Right-to-Know Update – What Businesses Working with the Government Should Know

Businesses that supply goods or services to government agencies at any level must be aware that some portion of the documents exchanged with the agency and the information contained there will be a public record.  Six years into Pennsylvania’s “new” Right-to-Know Law, many businesses are finding that information involving contracts, responses to RFPs and payments made to and received by government agencies are accessible by citizens, the news media and competitors.  Rarely is all such information a public record.  The Right-to-Know Law contains provisions protecting confidential, proprietary or trade secret information. Other laws, like the Trade Secrets Act, may also prohibit disclosure of specific information.  Any business dealing with a government customer should keep the following 5 points in mind in order to provide the best possible protection for its confidential, proprietary or trade secret data.

1.  Carefully read all requests for proposals and contracts from government agencies and understand your obligations to specifically identify such information.

Particularly when dealing with the Commonwealth, RFPs will contain an alert that various information may be public record and may be released by the agency involved to a requester filing a proper Right-to-Know request.  Commonwealth agencies also require businesses to sign an Acknowledgment that the Commonwealth is not responsible for the release of information which is not clearly marked and segregated as confidential, proprietary or trade secret. In addition, the Commonwealth will require the business to defend and indemnify the Commonwealth if it suffers any penalty for withholding information which is later found not to fit those categories or, if the business wants the Commonwealth to defend the information the Commonwealth does not believe is appropriate.  This may require the business to expend money for legal fees on its own and, in certain circumstances, the business may be forced to repay the Commonwealth for defending an improper claim or for defending against the release of information the Commonwealth does not believe is appropriately exempted under the provisions claimed by the business.  Although some municipal and county agencies have similar provisions, most do not and are not as well prepared to protect or to defend the confidential or proprietary information.  In these instances, identifying and segregating your business information under Commonwealth-like guidelines is advisable to protect against improper release.

2.  It is the responsibility of the business contracting with the government agency to clearly identify and segregate information the business believes to be confidential, proprietary or a trade secret.

Commonwealth agencies require businesses to carefully identify by page number, description and explanation information contained within responses to RFPs or in contracts which the business believes should not be publicly disclosed.  In most instances, it is much more advisable for the business to segregate the information believed to be proprietary or confidential into certain pages or sections which can be segregated and clearly marked as such.  If this is done properly, when the agency receives a Right-to-Know request, the government agency can more easily identify the information asserted to be confidential and can easily segregate it from information which is not protected and must be disclosed.  There are no penalties under the Right-to-Know Law which a business may seek against a government agency which inadvertently releases confidential or proprietary information.  Although remedies may be available under separate tort claims or the Trade Secrets Act, such remedies are not easily sought and require the filing and financing of separate litigation.  If the information was not clearly marked, the chances of success are greatly reduced.

3.  Know that the contract itself and most of the materials submitted in response to RFPs are public record and cannot be protected.

The actual contract between a business and a government agency is normally a public record and must be released.  Certain information may be excluded or redacted from it, but the contract itself for the most part must be made public.  In addition, monies paid under the contract to the business or by the business to the government agency are “financial records” and are public information.  Since the main thrust of open records laws is to allow citizens to know how tax dollars are spent and received, this information will be a public record.

4.  Assume that most of the information submitted by the business will be a public record and plan and act accordingly.

A business should approach dealing with a government agency with the idea that most of the transaction between the two will be a public record.  Therefore, in drafting contract clauses and in providing pricing and payment/cost information, assume that this information will be available to competitors and critics if not properly excluded.  Certain information on pricing, financial-soundness of the business and trade secrets, such as formulas, drawings, plans or other information that is of a competitive value to its owner and is truly kept “secret” by the business can be protected but may involve litigation to do so.  Plan how you will prepare and submit the information to the agency and keep confidential, but not essential information, out of the materials submitted.

5.  Conversely, a business can use the Right-to-Know Law to obtain information about one’s competitors or to assist in planning how to respond to government RFPs or contracts.

The greater access to government records afforded by the Right-to-Know Law can provide a quick and inexpensive method to gain information concerning competitors or in learning how best to respond to an agency’s RFPs or proposed contracts.  A business can submit a Right-to-Know request to the agency and ask for copies of existing contracts or, in the case of bidding for goods and services in response to RFPs, copies of the materials submitted in response to the RFP once the successful bid has been awarded.  Although certain information regarding the financial ability of the submitting business to carry out the contract is still protected from public disclosure, useful information can be gained from such a request.  From an educational standpoint, obtaining copies of prior contracts or bid responses may enable the business to avoid having its proposal rejected for technical reasons such as failure to follow the required form or supplying the required information in the form requested.  With regard to contract negotiations, it will provide an insight into contract provisions which the agency is willing to accept and those which it will not.  Copies of the Standard Right-to-Know Request Form, which must be accepted by all agencies, may be found at http://openrecords.state.pa.us under “Forms”, “Right-to-Know Uniform Request Form.”  Be sure when making such a request to ask for records or documents and not to ask questions or ask for information.

Contracting with government agencies is vital to many businesses and an important source of revenue.  However, unlike dealing with private entities, the spending of public funds exposes those doing business with the government to greater access to the contracts and related information which is part of every normal business transaction.  The business that recognizes this and plans accordingly will be both successful in continuing business with the government and in protecting those portions of its business information which truly are  confidential, proprietary or a trade secret.

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