Uncharted Territory: Protestor Files Suit Challenging GAO’s Redaction Policy

Protests and LitigationWe’ll be watching with interest as Pond Constructors, Inc. v. Government Accountability Office, No. 1:17-cv-00881, makes its way through the U.S. District Court for the District of Columbia.  Following an unsuccessful bid protest, Pond Constructors, Inc. (“Pond”) proposed to redact from the Government Accountability Office’s (“GAO’s”) final decision the procuring agency’s source selection analysis of Pond’s proposal, including  past performance and technical ratings, small business participation rankings, and price.  Pond argues that this information was produced under GAO’s protective order during the bid protest, and, moreover, the information is protected from disclosure under the Freedom of Information Act (“FOIA”).  Nothing in the regulations requires GAO to publish this information; in fact, GAO’s bid protest regulations require GAO to publish a public version of its decision “omitting the protected information . . . wherever possible.”  4 C.F.R. § 21.2.

Contractors occasionally convince GAO to make broader redactions.  But most contractors find themselves in Pond’s shoes, where the GAO, in its discretion, refuses to redact the information in its public decision.  According to an exhibit accompanying Pond’s complaint, the GAO attorney stated that the GAO “does not generally redact the proposed pricing or adjectival ratings, and, based on the arguments presented, we have not concluded that there is a need for an exception in this case.”  In our experience, once GAO decides what it will and will not redact, that is usually the end of the story.  Repeat players accept this as a price of the protest business, but Pond appears ready and willing for a fight.

Pond argues that the information at issue is protected from disclosure by FOIA Exemption 4 and GAO’s standard protective order.  Exemption 4 protects information that is “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. § 552(b)(4).  Courts interpret “commercial” broadly to include any information “pertaining to or relating to or dealing with commerce.”  See American Airlines, Inc. v. Nat’l Mediation Board, 588 F.2d 863, 870 (2d Cir. 1978).  In general, information that an offeror must submit as part of its proposal is confidential if disclosing the information would either (1) “impair the Government’s ability to obtain necessary information in the future” or (2) “cause substantial harm to the competitive position of the person from whom the information was obtained.”  Nat’l Parks and Conversation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).  This is the same rationale GAO gives for issuing a protective order in bid protest cases.

GAO’s protective order, which is standard issue in every protest, allows parties to designate a broad range of source selection material as protected, and it limits admission to the protective order to attorneys and their support staff “who are not involved in competitive decision making” for any party or entity.  As stated in the protective order itself, the goal is “to limit disclosure of certain material and information submitted in the . . . protest, so that no party obtaining access to protected material “will gain a competitive advantage as a result of the disclosure.”

These protections ring hollow if GAO interprets FOIA Exemption 4 and its protective order as providing only limited protection to offerors who file a protest.  Under the National Parks test, Pond would have a strong argument to prevent the agency conducting the procurement from disclosing the very information that GAO intends to disclose.  Pond’s case tests whether, by exercising its right to protest the procurement, a contractor loses much of its FOIA Exemption 4 protection.  This also raises important questions about the scope and power of the GAO’s protective order.

GAO may not be itching for a test of its redaction practices, so we won’t be surprised if the case gets resolved without a decision, like the one filed last year by Torres Advanced Enterprise Solutions.  But if Pond fights its case all the way to the end, we may see some groundbreaking precedent in an area that, to date, has lurked in the depths of GAO discretion.  It is salt in the wound when a contractor loses a contract, then loses the protest, then learns that GAO will release its losing price and ratings, which wouldn’t be public but for the protest.