Federal Acquisition Regulation; Enhancing Contract Transparency, 7522-7526 [2011-2900]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 76, Number 28 (Thursday, February 10, 2011)]
[Proposed Rules]
[Pages 7522-7526]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2900]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 24

[FAR Case 2009-004; Docket 2010-0089, Sequence 2]
RIN 9000-AL59


Federal Acquisition Regulation; Enhancing Contract Transparency

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Advance notice of proposed rulemaking; withdrawal.

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SUMMARY: DoD, GSA, and NASA are issuing this document to summarize and 
respond to the comments received in response to the advance notice of 
proposed rulemaking published in the Federal Register at 75 FR 26916, 
May 13, 2010. This information was used to determine if the FAR should 
be amended to provide for further transparency in Government contracts.
    DoD, GSA, and NASA acknowledge the comments and solutions provided 
and will take this information into account, at a later date, in 
determining if the FAR should be amended to further enhance 
transparency in Government contracting.
    At this time, DoD, GSA, and NASA do not plan to amend the FAR 
because some of the existing acquisition systems at https://www.acquisition.gov provide certain information on Government contracts 
that is readily available to the public, and most of the content of a 
contract solicitation or contract action not already available on one 
of the acquisition systems at https://www.acquisition.gov is either 
standard FAR terms and conditions available at https://www.acquisition.gov/far/, agency specific terms and 
conditions available from the contracting agency Web site, or sensitive 
information that may be releasable under FOIA.

DATES: The advance notice of proposed rulemaking published in the 
Federal Register at 75 FR 26916, May 13, 2010, is withdrawn as of 
February 10, 2011.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Michael Jackson, Procurement Analyst, at (202) 208-4949. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAR Case 2009-
004.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA published an advance notice of proposed 
rulemaking in the Federal Register (75 FR 26916, May 13, 2010) 
requesting information that would assist in determining how best to 
amend the FAR to enable public posting of contract actions, should such 
posting become a requirement in the future, without compromising (1) 
contractors' proprietary and confidential commercial or financial 
information or (2) Government-sensitive information. The transparency 
effort is intended to promote efficiency in Government contracting 
consistent with the Administration's memorandum entitled Transparency 
and Open Government (January 21, 2009, available at: https://www.whitehouse.gov/the_press_office/TransparencyandOpenGovernment/).
    This is a significant regulatory action and, therefore, was subject 
to review under Section 6(b) of Executive Order 12866, Regulatory 
Planning and Review, dated September 30, 1993. This rule is not a major 
rule under 5 U.S.C. 804.

Discussion of Public Comments

    In response to the May notice, 15 respondents, including Government 
agencies, industry associations, advocacy groups, and private 
individuals, submitted a total of 44 comments. The comments fall into 
nine categories, each of which is discussed in the following sections.
1. Public Meeting
    Comments: Two respondents commented on the usefulness of a public 
meeting. The first respondent favored a public meeting so that the 
costs associated with publicly posting contracts could be addressed. 
Another respondent stated that holding a public meeting on the methods 
by which contracts will be made public and the types of information 
that should be

[[Page 7523]]

