Overview
This section outlines the mandatory application of the Privacy Act of 1974 to government contractors when they are tasked with designing, developing, or operating a system of records on individuals to fulfill an agency function.
Key Rules
- Applicability: The requirements of the Act must be applied to any contractor and its employees if the contract involves the design, development, or operation of a system of records on behalf of an agency.
- Legal Status of Records: Any system of records operated by a contractor under these conditions is legally deemed to be "maintained by the agency" and is subject to full Act oversight.
- Criminal Liability: For the purposes of criminal penalties under the Act, contractor employees are considered "agency employees" and can be held personally liable for violations.
- Civil Liability: Federal agencies may face civil lawsuits and be held liable for damages to individuals if they fail to ensure their contractors comply with the Act’s requirements.
Practical Implications
- Contractors handling sensitive personal data must implement the same stringent privacy protections and access controls as the federal government.
- Contracting officers must ensure specific Privacy Act clauses are included in solicitations and contracts to mitigate the agency's risk of civil litigation and to clarify the contractor's criminal exposure.