NASA Federal Acquisition Regulation Supplement (NFS): Contractor Whistleblower Protections, 43958-43961 [2014-17728]

Agencies

• National Aeronautics and Space Administration

[Federal Register Volume 79, Number 145 (Tuesday, July 29, 2014)]
[Rules and Regulations]
[Pages 43958-43961]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17728]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1803, 1816, and 1852

RIN 2700-AE08


NASA Federal Acquisition Regulation Supplement (NFS): Contractor 
Whistleblower Protections

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Interim rule.

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SUMMARY: NASA is issuing an interim rule amending the NASA FAR 
Supplement (NFS) to implement statutory requirements providing 
whistleblower protections for contractor and subcontractor employees 
and to address the allowability of legal costs incurred by a contractor 
related to whistleblower proceedings.

DATES: Effective date: July 29, 2014. In accordance with FAR 
1.108(d)(3), contracting officers are encouraged to include the changes 
in this interim rule in major modifications to contracts and orders 
awarded prior to the effective date of this interim rule.
    Comment date: Comments on this interim rule should be submitted in 
writing to the address shown below on or before September 29, 2014.

ADDRESSES: Interested parties may submit comments, identified by RIN 
number 2700-AE08 via the Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. 
Comments may also be submitted to Leigh Pomponio via email at 
leigh.pomponio@NASA.gov. Comments received generally will be posted 
without change to https://www.regulations.gov, including any personal 
information provided. To confirm receipt of your comment(s), please 
check www.regulations.gov, approximately two to three days after 
submission to verify posting.

FOR FURTHER INFORMATION CONTACT: Leigh Pomponio, NASA, Office of 
Procurement, email: leigh.pomponio@NASA.gov or phone: 202-358-0592.

SUPPLEMENTARY INFORMATION: 

A. Background

    This interim rule revises the NFS to implement a policy providing 
whistleblower protections for contractor and subcontractor employees. 
This rule implements 10 U.S.C. 2409 as amended by section 846 of the 
National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-
181) and section 827 of the National Defense Authorization Act for 
Fiscal Year 2013 (Pub. L. 112-239). Section 846, entitled Protection of 
Contractor Employees from Reprisal for Disclosure of Certain 
Information, and Section 827, entitled ``Enhancement of Whistleblower 
Protections for Contractor Employees,'' made extensive changes to 10 
U.S.C. 2409, entitled ``Contractor employees: protection from reprisal 
or disclosure.'' Paragraph (g) of section 827 amended paragraph (k) of 
10 U.S.C. 2324, ``Allowable costs under defense contracts'' which is 
also applicable to NASA contracts. Paragraph (g) is implemented by this 
interim rule.
    Paragraph 827(i)(1) specifies that the amendments made by section 
827 are applicable to--
    Contracts awarded on or after the effective date;
    Task orders entered into on or after the effective date, pursuant 
to contracts awarded before, on, or after such date; and
    Contracts awarded before the effective date, which are modified to 
include a contract clause providing for the applicability of such 
amendments.
    Paragraph 827(i)(3) requires that at the time of any major 
modification to a contract that was awarded before the effective date, 
the head of the contracting agency shall make best efforts to include, 
in the contract, a clause providing for the applicability to the 
contract of the amendments made by section 827.
    Section 846 of the NDAA for FY 2008 and Section 827 of the NDAA for 
FY 2013 created a standalone statute for NASA that is not dependent on 
the Federal Acquisition Regulation (FAR) coverage. The NASA contractor 
whistleblower rule is based on an independent statute that applies only 
to Title 10 agencies. Section 828, Pilot Program for Enhancement of 
Contractor Whistleblower Protections, of the NDAA for FY 2013 has been 
implemented in the FAR; see FAR Case 2013-015, 78 FR 60169, https://www.gpo.gov/fdsys/pkg/FR-2013-09-30/html/2013-23703.htm. Section 828 
establishes a four-year ``pilot program'' to provide enhanced 
whistleblower protections for employees of civilian agency contractors 
and subcontractors and suspend the use of FAR 3.901 through 3.906.
    The FAR also incorporates sections 827(g) and 828(d) of the NDAA 
for FY 2013 (Pub. L. 112-239); see FAR Case 2013-017, 78 FR 60173, 
https://www.gpo.gov/fdsys/pkg/FR-2013-09-30/pdf/2013-23764.pdf, which 
address legal costs incurred by a contractor in connection with a 
proceeding commenced by a contractor employee submitting a complaint 
under the applicable whistleblower section.

