New rules proposed to protect contractor information

White House wants new safeguards to stop contractors from getting inside information on competitors.

As part of a new revision of the Federal Acquisition Regulations, the Obama administration wants to prevent contractors from gaining an inside edge by gaining access to information not available to other bidders.

For example, a contractor might work on a project with the government that requires access to another business’s contract information. The company could potentially use the information to outbid the competitor for a contract.


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Rules against this scenario are not new. However, administration officials have proposed new governmentwide policies regarding disclosing and protecting sensitive information. They also want to create a new section of the FAR for regulations that address this problem. The existing provisions are part of the larger section on organizational conflicts of interest (OCI). But regulators are saying the problem is not an OCI issue.

Administration officials hope to increase awareness of the problem by putting the regulations in a separate section.

“Treating this topic independently will allow for more targeted coverage that properly addresses the specific concerns involved in such cases,” according to the new proposal released April 26.

The proposal comes as part of a larger revision of the OCI rules.

The proposal provides substantial safeguards designed to deal with some of the concerns created by a company’s access to information not released publicly. Administration officials want to leave it to the contracting officer to determine, on a case-by-case basis, whether the protections are adequate, or if a situation involving an unfair competitive advantage remains to be resolved.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council, along with the Office of Federal Procurement Policy, have proposed that all contractors should be contractually obligated to protect the information. They also want companies to require their employees who may access the disclosed information to sign nondisclosure agreements, which would be enforceable by both the government and a third party.

The councils also said issues around getting an unfair advantage over competitors are unrelated to OCIs, and may arise from other circumstances, such as a company that hired former government employee, who has had access to information on competitors. But most often, past work is the main issue.

“The councils recognized that much of such access comes from performance on other government contracts,” they wrote in the proposal.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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