114th Congress } { Rept. 114-836
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
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WHISTLEBLOWER PROTECTIONS FOR CONTRACTORS ACT
_______
November 29, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 5920]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 5920) to enhance whistleblower
protection for contractor and grantee employees, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Committee Statement and Views.................................... 2
Section-by-Section............................................... 3
Explanation of Amendments........................................ 4
Committee Consideration.......................................... 4
Roll Call Votes.................................................. 4
Correspondence................................................... 5
Application of Law to the Legislative Branch..................... 7
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 7
Statement of General Performance Goals and Objectives............ 7
Duplication of Federal Programs.................................. 7
Disclosure of Directed Rule Makings.............................. 7
Federal Advisory Committee Act................................... 7
Unfunded Mandate Statement....................................... 7
Earmark Identification........................................... 7
Committee Estimate............................................... 8
Budget Authority and Congressional Budget Office Cost Estimate... 8
Changes in Existing Law Made by the Bill, as Reported............ 9
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 5920, the Whistleblower Protections for Contractors
Act, expands whistleblower protections to federal contractors
by providing subgrantees and personal services contractors the
same whistleblower protections currently afforded to
contractors, direct grant recipients and subcontractors. H.R.
5920 also prohibits reimbursement for legal fees in connection
with any criminal, civil, or administrative proceedings that
are accrued in defense against reprisal claims.
BACKGROUND AND NEED FOR LEGISLATION
H.R. 5920 extends whistleblower protections to subgrantees
and personal service contractors on both defense and civilian
contracts and grant awards. The bill also makes permanent the
current whistleblower protection pilot program for civilian
contract and grant employees.
Specifically, the bill extends to ``personal services
contractors'' certain whistleblower protections. Under the
Federal Acquisition Regulation (FAR), a personal services
contract ``is characterized by the employer-employee
relationship it creates between the Government and the
contractor's personnel.''\1\ While such contractors are
critical partners with the Federal Government and well-
positioned to identify waste, fraud, and abuse, this category
of contractors is not currently afforded the same whistleblower
protections as other categories of contractors.
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\1\Federal Acquisition Regulation, 37.104--Personal Services
Contract, http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/
fardfars/far/37.htm#P52_7302 (Last accessed 092616).
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Under H.R. 5920, whistleblower protections currently
authorized for Department of Defense contractors,
subcontractors, grantees, or subgrantees under 10 U.S.C.
Sec. 2409, are extended to personal services contractors.
Similarly, H.R. 5920 extends to subgrantees and personal
services contractors the whistleblower protections currently
authorized for contractors, subcontractors, and grantees under
Section 4712(a)(1) of title 41, United States Code.
H.R. 5920 also makes permanent protections which prohibit
an employee of a contractor, subcontractor, or grantee,
subgrantee, or personal services contractor from being
discharged, demoted, or otherwise discriminated against as a
reprisal for disclosing information that the employee
reasonably believes is evidence of gross mismanagement of a
federal contract or grant, a gross waste of federal funds, an
abuse of authority relating to a federal contract or grant, a
substantial and specific danger to public health or safety, or
a violation of law, rule, or regulation related to a federal
contract (including the competition for or negotiation of a
contract) or grant.
These protections were part of a pilot program passed as
part of the National Defense Authorization Act for Fiscal Year
2013 signed into law on January 2, 2013.\2\ The four-year pilot
program authorized whistleblower protections for civilian grant
and contract employees from July 1, 2013 through January 1,
2017. The pilot program expanded the scope of protections
implemented in the American Recovery and Reinvestment Act of
2009, which included whistleblower protections for recipients
of stimulus fund contracts.\3\
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\2\National Defense Authorization Act for Fiscal Year 2013, Pub. L.
No. 112-239, Division A, Title VIII, Sec. 828 (2013).
\3\American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-
5, Division A, Title XV, Sec. 1553 (2009).
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Upon introducing H.R. 5920, the original sponsors discussed
the need for the enhanced and expended whistleblower
protections provided by this legislation. In a bipartisan joint
press release, House sponsors stated, ``Whistleblowers are the
front line of defense against waste, fraud, and abuse. The
employees who work on federal contracts and grants see
firsthand when taxpayer money is being wasted, and they must be
protected against retaliation when they blow the whistle on
wrongdoing. This bill makes such protections permanent and
ensures more employees are covered.''\4\
---------------------------------------------------------------------------
\4\Press release issued by Representatives Elijah E. Cummings,
Jason Chaffetz, Tammy Duckworth, Hakeem Jeffries, John Conyers, Jr.,
and Stephen Lynch entitled, ``House Members Introduce Bipartisan
Legislation to Expand Whistleblower Protections for Federal
Contractors'' (July 22, 2016), https://conyers.house.gov/media-center/
press-releases/house-members-introduce-bipartisan-legislation-expand-
whistleblower (Last accessed 0925/16).
---------------------------------------------------------------------------
H.R. 5920 also prohibits reimbursement for legal fees
accrued in defense against whistleblower retaliation claims,
and makes clear that, for contracts in existence at the time of
the bill's enactment, when there is a major modification of the
contract, the head of the contracting agency is required to add
a clause applying the bill's amendments.
LEGISLATIVE HISTORY
H.R. 5920 was introduced by Ranking Member Elijah E.
Cummings (D-MD) on July 21, 2016 and referred to the Committee
on Oversight and Government Reform. In addition, the bill was
referred to the Committee on Armed Services. H.R. 5920 was
favorably reported by the Committee on Oversight and Government
Reform by unanimous consent on September 15, 2016, without
amendment.
Similar legislation, S. 795, was introduced in the Senate
by Senator Claire McCaskill (D-MO) on March 18, 2015 and
referred to the Senate Homeland Security and Governmental
Affairs Committee (HSGAC), with HSGAC Chairman Ron Johnson (R-
WI) as an original cosponsor. On June 7, 2016, HSGAC ordered S.
795 favorably reported, with an amendment. On June 23, 2016, S.
795 was passed by unanimous consent in the Senate, with an
amendment, and referred to the Committee on Oversight and
Government Reform and the Committee on Armed Services in the
House.
Section-by-Section
Section 1. Short title
Designates the short title of the bill as the
``Whistleblower Protections for Contractors Act.''
Section 2. Enhancement of whistleblower protection for contractor and
grantee employees
Subsection (a) expands whistleblower protections to
employees of subgrantees with regard to civilian grants and to
employees of personal services contractors with regard to both
defense and civilian contracts. It also permanently extends the
civilian pilot program of whistleblower protections in 41
U.S.C. Sec. 4712, and makes necessary technical and conforming
amendments.
Subsection (b) prohibits reimbursement for legal fees in
connection with any criminal, civil or administrative
proceedings that are accrued in defense against reprisal
claims.
