Infotech and the law: The art of writing reverse FOIA letters

Devon Hewitt

Under the Freedom of Information Act, companies may request copies of contracts from the government, including a contractor's proposal. This information, however, often contains confidential and proprietary data submitted by the winning contractor that the requesting company could use to obtain a competitive advantage.

Before releasing this data, the government is required to give the contractor an opportunity to object to the release of the information, stating its objections in what has become known as a reverse FOIA letter.

The contractor's strongest argument against an FOIA request is that the information falls under FOIA exemption 4 covering "trade secrets and commercial and financial information" that is "privileged or confidential." Such information also may be barred from release by the Trade Secrets Act.

Two tests are used to determine if information is covered by exemption 4. The test to be applied depends on whether the information was submitted under compulsion or voluntarily.

Courts have held that unit or lump sum pricing included in a proposal was submitted to the government under compulsion, but line-item pricing or technical information is considered submitted on a voluntary basis.

Commercial or financial information submitted under compulsion is the most difficult to prevent from release. This information will be deemed confidential only if its disclosure would impair the government's ability to obtain necessary information in the future or cause substantial harm to the competitive position of the person from whom the information was obtained.

Commercial or financial information submitted voluntarily, on the other hand, will be deemed confidential under exemption 4 if it would customarily not be released to the public by the person from whom it was obtained.

To demonstrate that the requested information satisfies either or both of these tests, the contractor should describe how the company ensures the information is kept confidential. For example, does the company keep this information under lock and key? Does it limit the number and type of people that have access to this information? Does it conspicuously label every document submitted to the government with the restrictive language as mandated by Federal Acquisition Regulations?

The letter should also discuss the industry custom regarding the release of this type of information. Is this information generally not released to competitors? Is the contractor involved in a highly competitive industry? Is the information of this FOIA request similar to information that would provide a competitor with an advantage in future procurements?

For example, are the prices quoted in this contract a reasonable predictor of the company's future prices in future procurements? Would release of this information reveal the company's profit multiplier or general and administrative costs and overhead? Can a compromise be reached by agreeing to release the information after several years?

The more time a contractor takes to apply the general legal rules to the specific facts of its company and procedures in the reverse FOIA letter, the more likely it will be successful in preventing its proprietary and confidential information from being released under FOIA. *

Devon Hewitt is a partner of Government Practices at ShawPittman in McLean, Va. She can be reached at devon.hewitt@shawpittman.com.

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