The ongoing federal contracting transparency initiatives will not yet include the publication of actual contract documents on the internet. According to a Federal Register notice published on February 10, 2011 [pdf], that proposal has been withdrawn, at least for now.

The proposal to put the text of federal contract documents online was formally raised on May 13, 2010. The FAR Councils published an advance notice of proposed rulemaking reflecting its belief that such on-line access would soon be a requirement.

Despite the problems that internet access to contract documents might create, the assumption that it would be part of the effort to increase transparency in contracting seemed well founded. Federal spending on contracts had doubled in the preceding ten years. Congress had passed the Federal Funding Accountability Act of 2006, the Government Funding Transparency Act of 2008, and the American Recovery and Reinvestment Act of 2009. Early in 2009, President Obama issued a number of policy directives mandating increased transparency, especially in the area of federal contracting. Posting contracts on the internet was just part of the trend.

Now it appears that the regulators have realized that the problems with putting federal contracts online cannot easily be resolved or ignored. In its February 10, 2011 notice, the FAR Councils acknowledged that the majority of those who submitted comments were concerned about the conflict between automatic posting of contract documents and the protections afforded by the Freedom of Information Act. 

Of course the FOIA provision most closely linked with federal contracting is Exemption 4, which provides that trade secrets and confidential commercial or financial information need not be released to the public. Existing FOIA regulations and procedures include a requirement that contractors be given notice and an opportunity to object to the impending public release of their proprietary information.  The Trade Secrets Act makes it a crime for a federal officer or employee to release contractor information that falls within the scope of FOIA Exemption 4.

Rather than suggesting a solution to the problem of protecting contractor information or simply announcing its insignificance, the FAR Councils took a more cautious approach.  The notice announcing the withdrawal of the proposal to post contracts on the internet acknowledges that “FOIA regulations and procedures . . . must be closely examined by the FOIA experts and adequately addressed.” 76 Fed. Reg. 7523 (Feb. 10, 2011).

Assuming the proposal isn’t simply dropped, we’ll be watching to see if the close examination by FOIA experts takes place and what results it might yield. For now, contractors will have to focus on the rest of the contractor transparency initiatives, which have already begun to go into effect.  

We discuss the new executive compensation and subcontractor reporting requirements, the requirement to self-report “responsibility matters,” and the public availability of the FAPIIS database here.