Some contractors require employees who seek to report fraud, waste, or abuse, to sign internal confidentiality agreements or statements prohibiting them from lawfully reporting such fraud, waste, or abuse to designated investigative or law enforcement representatives of a Federal department or agency authorized to receive such information. Understandably, such requirements provide contractors the opportunity to perform their own internal investigations of the suspected fraud, waste, and abuse before the authorities are notified and a chance to minimize any adverse consequences. However, such confidentiality agreements are not permitted under DoD contracts.
We reported on a similar prohibition last February (see DoD Prohibition on Confidentiality Agreements Designed to Cover Up Fraud, Waste, and Abuse). That prohibition applied to Fiscal Year 2015 funds. The Department of Defense has not extended that prohibition to Fiscal Year 2016 funds, specifically, funds made available by the Continuing Appropriations Act, 2016 (Public Law 114-53) or any other Act that extends to FY 2016 funds.
There are three main points to the prohibition.
- First, contractors cannot require employees or subcontractors seeking to report fraud, waste, or abuse to sign or comply with internal confidentiality agreements or statements prohibiting or restricting them from reporting to investigative or law enforcement representatives.
- Second, contractors must notify employees that any previous agreements they may have signed are no longer in effect.
- Finally, the Government may seek any available remedies in the event the contractor fails to perform in accordance with the terms and conditions of the contract as a result of Government action under this clause.
You can read more about DoD's prohibition here.