[Federal Register Volume 74, Number 60 (Tuesday, March 31, 2009)]
[Rules and Regulations]
[Pages 14633-14636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7020]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 3 and 52

[FAC 2005-32; FAR Case 2009-012; Item II; Docket 2009-0009, Sequence 1]
RIN 9000-AL19


Federal Acquisition Regulation; FAR Case 2009-012, American 
Recovery and Reinvestment Act of 2009 (the Recovery Act)--Whistleblower 
Protections

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement the 
American Recovery and Reinvestment Act of 2009 (the Recovery Act) with 
respect to section 1553 of Division A, Protecting State and Local 
Government and Contractor Whistleblowers. This rule prohibits non-
Federal employers from discharging, demoting, or discriminating against 
an employee as a reprisal for disclosing information.

DATES: Effective Date: March 31, 2009.
    Applicability Date: The rule applies to solicitations issued and 
contracts awarded on or after the effective date of this rule. 
Contracting officers shall modify, on a bilateral basis, in accordance 
with FAR 1.108(d)(3), existing contracts to include the FAR clause for 
future orders, if the Recovery Act funds will be used. In the event 
that a contractor refuses to accept such a modification, the contractor 
will not be eligible for receipt of the Recovery Act funds.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before June 1, 2009 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-32, FAR case 2009-
012, by any of the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``FAR Case 2009-012'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
FAR Case 2009-012. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``FAR Case 2009-012'' on your attached 
document.
    <bullet> Fax: 202-501-4067.
    <bullet> Mail: General Services Administration, FAR Secretariat 
(VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, Washington, 
DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-32, FAR 
case 2009-012, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Jeritta Parnell, Procurement Analyst, at (202) 501-4082. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-32, FAR case 
2009-012.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule implements section 1553 of the American Recovery 
and Reinvestment Act of 2009 (the Recovery Act) with respect to the 
protection of whistleblowers, by adding a new section 3.907, 
Whistleblower Protections Under the American Recovery and Reinvestment 
Act of 2009 and a new clause at FAR 52.203-15, Whistleblower 
Protections Under the American Recovery and Reinvestment Act of 2009, 
and its prescription in FAR 3.907-7.
    On February 17, 2009, the President signed Public Law 111-5, the 
American Recovery and Reinvestment Act of 2009, including a number of 
provisions to be implemented in Federal Government contracts. Among 
these provisions is Section 1553 of the Recovery Act, ``Protecting 
State and Local Government and Contractor Whistleblowers''. This 
requirement promotes transparency in Federal contracting.

B. Discussion

    FAR 3.907 provides that non-Federal employers receiving funds under 
the Recovery Act are prohibited from discharging, demoting, or 
discriminating against employees as a reprisal for disclosing certain 
covered information to certain categories of Government officials or a 
person with supervisory authority over the employee. This section 
further provides definitions relevant to the statute; establishes time 
periods within which the Inspector General and the agency head must 
take action with regard to a complaint filed by a contractor employee; 
establishes procedures for access to investigative files of the 
Inspector General; and provides for remedies and enforcement authority. 
FAR 3.907-7 prescribes a new clause at 52.203-15.

C. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold

    Section 4101 of Public Law 103-355, the Federal Acquisition 
Streamlining Act (FASA) (41 U.S.C. 429), governs the applicability of 
laws to contracts or subcontracts in amounts not greater than the 
simplified acquisition threshold. It is intended to limit the 
applicability of laws to them. The FASA provides that if a provision of 
law contains criminal or civil penalties, or if the Federal Acquisition 
Regulatory Council (FAR Council) makes a written determination that it 
is not in the best interest of the Federal Government to exempt 
contracts or subcontracts at or below the simplified acquisition 
threshold, the law will apply to them.
    Therefore, given section 1553 of the Recovery Act, which extends 
whistleblower protections to employees of contractors that receive 
contracts funded under the Recovery Act, and the initial implementing 
guidance for the Recovery Act issued on February 18,

[[Page 14634]]

2009 by the Director of the Office of Management and Budget committing 
to an unprecedented level of transparency and accountability for 
taxpayer dollars, the FAR Council has determined that it is in the best 
interest of the Federal Government to apply this rule to acquisitions 
at or below the simplified acquisition threshold, as defined at FAR 
2.101.

