In a case decided this week, the United States Court of Appeals for the Third Circuit turned government filing deadlines on their head by holding that federal Offices of the Inspector General (“OIG”) are not actually bound by the statutory language stating that the OIG “shall” issue an investigative report within 180 days after receiving a whistleblower complaint.
In Jacobs Project Management Co. v. U.S. Department of the Interior, Jacobs petitioned for a review of a final order issued by the Department of the Interior (“DOI”) concluding that Jacobs retaliated against a former employee for whistleblowing in violation of 41 U.S.C. § 4712. In this case, a Jacobs’ employee filed a whistleblower reprisal claim in 2015 alleging that his employer failed to renew his employment contract in retaliation for his having disclosed payment discrepancies under Jacobs’ government contract. Pursuant to Section 4712, the OIG had 180 days to issue a report, and an additional 180 days after properly extending the deadline with the consent of the complainant. However, the OIG did not complete its report until February 2017, well beyond the 360-day deadline. Three years went by before DOI sent Jacobs a letter indicating it had never received a response to the 2017 report. In response, Jacobs first claimed it had never received the report from the OIG, and then it subsequently declined to submit a response to the OIG’s report because the report was issued after the statutory deadline – more than 360 days and in violation of Section 4712. A year later, beyond the 30-day deadline, DOI issued a final order concluding that Jacobs had engaged in prohibited reprisal against the complainant employee in violation of Section 4712 and awarding the complainant $803,906.08.
Jacobs appealed this final order, claiming that DOI lacked jurisdiction to issue the final order after the statutory deadline had passed. Specifically, Jacobs pointed to the mandatory language in Section 4712, which expressly states: “the Inspector General shall make a determination that a complaint is frivolous, fails to allege a violation of the prohibition in subsection (a), or has previously been addressed in another Federal or State judicial or administrative proceeding initiated by the complainant or submit a report under paragraph (1) within 180 days after receiving the complaint.” 41 U.S.C. § 4712(a). Or alternatively, “[i]f the Inspector General is unable to complete an investigation in time to submit a report within the 180-day period specified in subparagraph (A) and the person submitting the complaint agrees to an extension of time, the Inspector General shall submit a report under paragraph (1) within such additional period of time, up to 180 days, as shall be agreed upon between the Inspector General and the person submitting the complaint.” Id. at § 4712(b).
Notwithstanding the use of the word “shall,” which in most statutory interpretation indicates a nondiscretionary, mandatory requirement, the Third Circuit denied Jacobs’ petition for review, finding no timeliness bar to the OIG report issued more than 360 days after filing of the initial complaint. In reasoning that the word “shall” did not actually impose a filing deadline on the OIG, the Court offered the following reasons:
- The use of the word “shall” in the statute (e.g. the IG “shall” make a determination within 180 days) alone does not indicate that the deadlines are jurisdictional.
- “[T]he text of the statute does not contain a consequence for the agency’s failure to comply with the statutory deadlines.” The result of an agency’s tardiness only equates to an exhaustion of remedies and provides the complainant another avenue to seek relief – it does not mean that the agency cannot continue to act if a lawsuit is not filed.
- “[I]nterpreting the deadlines in § 4712 as jurisdictional would be contrary to the statute’s primary purpose” of protecting whistleblowers from reprisal.
- There are “less dramatic remedies” available for failure to meet a statutory deadline. Jacobs could have filed suit under the Administrative Procedure Act to “compel agency action unlawfully withheld or unreasonably delayed.”
- The Court is reluctant to construe statutory deadlines as jurisdictional when a statute requires the agency to resolve an entire dispute within a specified timeframe.
- The Court is “reluctant to conclude that a deadline is jurisdictional ‘when important public rights are at stake.’”
The Court’s ruling, that this deadline is not jurisdictional, presents an interesting enforceability question and an apparent double standard for government contractor litigants in disputes against the government. The Court of Federal Claims, the Comptroller General, and the Boards of Contract Appeals have all strictly applied deadlines to initiate bid protests, claims, and administrative litigation when brought by contractors filing suit against the government, and regularly dismiss protests and claims as untimely when not brought within the strict deadline set forth in the federal regulations.
Yet in this case, the Third Circuit found that, despite the use of the word “shall” in Section 4712, “the statutory deadlines for agency action in § 4712 are best interpreted ‘as a spur to prompt [agency] action, not as a bar to tardy completion.’” In so ruling, the Third Circuit essentially converted a statutory requirement (“shall”) into a loose guideline (claiming there is a “permissive nature [to] the language”) that does not actually limit an agency’s power to act if it fails to comply with a statutory deadline.
Going forward, the impact of this decision remains unknown. It is likely, however, that Courts may similarly relax the statutory filing deadline for the Department of Defense (“DOD”) OIG reports brought under the corollary whistleblower retaliation statute, 10 USC § 4701, which similarly requires that the OIG “shall” issue a report in response to a whistleblower retaliation claim within 180 days after receiving the complaint. The decision also begs the question whether the Third Circuit, by loosening the requirement for government filings, will have paved the road for contractors who, in seeking relief from untimely protests or claims against the government, also may argue that the use of the word “shall” in the applicable regulations is not jurisdictional and therefore not a bar to filing an otherwise untimely claim.
At least one takeaway is clear: the Third Circuit’s decision serves as a warning to contractors who may be facing whistleblower reprisal claims under Section 4712. The OIG’s investigations are not necessarily over at the expiration of the statutory deadlines. Contractors who have not received an investigation report or a final order from the agency at the expiration of the deadline should request timely reports or orders that an investigation has been concluded.