Subsection (c) requires that, for contracts in existence at
the time of the bill's enactment, when there is a major
modification of the contract, the head of the contracting
agency add a clause applying the bill's amendments.
Explanation of Amendments
No amendments to H.R. 5920 were offered or adopted during
Full Committee consideration of the bill.
Committee Consideration
On September 15, 2016 the Committee met in open session and
ordered reported favorably the bill, H.R. 5920, by unanimous
consent, a quorum being present.
Roll Call Votes
No roll call votes were requested or conducted during Full
Committee consideration of H.R. 5920.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill enhances whistleblower protection for contractor and
grantee employees. As such this bill does not relate to
employment or access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goal and objective of the bill is to enhance whistleblower
protection for contractor and grantee employees.
Duplication of Federal Programs
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of 5 U.S.C. 551.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
herein.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Committee Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
this bill. However, clause 3(d)(2)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for this bill from the Director of
Congressional Budget Office:
September 30, 2016.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5920, the
Whistleblower Protections for Contractors Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
H.R. 5920--Whistleblower Protections for Contractors Act
H.R. 5920 would amend federal law to permanently extend
legal protections to certain nonfederal employees (contractors,
subcontractors, grantees, and others employed by entities that
receive federal finds) who report waste, fraud, or abuse
involving federal funds. Specifically, under the bill, anyone
who reports the misuse of federal funds could not be demoted,
discharged, or discriminated against because of the disclosure.
The current four-year pilot program that extends those same
protections ends in December 2016.
The cost to implement H.R. 5920 would depend on the number
of whistleblower claims made by those nonfederal employees.
Evidence from the pilot program that currently protects certain
nonfederal employees from such discrimination suggests that the
number of such claims brought by such employees has totaled
less than 20 for each of the 26 major federal agencies. CBO
estimates that implementing H.R. 5920 would cost about $3,000
to investigate each claim, or about $5 million over the 2017-
2021 period. Any such spending would be subject to the
availability of appropriated funds. Enacting the bill could
affect direct spending by agencies not funded through annual
appropriations; therefore, pay-as-you-go procedures apply. CBO
estimates, however, that any net increase in spending by those
agencies would be negligible. Enacting H.R. 5920 would not
affect revenues.
CBO estimates that enacting H.R. 5920 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
H.R. 5920 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On May 27, 2016, CBO transmitted a cost estimate for S.
795, a bill to enhance whistleblower protection for contractor
and grantee employees, as ordered reported by the Senate
Committee on Homeland Security and Governmental Affairs on
February 10, 2016. The two pieces of legislation are similar
and CBO's estimates of their budgetary effects are the same.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
TITLE 10, UNITED STATES CODE
* * * * * * *
SUBTITLE A--GENERAL MILITARY LAW
* * * * * * *
PART IV--SERVICE, SUPPLY, AND PROCUREMENT
* * * * * * *
CHAPTER 137--PROCUREMENT GENERALLY
* * * * * * *
Sec. 2324. Allowable costs under defense contracts
(a) Indirect Cost That Violates a FAR Cost Principle.--The
head of an agency shall require that a covered contract provide
that if the contractor submits to the agency a proposal for
settlement of indirect costs incurred by the contractor for any
period after such costs have been accrued and if that proposal
includes the submission of a cost which is unallowable because
the cost violates a cost principle in the Federal Acquisition
Regulation or applicable agency supplement to the Federal
Acquisition Regulation, the cost shall be disallowed.
(b) Penalty for Violation of Cost Principle.--(1) If the head
of the agency determines that a cost submitted by a contractor
in its proposal for settlement is expressly unallowable under a
cost principle referred to in subsection (a) that defines the
allowability of specific selected costs, the head of the agency
shall assess a penalty against the contractor in an amount
equal to--
(A) the amount of the disallowed cost allocated to
covered contracts for which a proposal for settlement
of indirect costs has been submitted; plus
(B) interest (to be computed based on provisions in
the Federal Acquisition Regulation) to compensate the
United States for the use of any funds which a
contractor has been paid in excess of the amount to
which the contractor was entitled.
(2) If the head of the agency determines that a proposal for
settlement of indirect costs submitted by a contractor includes
a cost determined to be unallowable in the case of such
contractor before the submission of such proposal, the head of
the agency shall assess a penalty against the contractor in an
amount equal to two times the amount of the disallowed cost
allocated to covered contracts for which a proposal for
settlement of indirect costs has been submitted.
(c) Waiver of Penalty.--The Federal Acquisition Regulation
shall provide for a penalty under subsection (b) to be waived
in the case of a contractor's proposal for settlement of
indirect costs when--
(1) the contractor withdraws the proposal before the
formal initiation of an audit of the proposal by the
Federal Government and resubmits a revised proposal;
(2) the amount of unallowable costs subject to the
penalty is insignificant; or
(3) the contractor demonstrates, to the contracting
officer's satisfaction, that--
(A) it has established appropriate policies
and personnel training and an internal control
and review system that provide assurances that
unallowable costs subject to penalties are
precluded from being included in the
contractor's proposal for settlement of
indirect costs; and
(B) the unallowable costs subject to the
penalty were inadvertently incorporated into
the proposal.
(d) Applicability of Contract Disputes Procedure to
Disallowance of Cost and Assessment of Penalty.--An action of
the head of an agency under subsection (a) or (b)--
(1) shall be considered a final decision for the
purposes of section 7103 of title 41; and
(2) is appealable in the manner provided in section
7104(a) of title 41.
(e) Specific Costs Not Allowable.--(1) The following costs
are not allowable under a covered contract:
(A) Costs of entertainment, including amusement,
diversion, and social activities and any costs directly
associated with such costs (such as tickets to shows or
sports events, meals, lodging, rentals, transportation,
and gratuities).
(B) Costs incurred to influence (directly or
indirectly) legislative action on any matter pending
before Congress, a State legislature, or a legislative
body of a political subdivision of a State.
(C) Costs incurred in defense of any civil or
criminal fraud proceeding or similar proceeding
(including filing of any false certification) brought
by the United States where the contractor is found
liable or has pleaded nolo contendere to a charge of
fraud or similar proceeding (including filing of a
false certification).
(D) Payments of fines and penalties resulting from
violations of, or failure to comply with, Federal,
State, local, or foreign laws and regulations, except
when incurred as a result of compliance with specific
terms and conditions of the contract or specific
written instructions from the contracting officer
authorizing in advance such payments in accordance with
applicable provisions of the Federal Acquisition
Regulation.
(E) Costs of membership in any social, dining, or
country club or organization.
(F) Costs of alcoholic beverages.
(G) Contributions or donations, regardless of the
recipient.