B. Discussion and Analysis

    The current FAR addresses this subject at subpart 3.9. This rule 
will add NASA-unique requirements at Subpart 1803.9 of the NFS, 
entitled ``Whistleblower Protections for Contractor Employees.'' The 
subpart covers the policy, procedures for filing and investigating 
complaints, remedies, clause prescriptions, and a related clause at NFS 
1852.203-71, entitled ``Requirement to Inform Employees of 
Whistleblower Rights''.
    This interim rule also adds a prescription at 1816.3 and a clause 
1852.216-90, ``Allowability of Legal Costs Incurred in Connection with 
a Whistleblower Proceeding'' to implement paragraph (g) of section 827 
which addresses treatment of cost incurred in connection with 
whistleblower proceedings. Due to the effective date of the Act, and 
because the Act encourage agencies to modify contracts (at the time of 
any major modification to a contract) that were awarded before the 
effective date of the Act, it is necessary to create a revised cost 
principle applicable to any task orders issued against contracts 
awarded prior to the effective date of this regulation and any 
contracts modified to implement section 827. Otherwise, FAR clause 
52.216-7, Allowable Cost and Payment governs.

C. Changes to NFS

    The statutory changes to 10 U.S.C. 2409 made by section 846 of the 
National Defense Authorization Act for Fiscal Year 2008 and section 827 
of the National Defense Authorization Act for

[[Page 43959]]

Fiscal Year 2013 are implemented in the NFS by adding subpart 1803.9 
which heretofore did not exist. This subpart adds NASA-specific 
whistleblower protections for contractor employees. To fully implement 
the statutory changes, a prescription and clause is added to create a 
revised cost principle that covers limited circumstances and a limited 
time period.

D. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

E. Regulatory Flexibility Act

    NASA certifies that this interim rule will not 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 the rule neither changes the substance of contract or 
solicitation procedures or policies nor creates a whistleblower 
protection for contractor employees. Such protections currently exist, 
and this case only clarifies contractors' rights and the remedies 
available to their employees.

F. Paperwork Reduction Act

    This interim rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. Chapter 35).

G. Determination To Issue an Interim Rule

    A determination has been made by the Assistant Administrator for 
Procurement, pursuant to 41 U.S.C. 1701(d) that urgent and compelling 
reasons exist to justify promulgating this rule on an interim basis 
without prior opportunity for public comment. This action is necessary 
for the following reasons: First, by operation of law, the revised 
statute became effective on July 1, 2013 (i.e., Congress included 
language in section 827 specifically addressing the effective date of 
the changes to 10 U.S.C. 2409). Second, the revisions impose new 
responsibilities on agencies and create certain new rights for 
contractor employees. Specifically, as of July 1, 2013:

--There are changes and additions in the list of entities to whom a 
whistleblower disclosure makes the whistleblower eligible for 
additional protections against reprisal;
--Agency heads have expanded responsibilities to take specific actions 
with regard to a NASA Inspector General finding of reprisal against a 
contractor whistleblower;
--The law requires that the written notice to employees of their 
whistleblower rights must be provided in the ``predominant native 
language of the workforce'';
--For the first time, contractors must flow down to subcontractors the 
requirement to provide written notice to subcontractor employees; and
--There is a new exemption for elements of the intelligence community 
that was not available under previous laws.

