Government Contracts Monitor

DOD Adopts Final Rule Enhancing Whistleblower Protections and Interim Rule on Contractor Access to Litigation Information

March 11, 2014

Contractors should be aware of two Rules recently adopted by DOD – both effective February 28, 2014. First, DOD adopted a final rule implementing statutory amendments enhancing whistleblower protections for contractor and subcontractor employees. Second, DOD issued an interim rule allowing its litigation support contractors access to a broad range of “litigation information,” including sensitive information and computer software and technical data, subject to certain protections.

Whistleblower Protections

Among other things, the Final Rule requires notice to employees of their whistleblower rights, prohibits reprisal at the request of an executive branch official, except in limited circumstances, and explicitly states that nothing in these provisions provides any rights to disclose classified information not otherwise provided by law. The Final Rule revises DFARS Subpart 203.9 to implement Section 827 of the National Defense Authorization Act (NDAA) for Fiscal Year 2013 (except Paragraph (g) of Section 827, pertaining to allowable costs under defense contracts, which is being addressed in a separate DFARS case). The Final Rule largely adopts DOD’s previously published Interim Rule, which became effective September 30, 2013, with relatively minor changes, including clarifying that DFARS Subpart 203.9 is to be used as to DOD contracts, in lieu of FAR Subpart 3.9, in view of the separate statutory whistleblower protection regime applicable to DOD, set forth in 10 U.S.C. § 2409.

Access to Litigation Information

The Interim Rule creates new DFARS Subpart 204.74, and three new associated clauses, implementing the statutory authority conferred by Section 802 of the National Defense Authorization Act (NDAA) for Fiscal Year 2012 (FY12), and new 10 U.S.C. § 129d. The basic objective of the new rule is to expressly authorize DOD to provide its litigation support contractors a broad range of “litigation information,” subject to (i) limiting the use of such information to litigation support purposes, and (ii) requiring “all protections necessary” to preclude misuse or unauthorized disclosure. The new clauses, required to be flowed down into all subcontracts, provide notice of the authorized possible disclosure to offerors and contractors. The statute and new rule provide the data owner with legal remedies, as a third-party beneficiary, and require the litigation support contractor to indemnify the government from any breach claim or damages. Comments on the Interim Rule are invited on or before April 29, 2014, for consideration in formulating a proposed final rule.

Hopewell Darneille is the attorney responsible for the content of this article.