Overview
FAR 52.224 establishes the contractual requirements for protecting individual privacy under the Privacy Act of 1974. It specifically governs how contractors must design, develop, or operate a "system of records" on behalf of a federal agency and sets mandatory standards for privacy training and the handling of Personally Identifiable Information (PII).
Key Rules
- Applicability: These clauses are mandatory when a contractor is tasked with designing, developing, or operating a system of records to accomplish an agency function.
- Legal Liability: For the purposes of the Privacy Act, contractors and their employees are considered agency employees; this means they are subject to the same civil and criminal penalties as federal staff for violations of the Act.
- Identification of Systems: Under 52.224-2, the contract must specifically identify the systems of records being managed and the specific work the contractor is authorized to perform on those systems.
- Mandatory Training: FAR 52.224-3 requires initial and annual privacy training for all contractor employees who access systems of records or handle PII. This training must be role-based, test the user's knowledge, and cover breach response procedures.
- Documentation: Contractors are required to maintain records of completed training and provide them to the Contracting Officer upon request.
- Flow-down Requirements: These provisions must be included in all subcontracts that involve the design, development, or operation of a system of records or access to PII.
Practical Implications
- Operational Readiness: Contractors cannot grant employees access to sensitive data or systems until training is completed and documented, which requires proactive onboarding procedures to avoid project delays.
- Risk Management: Because contractor personnel face direct criminal liability for Privacy Act violations, firms must implement rigorous internal controls and auditing to ensure data is handled only for authorized, official purposes.