    The most effective and efficient way to ensure awareness and 
compliance by agencies and contractors with all of these requirements 
is through immediate regulatory change. Delaying promulgation may delay 
the effective date of regulations but will not postpone when the law 
becomes applicable to contractors and subcontractors. Thus, ordinary 
notice and comment procedures would unnecessarily increase the risk of 
confusion and noncompliance, defeating the regulatory objective.
    Moreover, there is little likelihood that the publication of this 
interim rule without prior comment will increase burden on contractors. 
This interim regulation qualifies as an interpretative rule, as it 
provides basic guidance that agencies and contractors need to comply 
with the statute. Indeed, this regulation prescribes little beyond that 
which is set forth clearly in the statutes.
    Nevertheless, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), NASA 
will consider public comments received in response to this interim rule 
in the formation of the Agency's final rule.

List of Subjects in 48 CFR Parts 1803, 1816, and 1852

    Government procurement.

William P. McNally,
Assistant Administrator for Procurement.

    Accordingly, 48 CFR Parts 1803, 1816, and 1852 are amended as 
follows:

0
1. The authority citation for 48 CFR parts 1803, 1816, and 1852 are 
revised to read as follows:

    Authority:  51 U.S.C. 20113(a) and 48 CFR chapter 1.

PART 1803--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
2. Add subpart 1803.9 to read as follows:
Subpart 1803.9--Contractor Employee Whistleblower Protections
Sec.
1803.900 Scope of subpart.
1803.901 Definition.
1803.903 Policy.
1803.904 Procedures for filing complaints.
1803.905 Procedures for investigating complaints.
1803.906 Remedies.
1803.907 Classified information.
1803.970 Contract clause.

Subpart 1803.9--Contractor Employee Whistleblower Protections


1803.900  Scope of subpart.

    This subpart applies to NASA instead of FAR subpart 3.9.
    (a) This subpart implements 10 U.S.C. 2409 as amended by section 
846 of the National Defense Authorization Act for Fiscal Year 2008 
(Pub. L. 110-181), section 842 of the National Defense Authorization 
Act for Fiscal Year 2009 (Pub. L. 110-417), and section 827 of the 
National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 112-
239).
    (b) This subpart does not apply to any element of the intelligence 
community, as defined in 50 U.S.C. 3003(4). This subpart does not apply 
to any disclosure made by an employee of a contractor or subcontractor 
of an element of the intelligence community if such disclosure--
    (1) Relates to an activity or an element of the intelligence 
community; or
    (2) Was discovered during contract or subcontract services provided 
to an element of the intelligence community.


1803.901  Definition.

    Abuse of authority, as used in this subpart, means an arbitrary and 
capricious exercise of authority that is inconsistent with the mission 
of NASA or the successful performance of a NASA contract.


1803.903  Policy.

    (a) Policy. 10 U.S.C. 2409 prohibits contractors or subcontractors 
from discharging, demoting, or otherwise discriminating against an 
employee as a reprisal for disclosing, to any of the entities listed at 
paragraph (b) of this section, information that the employee

[[Page 43960]]

reasonably believes is evidence of gross mismanagement of a NASA 
contract, a gross waste of NASA funds, an abuse of authority relating 
to a NASA contract, a substantial and specific danger to public health 
or safety, or a violation of law, rule, or regulation related to a NASA 
contract (including the competition for or negotiation of a contract). 
Such reprisal is prohibited even if it is undertaken at the request of 
an executive branch official, unless the request takes the form of a 
non-discretionary directive and is within the authority of the 
executive branch official making the request.
    (b) Entities to whom disclosure may be made:
    (1) A Member of Congress or a representative of a committee of 
Congress.
    (2) The NASA Inspector General or any other Inspector General that 
has oversight over contracts awarded by or on behalf of NASA.
    (3) The Government Accountability Office.
    (4) A NASA employee responsible for contract oversight or 
management.
    (5) An authorized official of the Department of Justice or other 
law enforcement agency.
    (6) A court or grand jury.
    (7) A management official or other employee of the contractor or 
subcontractor who has the responsibility to investigate, discover, or 
address misconduct.
    (c) Disclosure clarified. An employee who initiates or provides 
evidence of contractor or subcontractor misconduct in any judicial or 
administrative proceeding relating to waste, fraud, or abuse on a NASA 
contract shall be deemed to have made a disclosure.
    (d) Contracting officer actions. A contracting officer who receives 
a complaint of reprisal of the type described in paragraph (a) of this 
section shall forward it to legal counsel and to the NASA Inspector 
General.


