The National Defense Authorization Act for Fiscal Year 2013 Adds New Whistleblower Protections for Employees of Federal Contractors and Subcontractors

On January 2, 2013, President Obama signed into law Sections 827 and 828 of the National Defense Authorization Act for Fiscal Year 2013 (“NDAA”) to strengthen whistleblower protections for employees of federal contractors and subcontractors.  Specifically, the NDAA (1) enhanced whistleblower protections for employees of contractors and subcontractors of the Department of Defense (“DoD”) and the National Aeronautics and Space Administration (“NASA”); and (2) established a four-year pilot program to increase whistleblower protections for employees of all contractors and subcontractors of federal executive agencies. 

Pilot Program

Protected Whistleblowers Defined

The pilot program under the NDAA prohibits federal executive agency contractors and subcontractors from retaliating against their employees for disclosing information the employees “reasonably believe” is evidence of any of the following:

  • “Gross mismanagement” of a federal contract or grant;
  • “Gross waste” of federal funds;
  • “Abuse of authority” relating to a federal contract or grant;
  • Violation of law, rule, or regulation related to a federal contract or grant; or
  • Substantial and specific danger to public health or safety.

These disclosures are protected when made to certain entities or individuals, including a Member of Congress, an Inspector General of a federal executive agency, a federal employee responsible for contract or grant oversight at the relevant agency, a court or grand jury, an authorized official at a law enforcement agency, or an employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address the misconduct.  The whistleblower protections provided by the pilot program cannot be waived or modified by agreement, policy, form, or condition of employment.

Enforcement Procedures and Remedies

The pilot program contains specific administrative and judicial complaint and investigation procedures for whistleblowers of federal contractors and subcontractors.  Under these procedures, a covered whistleblower may submit a complaint to the Inspector General of the relevant executive agency no more than three years after the date on which the alleged retaliation occurred.  The Inspector General must investigate the complaint unless the Inspector General determines the complaint is frivolous, fails to allege a violation under the pilot program, or has been previously addressed in another formal proceeding.  Unless an extension is agreed to by the whistleblower, the Inspector General must complete its investigation and submit a report of its findings within at 180 days to the whistleblower, the affected contractor or subcontractor, and the head of the agency.

Within thirty days of receiving the Inspector General report, the head of the executive agency must issue an order either denying relief to the whistleblower or ordering one or more of the following actions: (1) order the contractor to take affirmative action to abate the reprisal; (2) order the contractor to pay compensatory damages, back pay, and reinstate the whistleblower to the position the whistleblower held immediately before the reprisal; and/or (3) order the contractor to pay the whistleblower all costs and expenses that were reasonably incurred by the whistleblower, including attorneys’ fees and expert witnesses’ fees.

If the agency denies the whistleblower relief or the agency has not issued an order within 210 days after the initial complaint was submitted, the whistleblower can file a civil action in appropriate federal district court for a de novo review of his or her claims.  The action cannot be filed more than two years after the whistleblower’s administrative remedies have been exhausted.

If the agency finds in favor of the whistleblower and it determines that the contractor has failed to comply with its order, it may pursue a federal action against the contractor seeking injunctive relief, damages, and attorneys’ fees and costs.  The whistleblower may join in this action with the agency.

In addition, any person adversely affected or aggrieved by the agency’s order may directly petition the federal appellate court where the reprisal allegedly occurred.  The petition must be filed within 60 days after the order is issued.  The appeal, however, will not stay the enforcement of the agency’s order, unless the court specially grants a stay.

Study and Report to Congress

The Comptroller General must begin conducting a study within the next three years to evaluate the pilot program and must submit within the next four years a report to Congress on the results of that study, which includes findings and recommendations on the pilot program.

Enhanced Whistleblower Protections for DoD and NASA Contractors

10 U.S.C. Section 2409 already included whistleblower protections for employees of DoD and NASA contractors.  The NDAA expanded these whistleblower protections by amending 10 U.S.C. Section 2409 to include employees of DoD and NASA subcontractors and added disclosures relating to an “abuse of authority” on a DoD or NASA contract to the list of protected disclosures.  It also amended the administrative and judicial enforcement provisions to mirror those under the pilot program. 

Agency Notification Requirement

The head of each executive agency must ensure that all contractors and subcontractors with that agency inform their employees in writing of each of these new whistleblower protections.  The notification must be in the predominant native language of the contractors’ or subcontractors’ workforce.

 Effective Date and Coverage

The new whistleblower protections will take effect on July 1, 2013 and apply to all contracts awarded or modified on or after that date or task orders entered on or after that date.  These whistleblower provisions, however, do not apply to a disclosure of any activity relating to an “element of the intelligence community,” as defined in the National Security Act of 1974, or that was discovered as a result of the performance of a contract or subcontract with an element of the intelligence community.  In addition, the Federal Acquisition Regulations must be revised by July 1, 2013 to implement the new whistleblower requirements. 

Implications for Federal Contractors and Subcontractors

The new whistleblower provisions in the NDAA continue the trend of federal legislation aimed at increasing protections for whistleblower in order to encourage them to report unlawful, corrupt, or unethical behavior.  These new protections emphasis the need for federal contractors and subcontractors to ensure they have adequate whistleblower complaint and reporting procedures in place.  Such efforts include conducting whistleblower training for employees, particularly for managers and high level officials, reviewing and updating whistleblower policies, and establishing or reviewing whistleblower complaint procedures.

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