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Pilot Program for Enhancement of Employee Whistleblower Protection

on Monday, 10 February 2014 in Health Law Alert: Erin E. Busch, Editor

Certain federal grantees have received a letter from the Health Resources and Services Administration, regarding the Pilot Program for Enhancement of Employee Whistleblower Protection (the “Pilot Program”). This communication informs federal grantees, subgrantees, contractors, and subcontractors of their obligations under the Pilot Program, as authorized by the National Defense Authorization Act (“NDAA”) for Fiscal Year 2013 (Pub. L. 112-239, enacted January 2, 2013). The Pilot Program became effective July 1, 2013, and continues through January 1, 2017.


The four-year Pilot Program enhances whistleblower protections for contractor employees and creates additional obligations for federal agencies. Section 828 of the NDAA adds a new section 4712 to Title 41 of the U.S. Code, which contains the elements of the Pilot Program and suspends the pre-existing whistleblower protections at 41 U.S.C. § 4705 for the duration of the Pilot Program. An interim rule released September 30, 2013 by the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) created a new Federal Acquisition Regulation (“FAR”) section at 48 CFR § 3.908 to implement 42 U.S.C. § 4712. 78 FR 60171, Sept. 30, 2013. FAR sections 3.901 – 3.906 remain intact but are similarly suspended during the Pilot Program. These provisions will be reinstated at the close of the Pilot Program absent Congressional action.


Under the Pilot Program, an “employee of a contractor, subcontractor, or grantee may not be discharged, demoted or otherwise discriminated against as a reprisal” for reporting certain specified information to specifically listed entities or individuals. 41 U.S.C. § 4712(a). The section targets the disclosure of information that an employee reasonably believes to be any of the following:


• Evidence of gross mismanagement of a federal contract or grant;
• A gross waste of federal funds;
• An abuse of authority relating to a federal contract or grant (defined by 48 CFR § 3.908-2 as “an arbitrary and capricious exercise of authority that is inconsistent with the mission of the executive agency concerned or the successful performance of a contract of such agency”);
• A substantial and specific danger to public health or safety; or
• A violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant.


To be protected under this provision, the employee must disclose this information to one of the following entities or individuals:


• A member of Congress or representative of a committee of Congress;
• An Inspector General;
• The Government Accountability Office;
• A federal employee responsible for contract oversight or management at the relevant agency;
• An authorized official of the Department of Justice or other law enforcement agency;
• A court or grand jury; or
• A management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address misconduct.


Notably, this list is an expanded version of the list of protected entities set forth in the currently suspended whistleblower protections at 48 CFR § 3.903.


The governing statute and regulations of the Pilot Program outline the process for filing complaints, the Inspector General’s procedure for investigating complaints, the statutory remedies and time frames for action, and procedures for enforcement of orders. These requirements reflect additional responsibilities for agencies under the Pilot Program as compared to the now-suspended whistleblower protections.


Significantly, the Pilot Program requires grantees, subgrantees, contractors, and subcontractors to notify their employees in writing of the rights and remedies provided under the Pilot Program, “in the predominant native language of the workforce.” 41 U.S.C. § 4712(d). The regulations further provide that the contracting officer must insert the following clause in all solicitations and contracts that exceed the simplified acquisition threshold:


(a) This contract and employees working on this contract will be subject to the whistleblower rights and remedies in the pilot program on Contractor employee whistleblower protections established at 41 U.S.C. 4712 by section 828 of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 112-239) and FAR 3.908.
(b) The Contractor shall inform its employees in writing, in the predominant language of the workforce, of employee whistleblower rights and protections under 41 U.S.C. 4712, as described in section 3.908 of the Federal Acquisition Regulation.
(c) The Contractor shall insert the substance of this clause, including this paragraph (c), in all subcontracts over the simplified acquisition threshold.
42 CFR § 52.203-17 (as referenced in 42 CFR § 3.908-9).


The Pilot Program applies to all federal agencies except the DoD, NASA and the Coast Guard. This exemption now also extends to “any element of the intelligence community” as defined in section 3(4) of the National Security Act of 1947. 48 CFR § 3.908-1(b). In addition, the Pilot Program does not impact FAR § 3.907, which provides whistleblower protections for contracts under the American Recovery and Reinvestment Act of 2009. Further, the Pilot Program “does not provide any right to disclose classified information not otherwise provided by law.” 48 CFR § 3.908-8.


Regardless of whether an organization has received a letter from a federal agency describing the Pilot Program, all federal grantees, subgrantees, contractors, and subcontractors should be aware of the Pilot Program and take the necessary steps to comply with its requirements through January 1, 2017.


Laura A. Feldman

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