1803.904  Procedures for filing complaints.

    (a) Any employee of a contractor or subcontractor who believes that 
he or she has been discharged, demoted, or otherwise discriminated 
against contrary to the policy in 1803.903 may file a complaint with 
the Inspector General of NASA.
    (b) A complaint may not be brought under this section more than 
three years after the date on which the alleged reprisal took place.
    (c) The complaint shall be signed and shall contain--
    (1) The name of the contractor;
    (2) The contract number, if known; if not known, a description 
reasonably sufficient to identify the contract(s) involved;
    (3) The violation of law, rule, or regulation giving rise to the 
disclosure;
    (4) The nature of the disclosure giving rise to the discriminatory 
act, including the party to whom the information was disclosed; and
    (5) The specific nature and date of the reprisal.


1803.905  Procedures for investigating complaints.

    (a) Unless the NASA Inspector General makes a determination that 
the complaint is frivolous, fails to allege a violation of the 
prohibition in 1803.903, or has been previously addressed in another 
Federal or State judicial or administrative proceeding initiated by the 
complainant, the NASA Inspector General will investigate the complaint.
    (b) If the NASA Inspector General determines that a complaint 
merits further investigation, the NASA Inspector General will--
    (1) Notify the complainant, the contractor alleged to have 
committed the violation, and the head of the Agency;
    (2) Conduct an investigation; and
    (3) Provide a written report of findings to the complainant, the 
contractor alleged to have committed the violation, and the head of the 
Agency.
    (c) The NASA Inspector General--
    (1) Will determine that the complaint is frivolous or will submit 
the report addressed in paragraph (b) of this section within 180 days 
after receiving the complaint; and
    (2) If unable to submit a report within 180 days, will submit the 
report within the additional time period, up to 180 days, to which the 
person submitting the complaint agrees.
    (d) The NASA Inspector General may not respond to any inquiry or 
disclose any information from or about any person alleging the 
reprisal, except to the extent that such response or disclosure is--
    (1) Made with the consent of the person alleging reprisal;
    (2) Made in accordance with 5 U.S.C. 552a (the Freedom of 
Information Act) or as required by any other applicable Federal law; or
    (3) Necessary to conduct an investigation of the alleged reprisal.
    (e) The legal burden of proof specified at paragraph (e) of 5 
U.S.C. 1221 (Individual Right of Action in Certain Reprisal Cases) 
shall be controlling for the purposes of an investigation conducted by 
the NASA Inspector General, decision by the head of the Agency, or 
judicial or administrative proceeding to determine whether prohibited 
discrimination has occurred.


1803.6  Remedies.

    (a) Not later than 30 days after receiving a NASA Inspector General 
report in accordance with 1803.905, the head of the Agency shall 
determine whether sufficient basis exists to conclude that the 
contractor has subjected the complainant to a reprisal as prohibited by 
1803.903 and shall either issue an order denying relief or shall take 
one or more of the following actions:
    (1) Order the contractor to take affirmative action to abate the 
reprisal.
    (2) Order the contractor to reinstate the person to the position 
that the person held before the reprisal, together with compensatory 
damages (including back pay), 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 contractor 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, as determined by the head of the Agency.
    (b) If the head of the Agency issues an order denying relief or has 
not issued an order within 210 days after the submission of the 
complaint or within 30 days after the expiration of an extension of 
time granted in accordance with 1803.905(3)(ii), and there is no 
showing that such delay is due to the bad faith of the complainant--
    (1) The complainant shall be deemed to have exhausted all 
administrative remedies with respect to the complaint; and
    (2) The complainant may bring a de novo action at law or equity 
against the contractor to seek compensatory damages and other relief 
available under 10 U.S.C. 2409 in the appropriate district court of the 
United States, which shall have jurisdiction over such an action 
without regard to the amount in controversy. Such an action shall, at 
the request of either party to the action, be tried by the court with a 
jury. An action under this authority may not be brought more than two 
years after the date on which remedies are deemed to have been 
exhausted.
    (c) Whenever a contractor fails to comply with an order issued by 
the head of agency in accordance with 10 U.S.C. 2409, the head of the 
Agency or designee shall request the Department of Justice to file an 
action for enforcement

