It is common practice for contractors to provide the government with their confidential and propriety information – whether it comes in the form of a response to a solicitation, invitation for bid, or other materials provided during the course of contract performance.
Since you provided the information on a public contract, does that mean the information is now available to anyone (including your competitors) through a simple Freedom of Information Act (FOIA) request? A recent decision from the U.S. Supreme Court says that the answer is No.
Federal agencies are required to disclose any information requested under FOIA — unless it falls under one of nine exemptions. Exemption No. 4 protects trade secrets and/or a contractor’s commercial or financial information that is confidential or privileged.
The Supreme Court considered whether commercial or financial information that is customarily and actually treated as private by its owner – but nevertheless provided to the government during contract performance – remains “confidential” under FOIA Exemption No. 4 (and is therefore shielded from disclosure). The Court held that the exemption applies, even where the contractor provided the information on a public contract. Critically, the Court also held that the contractor is not required to show that disclosure of its confidential information would also cause substantial harm to its competitive position – the confidential nature of the information is sufficient.
This ruling provides contractors who are trying to protect their confidential and proprietary information with significant leverage against FOIA requests from competitors.
However – while the decision is favorable for contractors – it should only be relied on as a last line of defense. Even with the recent ruling, a contractor can still take additional precautionary measures to prevent their information from disclosure to third parties under FOIA. Simple steps like the following can go a long way:
· Disclose confidential or proprietary information only when necessary/required by the government
· Limit the internal availability of the information to only critical employees, and
· Label all sensitive information as confidential and proprietary.
Contractors failing to follow these protocols run the risk of the agency determining the information is not confidential – thus opening the door to FOIA requests (and placing the contractor’s information outside of the protections of the Supreme Court decision discussed above).