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Decision to Disclose Pricing Data under FOIA Upheld

The government's decision to disclose a contractor's pricing data under the Freedom of Information Act was not arbitrary and capricious, according to the District Court for the District of Columbia, because the contractor failed to establish it was likely to suffer substantial competitive harm from the information's release. The government engaged the contractor to produce a new generation of satellites for the Global Positioning System. The contract was awarded in 1996 and was scheduled to run through 2012. After being informed of a 2004 FOIA request, the contractor sought to prevent the disclosure of its pricing information, believing the FOIA request was made by one of its major competitors and the information could be used to predict the contractor's future labor rates. The parties did not dispute the release of data for 1996 through 1999, and the government agreed with the contractor that data for 2005 through 2012 should not be disclosed as it would be likely to cause the contractor competitive harm. The parties disputed, however, the information for 2000 through 2004. Following the government's decision to release data from this time period, the contractor filed for declaratory and injunctive relief and both parties moved for summary judgment.
FOIA Exemption 4

Although the FOIA "mandates a strong presumption in favor of disclosure," information falling under FOIA's Exemption 4, which protects trade secrets and commercial or financial data that are privileged or confidential (5 USC 552(b)(4)), must be withheld. The contractor argued releasing the requested pricing information would likely result in substantial harm to its competitive position because it would permit underbidding by its competitors. However, the government determined the change in the contractor's rates over time did not follow a linear progression and consequently could not be extrapolated from the disputed information. The contractor failed to rebut this conclusion and satisfy its burden to show it would suffer competitive harm if the pricing data were released. The contractor provided a chart purportedly showing a competitor armed with the requested information could estimate the contractor's annual "percent increase factor," but this chart provided only a limited analysis of the requested data and did not explain how release of other information would harm the contractor's competitive position. Also, the contractor failed to counter the government's conclusion that past labor rates could not be used to predict rates reliably for purposes of bidding on a current procurement. Finally, the contractor's argument about the predictive value of the chart was premised on its claim that price increases are constant, but it failed to explain why it agreed to the release of the same information from the 1996 to 1999 period. The government's summary judgment motion, therefore, was granted, and the contractor's denied. (The Boeing Co. v. Dept. of the Air Force, DC DC, 53 CCF 79,118)


(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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