[[Page 43961]]

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 paragraph, the court may grant appropriate relief, including 
injunctive relief, compensatory and exemplary damages, and reasonable 
attorney fees and costs. The person upon whose behalf an order was 
issued may also file such an action or join in an action filed by the 
head of the agency.
    (d) Any person adversely affected or aggrieved by an order issued 
by the head of the Agency in accordance with 10 U.S.C. 2409 may obtain 
judicial review of the order's conformance with the law, and the 
implementing regulation, 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 or designee. Review 
shall conform to chapter 7 of title 5, Unites States Code. Filing such 
an appeal shall not act to stay the enforcement of the order by the 
head of an agency, unless a stay is specifically entered by the court.
    (e) The rights and remedies provided for in this subpart may not be 
waived by any agreement, policy, form, or condition of employment.


1803.907  Classified information.

    Nothing in this subpart provides any rights to disclose classified 
information not otherwise provided by law.


1803.970  Contract clause.

    Use the clause at 1852.203-71, Requirement to Inform Employees of 
Whistleblower Rights, in all solicitations and contracts.

PART 1816--TYPES OF CONTRACTS

0
3. Section 1816.307-70 is amended by adding paragraph (g) to read as 
follows:


1816.307-70  NASA contract clauses.

* * * * *
    (g) As required by section 827 of the National Defense 
Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), use the 
clause at 1852.216-90, Allowability of Costs Incurred in Connection 
With a Whistleblower Proceeding--
    (1) In task orders entered pursuant to contracts awarded before 
September 30, 2013, that include the clause at FAR 52.216-7, Allowable 
Cost and Payment; and
    (2) In contracts awarded before September 30, 2013, that--
    (i) Include the clause at FAR 52.216-7, Allowable Cost and Payment; 
and
    (ii) Are modified to include the clause at 1852.203-71, Requirement 
to Inform Employees of Whistleblower Rights, dated June 2013 or later.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Section 1852.203-71is added to read as follows:


1852.203-71  Requirement to inform employees of whistleblower rights.

    As prescribed in 1803.970, use the following clause:

Requirement to Inform Employees of Whistleblower Rights

[August 2014]

    (a) The Contractor shall inform its employees in writing, in the 
predominant native language of the workforce, of contractor employee 
whistleblower rights and protections under 10 U.S.C. 2409, as 
described in subpart 1803.09 of the NASA FAR Supplement.
    (b) The Contractor shall include the substance of this clause, 
including this paragraph (b), in all subcontracts.
    (End of clause)

0
5. Section 1852.216-90 is added to read as follows:


1852.216-90  Allowability of legal costs incurred in connection with a 
whistleblower proceeding.

    As prescribed in 216.307-70(g), use the following clause:

Allowability of Legal Costs Incurred In Connection with a Whistleblower 
Proceeding

[August 2014]

    Pursuant to section 827 of the National Defense Authorization 
Act for Fiscal year 2013 (Pub. L. 112-239), notwithstanding FAR 
clause 52.216-7, Allowable Cost and Payment--
    (1) The restrictions of FAR 31.205-47(b) on allowability of 
costs related to legal and other proceedings also apply to any 
proceeding brought by a contractor employee submitting a complaint 
under 10 U.S.C. 2409, entitled ``Contractor employees: protection 
from reprisal for disclosure of certain information;'' and
    (2) Costs incurred in connection with a proceeding that is 
brought by a contractor employee submitting a complaint under 10 
U.S.C. 2409 are also unallowable if the result is an order to take 
corrective action under 10 U.S.C. 2409.
    (End of clause)
[FR Doc. 2014-17728 Filed 7-28-14; 8:45 am]
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