(H) Costs of advertising designed to promote the
contractor or its products.
(I) Costs of promotional items and memorabilia,
including models, gifts, and souvenirs.
(J) Costs for travel by commercial aircraft which
exceed the amount of the standard commercial fare.
(K) Costs incurred in making any payment (commonly
known as a ``golden parachute payment'') which is--
(i) in an amount in excess of the normal
severance pay paid by the contractor to an
employee upon termination of employment; and
(ii) is paid to the employee contingent upon,
and following, a change in management control
over, or ownership of, the contractor or a
substantial portion of the contractor's assets.
(L) Costs of commercial insurance that protects
against the costs of the contractor for correction of
the contractor's own defects in materials or
workmanship.
(M) Costs of severance pay paid by the contractor to
foreign nationals employed by the contractor under a
service contract performed outside the United States,
to the extent that the amount of severance pay paid in
any case exceeds the amount paid in the industry
involved under the customary or prevailing practice for
firms in that industry providing similar services in
the United States, as determined under the Federal
Acquisition Regulation.
(N) Costs of severance pay paid by the contractor to
a foreign national employed by the contractor under a
service contract performed in a foreign country if the
termination of the employment of the foreign national
is the result of the closing of, or the curtailment of
activities at, a United States military facility in
that country at the request of the government of that
country.
(O) Costs incurred by a contractor in connection with
any criminal, civil, or administrative proceeding
commenced by the United States or a State, to the
extent provided in subsection (k).
(P) Costs of compensation of any contractor employee
for a fiscal year, regardless of the contract funding
source, to the extent that such compensation exceeds
$625,000 adjusted annually for the U.S. Bureau of Labor
Statistics Employment Cost Index for total compensation
for private industry workers, by occupational and
industry group not seasonally adjusted, except that the
Secretary of Defense may establish exceptions for
positions in the science, technology, engineering,
mathematics, medical, and cybersecurity fields and
other fields requiring unique areas of expertise upon a
determination that such exceptions are needed to ensure
that the Department of Defense has continued access to
needed skills and capabilities.
(P) Costs of compensation of contractor and
subcontractor employees for a fiscal year, regardless
of the contract funding source, to the extent that such
compensation exceeds $487,000 per year, adjusted
annually to reflect the change in the Employment Cost
Index for all workers, as calculated by the Bureau of
Labor Statistics, except that the head of an executive
agency may establish one or more narrowly targeted
exceptions for scientists, engineers, or other
specialists upon a determination that such exceptions
are needed to ensure that the executive agency has
continued access to needed skills and capabilities.
(Q) Costs incurred by a contractor in connection with
a congressional investigation or inquiry into an issue
that is the subject matter of a proceeding resulting in
a disposition as described in subsection (k)(2).
(2)(A) The Secretary of Defense may provide in a military
banking contract that the provisions of paragraphs (1)(M) and
(1)(N) shall not apply to costs incurred under the contract by
the contractor for payment of mandated foreign national
severance pay. The Secretary may include such a provision in a
military banking contract only if the Secretary determines,
with respect to that contract, that the contractor has taken
(or has established plans to take) appropriate actions within
the contractor's control to minimize the amount and number of
incidents of the payment of severance pay by the contractor to
employees under the contract who are foreign nationals.
(B) In subparagraph (A):
(i) The term ``military banking contract'' means a
contract between the Secretary and a financial
institution under which the financial institution
operates a military banking facility outside the United
States for use by members of the armed forces stationed
or deployed outside the United States and other
authorized personnel.
(ii) The term ``mandated foreign national severance
pay'' means severance pay paid by a contractor to a
foreign national employee the payment of which by the
contractor is required in order to comply with a law
that is generally applicable to a significant number of
businesses in the country in which the foreign national
receiving the payment performed services under the
contract.
(C) Subparagraph (A) does not apply to a contract with a
financial institution that is owned or controlled by citizens
or nationals of a foreign country, as determined by the
Secretary of Defense. Such a determination shall be made in
accordance with the criteria set out in paragraph (1) of
section 4(g) of the Buy American Act (as added by section
7002(2) of the Omnibus Trade and Competitiveness Act of 1988)
and the policy guidance referred to in paragraph (2)(A) of that
section.
(3)(A) Pursuant to the Federal Acquisition Regulation and
subject to the availability of appropriations, the head of an
agency awarding a covered contract (other than a contract to
which paragraph (2) applies) may waive the application of the
provisions of paragraphs (1)(M) and (1)(N) to that contract if
the head of the agency determines that--
(i) the application of such provisions to the
contract would adversely affect the continuation of a
program, project, or activity that provides significant
support services for members of the armed forces
stationed or deployed outside the United States;
(ii) the contractor has taken (or has established
plans to take) appropriate actions within the
contractor's control to minimize the amount and number
of incidents of the payment of severance pay by the
contractor to employees under the contract who are
foreign nationals; and
(iii) the payment of severance pay is necessary in
order to comply with a law that is generally applicable
to a significant number of businesses in the country in
which the foreign national receiving the payment
performed services under the contract or is necessary
to comply with a collective bargaining agreement.
(B) The head of an agency shall include in the solicitation
for a covered contract a statement indicating--
(i) that a waiver has been granted under subparagraph
(A) for the contract; or
(ii) whether the head of the agency will consider
granting such a waiver, and, if the agency head will
consider granting a waiver, the criteria to be used in
granting the waiver.
(C) The head of an agency shall make the final determination
regarding whether to grant a waiver under subparagraph (A) with
respect to a covered contract before award of the contract.
(4) The provisions of the Federal Acquisition Regulation
implementing this section may establish appropriate
definitions, exclusions, limitations, and qualifications.
(f) Required Regulations.--(1) The Federal Acquisition
Regulation shall contain provisions on the allowability of
contractor costs. Such provisions shall define in detail and in
specific terms those costs which are unallowable, in whole or
in part, under covered contracts. The regulations shall, at a
minimum, clarify the cost principles applicable to contractor
costs of the following:
(A) Air shows.
(B) Membership in civic, community, and professional
organizations.
(C) Recruitment.
(D) Employee morale and welfare.
(E) Actions to influence (directly or indirectly)
executive branch action on regulatory and contract
matters (other than costs incurred in regard to
contract proposals pursuant to solicited or unsolicited
bids).
(F) Community relations.
(G) Dining facilities.
(H) Professional and consulting services, including
legal services.
(I) Compensation.
(J) Selling and marketing.
(K) Travel.
(L) Public relations.
(M) Hotel and meal expenses.
(N) Expense of corporate aircraft.
(O) Company-furnished automobiles.
(P) Advertising.
(Q) Conventions.
