FAR 3.909-1—Prohibition.
Plain-English Summary
FAR 3.909-1 implements a funding prohibition tied to appropriations law: the Government may not use fiscal year 2015 and later funds to award or fund a contract with an entity that requires its employees or subcontractors to sign internal confidentiality agreements or statements that block, limit, or chill lawful reporting of waste, fraud, or abuse to an authorized Federal investigative or law enforcement representative. The section is aimed at protecting whistleblower communications and ensuring that contractor internal policies do not override the public interest in reporting misconduct to the Government. It applies not only to direct employees but also to subcontractors, and it reaches both explicit bans and broader restrictions that would interfere with lawful reporting. The section also clarifies an important exception: it does not conflict with required nondisclosure agreements for classified information, including Standard Form 312, Form 4414, and similar agency-issued classified information nondisclosure forms. In practice, this means contracting officers must avoid funding awards to entities with prohibited confidentiality policies, and contractors must ensure their internal agreements and reporting policies preserve employees’ and subcontractors’ ability to report fraud, waste, or abuse to the proper Federal authorities.
Key Rules
No funds for prohibited contracts
The Government cannot use fiscal year 2015 and later appropriated funds to contract with an entity that uses restrictive confidentiality agreements or statements covered by this section. This is a funding restriction, so it affects whether the Government may award or continue to fund the contract.
Applies to employees and subcontractors
The prohibition covers agreements imposed on both employees and subcontractors of the entity. A contractor cannot avoid the rule by limiting the restriction to one tier of its workforce or supply chain.
Protects lawful reporting
The barred agreements are those that prohibit or otherwise restrict lawful reporting of waste, fraud, or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive the information. The focus is on preserving lawful whistleblower disclosures to the Government.
Internal confidentiality clauses are covered
The rule reaches internal confidentiality agreements or statements, not just formal nondisclosure contracts. Any language that has the effect of preventing protected reporting can trigger the prohibition.
Classified information exception
The prohibition does not override requirements for classified information nondisclosure forms such as SF 312, Form 4414, or other agency forms governing classified information. Those security-related nondisclosure obligations remain valid.
Applies through appropriations and CRs
The section references section 743 and successor provisions in later appropriations acts, including extensions through continuing resolutions. Users must check current funding law because the restriction is tied to appropriated funds and may be carried forward by later enactments.
Responsibilities
Contracting Officer
Verify that the contemplated award or funding action is not prohibited by this section, and ensure the contractor’s known confidentiality policies do not bar lawful reporting of waste, fraud, or abuse. If a contractor’s practices raise concerns, the contracting officer should coordinate with legal and policy officials before obligating funds.
Agency
Ensure procurement policies, solicitation language, and award decisions comply with the appropriations restriction. Agencies should also provide oversight and guidance so that contractors understand the limits on confidentiality agreements.
Contractor
Review and revise internal confidentiality agreements, employment policies, and subcontract terms so they do not prohibit or restrict lawful reporting to authorized Federal investigative or law enforcement representatives. The contractor must preserve protected reporting rights while still maintaining legitimate confidentiality and security controls.
Subcontractor
Comply with any applicable flowdown or internal policy requirements and avoid using confidentiality provisions that restrict lawful whistleblower reporting. Subcontractors should ensure their own agreements do not create a violation for the prime contractor or the Government funding action.
Employees and Workers
Understand that they may not be barred from lawfully reporting waste, fraud, or abuse to authorized Federal officials. They should review confidentiality language carefully and raise concerns if a policy appears to restrict protected disclosures.
Practical Implications
Contractors should audit employment, separation, and subcontractor confidentiality clauses to make sure they do not contain overbroad language that could be read to block whistleblower reporting.
A common pitfall is using broad boilerplate such as "do not disclose any information to anyone" without carving out lawful disclosures to the Government; that kind of language can create compliance risk.
The classified-information exception is narrow: it protects legitimate security nondisclosure requirements, but it does not justify restrictions on reporting fraud, waste, or abuse unrelated to classified material.
Contracting officers should not assume a contractor is compliant just because it has a standard NDA; the key question is whether the agreement preserves lawful reporting rights to authorized Federal representatives.
Because the rule is tied to appropriated funds and successor provisions, users should confirm the current fiscal-year funding authority and any continuing resolution language before award or modification.
Official Regulatory Text
(a) The Government is prohibited from using fiscal year 2015 and subsequent fiscal year funds for a contract with an entity that requires employees or subcontractors of such entity seeking to report waste, fraud, or abuse to sign internal confidentiality agreements or statements prohibiting or otherwise restricting such employees or subcontractors from lawfully reporting such waste, fraud, or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information. See section 743 of Division E, Title VII, of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and its successor provisions in subsequent appropriations acts (and as extended in continuing resolutions.) (b) The prohibition in paragraph (a) of this section does not contravene requirements applicable to Standard Form 312 (Classified Information Nondisclosure Agreement), Form 4414 (Sensitive Compartmented Information Nondisclosure Agreement), or any other form issued by a Federal department or agency governing the nondisclosure of classified information.