New whistleblower law: what it means for DoD contractors.

• Author: Erwin, Sandra I.

* Of the hundreds of complaints handled by the Defense Department's inspector general office in 2006, only 18 came from defense industry whistleblowers. By 2012, the number grew to 85.

Thanks to a new contractor whistleblower protection law, the IG hotline might begin to ring more often in the years ahead, government officials and watchdog groups predict.

An amendment to Title 10, United States Code, Section 2409, called, "Contractor Employees: Protection From Reprisal for Disclosure of Certain Information," expands whistleblower protections to employees of subcontractor firms that receive federal funds either from Pentagon contracts or grants. Previously, only employees of prime contractors were covered.

Another significant provision is that contractor employees who report suspected waste, fraud and abuse to their company's chain of command, rather than directly to the government, also are being protected by the new statute.

The legislation, signed by President Obama in January as part of the 2013 National Defense Authorization Act, took effect July 1.

Defense Department IG officials hail the amendment as a long-overdue step toward protecting industry whistleblowers.

"There is a lot of whistleblower protection out there, but [this amendment] moves the Defense Department into modern standards of whistleblower protection that already exist for federal employees," said Marguerite C. Garrison, Defense Department deputy inspector general for administrative investigations.

The provisions in the law make it "easier to prove whether there was reprisal," Garrison told National Defense. An employee of a defense subcontractor may not be discharged, demoted or discriminated against as a reprisal for disclosing information about a suspected violation of law related to a Defense Department contract.

"Frequently, subcontractor employees are in a position to report wrongdoing and they should have the same protection against reprisals that prime contractors do," said Michael Shanker, director of whistleblower reprisal investigations at the IG office.

The new rule caps a decades-long progression in whistleblower laws. Since the late 1980s, Congress has authorized the Defense Department IG office to investigate or oversee investigations of allegations of whistleblower reprisal.

The previous absence of protection for subcontractor employees was a "gaping loophole" in the law, considering that a large share of the money the government spends ends up with a...