D. Applicability to Commercial Item Contracts

    Section 8003 of Public Law 103-355, the FASA (41 U.S.C. 430), 
governs the applicability of laws to commercial items, and is intended 
to limit the applicability of laws to commercial items. The FASA 
provides that if a provision of law contains criminal or civil 
penalties, or if the Federal Acquisition Regulatory Council makes a 
written determination that it is not in the best interest of the 
Federal Government to exempt commercial item contracts, the provision 
of law will apply to contracts for commercial items. The same applies 
for subcontracts for commercial items.
    Therefore, given section 1553 of the Recovery Act, which prohibits 
non-Federal employers working on contracts funded with the Recovery Act 
funds from discharging, demoting, or discriminating against an employee 
as a reprisal for disclosing information the employee reasonably 
believes is evidence of information listed in section 1553(a), the FAR 
Council has determined that the rule should apply to contracts for 
commercial items, as defined at FAR 2.101, at both the prime and 
subcontract levels.

E. Applicability to Commercially Available Off-the-Shelf (COTS) Item 
Contracts

    Section 4203 of Public Law 104-106, the Clinger-Cohen Act of 1996 
(41 U.S.C. 431), governs the applicability of laws to the procurement 
of COTS items, and is intended to limit the applicability of laws to 
them. Clinger-Cohen provides that if a provision of law contains 
criminal or civil penalties, or if the Administrator for Federal 
Procurement Policy makes a written determination that it is not in the 
best interest of the Federal Government to exempt COTS item contracts, 
the provision of law will apply.
    Therefore, given section 1553 of the American Recovery and 
Reinvestment Act of 2009 (Recovery Act), which prohibits non-Federal 
employers working on contracts funded with the Recovery Act funds from 
discharging, demoting, or discriminating against an employee as a 
reprisal for disclosing information the employee reasonably believes is 
evidence of information listed in section 1553(a), the Administrator, 
Office of the Federal Procurement Policy, has determined that the rule 
should apply to COTS item contracts, as defined at FAR 2.101.
    This is a significant regulatory action and, therefore, was subject 
to Office of Management and Budget (OMB) review under section 6 of 
Executive Order 12866, Regulatory Planning and Review, dated September 
30, 1993. This rule is not a major rule under 5 U.S.C. 804.

F. Regulatory Flexibility Act

    The Councils do not expect this interim rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because this rule applies similar, but not identical, whistleblower 
protections to contractor and subcontractor employees as currently 
covered in FAR Subpart 3.9. Likewise, this rule only applies to 
contracts funded in whole or in part with the Recovery Act funds. 
Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. The Councils will consider comments from small entities 
concerning the affected FAR Parts 3 and 52 in accordance with 5 U.S.C. 
610. Interested parties must submit such comments separately and should 
cite 5 U.S.C. 601, et seq., (FAC 2005-32, FAR Case 2009-012) in all 
correspondence.

G. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. Chapter 
35, et seq.

H. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the American Recovery and Reinvestment Act of 2009 
became effective on enactment, and contracts using funds appropriated 
by the Recovery Act will soon be ready to award. However, pursuant to 
Public Law 98-577 and FAR 1.501, the Councils will consider public 
comments received in response to this interim rule in the formation of 
the final rule.

List of Subjects in 48 CFR Parts 3 and 52

    Government procurement.

    Dated: March 25, 2009.
Al Matera,
Director,Office of Acquisition Policy.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 3 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 3 and 52 continues to read 
as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
2. Revise section 3.900 to read as follows:


3.900  Scope of subpart.

    (a) Sections 3.901 through 3.906 of this subpart implement 10 
U.S.C. 2409 and 41 U.S.C. 265, as amended by Sections 6005 and 6006 of 
the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355).
    (b) Section 3.907 of this subpart implements Section 1553 of the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), and 
applies to all contracts funded in whole or in part by that Act.