(2) The Federal Acquisition Regulation shall require that a
contracting officer not resolve any questioned costs until he
has obtained--
(A) adequate documentation with respect to such
costs; and
(B) the opinion of the contract auditor on the
allowability of such costs.
(3) The Federal Acquisition Regulation shall provide that, to
the maximum extent practicable, the contract auditor be present
at any negotiation or meeting with the contractor regarding a
determination of the allowability of indirect costs of the
contractor.
(4) The Federal Acquisition Regulation shall require that all
categories of costs designated in the report of the contract
auditor as questioned with respect to a proposal for settlement
be resolved in such a manner that the amount of the individual
questioned costs that are paid will be reflected in the
settlement.
(g) Applicability of Regulations to Subcontractors.--The
regulations referred to in subsections (e) and (f)(1) shall
require prime contractors of a covered contract, to the maximum
extent practicable, to apply the provisions of such regulations
to all subcontractors of the covered contract.
(h) Contractor Certification Required.--(1) A proposal for
settlement of indirect costs applicable to a covered contract
shall include a certification by an official of the contractor
that, to the best of the certifying official's knowledge and
belief, all indirect costs included in the proposal are
allowable. Any such certification shall be in a form prescribed
in the Federal Acquisition Regulation.
(2) The head of the agency or the Secretary of the military
department concerned may, in an exceptional case, waive the
requirement for certification under paragraph (1) in the case
of any contract if the head of the agency or the Secretary--
(A) determines in such case that it would be in the
interest of the United States to waive such
certification; and
(B) states in writing the reasons for that
determination and makes such determination available to
the public.
(i) Penalties for Submission of Cost Known as Not
Allowable.--The submission to an agency of a proposal for
settlement of costs for any period after such costs have been
accrued that includes a cost that is expressly specified by
statute or regulation as being unallowable, with the knowledge
that such cost is unallowable, shall be subject to the
provisions of section 287 of title 18 and section 3729 of title
31.
(j) Contractor To Have Burden of Proof.--In a proceeding
before the Armed Services Board of Contract Appeals, the United
States Court of Federal Claims, or any other Federal court in
which the reasonableness of indirect costs for which a
contractor seeks reimbursement from the Department of Defense
is in issue, the burden of proof shall be upon the contractor
to establish that those costs are reasonable.
(k) Proceeding Costs Not Allowable.--(1) Except as otherwise
provided in this subsection, costs incurred by a contractor or
subcontractor, or personal services contractor in connection
with any criminal, civil, or administrative proceeding
commenced by the United States, by a State, or by a contractor
or subcontractor, or personal services contractor employee
submitting a complaint under section 2409 of this title are not
allowable as reimbursable costs under a covered contract,
subcontract, or personal services contract if the proceeding
(A) relates to a violation of, or failure to comply with, a
Federal or State statute or regulation or to any other activity
described in subparagraphs (A) through (C) of section
2409(a)(1) of this title, and (B) results in a disposition
described in paragraph (2).
(2) A disposition referred to in paragraph (1)(B) is any of
the following:
(A) In the case of a criminal proceeding, a
conviction (including a conviction pursuant to a plea
of nolo contendere) by reason of the violation or
failure referred to in paragraph (1).
(B) In the case of a civil or administrative
proceeding involving an allegation of fraud or similar
misconduct, a determination of contractor or
subcontractor, or personal services contractor
liability on the basis of the violation or failure
referred to in paragraph (1).
(C) In the case of any civil or administrative
proceeding, the imposition of a monetary penalty or an
order to take corrective action under section 2409 of
this title by reason of the violation or failure
referred to in paragraph (1).
(D) A final decision--
(i) to debar or suspend the contractor or
subcontractor, or personal services contractor;
(ii) to rescind or void the contract,
subcontract, or personal services contract; or
(iii) to terminate the contract, subcontract,
or personal services contract for default;
by reason of the violation or failure referred to in
paragraph (1).
(E) A disposition of the proceeding by consent or
compromise if such action could have resulted in a
disposition described in subparagraph (A), (B), (C), or
(D).
(3) In the case of a proceeding referred to in paragraph (1)
that is commenced by the United States and is resolved by
consent or compromise pursuant to an agreement entered into by
a contractor or subcontractor, or personal services contractor
and the United States, the costs incurred by the contractor or
subcontractor, or personal services contractor in connection
with such proceeding that are otherwise not allowable as
reimbursable costs under such paragraph may be allowed to the
extent specifically provided in such agreement.
(4) In the case of a proceeding referred to in paragraph (1)
that is commenced by a State, the head of the agency or
Secretary of the military department concerned that awarded the
covered contract, subcontract, or personal services contract
involved in the proceeding may allow the costs incurred by the
contractor or subcontractor, or personal services contractor in
connection with such proceeding as reimbursable costs if the
agency head or Secretary determines, in accordance with the
Federal Acquisition Regulation, that the costs were incurred as
a result of (A) a specific term or condition of the contract,
subcontract, or personal services contract, or (B) specific
written instructions of the agency or military department.
(5)(A) Except as provided in subparagraph (C), costs incurred
by a contractor or subcontractor, or personal services
contractor in connection with a criminal, civil, or
administrative proceeding commenced by the United States or a
State in connection with a covered contract, subcontract, or
personal services contract may be allowed as reimbursable costs
under the contract, subcontract, or personal services contract
if such costs are not disallowable under paragraph (1), but
only to the extent provided in subparagraph (B).
(B)(i) The amount of the costs allowable under subparagraph
(A) in any case may not exceed the amount equal to 80 percent
of the amount of the costs incurred, to the extent that such
costs are determined to be otherwise allowable and allocable
under the Federal Acquisition Regulation.
(ii) Regulations issued for the purpose of clause (i) shall
provide for appropriate consideration of the complexity of
procurement litigation, generally accepted principles governing
the award of legal fees in civil actions involving the United
States as a party, and such other factors as may be
appropriate.
(C) In the case of a proceeding referred to in subparagraph
(A), contractor or subcontractor, or personal services
contractor costs otherwise allowable as reimbursable costs
under this paragraph are not allowable if (i) such proceeding
involves the same contractor or subcontractor, or personal
services contractor misconduct alleged as the basis of another
criminal, civil, or administrative proceeding, and (ii) the
costs of such other proceeding are not allowable under
paragraph (1).
(6) In this subsection:
(A) The term ``proceeding'' includes an
investigation.
(B) The term ``costs'', with respect to a
proceeding--
(i) means all costs incurred by a contractor
or subcontractor, or personal services
contractor, whether before or after the
commencement of any such proceeding; and
(ii) includes--
(I) administrative and clerical
expenses;
(II) the cost of legal services,
including legal services performed by
an employee of the contractor or
subcontractor, or personal services
contractor;
(III) the cost of the services of
accountants and consultants retained by
the contractor or subcontractor, or
personal services contractor; and
(IV) the pay of directors, officers,
and employees of the contractor or
subcontractor, or personal services
contractor for time devoted by such
directors, officers, and employees to
such proceeding.
(C) The term ``penalty'' does not include
restitution, reimbursement, or compensatory damages.
(l) Definitions.--In this section:
(1)(A) The term ``covered contract'' means a contract
for an amount in excess of $500,000 that is entered
into by the head of an agency, except that such term
does not include a fixed-price contract without cost
incentives or any firm fixed-price contract for the
purchase of commercial items.
(B) Effective on October 1 of each year that is
divisible by five, the amount set forth in subparagraph
(A) shall be adjusted to the equivalent amount in
constant fiscal year 1994 dollars. An amount, as so
adjusted, that is not evenly divisible by $50,000 shall
be rounded to the nearest multiple of $50,000. In the
case of an amount that is evenly divisible by $25,000
but is not evenly divisible by $50,000, the amount
shall be rounded to the next higher multiple of
$50,000.
(2) The term ``head of the agency'' or ``agency
head'' does not include the Secretary of a military
department.
(3) The term ``agency'' means the Department of
Defense, the Coast Guard, and the National Aeronautics
and Space Administration.
(4) The term ``compensation'', for a year, means the
total amount of wages, salary, bonuses and deferred
compensation for the year, whether paid, earned, or
otherwise accruing, as recorded in an employer's cost
accounting records for the year.
(6) The term ``fiscal year'' means a fiscal year
established by a contractor for accounting purposes.
* * * * * * *
CHAPTER 141--MISCELLANEOUS PROCUREMENT PROVISIONS
* * * * * * *
Sec. 2409. Contractor employees: protection from reprisal for
disclosure of certain information
(a) Prohibition of Reprisals.--(1) An employee of a
contractor, subcontractor, grantee, or subgrantee or personal
services contractor may not be discharged, demoted, or
otherwise discriminated against as a reprisal for disclosing to
a person or body described in paragraph (2) information that
the employee reasonably believes is evidence of the following:
(A) Gross mismanagement of a Department of Defense
contract or grant, a gross waste of Department funds,
an abuse of authority relating to a Department contract
or grant, or a violation of law, rule, or regulation
related to a Department contract (including the
competition for or negotiation of a contract) or grant.
(B) Gross mismanagement of a National Aeronautics and
Space Administration contract or grant, a gross waste
of Administration funds, an abuse of authority relating
to an Administration contract or grant, or a violation
of law, rule, or regulation related to an
Administration contract (including the competition for
or negotiation of a contract) or grant.
(C) A substantial and specific danger to public
health or safety.
(2) The persons and bodies described in this paragraph are
the persons and bodies as follows:
(A) A Member of Congress or a representative of a
committee of Congress.
(B) An Inspector General.
(C) The Government Accountability Office.
(D) An employee of the Department of Defense or the
National Aeronautics and Space Administration, as
applicable, responsible for contract oversight or
management.
(E) An authorized official of the Department of
Justice or other law enforcement agency.
(F) A court or grand jury.
(G) A management official or other employee of the
contractor or subcontractor who has the responsibility
to investigate, discover, or address misconduct.
(3) For the purposes of paragraph (1)--
(A) 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 Department of Defense or National
Aeronautics and Space Administration contract or grant
shall be deemed to have made a disclosure covered by
such paragraph; and
(B) a reprisal described in paragraph (1) is
prohibited even if it is undertaken at the request of a
Department or Administration official, unless the
request takes the form of a nondiscretionary directive
and is within the authority of the Department or
Administration official making the request.
(b) Investigation of Complaints.--(1) A person who believes
that the person has been subjected to a reprisal prohibited by
subsection (a) may submit a complaint to the Inspector General
of the Department of Defense, or the Inspector General of the
National Aeronautics and Space Administration in the case of a
complaint regarding the National Aeronautics and Space
Administration. Unless the Inspector General determines that
the complaint is frivolous, fails to allege a violation of the
prohibition in subsection (a), or has previously been addressed
in another Federal or State judicial or administrative
proceeding initiated by the complainant, the Inspector General
shall investigate the complaint and, upon completion of such
investigation, submit a report of the findings of the
investigation to the person, the contractor concerned, and the
head of the agency.
(2)(A) Except as provided under subparagraph (B), the
Inspector General shall make a determination that a complaint
is frivolous, fails to allege a violation of the prohibition in
subsection (a), or has previously been addressed in another
Federal or State judicial or administrative proceeding
initiated by the complainant or submit a report under paragraph
(1) within 180 days after receiving the complaint.
(B) If the Inspector General is unable to complete an
investigation in time to submit a report within the 180-day
period specified in subparagraph (A) and the person submitting
the complaint agrees to an extension of time, the Inspector
General shall submit a report under paragraph (1) within such
additional period of time, up to 180 days, as shall be agreed
upon between the Inspector General and the person submitting
the complaint.
(3) The 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--
(A) made with the consent of the person alleging the
reprisal;
(B) made in accordance with the provisions of section
552a of title 5 or as required by any other applicable
Federal law; or
(C) necessary to conduct an investigation of the
alleged reprisal.
(4) A complaint may not be brought under this subsection more
than three years after the date on which the alleged reprisal
took place.
(c) Remedy and Enforcement Authority.--(1) Not later than 30
days after receiving an Inspector General report pursuant to
subsection (b), the head of the agency concerned shall
determine whether there is sufficient basis to conclude that
the contractor concerned has subjected the complainant to a
reprisal prohibited by subsection (a) and shall either issue an
order denying relief or shall take one or more of the following
actions:
(A) Order the contractor to take affirmative action
to abate the reprisal.
(B) 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.
(C) 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.
(2) If the head of an executive agency issues an order
denying relief under paragraph (1) or has not issued an order
within 210 days after the submission of a complaint under
subsection (b), or in the case of an extension of time under
paragraph (b)(2)(B), not later than 30 days after the
expiration of the extension of time, and there is no showing
that such delay is due to the bad faith of the complainant, 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 contractor to seek compensatory damages and other relief
available under this section 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 paragraph
may not be brought more than two years after the date on which
remedies are deemed to have been exhausted.
(3) An Inspector General determination and an agency head
order denying relief under paragraph (2) shall be admissible in
evidence in any de novo action at law or equity brought
pursuant to this subsection.
(4) Whenever a person fails to comply with an order issued
under paragraph (1), the head of the agency shall 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 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.
(5) Any person adversely affected or aggrieved by an order
issued under paragraph (1) may obtain review of the order's
conformance with this subsection, and any regulations issued to
carry out 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. Review shall conform to chapter 7 of title 5.
