October 5, 2023

The Federal Acquisition Regulatory (FAR) Council published a final rule implementing legislation enacted in 2016 (P.L. 114-261 or “the 2016 Act”) making permanent a four-year pilot program extending enhanced whistleblower protections to employees of federal contractors and subcontractors and federal grantees.

Under the final rule, federal contractors, subcontractors, and grantees are prohibited from discharging, demoting, or otherwise discriminating against an employee as reprisal for disclosure to certain covered entities any information the employee reasonably believes is evidence of “gross mismanagement of a Federal contract, a gross waste of Federal funds, an abuse of authority relating to a Federal contract, 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).” Covered entities to which disclosures may be made include: (1) a Member of Congress or a representative of a committee of Congress; (2) an Inspector General; (3) the Government Accountability Office; (4) a federal employee responsible for contract oversight or management at the relevant agency; (5) an authorized official of the Department of Justice or other law enforcement agency; (6) a court or grand jury; and (7) a management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address misconduct.  In a change from the proposed rule, the FAR Council is applying the requirement for contractors and subcontractors to inform their employees of the whistleblower protections in acquisitions at or below the simplified acquisition threshold (SAT), which is currently $250,000. The proposed rule would have required such disclosures only for acquisitions above the SAT. By expanding this provision for solicitations and contracts at or below the SAT, the FAR Council hopes “employees will be more aware of the whistleblower protections.” The final rule also effectuates the 2016 Act’s revision to federal contracting cost principles prohibiting reimbursement to federal contractors, subcontractors, and grantees for legal costs incurred in a criminal, civil, or administrative proceeding for fraud or similar misconduct. 

This final rule is effective on November 6, 2023.

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