Publicly Released: August 1, 2023
Objective
The objective of this audit was to determine whether DoD contracting officials included the required whistleblower clauses in contracts and ensured that DoD contractors were compliant with the requirement to inform employees in writing of their whistleblower rights and protections.
Background
Federal law provides statutory protections for Federal employees and DoD contractors who engage in the important act of “whistleblowing,” that is, making a disclosure of what they reasonably believe to be evidence of illegal or improper Government activities. Federal and DoD acquisition regulations require contracting officers to include a whistleblower clause in solicitations and contracts. The clause requires that contractors inform employees in writing of their whistleblower rights and protections.
Finding
DoD contracting officers generally included the required whistleblower clause in contracts but did not go beyond that requirement to verify that the contractors were compliant with the requirement to inform employees in writing of their whistleblower rights and protections. We projected that DoD contracting officers included the required whistleblower clause in 29,793 (95 percent) of the 31,340 FY 2020 contracts and that contracting officers omitted the clause from 860 (2.7 percent) of the 31,340 FY 2020 contracts. However, contracting officers verified that the contractors informed their employees in writing of whistleblower rights and July 28, 2023 protections for only 3 (4 percent) of the 74 of the contracts we reviewed for such follow up. The contracting officers for the other 71 contracts did not verify compliance because DoD guidance does not require contracting officers to do so. Although not including a whistleblower clause in DoD contracts and not informing contractor employees in writing does not impact the whistleblower rights and protections of contractor employees, it may reduce the number of employees who are aware of or understand those rights and protections. It may also reduce the number of critical disclosures made by contractor employees who identify waste, fraud, mismanagement, and abuse and loss of taxpayer dollars. In FY 2022, the DoD recovered more than $44.5 million as a result of hotline and contractor disclosures.
In addition to our findings regarding the required clauses, we found that one whistleblower clause that did not apply to the DoD, Federal Acquisition Regulation 52.203-17, was still included in 96 (41 percent) of the 235 contracts we reviewed.
Recommendations
We recommend that the Principal Director, Defense Pricing and Contracting: (1) implement controls in the contract writing, (2) direct contracting officers to review the whistleblower clauses included in contracts and modify the contracts as necessary, and (3) include a reminder on the importance of including required whistleblower clauses in training. We also recommend that the Principal Director issue guidance directing contracting personnel to apply a risk-based approach.
Management Comments and Our Response
The Principal Director, Defense Pricing and Contracting, agreed with the recommendations, and their planned actions should address the recommendations. Therefore, the recommendations are resolved but will remain open. We will close the recommendations once we verify the actions have been implemented.
This report is a result of Project No. D2021-D000AV-0150.000