SUPPLEMENTARY INFORMATION:

A. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 74 FR 14633 on March 31, 2009, to implement the Recovery Act with respect to section 1553 of Division A, Protecting State and Local Government and Contractor Whistleblowers. A Technical Amendment was published in the Federal Register at 74 FR 22810 on May 14, 2009.

The comment period closed on June 1, 2009. Six comments from two respondents were received. The Councils considered the comments received and concluded that the interim rule should be converted to a final rule with minor changes.

The comments received are discussed below.

a.The first respondent submitted the following 4 comments.

Comment 1. The respondent believes that the prescription at FAR 3.907-7 is too broad and should be revised to limit application more specifically to work funded with the Recovery Act funds. Revised language is proposed for FAR 3.907-7 as follows: “Use the clause at 52.203-15, Whistleblower Protections under the ARRA of 2009 in—All solicitations and contracts entirely funded with Recovery Act funds; and All solicitations and contracts funded in part with Recovery Act funds for the work to be funded with those Recovery Act funds.”

Response. Section 1553 prohibits reprisals against any employee of a contractor receiving “covered funds” for disclosing certain information related to “covered funds.” The limitation of the applicability of the rule is created by the ( printed page 34259) definition of covered information, which means only information that the employee reasonably believes is evidence of gross mismanagement of the contract or subcontract related to covered funds, gross waste of covered funds, a substantial and specific danger to public health or safety related to the implementation or use of covered funds, an abuse of authority related to the implementation or use of covered funds, or a violation of law, rule, or regulation related to an agency contract (including the competition for or negotiation of a contract) awarded or issued relating to covered funds. It does not apply to information relating to problems not associated with the use of covered funds.

Section 1553 defines “Covered funds” to mean any contract, grant, or other payment received by a contractor if—

(1) The Federal Government provides any portion of the money or property that is provided, requested, or demanded; and

(2) At least some of the funds are appropriated or otherwise made available by the Recovery Act.

As defined in section 1553, covered funds is broader than just funds appropriated or otherwise made available by the Recovery Act.

Since the prohibition of reprisals applies to any employee of the contractor receiving the covered funds, the clause prescription as stated in the interim rule at FAR 3.907-7 is correct. However, the Councils have revised the definition of “covered funds” at FAR 3.907-1 to be more consistent with the statutory definition, and have revised the flowdown in the clause at FAR 52.203-15(b) to apply only to subcontracts that are funded in whole or in part with the Recovery Act funds.

Comment 2. The respondent states that because section 1553 of the Recovery Act is implemented by FAR 52.203-15 and included in contracts for commercial items by FAR 52.212-5(b)(3), it is not necessary to amend paragraph (r) of FAR 52.212-4.

Response. The Councils agree. The newly added language at FAR 52.212-4(r) is deleted.

Comment 3. The respondent states that the clause at FAR 52.203-15 should be indicated as a “check-off” clause as has been noted for FAR 52.212-5(b)(4), and FAR 52.204-11 (FAR Case 2009-009).

Response. The Councils agree. However, it is not necessary to make any further changes to the rule. This is a checklist being interpreted correctly by the U.S. National Archives and Records Administration and the U.S. Government Printing Office.

Comment 4. The respondent states that it is unnecessary to include the reference to FAR 52.203-15 in paragraph (e)(1) of FAR 52.212-5 because this was incorporated under FAR Case 2009-011.

Response. The Councils partially agree. The Technical Amendment to the rule, published in the Federal Register at 74 FR 22810 on May 14, 2009, moved this paragraph to the Alternate II.

b. The second respondent submitted 2 comments to the interim rule.

Comment 1. The respondent believes that the rule should be amended to require the contracting officer to immediately forward the complaint ONLY to the Office of Inspector General (OIG).

Response. The Councils partially agree. The language in FAR 3.907-3(c) is revised to add “and to other designated officials in accordance with agency procedures (e.g., agency legal counsel”) so that agencies are informed as well as the OIG.

Comment 2. The respondent believes that the Recovery Act grants authority concerning the extension of time for investigating complaints and the determination on whether or not to investigate or to discontinue an investigation to the IG, not to the agency head as stated in FAR 3.907-6(c)(1).

Response. The Councils agree that subsection (b) of section 1553 gives the authority to the IG. However, FAR 3.907-6(c)(1) reflects the wording of subsection (c)(3) of section 1553. The FAR did not create any new authority here.

In addition, the Councils added a reference, at FAR 52.203-15, to the web address where contractors may obtain a whistleblower poster developed by the Recovery Accountability and Transparency (RAT) Board.

This is a significant regulatory action and, therefore, was subject to Office of Management and Budget review under section 6 of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final 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 applies similar, but not identical, whistleblower protections to contractor and subcontractor employees as currently covered in FAR subpart 3.9. Likewise, this rule only applies to contracts awarded with Recovery Act funds.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. chapter 35, et seq.

Accordingly, the interim rule published in the Federal Register at 74 FR 14633 on March 31, 2009, is adopted as a final rule with the following changes:

1. The authority citation for 48 CFR parts 3 and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Amend section 3.907-1 by revising the definition of “Covered funds” to read as follows:

3. Amend section 3.907-3 by revising paragraph (c) to read as follows:

4. Amend section 52.203-15 by revising the date of the clause, and paragraphs (a) and (b) to read as follows:

5. Amend section 52.212-4 by removing the clause date “(Mar 2009)” and adding “(JUN 2010)” and removing from paragraph (r) “Section 1553 of the American Recovery and Reinvestment Act of 2009 relating to whistleblower protections for contracts funded under that Act;”.

6. Amend section 52.212-5 by—

a. Revising the date of the clause;

b. Removing from paragraph (b)(3) “(Mar 2009)” and adding “(JUN 2010)” in its place; and

c. Revising paragraph (e)(1)(ii)(B) of Alternate II.

The revised text reads as follows:

7. Amend section 52.213-4 by revising the date of the clause and paragraph (a)(2)(vi) to read as follows:

8. Amend section 52.244-6 by revising the date of the clause and paragraph (c)(1)(ii) to read as follows: