The revised provision on contractors would make grantees and subcontractors susceptible to certain of the Act's provisions. [(m)] Equally important, the circumstances under which the law would apply to such parties is more precisely delineated than in the current law. "Any contractor or recipient of a Federal grant, or any subcontractor thereof, who performs any function on behalf of a Federal agency which requires the contractor or grantee to maintain individually identifiable records" would be subject to the provisions of the subsection, except that "employment, personnel, or other administrative records which the contractor or grantee maintains as a necessary aspect of supporting the performance of the contract or grant but which bear no other relation to the performance of the contract or grant" would not be covered. [(m)(1)(A)] The revised provision also would not apply to "individually identifiable records" which (a) are neither required nor implied by the terms of the contract or grant; (b) are records for which no representation of Federal sponsorship or association is made; and (c) are records which, except for audits or investigations, will not be available to the Federal agency with which the contract or grant is established. [(m)(1)(B)] These requirements would extend the coverage of the Act to Federal grantees whose functions are substantially the same as those of contractors.
Contractors and grantees would also be civilly liable under the Act, whereas currently they are only subject to the Act's criminal sanctions, and no agency would be permitted to include in a contract or grant a clause indemnifying the contractor or grantee against such civil liability. [(m)(3)(C)] This should increase the incentives for contractors and grantees to comply, since criminal sanctions are rarely enforced.