publicly accessible would allow various stakeholders to share different 
viewpoints on the topic. The respondent stated that, if such a meeting 
is held, it would like to be a presenter.
    Response: Only two respondents addressed the issue of a public 
meeting, and both were only moderately supportive on the topic. Because 
there were only two respondents that recommended a public meeting, and 
in view of the overall comments about this transparency effort, a 
public meeting will not be held at this time.
2. Automatic Preference For/Against Disclosure
    Comments: Respondents expressed a wide variety of preferences. One 
respondent stated that several agencies post an electronic copy of 
contract award documents in the agency Freedom of Information Act 
(FOIA) Reading Room (if the contract has been requested a minimum of 
three times and a redacted copy is available electronically). The same 
respondent also noted that some agencies post their contracts 
immediately because they are commercial purchases using published 
catalogs, which means that the prices are public information.
    A second respondent noted that certain proposal information and 
source selection information must be protected. The respondent further 
stated that protections apply to information obtained to determine 
reasonableness of price; trade secrets; privileged or confidential 
manufacturing processes and techniques; commercial and financial 
information that is privileged or confidential, including unit pricing; 
names of individuals providing past performance information; and 
classified information relevant to national security.
    A third respondent recommended that the Government provide open 
public access to information on the contracting process, including 
actual copies of contracts rather than coded summary data, as well as 
contracting officers' decisions and justifications. The respondent 
recommended making USAspending.gov the one-stop shop for public Federal 
contract spending information, by posting actual copies of contracts, 
task and delivery orders, modifications, amendments, other transaction 
agreements, grants, and leases, including price and cost information, 
proposals, solicitations, award decisions and justifications (including 
all documents related to contracts awarded with less than full and open 
competition and single-bid contract awards), audits, performance and 
responsibility data, and other related Government reports. The 
respondent conceded that the Government should protect classified 
information and other information that would potentially cause 
substantial harm to a contractor, but only when those exceptions are 
not outweighed by the public benefit that would be realized by this 
disclosure. The respondent believed that the burden should be placed on 
prospective contractors to justify withholding information from public 
view.
    Response: DoD, GSA, and NASA note that the comments cover various 
perspectives on transparency in Government contracting--from publishing 
everything to publishing nothing without first undertaking a complete 
FOIA analysis. Specific issues associated with the recommendations 
summarized above have been addressed in the context of other public 
comments that follow.
3. Protect Unclassified Information
    Comment: Three respondents expressed concern that any publication 
of contract documents would have a high likelihood of compromising 
proprietary information. Even if posting of contracts did not expose 
proprietary information, one respondent was concerned that it could 
expose military or other similar operations that could have national 
security implications, even though the published information, per se, 
was not classified. A third respondent noted that there is a 
significant body of unclassified Government information that also 
should be considered for protection; this respondent made reference to 
the advance notice of public rulemaking for Defense Federal Acquisition 
Regulation Supplement (DFARS) Case 2008-D028, Safeguarding Unclassified 
Information.
    Response: DoD, GSA, and NASA understand the importance of 
protecting unclassified information. The processes for doing so and the 
identification of what must be protected are under consideration in FAR 
Case 2009-022, and DFARS Case 2008-D028.
4. Transparency or FOIA Analysis
    Comments: The majority of respondents expressed concern about 
addressing transparency initiatives outside the context of the Freedom 
of Information Act. Concerns focused around whether there is a need to 
conduct a FOIA analysis prior to making a determination on the 
disclosure of protected information in an effort to meet transparency 
initiatives.
    Response: DoD, GSA, and NASA understand that the FOIA regulations 
and procedures and the Executive Order 12600, Predisclosure 
Notification Procedures for Confidential Commercial Information, must 
be closely examined by the FOIA experts and adequately addressed as 
consideration is being given to what contract documents to make 
available to the public.
5. A Transparency Requirement Would Reduce Competition
    Comments: Two respondents stated that creating a mandate for 
companies to post their contracts to public sites would place these 
companies in the position of sometimes choosing not to bid on 
Government procurements to avoid the disclosure of their sensitive 
competitive and/or proprietary data. This would have the effect of 
limiting or reducing competition.
    Response: DoD, GSA, and NASA take note of this concern but do not 
agree with this conclusion. Transparency could have the opposite effect 
and enhance competition.
6. A Posting Requirement Is an Administrative Burden and Will Increase 
Costs for Both Contractors and Government Agencies
    Comments: Some respondents maintained that requiring public posting 
of all contract actions would result in significant cost and 
administrative burdens, both for contractors and for the Government, 
and in addition, would involve unnecessary duplication of effort.
    Two respondents contended that the effort and expense in the 
redaction and posting process would be significant and challenging. One 
of these respondents noted that, ``with more than 30 million 
transactions issued by the Government annually, the redaction process 
alone would be overwhelming.'' The other respondent stated that the 
review and defense of confidential information contained within each 
contract would be a major undertaking, assuming a process similar to 
that now required by FOIA. A third respondent commented on the 
administrative costs and burden of posting, but also added that the 
training and oversight necessary to implement such a process, and the 
likely surge in public inquiries as a result of public posting of 
actions, would further compound these challenges. The same respondent 
also predicted a great deal of ``legal wrangling'' over the posting of 
proprietary information, which could delay the award of, or initiation 
of work under, contracts.
    A respondent predicted that the posting requirement would add work 
to an already overburdened acquisition workforce, and another 
respondent

