The latest thinking from the administration and the councils that regulate federal acquisition is to post online the text of all contracts and orders issued by the U.S. government. The advance notice of proposed rulemaking, issued May 13, is another step in implementing the “Transparency and Open Government” policy. Generally, providing more information to taxpayers about federal spending may seem like the right thing to do. However, the government requests and obtains huge amounts of proprietary and confidential information from corporations and individuals by contract in the course of its daily operations. Current law–through the Trade Secrets Act (18 U.S.C. ? 1905) and exemptions from the Freedom of Information Act (FOIA) (5 U.S.C. ? 552) –protects privately developed trade secrets, proprietary information and know-how. Federal contracts typically contain large amounts of proprietary information, ranging from new technologies to pricing strategies. A mandate to make each contract public is inconsistent with current law.

Even under current law, competitors (both domestic and foreign) comb thorough available government data to obtain competitive intelligence. Companies routinely file requests under FOIA to gain insights into their competitors' technology, pricing and competitive approach. Each federal contract contains a detailed statement of the contractor's approach, specifications (frequently developed by the contractor to meet a high-level performance objective), detailed spreadsheets setting out performance milestones, and cost or pricing data. Current law requires that an agency, upon receipt of a request for such information, inform the submitter and provide an opportunity to object to its release–to redact the sensitive pieces of information. If the government proposes to release information over a submitter's objection, the submitter may file a “reverse-FOIA” action in federal court to prevent release.

The new proposal states that it may not be “practical” to observe such procedures before contracts are posted–suggesting strongly that unilateral decisions about release of the information may be made by the government, because it is too burdensome to do otherwise. The challenge for government is to create a process that fairly provides an opportunity for contractors to protect their proprietary data. If it is too burdensome to allow submitters an opportunity to redact sensitive bits, then someone in the government will have to be responsible for making release decisions. This is a monumental task–the government awards millions of contracts each year. In order for such an approach to be effective, FOIA would have to be changed to deny companies the right to challenge unilateral government release decisions.

Currently, under the Federal Supply Schedule Program (the government's program for acquiring commercial items), the key terms of contracts are posted, including the price and labor rates. What is not available are the detailed work specifications and the actual price paid for the work performed. This program may be the best that the government can do.

The government needs to tread carefully here. Too much “transparency” will reduce competition and limit the government's access to the latest technological approaches. Companies will be very reluctant to provide innovative technical solutions and creative pricing arrangements if they know their information will be available freely to all of their competitors.

The latest thinking from the administration and the councils that regulate federal acquisition is to post online the text of all contracts and orders issued by the U.S. government. The advance notice of proposed rulemaking, issued May 13, is another step in implementing the “Transparency and Open Government” policy. Generally, providing more information to taxpayers about federal spending may seem like the right thing to do. However, the government requests and obtains huge amounts of proprietary and confidential information from corporations and individuals by contract in the course of its daily operations. Current law–through the Trade Secrets Act (18 U.S.C. ? 1905) and exemptions from the Freedom of Information Act (FOIA) (5 U.S.C. ? 552) –protects privately developed trade secrets, proprietary information and know-how. Federal contracts typically contain large amounts of proprietary information, ranging from new technologies to pricing strategies. A mandate to make each contract public is inconsistent with current law.

Even under current law, competitors (both domestic and foreign) comb thorough available government data to obtain competitive intelligence. Companies routinely file requests under FOIA to gain insights into their competitors' technology, pricing and competitive approach. Each federal contract contains a detailed statement of the contractor's approach, specifications (frequently developed by the contractor to meet a high-level performance objective), detailed spreadsheets setting out performance milestones, and cost or pricing data. Current law requires that an agency, upon receipt of a request for such information, inform the submitter and provide an opportunity to object to its release–to redact the sensitive pieces of information. If the government proposes to release information over a submitter's objection, the submitter may file a “reverse-FOIA” action in federal court to prevent release.

The new proposal states that it may not be “practical” to observe such procedures before contracts are posted–suggesting strongly that unilateral decisions about release of the information may be made by the government, because it is too burdensome to do otherwise. The challenge for government is to create a process that fairly provides an opportunity for contractors to protect their proprietary data. If it is too burdensome to allow submitters an opportunity to redact sensitive bits, then someone in the government will have to be responsible for making release decisions. This is a monumental task–the government awards millions of contracts each year. In order for such an approach to be effective, FOIA would have to be changed to deny companies the right to challenge unilateral government release decisions.

Currently, under the Federal Supply Schedule Program (the government's program for acquiring commercial items), the key terms of contracts are posted, including the price and labor rates. What is not available are the detailed work specifications and the actual price paid for the work performed. This program may be the best that the government can do.

The government needs to tread carefully here. Too much “transparency” will reduce competition and limit the government's access to the latest technological approaches. Companies will be very reluctant to provide innovative technical solutions and creative pricing arrangements if they know their information will be available freely to all of their competitors.