Proposed FAR Rule Prohibits Whistleblower Confidentiality Agreements

A proposed rule would amend the Federal Acquisition Regulation to remove restrictions on the ability of contractor employees and subcontractors to report waste, fraud, or abuse to the government.

The proposed rule implements section 743 of the Consolidated and Further Continuing Appropriations Act, 2015 (PL 113-235) at new FAR 3.909, Prohibition on contracting with entities that require certain internal confidentiality agreements.

Proposed FAR 3.909 and its subsections prohibit the government from using certain appropriated funds for a contract with an entity that requires its employees or subcontractors to sign internal confidentiality agreements restricting the lawful reporting of waste, fraud, or abuse to a department or agency authorized to receive such information.

The rule would apply to all solicitations and resultant contracts funded with Fiscal Year 2015 or later funds subject to the prohibition, including contracts and subcontracts for acquisitions below the simplified acquisition threshold, and for commercial items and commercially available off-the-shelf items.

A new solicitation provision at FAR 52.203-XX and a new clause at FAR 52.203-YY notify offerors and contractors about the prohibition. The proposed solicitation provision requires offerors to represent that they do not require employees to enter into these confidentiality agreements, and the clause requires contractors to notify employees that pre-existing confidentiality agreements covered by the rule are no longer in effect.

The government would have to modify existing contracts to include the clause before obligating FY 2015 or later funds subject to the prohibition. The provision and clause would not apply to personal services contracts with individuals.

Submit comments referencing FAR Case 2015-012 by March 22, 2016. For the text of the proposed rule, see 81 FR 3763.

About William Van Huis

Bill Van Huis is a Senior Writer/Analyst for Wolters Kluwer Law & Business who tracks and analyzes new regulations impacting federal government contracting. He also follows court decisions involving bid protests and contract disputes. You can find his work in WK publications like Government Contract Reports and the FAR and DFARS Matrix Tools. Bill is a Certified Professional Contracts Manager, and he has a law degree from Southern Illinois University, where he graduated summa cum laude. Prior to joining WK, Bill worked both inside and outside state and local government in the areas of procurement and municipal finance. Bill also worked as a staff attorney for the Illinois Supreme Court.
This entry was posted in Compliance, FAR, Regulations and tagged , , , , . Bookmark the permalink.