United States: New Government Database Could Disclose Contractors' Confidential Information

Despite the stated purpose of the Federal Awardee Performance and Integrity Information System (FAPIIS) to provide a "one-stop shop" for contracting officers, all of the information posted in FAPIIS on or after April 15, 2011, except for past performance reviews, will be available to the public at large. This Legal News Alert discusses the significant implications the public disclosure of FAPIIS information may have on contractors and provides some practical advice on how contractors can protect against the disclosure of their confidential and proprietary information.

History and Purpose of FAPIIS

To increase scrutiny of contractor integrity and improve the quality of contractor performance, Section 872 of the National Defense Authorization Act for Fiscal Year 2009 required the General Services Administration (GSA) to create a system containing specific information on covered federal government contractors' integrity and performance. In response, on March 23, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (FAR Councils) amended the Federal Acquisition Regulation (FAR) to implement FAPIIS.

FAPIIS includes information relating to contractors' past performance reviews, suspensions, debarments, non-responsibility determinations, and civil, criminal, and administrative proceedings relating to a contractor's performance of federal, state, and local contracts, grants, and cooperative agreements. Contracting officers must review the information in FAPIIS when making their responsibility determinations. To support this purpose, initially the information in FAPIIS was only available to the contractor, government personnel, and authorized users performing business on behalf of the government.

Risk of Disclosure of Confidential Information

In accordance with a new rule issued by the FAR Councils on January 24, 2011, implementing Section 3010 of the Supplemental Appropriations Act for Fiscal Year 2010, all information in FAPIIS posted on or after April 15, 2011, except for "past performance reviews," will be publicly available. The new rule does not define the term "past performance reviews" nor does it contain sufficient safeguards to protect against the disclosure of contractors' trade secrets or commercial or financial information otherwise protected from public disclosure under Exemption 4 of the Freedom of Information Act (FOIA). Although contracting officers must take steps to ensure they do not post information in FAPIIS on or after April 15, 2011 protected by a FOIA disclosure exemption, contracting officers are not required to provide contractors with copies of documents prior to posting them on FAPIIS, nor otherwise give contractors an opportunity to identify information that may be protected from disclosure under a FOIA exemption. Once the contracting officer makes a unilateral determination that, in his/her opinion, the documents do not contain information that would create a harm protected by a FOIA disclosure exemption, and the contracting officer posts the information in FAPIIS, the information is publicly available. A contractor's only available recourse is to submit comments through a clarification or rebuttal or request that the contracting officer remove the information from FAPIIS based on the FOIA exemption.

Recommended Actions for Contractors

Contractors with current, active federal contracts and grants with total value greater than $10 million should immediately submit a FOIA request to GSA requesting a copy of all information in FAPIIS relating to themselves to give them the opportunity to comment on any negative or incorrect information posted in FAPIIS through a clarification or rebuttal to ensure the information in FAPIIS is accurate. Additionally, contractors can identify for GSA any information in FAPIIS covered under a FOIA exemption and put GSA on notice that such information should not be produced in response to any FOIA requests from third parties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.