Tuesday, August 23, 2011

Protect Your Proprietary Information

The Government is required to protect contractors' proprietary information from unauthorized disclosure. There are two recurring issues regarding this requirement. What is contractor "proprietary data" and what is "unauthorized disclosure".

Contractors are responsible for deciding what data is proprietary. FAR 52.215-1 provides specific language for marking information that they consider proprietary. There is specific wording for the cover page and truncated wording for each page that contains proprietary data. We've discussed this requirement and wording in earlier postings. Vigilance in protecting proprietary information is a must. Although not fail-safe, failing to include these markings greatly increases the likelihood that competitors will see your information, good ideas, indirect rates, compensation levels, etc.

Once "proprietary information" status is disclosed, FAR 2.104-4 kicks in. Paragraph (a) of that section states:

... no person or other entity may disclose contractor bid or proposal information or source selection information to any person other than a person authorized, in accordance with applicable agency regulations or procedures, by the agency head or the contracting officer to receive such information.

They key phrase here is "...person authorized in accordance with applicable agency regulations and procedures. If there is ever a dispute about who is or is not authorized, contractors should request copies of agencys' specific policies.

FAR 2.104-4 also contains procedures for resolving disagreements between contractors (or prospective contractors) and the Government as to whether certain information is indeed "proprietary". Some companies make it a policy to mark everything "proprietary" when it is not necessarily so. This practice often irritates Government personnel, causes more work for everyone, and is not recommended.

This clause does not authorized the withholding on any information from Congress, a Federal agency, GAO, or the Inspector General though if an agency releases such information, it must notify the contractor.

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