Submitting Data to the Government that Contains Proprietary Information

The Government is required to protect contractors' proprietary information from unauthorized disclosure. Contractors are responsible for deciding what data is proprietary. FAR 52.215-1 provides specific language for marking information that contractors consider to be proprietary. There is specific wording for a cover page and for each page that contains proprietary data. To read more about these protections, see "Protect Your Proprietary Information".

In a case that underscores the importance of protecting proprietary data as well making the point that it is the contractors', not the Government's responsibility to clearly identify proprietary data, the U.S. Court of Federal Claims denied a contractor's protest that the Air Force mistakenly included its proprietary data - specifically its indirect rate and fee structures - in solicitation materials. The contractor, who was also the incumbent contractor for the work, stressed that other bidders having knowledge of its proprietary data, had a baseline from which to prepare their own bids. The contractor asked for a five-year extension of its current contract as a remedy for the inadvertent release of its proprietary data.

The incumbent contractor had included indirect cost and award fee data in its management reports to the Air Force. The Air Force, in turn, included those reports in the solicitation without redacting the contractor's proprietary data. Upon learning of this from another potential bidder, the Air Force took reasonable steps to mitigate the disclosure including removal from the solicitation information and removing other offerors' ability to propose individual indirect rates and fees in a new competition.

The Court of Federal Claims found that the Air Force had taken reasonable steps to mitigate the damage however the Court also found that it was ultimately the contractor's fault, not the Government's, because the contractor had the affirmative duty to clearly mark data that was proprietary and by failing to do so, had waived its rights.

To read the entire decision, click here.