Management Alert: HUD Should Take Additional Steps to Protect Contractor Employees Who Disclose Wrongdoing

The OIG has learned that employees of thousands of contractors who receive funds from the U.S. Department of Housing and Urban Development (HUD) are not protected against retaliation for blowing the whistle on wrongdoing.  The gap in protections exists because (1) the contracts pre-date July 1, 2013, the date on which the anti-retaliation law codified at 41 U.S.C. § 4712 (Section 4712) became effective; and (2) HUD has not modified the contracts to include Section 4712 anti-retaliation provisions that would protect the employees.1  The OIG identified this problem following recent investigations of allegations of whistleblower retaliation against several employees of contractors.  Although the investigations revealed this problem with respect to Housing Assistance Payments (HAP) contracts, as discussed below, we believe that the same risk is present in many other HUD contracts.2 The OIG recommends that HUD address this serious risk by undertaking a comprehensive review of all contracts to determine whether they include Section 4712 anti-retaliation provisions.  We also recommend that HUD be proactive in seeking to modify any HUD contracts that do not include Section 4712 anti-retaliation language to confer whistleblower protections on contractor employees.