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Legal Govt Eagle

Duty to notify possible breach of Procurement Integirty Act

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Does anyone know of any case law that puts an obligation on the Government to notify offerors of a potential violation (but once investigated wasn't found to impact procurement) of procurement integrity act (unknowinging disclosure of procurement information)?

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Legal Govt Eagle,

Perhaps a complete answer depends on what was released.

On the one hand, one could imagine a scenario where no notification would be needed. For instance, if someone in the government inadvertently disclosed source selection information whose ultimate source is solely the government to an offeror or potential offeror, and then promptly corrected for any potential unfair competitive advantage that could result by disclosing the same information to all potential or actual offerors, thus making it public (and not longer procurement information), then there may not be any need to notify the world of the inadvertent disclosure.

On the other hand, if what was released was a company's proprietary information, then it isn't as clear to me that one could adequately mitigate the potential unfair competitive advantage (or other harms) without explaining what prompted it. For an example of what I'm talking about, you might want to read Ocean Services, B-292511.2, Nov. 6, 2003. Releasing proprietary information might not just violate the Procurement Integrity Act, it might also violate the Trade Secrets Act, might amount to breach of contract, and might even amount to a Constitutional Taking. Informing the source of the inadvertent disclosure and the steps taken to prevent further dissemination might help mitigate the damages that for which the government may ultimately be on the hook. Oh, and it also seems like the right thing to do.

You might also want to consider the potential implications of FAR 3.104-4(d) to your facts.

Edited by Jacques

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This is a timely thread. Allow me to ask this question....currently OMB/OFPP and GSA are seeking to capture and share prices paid information https://www.federalregister.gov/articles/2015/03/04/2015-04349/general-services-administration-acquisition-regulation-gsar-transactional-data-reporting#h-15. Although I can see how this would be helpful and beneficial for agency COs when negotiating price positions (assuming they know the nuances associated with price competition) I can't help but wonder if this is allowable considering the Procurement Integrity Act and Trade Secrets Act. I wonder about controls over access to data, never mind the ability to capture and share transactional data. Thoughts?

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jonmjohnson,

Realize that the PIA doesn't reach everything* (and its coverage to a particular procurement does end, typically at contract award), and the TSA only prohibits disclosure outside the government. I assume you're concerned about disclosures of proprietary information outside the government.

* see definition of "Federal agency procurement" at 41 USC 2101(4).

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Jacques...correct on that assumption. But I wonder about the amount of information internal contract employees have concerning their competitors. Even if the federal government were able to devise a mechanism to provide this information only to those with a .gov email address, we know that there plenty of people with this access. What would stop vendor X with access to prices pain from finding line item pricing of a competetor and either disclosing that or using it for their own gain and benefit? Call me crazy, but I do view pricing practices as being trade secret information, otherwise it would be material that would be releasable through a FOIA process, and it is not. Just some thoughts on this....I appreciate the response Jacques.

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I think any pricing information database being used to inform COs for future negotiations must be maintained without company names related to the prices. It would just be a scatter graphs of prices paid (by quantitiy breaks) with various averages given. The database should be public in my view too. Contractors should be able to see what prices we have been paying as much as the COs. Transparency you know. I will say that this data has limited value due to our not knowing all the terms and conditions or other unusual factors. However it would eliminate some rediculously high outliers as I have seen in some of my own agencies strategic sourcing price graphs. Works good for simple supplies, equipment and commodities but not sure how it can be very useful in service contracts.

Problem is that to get that pricing information, someone has to provide it in the format needed. This takes manpower that we don't have in the short term even if the computers do 80% of the work.

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"data has limited value due to our not knowing all the terms and conditions or other unusual factors."

Boof...you are hitting the nail on the head with this statement. 47, 42, 41, 39, 36, 35 are only data points...and in and of themselves meaningless without the underlying knowledge of what went into each. Unfortunately the trend towards data analytics misses this primary point entirely. I don't know many who are involved in pushing this concept forward who have the procurement knowledge and subject matter expertise capable of asking the right questions to pull data in a way that can help resolve problems (concering non-COTS products). Prices paid without knowledge of the terms, or how the particular price point fits in with the entirety of a pricing strategy, is not only misleading but dangerous. I like to think that COs understand this as common knowledge, but I am often proven wrong on this point.

You may be right about the outliers, and that could be a good thing for holding commodity/cots resellers more accountable. I can see this being a benefit for purchasing rather than contracting (pens, paper, printer toner, etc...) but less so in any non-commoditized products or services. Could this be a problem with people assuming COTS is the same as commercial, and therefore commercial pricing is the same as COTS pricing? I am clearly still playing with this between my ears a bit.

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