November 4, 2019

Department of Energy’s Incorporation of 41 U.S.C. 4712 Enhanced Whistleblower Protections for Contractor Employees into its Contracts

In January 2013, Congress enacted legislation (hereafter referred to as 41 U.S.C. 4712), effective July 1, 2013, to provide enhanced protections to contractor, subcontractor, and grantee employees who reasonably believe they experienced reprisal as a result of disclosing certain wrongdoing to specified entities and individuals.  To provide these protections to employees, the Department of Energy is required to: (1) include the Federal Acquisition Regulation (FAR) clause 52.203-17 in contracts over the simplified acquisition threshold ($250,000 as of February 2018) and awarded after September 30, 2013; and (2) make “best efforts” to include the FAR clause in any “major modification” to an existing contract awarded before the law went into effect.  Because whistleblowers play an important role in keeping our Government and its contractors honest, efficient, and accountable, we initiated this inspection to determine whether the Department had incorporated the 41 U.S.C. 4712 enhanced contractor whistleblower protections into its contracts.

In October 2013, the Department issued guidance encouraging Contracting Officers to include the clause in major modifications to contracts and orders awarded.  In addition, the Department held meetings with procurement directors to obtain a status update on successes and obstacles to incorporate the clause into existing contracts.  We reviewed 30 of the Department’s largest contracts, totaling approximately $386 billion, and found that the Department successfully incorporated the FAR clause into 28 of those contracts.  For the two contracts that did not have the FAR clause (one with Bechtel National, Inc. and another with URS-CH2M Oak Ridge LLC), Department contracting officials attempted to incorporate the FAR clause bilaterally (agreed upon by both parties) following passage of the law.  However, the contractors did not agree to include it in their contracts, citing numerous reasons, including that the FAR clause is only mandatory for new contracts, whistleblower protections already existed, and the addition could potentially create additional costs.  Department officials stated that they do not have the unilateral right to insert the FAR clause; therefore, there was no way to include the FAR clause without contractor agreement.

Because the Department was successful in its efforts to include the FAR clause in 28 of the 30 contracts we reviewed, employees of these contractors have been afforded the additional whistleblower protections under 41 U.S.C. 4712.  While the thousands of contractor and subcontractor employees for the two contracts without the FAR clause are still covered under the Department’s existing whistleblower program, they have not been afforded the additional whistleblower protections under 41 U.S.C. 4712, such as the increased statute of limitations from 90 days to 3 years for filing a complaint.   If major modifications are made to the Bechtel National, Inc. or URS-CH2M Oak Ridge LLC contracts in the future, we suggest that the Office of Acquisition Management work with the Office of Environmental Management to ensure that Contracting Officers make best efforts to include the FAR clause.

Topic: Management & Administration