Agencies finalize Rule on Contractor Whistleblower Costs

Effective July 25, 2014, The Department of Defense, General Services Administration, and NASA have implemented as a final with changes, an interim rule amending the Federal Acquisition Regulation (FAR) to adopt a section of the National Defense Authorization Act (NDAA) for the Fiscal Year (FY) 2013.  The rule addressed permissible legal costs incurred by a contractor or subcontractor related to a whistleblower proceeding brought by the submission of a complaint of reprisal by the contractor or subcontractor.

            The final rule will stop government contractors and subcontractors from charging the government legal fees related to whistleblower retaliation suits. These fees, incurred with any proceeding brought by a contractor or subcontractor employee submitting a whistleblower complaint of reprisal in accordance with 41 U.S.C.4712 or 10 U.S.C.2409, are treated the same as any pre-existing cost principle treats costs incurred with any proceeding brought by a Federal, State, local, or foreign government. This applies for violations of, or failure to comply with, any laws or regulations by the contractor, or costs incurred in connection with any proceeding brought by a third party in the name of the U.S. under the False Claims Act, 31 U.S.C.3730.  The final rule has been modified to include whistleblower complaints in the provisions at FAR 31.205-47(c).