Is Your Proprietary Data Protected?

Companies, especially companies new to the Government contracting arena, are often wary of sending proprietary company data off to faceless, nameless bureaucrats. One never knows where that information could end up. Will it somehow end up in the hands of the competition? Will it be passed along to other Government agencies, where perhaps, you've submitted proposals with different costing information? Will it end up in a congressional hearing? Will it become public? What about company responsibility to safeguard employee personnel data?

We can't tell you not to worry, but you shouldn't worry too much.  Agencies have a responsibility to protect proprietary information from disclosure outside the Executive Branch. Intentional and inadvertent disclosures can harm the competitive position of contractors among their competitors and impair the ability of the Federal Government to maintain a robust and competitive marketplace. Disclosure is also illegal under a variety of statutes. For this reason, Government contracting personnel including contract auditors are trained from the very beginning of their careers the importance of safeguarding proprietary information.

While there are restrictions on the release of proprietary information outside the Government, there are no general limitations on the disclosure of information between agencies within the Government. As a matter of fact, agencies are encouraged to share pricing information to help ensure the Government is getting the best value for taxpayers. While the flow of information outside the Government can cause harm, the flow of information between agencies (within the Executive Branch) does not cause harm but helps "root out wasteful duplication and negotiate  better deals for the taxpayer."

Sometimes the Government relies on contractors to help award other contracts. These contract workers will have access to the proprietary data of other contractors including cases where those contractors are in direct competition with their own company. In these cases, the Government tries to build a firewall so that proprietary data is not communicated back to the employer. These procedures are covered in FAR 9.5 regarding organizational conflicts of interest.

There have been cases where company proprietary information has been demanded of an Executive Agency by Congress and subsequently made public during a Congressional committee hearing, for example. These are extreme cases and would be difficult to prevent, no matter how tightly a company's or an Executive Agency's policies were drafted.

Contractors should be routinely marking each document that contains proprietary information with a statement to that effect. This should at least reduce the risk of inadvertent disclosures.