[[Page 7524]]

contended that it would detract from the contracting officer's primary 
responsibility to award and manage contracts.
    A respondent maintained that public posting of contract actions 
would be a duplicative administrative process because contract 
information is currently available through several venues, including 
FedBizOpps (FBO), USASpending.gov, and the Federal Procurement Data 
System (FPDS), and that these systems provide sufficient transparency 
while retaining the protection of information that should be considered 
in the contracting process. Another respondent commented that it finds 
it difficult to identify what would be made public with a mandatory 
public posting requirement that is not already publicly available. The 
respondent stated that the majority of information in a contract action 
is either located in the solicitation posted to FedBizOpps or is 
standard Federal Acquisition Regulation (FAR) contract language 
available for viewing at https://www.acquisition.gov/far. The 
respondent deemed the majority of information beyond what is in the 
solicitation and the FAR to be information that should be protected 
from disclosure. Two respondents took exception to the idea--as stated 
in the ANPR--that the transparency effort is intended ``to promote 
efficiency in Government contracting.'' The respondents do not 
acknowledge any direct correlation between posting contracts online and 
improving efficiency and spending.
    Response: DoD, GSA, and NASA take note of this concern. The cost 
increases mentioned will be considered in any determination concerning 
contract posting requirements. As mentioned, contract information is 
either located in the solicitation posted to FedBizOpps at https://www.fedbizopps.gov or is standard FAR contract language and terms and 
conditions are available at https://www.acquisition.gov/far. However, 
awarded contract documents such as the statement of work, detailed 
contract line item descriptions, terms and conditions, deliverables, 
contractor proposals from the awardee, or other information that 
resides with the awarding contract agency may be available under a FOIA 
request.
7. Governmentwide Integrated Electronic System
    Comments: Three respondents supported a posting requirement. One of 
these recommended that only the total value of the contract be posted. 
Another respondent suggested posting a non-proprietary version of 
contracts ``on the web'' for at least one year after award. The same 
respondent believed that ``all we need to do is write a line of code or 
a few lines of code into the existing contracting database that removes 
all of the proprietary information and allows the user to download or 
print a stripped version of it.'' In addition, a respondent suggested 
that, in order to store and provide access to this information, the 
Government must shift to a Governmentwide integrated electronic system 
that would create and store pre- and post-award contracting records. 
The expanded system should permit, according to the respondent, 
automatic redactions only of the most protected information or data 
fields, including classified information and other information that 
would potentially cause substantial harm to a contractor, but only when 
those exceptions are not outweighed by the public benefit that would be 
realized by the disclosure of such information.
    Response: The respondents recommended a variety of information and 
solutions for posting the information. DoD, GSA, and NASA recognize the 
need for transparency in Government contracting information and believe 
these recommendations require additional thought by our system experts 
to determine the cost benefit analysis, capabilities analysis of 
existing systems, etc., to determine if the recommended solution can be 
implemented in the Government's current integrated acquisition 
environment. The Government is working to improve its collection of 
contracting information, see the new System for Award Management (SAM), 
at https://www.acquisition.gov.
8. Posting Poses Significant Risks to Federal Employees
    Comments: Two respondents maintained that a mandatory requirement 
for public posting of contract actions would expose Government 
employees to risks of criminal fines or penalties.
    One respondent contended that the safeguards suggested by DoD, GSA, 
and NASA in the ANPR fall short of applying FOIA procedures to the 
proposed posting requirements and, as a result, will cause Government 
employees to bear increased risks related to improper disclosure of 
protected information. The respondent quoted the Trade Secrets Act, 18 
U.S.C. 1905, explaining that it prohibits the release of confidential 
information and imposes criminal fines and possible imprisonment, as 
well as termination of employment, for Government employees who 
disclose confidential information. The respondent suggested that a 
``FOIA-like review and redaction process,'' though burdensome to 
Government and industry, would be necessary to avoid risk to Government 
employees.
    The other respondent contended that Government employees may remain 
at risk if alternatives to the FOIA exemption 4 analysis are not 
adopted for purposes of public posting. This is because exemption 4 of 
FOIA is co-extensive with the Trade Secrets Act, which prohibits 
Government personnel from releasing contractor trade secrets and making 
them personally liable if that information is released. The respondent 
noted that the responsible Government agency employee would be at risk 
if required to publicly post a contract without express contractor 
authorization.
    Response: DoD, GSA, and NASA take note of this concern and will 
consider this issue if measures are taken to enhance transparency in 
Government contracting.
9. Alternatives Proposed
    a. Comments: One respondent opposed the requirement to publicly 
post contracts. However, the respondent proposed two alternatives to 
diminish the level of effort required. The first alternative posed was 
to state plainly in the solicitation that every page of a successful 
offeror's proposal not marked as proprietary would be posted on the 
Web. This approach gives contractors notice prior to proposal 
submission. The respondent's second alternative was to ask the 
successful offeror, at the time of award, to submit a redacted copy of 
the contract for public posting. Central to this alternative is the 
recognition that the contractor need not submit a detailed 
justification for its redactions but merely a declaration that the 
contractor has in good faith provided a redacted copy according to the 
current FOIA law.
    Response: DoD, GSA, and NASA take note of these alternatives and 
may consider each approach in determining how best to enhance 
transparency in this area.
    b. Comment: Somewhat similar to the previous respondent's first 
alternative, a respondent suggested that a contracting officer could 
post contracts online if the Government established the solicitation in 
such a way that offerors were required, in their proposals, to 
segregate anything that the vendor deems proprietary, keeping it in a 
separate section or attachment of the proposal. This approach would 
enable the majority of the contract to be posted online immediately. 
Then, if a FOIA