3.902  [Removed and Reserved]

0
3. Remove and reserve section 3.902.

0
4. Add sections 3.907 through 3.907-7 to read as follows:


3.907  Whistleblower Protections Under the American Recovery and 
Reinvestment Act of 2009 (the Recovery Act).


3.907-1  Definitions.

    As used in this section--
    Board means the Recovery Accountability and Transparency Board 
established by Section 1521 of the Recovery Act.
    Covered funds means funds appropriated by or otherwise made 
available by the Recovery Act.
    Covered information means information that the employee reasonably 
believes is evidence of gross mismanagement of the contract or 
subcontract related to covered funds, gross waste of covered funds, a 
substantial and specific danger to public health or safety related to 
the implementation or use of covered funds, an abuse of authority 
related to the implementation or use of covered funds, or a violation 
of law, rule, or regulation

[[Page 14635]]

related to an agency contract (including the competition for or 
negotiation of a contract) awarded or issued relating to covered funds.
    Inspector General means an Inspector General appointed under the 
Inspector General Act of 1978. In the Department of Defense that is the 
DoD Inspector General. In the case of an executive agency that does not 
have an Inspector General, the duties shall be performed by an official 
designated by the head of the executive agency.
    Non-Federal employer, as used in this section, means any employer 
that receives Recovery Act funds, including a contractor, 
subcontractor, or other recipient of funds pursuant to a contract or 
other agreement awarded and administered in accordance with the Federal 
Acquisition Regulation.


3.907-2  Policy.

    Non-Federal employers are prohibited from discharging, demoting, or 
otherwise discriminating against an employee as a reprisal for 
disclosing covered information to any of the following entities or 
their representatives:
    (1) The Board.
    (2) An Inspector General.
    (3) The Comptroller General.
    (4) A member of Congress.
    (5) A State or Federal regulatory or law enforcement agency.
    (6) A person with supervisory authority over the employee or such 
other person working for the employer who has the authority to 
investigate, discover, or terminate misconduct.
    (7) A court or grand jury.
    (8) The head of a Federal agency.


3.907-3  Procedures for filing complaints.

    (a) An employee who believes that he or she has been subjected to 
reprisal prohibited by the Recovery Act, Section 1553 as set forth in 
3.907-2, may submit a complaint regarding the reprisal to the Inspector 
General of the agency that awarded the contract.
    (b) The complaint shall be signed and shall contain--
    (1) The name of the contractor;
    (2) The contract number, if known; if not, a description reasonably 
sufficient to identify the contract(s) involved;
    (3) The covered information giving rise to the disclosure;
    (4) The nature of the disclosure giving rise to the discriminatory 
act; and
    (5) The specific nature and date of the reprisal.
    (c) A contracting officer who receives a complaint of reprisal of 
the type described in 3.907-2 shall forward it to the Office of the 
Inspector General, agency legal counsel or to the appropriate official 
in accordance with agency procedures.


3.907-4  Procedures for investigating complaints.

    Investigation of complaints will be in accordance with section 1553 
of the Recovery Act.


3.907-5  Access to investigative file of Inspector General.

    (a) The employee alleging reprisal under this section shall have 
access to the investigation file of the Inspector General, in 
accordance with the Privacy Act, 5 U.S.C. 552a. The investigation of 
the Inspector General shall be deemed closed for the purposes of 
disclosure under such section when an employee files an appeal to the 
agency head or a court of competent jurisdiction.
    (b) In the event the employee alleging reprisal brings a civil 
action under section 1553(c)(3) of the Recovery Act, the employee 
alleging the reprisal and the non-Federal employer shall have access to 
the investigative file of the Inspector General in accordance with the 
Privacy Act.
    (c) The Inspector General may exclude from disclosures made under 
3.907-5(a) or (b)--
    (1) Information protected from disclosure by a provision of law; 
and
    (2) Any additional information the Inspector General determines 
disclosure of which would impede a continuing investigation, provided 
that such information is disclosed once such disclosure would no longer 
impede such investigation, unless the Inspector General determines that 
the disclosure of law enforcement techniques, procedures, or 
information could reasonably be expected to risk circumvention of the 
law or disclose the identity of a confidential source.
    (d) An Inspector General investigating an alleged reprisal under 
this section may not respond to any inquiry or disclose any information 
from or about any person alleging such reprisal, except in accordance 
with 5 U.S.C. 552a or as required by any other applicable Federal law.


