NEW RULE SAYS YOU CAN’T REQUIRE EMPLOYEES/SUBS TO STAY QUIET ON FRAUD

The government really wants to know about your fraud, waste and abuse.  In addition to the long-standing “Mandatory Disclosure” rule, a new FAR rule effective last week prohibits government agencies from spending federal funds to contract with an entity that requires its employees or subcontractors to sign an internal confidentiality agreement that restricts the reporting of waste, fraud, or abuse to the government.  Steptoe and Johnson, who originally reported on the rule in a client advisory, states that the rule also requires contractors to represent that they do not require employees or subcontractors to sign or comply with such internal confidentiality agreements. The rule is applicable to all solicitations and contracts using FY 2015 or subsequent fiscal year funds that do not already contain a comparable provision, so companies may want to review existing agreements to ensure compliance.  Steptoe recommends that contractors consider examining their internal confidentiality agreements and procedures in light of the new rule, and modifying them as necessary.