Filing such an appeal shall not act to stay the enforcement of
the order of the head of an agency, unless a stay is
specifically entered by the court.
(6) The legal burdens of proof specified in section 1221(e)
of title 5 shall be controlling for the purposes of any
investigation conducted by an Inspector General, decision by
the head of an agency, or judicial or administrative proceeding
to determine whether discrimination prohibited under this
section has occurred.
(7) The rights and remedies provided for in this section may
not be waived by any agreement, policy, form, or condition of
employment.
(d) Notification of Employees.--The Secretary of Defense and
the Administrator of the National Aeronautics and Space
Administration shall ensure that contractors and subcontractors
of the Department of Defense and the National Aeronautics and
Space Administration, as applicable, inform their employees in
writing of the rights and remedies provided under this section,
in the predominant native language of the workforce.
(e) Exceptions.--(1) This section shall not apply to any
element of the intelligence community, as defined in section
3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4)).
(2) This section shall not apply to any disclosure made by an
employee of a contractor, subcontractor, or grantee of an
element of the intelligence community if such disclosure--
(A) relates to an activity of an element of the
intelligence community; or
(B) was discovered during contract, subcontract, or
grantee services provided to an element of the
intelligence community.
(f) Construction.--Nothing in this section may be construed
to authorize the discharge of, demotion of, or discrimination
against an employee for a disclosure other than a disclosure
protected by subsection (a) or to modify or derogate from a
right or remedy otherwise available to the employee.
(g) Definitions.--In this section:
(1) The term ``agency'' means an agency named in
section 2303 of this title.
(2) The term ``head of an agency'' has the meaning
provided by section 2302(1) of this title.
(3) The term ``contract'' means a contract awarded by
the head of an agency.
(4) The term ``contractor'' means a person awarded a
contract with an agency.
(5) The term ``Inspector General'' means an Inspector
General appointed under the Inspector General Act of
1978 and any Inspector General that receives funding
from, or has oversight over contracts awarded for or on
behalf of, the Secretary of Defense.
(6) The term ``abuse of authority'' means the
following:
(A) An arbitrary and capricious exercise of
authority that is inconsistent with the mission
of the Department of Defense or the successful
performance of a Department contract or grant.
(B) An arbitrary and capricious exercise of
authority that is inconsistent with the mission
of the National Aeronautics and Space
Administration or the successful performance of
an Administration contract or grant.
(7) The term ``grantee'' means a person awarded a
grant with an agency.
* * * * * * *
----------
TITLE 41, UNITED STATES CODE
* * * * * * *
SUBTITLE I--FEDERAL PROCUREMENT POLICY
* * * * * * *
CHAPTER 43--ALLOWABLE COSTS
* * * * * * *
Sec. 4304. Specific costs not allowable
(a) Specific Costs.--The following costs are not allowable
under a covered contract:
(1) Costs of entertainment, including amusement,
diversion, and social activities, and any costs
directly associated with those costs (such as tickets
to shows or sports events, meals, lodging, rentals,
transportation, and gratuities).
(2) Costs incurred to influence (directly or
indirectly) legislative action on any matter pending
before Congress, a State legislature, or a legislative
body of a political subdivision of a State.
(3) Costs incurred in defense of any civil or
criminal fraud proceeding or similar proceeding
(including filing of any false certification) brought
by the Federal Government where the contractor is found
liable or had pleaded nolo contendere to a charge of
fraud or similar proceeding (including filing of a
false certification).
(4) Payments of fines and penalties resulting from
violations of, or failure to comply with, Federal,
State, local, or foreign laws and regulations, except
when incurred as a result of compliance with specific
terms and conditions of the contract or specific
written instructions from the contracting officer
authorizing in advance those payments in accordance
with applicable provisions of the Federal Acquisition
Regulation.
(5) Costs of membership in any social, dining, or
country club or organization.
(6) Costs of alcoholic beverages.
(7) Contributions or donations, regardless of the
recipient.
(8) Costs of advertising designed to promote the
contractor or its products.
(9) Costs of promotional items and memorabilia,
including models, gifts, and souvenirs.
(10) Costs for travel by commercial aircraft that
exceed the amount of the standard commercial fare.
(11) Costs incurred in making any payment (commonly
known as a ``golden parachute payment'') that is--
(A) in an amount in excess of the normal
severance pay paid by the contractor to an
employee on termination of employment; and
(B) paid to the employee contingent on, and
following, a change in management control over,
or ownership of, the contractor or a
substantial portion of the contractor's assets.
(12) Costs of commercial insurance that protects
against the costs of the contractor for correction of
the contractor's own defects in materials or
workmanship.
(13) Costs of severance pay paid by the contractor to
foreign nationals employed by the contractor under a
service contract performed outside the United States,
to the extent that the amount of severance pay paid in
any case exceeds the amount paid in the industry
involved under the customary or prevailing practice for
firms in that industry providing similar services in
the United States, as determined under the Federal
Acquisition Regulation.
(14) Costs of severance pay paid by the contractor to
a foreign national employed by the contractor under a
service contract performed in a foreign country if the
termination of the employment of the foreign national
is the result of the closing of, or the curtailment of
activities at, a Federal Government facility in that
country at the request of the government of that
country.
(15) Costs incurred by a contractor or subcontractor,
or personal service contractor in connection with any
criminal, civil, or administrative proceeding commenced
by the Federal Government or a State, to the extent
provided in section 4310 of this title.
(16) Costs of compensation of senior executives of
contractors for a fiscal year, regardless of the
contract funding source, to the extent that the
compensation exceeds the benchmark compensation amount
determined applicable for the fiscal year by the
Administrator under section 1127 of this title.
(b) Waiver of Severance Pay Restrictions for Foreign
Nationals.--
(1) Executive agency determination.--Pursuant to the
Federal Acquisition Regulation and subject to the
availability of appropriations, an executive agency, in
awarding a covered contract, may waive the application
of paragraphs (13) and (14) of subsection (a) to that
contract if the executive agency determines that--
(A) the application of those provisions to
that contract would adversely affect the
continuation of a program, project, or activity
that provides significant support services for
employees of the executive agency posted
outside the United States;
(B) the contractor has taken (or has
established plans to take) appropriate actions
within the contractor's control to minimize the
amount and number of incidents of the payment
of severance pay by the contractor to employees
under the contract who are foreign nationals;
and
(C) the payment of severance pay is necessary
to comply with a law that is generally
applicable to a significant number of
businesses in the country in which the foreign
national receiving the payment performed
services under the contract or is necessary to
comply with a collective bargaining agreement.
(2) Solicitation to include statement about waiver.--
An executive agency shall include in the solicitation
for a covered contract a statement indicating--
(A) that a waiver has been granted under
paragraph (1) for the contract; or
(B) whether the executive agency will
consider granting a waiver and, if the
executive agency will consider granting a
waiver, the criteria to be used in granting the
waiver.
(3) Determination to be made before contract
awarded.--An executive agency shall make the final
determination whether to grant a waiver under paragraph
(1) with respect to a covered contract before award of
the contract.
(c) Establishment of Definitions, Exclusions, Limitations,
and Qualifications.--The provisions of the Federal Acquisition
Regulation implementing this chapter may establish appropriate
definitions, exclusions, limitations, and qualifications. A
submission by a contractor of costs that are incurred by the
contractor and that are claimed to be allowable under
Department of Energy management and operating contracts shall
be considered a proposal for settlement of indirect costs
incurred by the contractor for any period after those costs
have been accrued.
* * * * * * *
Sec. 4310. Proceeding costs not allowable
(a) Definitions.--In this section:
(1) Costs.--The term ``costs'', with respect to a
proceeding, means all costs incurred by a contractor,
subcontractor, or personal services contractor, whether
before or after the commencement of the proceeding,
including--
(A) administrative and clerical expenses;
(B) the cost of legal services, including
legal services performed by an employee of the
contractor, subcontractor, or personal services
contractor;
(C) the cost of the services of accountants
and consultants retained by the contractor,
subcontractor, or personal services contractor;
and
(D) the pay of directors, officers, and
employees of the contractor, subcontractor, or
personal services contractor for time devoted
by those directors, officers, and employees to
the proceeding.
(2) Penalty.--The term ``penalty'' does not include
restitution, reimbursement, or compensatory damages.
(3) Proceeding.--The term ``proceeding'' includes an
investigation.
(b) In General.--Except as otherwise provided in this
section, costs incurred by a contractor, subcontractor, or
personal services contractor in connection with a criminal,
civil, or administrative proceeding commenced by the Federal
Government or a State are not allowable as reimbursable costs
under a covered contract, subcontract, or personal services
contract if the proceeding--
(1) relates to a violation of, or failure to comply
with, a Federal or State statute or regulation or to
any other activity described in section 4712(a)(1) of
this title; and
(2) results in a disposition described in subsection
(c).
(c) Covered Dispositions.--A disposition referred to in
subsection (b)(2) is any of the following:
(1) In a criminal proceeding, a conviction (including
a conviction pursuant to a plea of nolo contendere) by
reason of the violation or failure referred to in
subsection (b).
(2) In a civil or administrative proceeding involving
an allegation of fraud or similar misconduct, a
determination of contractor, subcontractor, or personal
services contractor liability on the basis of the
violation or failure referred to in subsection (b).
(3) In any civil or administrative proceeding, the
imposition of a monetary penalty by reason of the
violation or failure referred to in subsection (b).
(4) A final decision to do any of the following, by
reason of the violation or failure referred to in
subsection (b):
(A) Debar or suspend the contractor,
subcontractor, or personal services contractor.
(B) Rescind or void the contract,
subcontract, or personal services contract.
(C) Terminate the contract, subcontract, or
personal services contract for default.
(5) A disposition of the proceeding by consent or
compromise if the disposition could have resulted in a
disposition described in paragraph (1), (2), (3), or
(4).
(d) Costs Allowed by Settlement Agreement in Proceeding
Commenced by Federal Government.--In the case of a proceeding
referred to in subsection (b) that is commenced by the Federal
Government and is resolved by consent or compromise pursuant to
an agreement entered into by a contractor, subcontractor, or
personal services contractor and the Federal Government, the
costs incurred by the contractor, subcontractor, or personal
services contractor in connection with the proceeding that are
otherwise not allowable as reimbursable costs under subsection
(b) may be allowed to the extent specifically provided in that
agreement.
(e) Costs Specifically Authorized by Executive Agency in
Proceeding Commenced by State.--In the case of a proceeding
referred to in subsection (b) that is commenced by a State, the
executive agency that awarded the covered contract,
subcontract, or personal services contract involved in the
proceeding may allow the costs incurred by the contractor,
subcontractor, or personal services contractor in connection
with the proceeding as reimbursable costs if the executive
agency determines, in accordance with the Federal Acquisition
Regulation, that the costs were incurred as a result of--
(1) a specific term or condition of the contract,
subcontract, or personal services contract; or
(2) specific written instructions of the executive
agency.
(f) Other Allowable Costs.--
(1) In general.--Except as provided in paragraph (3),
costs incurred by a contractor, subcontractor, or
personal services contractor in connection with a
criminal, civil, or administrative proceeding commenced
by the Federal Government or a State in connection with
a covered contract, subcontract, or personal services
contract may be allowed as reimbursable costs under the
contract, subcontract, or personal services contract if
the costs are not disallowable under subsection (b),
but only to the extent provided in paragraph (2).
(2) Amount of allowable costs.--
(A) Maximum amount allowed.--The amount of
the costs allowable under paragraph (1) in any
case may not exceed the amount equal to 80
percent of the amount of the costs incurred, to
the extent that the costs are determined to be
otherwise allowable and allocable under the
Federal Acquisition Regulation.
(B) Content of regulations.--Regulations
issued for the purpose of subparagraph (A)
shall provide for appropriate consideration of
the complexity of procurement litigation,
generally accepted principles governing the
award of legal fees in civil actions involving
the Federal Government as a party, and other
factors as may be appropriate.
(3) When otherwise allowable costs are not
allowable.--In the case of a proceeding referred to in
paragraph (1), contractor, subcontractor, or personal
services contractor costs otherwise allowable as
reimbursable costs under this subsection are not
allowable if--
(A) the proceeding involves the same
contractor, subcontractor, or personal services
contractor misconduct alleged as the basis of
another criminal, civil, or administrative
proceeding; and
(B) the costs of the other proceeding are not
allowable under subsection (b).
* * * * * * *
CHAPTER 47--MISCELLANEOUS
Sec
4701. Determinations and decisions.
* * * * * * *
[4712. Pilot program for enhancement of contractor protection from
reprisal for disclosure of certain information.]
4712. Enhancement of contractor protection from reprisal for disclosure
of certain information.
* * * * * * *
Sec. 4712. [Pilot program for enhancement] Enhancement of contractor
protection from reprisal for disclosure of certain
information
(a) Prohibition of Reprisals.--
(1) In general.--An employee of a contractor,
subcontractor, [or grantee] grantee, or subgrantee or
personal services contractor may not be discharged,
demoted, or otherwise discriminated against as a
reprisal for disclosing to a person or body described
in paragraph (2) information that the employee
reasonably believes is evidence of gross mismanagement
of a Federal contract or grant, a gross waste of
Federal funds, an abuse of authority relating to a
Federal contract or grant, a substantial and specific
danger to public health or safety, or a violation of
law, rule, or regulation related to a Federal contract
(including the competition for or negotiation of a
contract) or grant.
