For decades government contractors have used the Freedom of Information Act (FOIA) to gather intelligence, including details on competitor contracts and proposals.

FOIA generally provides that any person has a right to obtain access to federal agency records, except to the extent that such records (or portions of them) are protected from public disclosure by one of nine exemptions. The exemption most commonly used in the context of government contracting is related to trade secrets and confidential commercial or financial information.

Typical situations where contractors use FOIA include: (1) reviewing a competitor's winning proposal after an award, and, (2) in bidding on a new contract, checking on an incumbent’s price in a prior award.

FOIA Procedures

The procedures for invoking FOIA are relatively straightforward. You send a letter to the agency asking for a copy of the documents you're seeking, such as a contract, a proposal or a list of bidders.

You can send your request to an agency official, such as a contracting officer, or to the agency’s FOIA officer. You do not have to describe the reason for your request.

Once an agency receives a FOIA request, it has 20 working days to make a determination. Before 1996, once an agency was in receipt of a proper FOIA request, it was required to inform the requester of its decision to grant or deny access to the requested records within ten working days. The Electronic Freedom of Information Act Amendments of 1996 increased FOIA's time limit for responses, stretching it from ten to 20 working days.

In "unusual circumstances," an agency can extend the 20-day time limit for processing a FOIA request if it tells the requester in writing why it needs the extension and when it will make a determination on the request. The FOIA defines "unusual circumstances" as: (1) the need to search for and collect records from separate offices; (2) the need to examine a voluminous amount of records required by the request; and (3) the need to consult with another agency or agency component.

Release of Proposals

In 1996, Congress included a provision in the National Defense Authorization Act that prohibits the release of a proposal submitted by a contractor in response to a competitive solicitation. The only exceptions are for unsolicited proposals, proposals in the possession of NASA or the Coast Guard or any proposal that is set forth or incorporated by reference in a contract.

As a result, unsuccessful proposals are exempt from disclosure under FOIA, along with successful proposals that are not referenced in or incorporated into the resulting contract.

Because the winning proposal generally is of the highest interest to a losing bidder (rather than the proposals of fellow losers), this change does not seem terribly dramatic, that is unless contracting officers move away from the practice of incorporating proposals into contracts.

What types of information might be obtained? Here are examples from a recent court case:

(1) cost and fee information, including material, labor and overhead costs, as well as target costs, target profits and fixed fees;

(2) component and configuration prices, including unit pricing and contract line item numbers; and

(3) technical and management information, including subcontracting plans, asset allocation charts, and statements of the work necessary to accomplish certain system conversions.

Martin Marietta Corp. v. Dalton, 974 F. Supp. 37 (D.D.C. 1997).

To stop a competitor from yanking such information out of your winning proposal, you must show that your company will suffer "competitive harm." Generally, this means showing evidence of "actual competition and a likelihood of substantial competitive injury." CNA Fin. Corp. v. Donovan, 830 F.2d 1132 (D.C. Cir. 1987).

Only When Necessary

Keep in mind that you shouldn't use FOIA unless you have to. FOIA requests can take a long time, and they can be a drain on resources. In some cases, they can also bring grief to the agency people who work with you. And that's not a good thing.

In the course of gathering business intelligence that is not competitive -- e.g., names of agency contracting officers, program managers and basic contract information -- try to keep your requests informal. In other words, just ask for the information and see what happens before invoking FOIA. Make life easier for yourself and the folks you're working with at the agency.