisition Network.

FAR case 94-803 originated because with the enactment of Sections

6005 and 6006, whistleblower protections for contractor employees are

now virtually identical for contractors employed by both DoD and

civilian agencies.

A new subpart is being added to FAR Part 3 which states that these

protections apply to contractor employees on all Government contracts.

In implementing these sections, guidance found at page 222 of

Conference Report 103-712 was considered which states: ``The conferees

direct that the regulations implementing this provision should

establish procedures and standards that are as similar as practicable

to the procedures and standards already established in Department of

Defense regulations.'' However, unlike DoD FAR Supplement (DFARS)

subpart 203.71 (which implemented the former, and now repealed 10

U.S.C. 2409a), a clause which must be included in all contracts is not

being mandated. It is noted that, unlike 10 U.S.C. 2409a, neither

Section 6005 nor 6006 contains any language which mandates the

inclusion of a specific clause in contracts to enforce the prohibitions

of the law. Enforcement of this law, like so many other laws, is not

dependent on the presence of a clause in the contract. Furthermore, by

not prescribing a clause for all contracts, the physical size of the

contract document can be reduced and thereby further the acquisition

streamlining effort.

This case also includes a provision which requires that

whistleblower complaints be filed not more than 180 days after the date

on which the violation is alleged to have occurred or the date on which

the violation was discovered. This approach was used to ensure that the

Inspector General will be reviewing matters that can be reasonably

investigated. While neither Section 6005 nor 6006 contain a statute of

limitations, 10 U.S.C. 2409a and its implementing regulations provided

for same, and it is reasonable to include same in these regulations.

The FAR Council is interested in an exchange of ideas and opinions

with respect to the regulatory implementation of the Act. For that

reason, the FAR Council is conducting a series of public meetings.

However, the FAR Council has not scheduled a public meeting on this

rule (FAR case 94-803) because of the clarity and non-controversial

nature of the rule. If the public believes such a meeting is needed

with respect to this rule, a letter requesting a public meeting and

outlining the nature of the requested meeting shall be submitted to and

received by the FAR Secretariat (see ADDRESSES caption) on or before

January 3, 1995.

The FAR Council will consider such requests in determining whether

a public meeting on this rule should be scheduled.

B. Regulatory Flexibility Act

The proposed rule is not expected to have significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. During the past

four years under 10 U.S.C. 2409a, DoD processed less than 70 cases,

half against large contractors. Contractor employee whistleblower

actions are not expected to increase significantly as a result of the

enactment of Sections 6005 and 6006. An Initial Regulatory Flexibility

Analysis has, therefore, not been performed. Comments are invited from

small businesses and other interested parties. Comments from small

entities concerning the affected FAR subpart will also be considered in

accordance with Section 610 of the Act. Such comments must be submitted

separately and cite FAR case 94-803 in correspondence.

C. Paperwork Reduction Act-

The Paperwork Reduction Act does not apply because the proposed

changes to the FAR do not impose recordkeeping or information

collection requirements, or collections of information from offerors,

contractors, or members of the public which require the approval of the

Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 3

Government procurement.

Dated: November 23, 1994.

Edward C. Loeb,

Deputy Project Manager for the Implementation of the Federal

Acquisition Streamlining Act of 1994.

Therefore, it is proposed that 48 CFR Part 3 be amended as set

forth below:

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF

INTEREST-

1. The authority citation for 48 CFR Part 3 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Subpart 3.9, consisting of sections 3.900 through 3.906, is

added to read as follows:

Subpart 3.9--Whistleblower Protections for Contractor Employees

3.900 Scope of subpart.

3.901 Definitions.

3.902 Applicability.

3.903 Policy.

3.904 Procedures for filing complaints.

3.905 Procedures for investigating complaints.

3.906 Remedies.

3.900 Scope of subpart.-

This subpart implements 10 U.S.C. 2409 and 41 U.S.C. 251, et seq.,

as amended by Public Law 103-355, Sections 6005 and 6006.

3.901 Definitions.-

Authorized official of an agency means an officer or employee

responsible for contracting, program management, audit, inspection,

investigation, or enforcement of any law or regulation relating to

Government procurement or the subject matter of the contract.