(2) Persons and bodies covered.--The persons and
bodies described in this paragraph are the persons and
bodies as follows:
(A) A Member of Congress or a representative
of a committee of Congress.
(B) An Inspector General.
(C) The Government Accountability Office.
(D) A Federal employee responsible for
contract or grant oversight or management at
the relevant agency.
(E) An authorized official of the Department
of Justice or other law enforcement agency.
(F) A court or grand jury.
(G) A management official or other employee
of the contractor, subcontractor, or grantee
who has the responsibility to investigate,
discover, or address misconduct.
(3) Rules of construction.--For the purposes of
paragraph (1)--
(A) an employee who initiates or provides
evidence of contractor, subcontractor, or
grantee misconduct in any judicial or
administrative proceeding relating to waste,
fraud, or abuse on a Federal contract or grant
shall be deemed to have made a disclosure
covered by such paragraph; and
(B) a reprisal described in paragraph (1) 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) Investigation of Complaints.--
(1) Submission of complaint.--A person who believes
that the person has been subjected to a reprisal
prohibited by subsection (a) may submit a complaint to
the Inspector General of the executive agency involved.
Unless the Inspector General determines that the
complaint is frivolous, fails to allege a violation of
the prohibition in subsection (a), or has previously
been addressed in another Federal or State judicial or
administrative proceeding initiated by the complainant,
the Inspector General shall investigate the complaint
and, upon completion of such investigation, submit a
report of the findings of the investigation to the
person, the contractor or grantee concerned, and the
head of the agency.
(2) Inspector General action.--
(A) Determination or submission of report on
findings.--Except as provided under
subparagraph (B), the Inspector General shall
make a determination that a complaint is
frivolous, fails to allege a violation of the
prohibition in subsection (a), or has
previously been addressed in another Federal or
State judicial or administrative proceeding
initiated by the complainant or submit a report
under paragraph (1) within 180 days after
receiving the complaint.
(B) Extension of time.--If the Inspector
General is unable to complete an investigation
in time to submit a report within the 180-day
period specified in subparagraph (A) and the
person submitting the complaint agrees to an
extension of time, the Inspector General shall
submit a report under paragraph (1) within such
additional period of time, up to 180 days, as
shall be agreed upon between the Inspector
General and the person submitting the
complaint.
(3) Prohibition on disclosure.--The 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--
(A) made with the consent of the person
alleging the reprisal;
(B) made in accordance with the provisions of
section 552a of title 5 or as required by any
other applicable Federal law; or
(C) necessary to conduct an investigation of
the alleged reprisal.
(4) Time limitation.--A complaint may not be brought
under this subsection more than three years after the
date on which the alleged reprisal took place.
(c) Remedy and Enforcement Authority.--
(1) In general.--Not later than 30 days after
receiving an Inspector General report pursuant to
subsection (b), the head of the executive agency
concerned shall determine whether there is sufficient
basis to conclude that the contractor or grantee
concerned has subjected the complainant to a reprisal
prohibited by subsection (a) and shall either issue an
order denying relief or shall take one or more of the
following actions:
(A) Order the contractor or grantee to take
affirmative action to abate the reprisal.
(B) Order the contractor or grantee 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.
(C) Order the contractor or grantee 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 executive
agency.
(2) Exhaustion of remedies.--If the head of an
executive agency issues an order denying relief under
paragraph (1) or has not issued an order within 210
days after the submission of a complaint under
subsection (b), or in the case of an extension of time
under paragraph (b)(2)(B), not later than 30 days after
the expiration of the extension of time, and there is
no showing that such delay is due to the bad faith of
the complainant, 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 contractor or
grantee to seek compensatory damages and other relief
available under this section 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 paragraph may
not be brought more than two years after the date on
which remedies are deemed to have been exhausted.
(3) Admissibility of evidence.--An Inspector General
determination and an agency head order denying relief
under paragraph (2) shall be admissible in evidence in
any de novo action at law or equity brought pursuant to
this subsection.
(4) Enforcement of orders.--Whenever a person fails
to comply with an order issued under paragraph (1), the
head of the executive agency concerned shall 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 paragraph, the court may grant
appropriate relief, including injunctive relief,
compensatory and exemplary damages, and 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 executive agency.
(5) Judicial review.--Any person adversely affected
or aggrieved by an order issued under paragraph (1) may
obtain review of the order's conformance with this
subsection, and any regulations issued to carry out
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 executive agency. Review shall
conform to chapter 7 of title 5. Filing such an appeal
shall not act to stay the enforcement of the order of
the head of an executive agency, unless a stay is
specifically entered by the court.
(6) Burdens of proof.--The legal burdens of proof
specified in section 1221(e) of title 5 shall be
controlling for the purposes of any investigation
conducted by an Inspector General, decision by the head
of an executive agency, or judicial or administrative
proceeding to determine whether discrimination
prohibited under this section has occurred.
(7) Rights and remedies not waivable.--The rights and
remedies provided for in this section may not be waived
by any agreement, policy, form, or condition of
employment.
(d) Notification of Employees.--The head of each executive
agency shall ensure that contractors, subcontractors, and
grantees of the agency inform their employees in writing of the
rights and remedies provided under this section, in the
predominant native language of the workforce.
(e) Construction.--Nothing in this section may be construed
to authorize the discharge of, demotion of, or discrimination
against an employee for a disclosure other than a disclosure
protected by subsection (a) or to modify or derogate from a
right or remedy otherwise available to the employee.
(f) Exceptions.--(1) This section shall not apply to any
element of the intelligence community, as defined in section
3(4) of the National Security Act of 1947 (50 U.S.C. 401a(4)).
(2) This section shall not apply to any disclosure made by an
employee of a contractor, subcontractor, or grantee of an
element of the intelligence community if such disclosure--
(A) relates to an activity of an element of the
intelligence community; or
(B) was discovered during contract, subcontract, or
grantee services provided to an element of the
intelligence community.
(g) Definitions.--In this section:
(1) The term ``abuse of authority'' means an
arbitrary and capricious exercise of authority that is
inconsistent with the mission of the executive agency
concerned or the successful performance of a contract
or grant of such agency.
(2) The term ``Inspector General'' means an Inspector
General appointed under the Inspector General Act of
1978 and any Inspector General that receives funding
from, or has oversight over contracts or grants awarded
for or on behalf of, the executive agency concerned.
(h) Construction.--Nothing in this section, or the amendments
made by this section, shall be construed to provide any rights
to disclose classified information not otherwise provided by
law.
[(i) Duration of Section.--This section shall be in effect
for the four-year period beginning on the date of the enactment
of this section.]
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