3.907-6  Remedies and enforcement authority.

    (a) Burden of Proof. (1) Disclosure as contributing factor in 
reprisal.
    (i) An employee alleging a reprisal under this section shall be 
deemed to have affirmatively established the occurrence of the reprisal 
if the employee demonstrates that a disclosure described in section 
3.907-2 was a contributing factor in the reprisal.
    (ii) A disclosure may be demonstrated as a contributing factor in a 
reprisal for purposes of this paragraph by circumstantial evidence, 
including--
    (A) Evidence that the official undertaking the reprisal knew of the 
disclosure; or
    (B) Evidence that the reprisal occurred within a period of time 
after the disclosure such that a reasonable person could conclude that 
the disclosure was a contributing factor in the reprisal.
    (2) Opportunity for rebuttal. The head of an agency may not find 
the occurrence of a reprisal with respect to a reprisal that is 
affirmatively established under section 3.907-6(a)(1) if the non-
Federal employer demonstrates by clear and convincing evidence that the 
non-Federal employer would have taken the action constituting the 
reprisal in the absence of the disclosure.
    (b) No later than 30 days after receiving an Inspector General 
report in accordance with section 1553 of the Recovery Act, the head of 
the agency concerned shall determine whether there is sufficient basis 
to conclude that the non-Federal employer has subjected the complainant 
to a reprisal prohibited by subsection 3.907-2 and shall either issue 
an order denying relief in whole or in part or shall take one or more 
of the following actions:
    (1) Order the employer to take affirmative action to abate the 
reprisal.
    (2) Order the employer to reinstate the person to the position that 
the person held before the reprisal, together with the compensation 
(including back pay), compensatory damages, employment benefits, and 
other terms and conditions of employment that would apply to the person 
in that position if the reprisal had not been taken.
    (3) Order the employer to pay the complainant an amount equal to 
the aggregate amount of all costs and expenses (including attorneys' 
fees and expert witnesses' fees) that were reasonably incurred by the 
complainant for, or in connection with, bringing the complaint 
regarding the reprisal.
    (c)(1) The complainant shall be deemed to have exhausted all 
administrative remedies with respect to the complaint, and the 
complainant may bring a de novo action at law or equity against the 
employer to seek compensatory damages and other relief available under 
this section in the appropriate district court of United States, which 
shall have jurisdiction over such an action without regard to the 
amount in controversy if
    (i) The head of an agency--
    (A) Issues an order denying relief in whole or in part under 
paragraph (a) of this section;

[[Page 14636]]

    (B) Has not issued an order within 210 days after the submission of 
a complaint in accordance with section 1553 of the Recovery Act, or in 
the case of an extension of time in accordance with section 1553 of the 
Recovery Act, within 30 days after the expiration of the extension of 
time; or
    (C) Decides in accordance with section 1553 of the Recovery Act not 
to investigate or to discontinue an investigation; and
    (ii) There is no showing that such delay or decision is due to the 
bad faith of the complainant.
    (2) Such an action shall, at the request of either party to the 
action, be tried by the court with a jury.
    (d) Whenever an employer fails to comply with an order issued under 
this section, the head of the agency shall request the Department of 
Justice to file an action for enforcement of such order in the United 
States district court for a district in which the reprisal was found to 
have occurred. In any action brought under this section, the court may 
grant appropriate relief, including injunctive relief, compensatory and 
exemplary damages, and attorneys fees and costs.
    (e) Any person adversely affected or aggrieved by an order issued 
under paragraph (b) of this subsection may obtain review of the order's 
conformance with the law, and this section, in the United States Court 
of Appeals for a circuit in which the reprisal is alleged in the order 
to have occurred. No petition seeking such review may be filed more 
than 60 days after issuance of the order by the head of the agency.


