Thursday, June 14, 2012

Whistleblower Protection for Contractor Employees

Toady we are finishing our highlighting of selected sections contained within the fiscal year 2013 National Defense Authorization Act (NDAA) that are of interest to Government contractors. Of the four topics we've covered so far (compensation caps, access to internal audits, prohibition against excessive subcontracting, and contractor profits), all but the limitation on compensation will probably make it into the final legislation. The proposed limit on compensation ($250,300 per year) is extremely controversial and it is questionable as to whether it will survive in the present form, be modified in conference committee, or tossed out altogether. Today's topic on whistleblower protections will also probably make the final cut.

Whistleblower protections for contractor employees has been on the books for a number of years. The newly proposed legislation extends this protection to subcontractor employees. It significantly broadens the scope of the protection from violations of law, to violations of law, rule, or regulation. It also broadens the number of people to whom disclosure is protected. Under the proposed legislation, disclosures to the following will be protected:

  • A member of Congress or a representative of a committee of Congress
  • An inspector general
  • The Government Accountability Office (GAO)
  • A DoD employee responsible for contract oversight or management (this would included DCAA and DCMA)
  • An authorized official of the Department of Justice or other law enforcement agency
  • A court or grand jury.
  • A management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address misconduct.

Other changes to the whistleblower statute include:

  1. Reprisal is prohibited even if it is undertaken at the request of a DoD official (we wonder what event might have prompted this prohibition).
  2. Complaints must be brought within three years of the date on which the alleged reprisal took place.
  3. Compensatory damages are now allowed (could be significant for a contractor or subcontractor and the cost would not be allowable under Government contracts).
  4. Contractors and subcontractors must notify employees in writing of their rights and remedies (presumably, this will have to be more than something buried in fine print).

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