FOIA Update: New Disclosure Rule Adopted for Unit Prices

After many years of contentious disputes between agencies and federal contractors over the FOIA disclosability of unit prices in awarded government contracts, the recent rewrite of Part 15 of the Federal Acquisition Regulation (FAR) -- the governmentwide regulation that governs agency contracting -- should soon put this issue to rest.

On September 30, after public notice and comment, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule revising Part 15 of the FAR. Critical revisions of two sections now make clear that the unit prices of each award are to be disclosed to unsuccessful offerors during the postaward notice and debriefing process and, most significantly, are also to be made publicly available upon request. 62 Fed. Reg. 51,224, 51,254, 51,255 (1997) (to be codified at 48 C.F.R. §§ 15.503(b)(iv), 15.506(d)(2)).

Part 15 of the FAR has always contained a provision requiring agencies to disclose (with some exceptions) the unit prices of successful offerors to unsuccessful offerors during the postaward notification process for negotiated contracts. See 48 C.F.R. § 15.1003(b)(1)(iv) (1996). Because Exemption 4 protection is vitiated for information that is publicly available, the Justice Department has long advised agencies that the unit prices of successful offerors that are required to be disclosed under the FAR postaward notice process should not be considered to be within the available protection of Exemption 4. See FOIA Update, Fall 1984, at 4.

Nevertheless, over the years, numerous "reverse" FOIA cases have been brought by submitters who have challenged agency decisions to disclose unit prices, and agencies have been forced to litigate this issue time and again. The FAR rewrite should remedy that problem.

The newly issued FAR provisions expressly require disclosure of unit prices in both the postaward notice to and debriefing of unsuccessful offerors. Although there is an exception to that requirement for the postaward notice if "the number of items or other factors makes listing any stated unit prices impracticable," the FAR now expressly limits that exception to what is required to be included in the contents of the postaward notice itself. 62 Fed. Reg. at 51,254. Further, an entirely new provision has been added to the FAR to specifically provide that "the items, quantities, and any stated unit prices of each award shall be made publicly available, upon request." Id. Thus, even if it is impracticable to include voluminous unit prices in a postaward notice itself, once such information is requested, the agency now must make it publicly available.

In addition to these changes made to the postaward notice section, the FAR rewrite also changes the section specifying the information that is required to be disclosed during postaward debriefings of offerors. Id. at 51,255. The debriefing provision now explicitly provides that during a debriefing the "overall evaluated cost or price (including unit prices)" shall be furnished the debriefed offeror.

Thus, unsuccessful offerors (who frequently request pricing information concerning successful contractors) now will have two distinct avenues open to them to obtain unit price information as part of the contracting process itself -- i.e., through the postaward notice or a postaward debriefing. Most significantly, the unsuccessful offeror (or, for that matter, any member of the public) can request such information, and the FAR directs that it shall be made "publicly available." As the D.C. Circuit Court of Appeals has recognized, "[t]o the extent that any data requested under [the] FOIA are in the public domain, the submitter is unable to make any claim to confidentiality -- a sine qua non of Exemption 4." CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1154 (D.C. Cir. 1987).

As a result of the FAR's new express authorization to publicly release "items, quantities, and any stated unit prices of each award" upon request, agencies will no longer have to go through the oftentimes-cumbersome process of giving submitter notice prior to disclosing unit prices in response to a FOIA request. Exec. Order No. 12,600, § 8(b). Since public disclosure of awarded unit prices will now be a mandatory part of the postaward process, successful offerors will not reasonably be able to argue that their unit prices should be withheld under the FOIA, because those prices no longer could possibly be considered "confidential."

These new FAR provisions (which were developed by OIP Senior Counsel Melanie Ann Pustay) become mandatory for contracts solicited after January 1, 1998, regarding which submitter notice will no longer be required.

This issue of FOIA Update contains a cumulative index covering Volumes I through XVIII of its publication, from 1979 through 1997.

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