3.907-7  Contract Clause.

    Use the clause at 52.203-15, Whistleblower Protections Under the 
American Recovery and Reinvestment Act of 2009 in all solicitations and 
contracts funded in whole or in part with Recovery Act funds.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Add section 52.203-15 to read as follows:


52.203-15  Whistleblower Protections Under the American Recovery and 
Reinvestment Act of 2009

    As prescribed in 3.907-7, use the following clause:

Whistleblower Protections Under the American Recovery and Reinvestment 
Act of 2009 (Mar 2009)

    (a) The Contractor shall post notice of employees rights and 
remedies for whistleblower protections provided under section 1553 
of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-
5).
    (b) The Contractor shall include the substance of this clause 
including this paragraph (b) in all subcontracts.


(End of clause)


0
6. Amend section 52.212-4 by revising the date of the clause and 
paragraph (r) to read as follows:


52.212-4  Contract Terms and Conditions--Commercial Items.

* * * * *
Contract Terms and Conditions--Commercial Items (MAR 2009)
* * * * *
    (r) Compliance with laws unique to Government contracts. The 
Contractor agrees to comply with 31 U.S.C. 1352 relating to 
limitations on the use of appropriated funds to influence certain 
Federal contracts; 18 U.S.C. 431 relating to officials not to 
benefit; 40 U.S.C. 3701, et seq., Contract Work Hours and Safety 
Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C. 
265 and 10 U.S.C. 2409 relating to whistleblower protections; 
Section 1553 of the American Recovery and Reinvestment Act of 2009 
relating to whistleblower protections for contracts funded under 
that Act; 49 U.S.C. 40118, Fly American; and 41 U.S.C. 423 relating 
to procurement integrity.
* * * * *

(End of clause)


0
7. Amend section 52.212-5 by--
    a. Revising the date of the clause;
    b. Redesignating paragraphs (b)(3) thru (b)(41) as paragraphs 
(b)(4) thru (b)(42), respectively, and adding a new paragraph (b)(3); 
and
    c. Redesignating paragraphs (e)(1)(iii) thru (e)(1)(xiii) as 
paragraphs (e)(1)(iv) thru (e)(1)(xiv), respectively, and adding a new 
paragraph (e)(1)(iii). The revised and added text reads as follows:


52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items (Mar 2009)

* * * * *
    (b) * * *
    (3) 52.203-15, Whistleblower Protections under the American 
Recovery and Reinvestment Act of 2009 (Section 1553 of Pub. L. 111-
5).
* * * * *
    (e)(1) * * *
    (iii) 52.203-15, Whistleblower Protections Under the American 
Recovery and Reinvestment Act of 2009 (Section 1553 of Pub. L. 111-
5). Applies to subcontracts funded under the Act.
* * * * *


(End of clause)


0
8. Amend section 52.213-4 by revising the date of the clause and 
paragraph (a)(2)(vi) to read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (Mar 2009)

    (a) * * *
    (2) * * *
    (vi) 52.244-6, Subcontracts for Commercial Items. (MAR 2009)
* * * * *

0
9. Amend section 52.244-6 by revising the date of the clause; 
redesignating paragraphs (c)(1)(ii) thru (c)(1)(viii) as paragraphs 
(c)(1)(iii) thru (c)(1)(ix), respectively, and adding a new paragraph 
(c)(1)(ii).


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Mar 2009)

* * * * *
    (c)(1) * * *
    (ii) 52.203-15, Whistleblower Protections Under the American 
Recovery and Reinvestment Act of 2009 (Section 1553 of Pub. L. 111-
5). Applies to subcontracts funded under the Act.
* * * * *

(End of clause)

[FR Doc. E9-7020 Filed 3-30-09; 8:45 am]
BILLING CODE 6820-EP-P