FAR 52.203-19—Prohibition on Requiring Certain Internal Confidentiality Agreements or Statements.
Plain-English Summary
FAR 52.203-19 prohibits contractors from using certain internal confidentiality agreements or statements that would stop employees or subcontractors from lawfully reporting waste, fraud, or abuse related to a Government contract to an authorized Federal investigative or law enforcement representative, such as an agency Inspector General. The clause defines key terms, including "internal confidentiality agreement or statement," "subcontract," and "subcontractor," so contractors know exactly what agreements are covered and who is affected. It also requires contractors to notify current employees and subcontractors that any preexisting conflicting restrictions are no longer effective, while making clear that the rule does not override classified-information nondisclosure requirements such as SF 312, Form 4414, or similar agency forms. The clause further ties noncompliance to appropriations restrictions, meaning the Government may be prohibited from using funds for a contractor found out of compliance. Finally, it requires flowdown of the clause to subcontracts, so the same protections and restrictions extend through the contracting chain. In practice, this clause is meant to preserve whistleblower-style reporting channels for contract-related misconduct while allowing legitimate protection of classified information and other lawful confidentiality obligations.
Key Rules
No gag clauses on reporting
The contractor may not require employees or subcontractors to sign or follow internal confidentiality agreements that prohibit or restrict lawful reporting of waste, fraud, or abuse related to a Government contract. The protected reporting must be to a designated Federal investigative or law enforcement representative authorized to receive the information.
Covered agreements are broad
An "internal confidentiality agreement or statement" includes any written confidentiality promise the contractor requires employees or subcontractors to sign about nondisclosure of contractor information, with limited exceptions. It does not include confidentiality agreements arising out of civil litigation or agreements signed at the behest of a Federal agency.
Preexisting restrictions must be neutralized
The contractor must notify current employees and subcontractors that any preexisting internal confidentiality restrictions inconsistent with this clause are no longer in effect. This is an affirmative notice obligation, not just a passive compliance expectation.
Classified information rules remain valid
The prohibition on restricting lawful reporting does not override requirements tied to SF 312, Form 4414, or other Federal nondisclosure forms governing classified information. Contractors must distinguish protected whistleblower-type reporting from lawful classified-information controls.
Funding consequences for noncompliance
If the Government determines the contractor is not complying with the clause, appropriated funds may not be used for the contract under the cited appropriations restriction. This creates a significant financial and performance risk beyond ordinary contractual remedies.
Flowdown to subcontracts
The contractor must include the substance of the clause, including the flowdown requirement itself, in subcontracts under the covered contract. This ensures subcontractors are bound by the same reporting-protection rules.
Responsibilities
Contracting Officer / Government
Insert the clause when prescribed, monitor compliance as appropriate, and determine whether a contractor is out of compliance for purposes of the appropriations restriction. The Government also relies on authorized investigative or law enforcement channels to receive protected reports.
Contractor
Do not require employees or subcontractors to sign or comply with internal confidentiality agreements that block lawful reporting of waste, fraud, or abuse related to a Government contract. Notify current employees and subcontractors that conflicting preexisting restrictions are no longer in effect, preserve lawful classified-information protections, and flow the clause down to subcontracts.
Employees
May lawfully report waste, fraud, or abuse related to performance of a Government contract to an authorized Federal investigative or law enforcement representative without being barred by covered internal confidentiality restrictions.
Subcontractors
Must not impose prohibited internal confidentiality restrictions on their own employees or lower-tier subcontractors, must honor the reporting protections, and must accept the flowed-down clause in covered subcontracts.
Federal departments or agencies authorized to receive reports
Provide the designated investigative or law enforcement channels to receive lawful reports of waste, fraud, or abuse, including offices such as an Inspector General where authorized.
Practical Implications
Review employee handbooks, onboarding forms, NDAs, and subcontract templates for any language that could be read to bar lawful reporting of fraud, waste, or abuse to the Government.
Do not assume a broad confidentiality clause is safe just because it protects proprietary information; if it can be read to chill protected reporting, it may violate this clause.
Send a clear written notice to current employees and subcontractors when legacy confidentiality language conflicts with this rule, and keep proof of that notice.
Keep classified-information nondisclosure requirements separate from general confidentiality language so you do not accidentally weaken lawful security controls while trying to comply with whistleblower protections.
Failure to comply can create serious consequences, including funding restrictions and contract performance problems, so this is not just a paperwork clause; it should be reviewed by legal, HR, and procurement teams together.
Official Regulatory Text
As prescribed in 3.909-3 (b) , insert the following clause: Prohibition on Requiring Certain Internal Confidentiality Agreements or Statements (Jan 2017) (a) Definitions . As used in this clause- Internal confidentiality agreement or statement means a confidentiality agreement or any other written statement that the contractor requires any of its employees or subcontractors to sign regarding nondisclosure of contractor information, except that it does not include confidentiality agreements arising out of civil litigation or confidentiality agreements that contractor employees or subcontractors sign at the behest of a Federal agency. Subcontract means any contract as defined in subpart 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes but is not limited to purchase orders, and changes and modifications to purchase orders. Subcontractor means any supplier, distributor, vendor, or firm (including a consultant) that furnishes supplies or services to or for a prime contractor or another subcontractor. (b) The Contractor shall not require its employees or subcontractors to sign or comply with internal confidentiality agreements or statements prohibiting or otherwise restricting such employees or subcontractors from lawfully reporting waste, fraud, or abuse related to the performance of a Government contract to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information ( e.g. , agency Office of the Inspector General). (c) The Contractor shall notify current employees and subcontractors that prohibitions and restrictions of any preexisting internal confidentiality agreements or statements covered by this clause, to the extent that such prohibitions and restrictions are inconsistent with the prohibitions of this clause, are no longer in effect. (d) The prohibition in paragraph (b) of this clause 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. (e) In accordance with 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) use of funds appropriated (or otherwise made available) is prohibited, if the Government determines that the Contractor is not in compliance with the provisions of this clause. (f) The Contractor shall include the substance of this clause, including this paragraph (f), in subcontracts under such contracts. (End of clause)