Authorized official of the Department of Justice means any person

responsible for the investigation, enforcement, or prosecution of any

law or regulation.

Head of agency, within the Department of Defense, means the

Secretaries of Defense, Army, Navy, and Air Force. For civilian

agencies, see (FAR) 48 CFR 2.101.

Inspector General means an Inspector General appointed under the

Inspector General Act of 1978, as amended. In the Department of Defense

that is the DOD Inspector General. In the case of an executive agency

that does not have an Inspector General, the duties shall be performed

by an official designated by the head of the executive agency.

3.902 Applicability.

This subpart applies to all Government contracts.

3.903 Policy.

Government contractors shall not discharge, demote or otherwise

discriminate against an employee as a reprisal for disclosing

information to a Member of Congress, an authorized official of an

agency or of the Department of Justice, relating to a substantial

violation of law related to a contract (including the competition for

or negotiation of a contract).

3.904 Procedures for filing complaints.-

(a) Any employee of a contractor who believes that he or she has

been discharged, demoted, or otherwise discriminated against contrary

to the policy in 3.903 may file a complaint with the Inspector General

of the agency that awarded the contract.

(b) Complaints shall be filed not more than 180 days after the date

on which the reprisal is alleged to have occurred or the date on which

the reprisal was discovered, whichever is later.

(c) The complaint shall be signed and contain--

(1) The name of the contractor;

(2) The contract number, if known; if not, a description reasonably

sufficient to identify the contract(s) involved;

(3) The substantial violation of law giving rise to the disclosure;

(4) The nature of the disclosure giving rise to the discriminatory

act; and

(5) The specific nature and date of the reprisal.

3.905 Procedures for investigating complaints.

(a) Upon receipt of a complaint, the Inspector General shall

conduct an initial inquiry. If the Inspector General determines that

the complaint is frivolous or for other reasons does not merit further

investigation, the Inspector General shall advise the complainant that

no further action on the complaint will be taken.

(b) If the Inspector General determines that the complaint merits

further investigation, the Inspector General shall notify the

complainant, contractor, and head of the contracting activity. The

Inspector General shall conduct an investigation and provide a written

report of findings to the head of the agency.-

(c) Upon completion of the investigation, the head of the agency

shall ensure that the Inspector General provides the report of findings

to--

(1) The complainant and any person acting on the complainant's

behalf;-

(2) The contractor alleged to have committed the violation; and-

(3) The head of the contracting activity.

(d) The complainant and contractor shall be afforded the

opportunity to submit a written response to the report of findings

within 30 days to the head of the agency.

(e) At any time, the head of the agency may request additional

investigative work be done on the complaint.

3.906 Remedies.-

(a) If the head of the agency determines that a contractor has

subjected one of its employees to a reprisal for providing information

to a Member of Congress, an authorized official of an agency or the

Department of Justice, the head of the agency may take one or more of

the following actions:

(1) Order the contractor to take affirmative action to abate the

reprisal.-

(2) Order the contractor to reinstate the person to the position

that the person held before the reprisal, together with the

compensation (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) Order the contractor to pay the complainant an amount equal to

the aggregate amount of all costs and expenses (including attorneys'

fees and expert witnesses' fees) that were reasonably incurred by the

complainant for, or in connection with, bringing the complaint

regarding the reprisal.

(b) Whenever a contractor fails to comply with an order, the head

of the agency shall request the Department of Justice to file an action

for enforcement of such order in the United States district court for a

district in which the reprisal was found to have occurred. In any

action brought under these provisions, the court may grant appropriate

relief, including injunctive relief and compensatory and exemplary

damages.

(c) Any person adversely affected or aggrieved by an order issued

under these provisions may obtain review of the order's conformance

with the law, and these regulations, in the United States Court of

Appeals for a circuit in which the reprisal is alleged in the order to

have occurred. No petition seeking such review may be filed more than

60 days after issuance of the order by the head of the agency. Review

shall conform to Chapter 7 of Title 5, United States Code.

[FR Doc. 94-29422 Filed 11-30-94; 8:45 am]

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