[[Page 7525]]

request was made subsequently for the material not posted, the 
Government's review and redaction would be made simpler by looking over 
just the section or attachment not posted initially.
    Response: DoD, GSA, and NASA take note of this approach, but 
believe it relies entirely on the successful offeror's judgment, and it 
does not address the Government's requirement to protect classified 
information or other, unclassified information that may require 
safeguarding.
    c. Comment: Eight other respondents proposed specific alternatives 
in lieu of publishing contracts. One respondent opposed posting of any 
information because it would have the effect of releasing contractors' 
pricing information. Another respondent believed that the current 
posting requirement for contract/order award information (contract 
number, awardee information, total amount of award) was sufficient and 
that additional information should not be released. Another respondent 
would be more conservative and post only the total value of the 
contract.
    One respondent suggested exempting entire classes of contracts from 
the posting requirement. This respondent suggested that contracts 
awarded using the sixth exemption from full and open competition should 
not be posted. A fifth respondent proposed that the Government must 
find a way to ensure the protection of an entity's information that 
supports pending patents in addition to protecting competition-
sensitive pricing or technical information.
    A respondent suggested that solicitations include a clear statement 
that every page not marked as proprietary will be posted on the Web or, 
in the alternative, ask the successful offeror, at the time of award, 
to submit a redacted copy of the contract for public posting. The 
seventh respondent recommended redacting (presumably by the Government) 
all confidential and proprietary information and any item associated 
with national security prior to posting contracts.
    The eighth respondent stated its preference for avoiding a contract 
posting requirement entirely but suggested, if posting is inevitable, 
that the Government--
    1. Add a module to FedBizOpps where the successful offeror could 
post a redacted contract, and enforce the posting requirement by 
withholding payment on the contractor's first invoice until the 
redacted contract has been posted;
    2. Establish a threshold, e.g., $10 million, below which contracts 
need not be posted; and
    3. Require posting of only the statement of work (SOW)/performance 
work statement (PWS) and deliverable schedule, but give contracting 
officers authority to exempt a SOW/PWS from the posting requirement if 
it contained proprietary information.
    Response: DoD, GSA, and NASA are appreciative of the respondents 
that provided specific alternatives for our consideration. Any 
contract-posting initiative must give consideration to the costs 
involved (in technology and software as well as the time of contractor 
and Government employees) and the risks associated with posting this 
information (e.g., lawsuits against the Government for inadvertently 
releasing information that could be damaging to national security and/
or the competitive positions of companies doing business with the 
Government). DoD, GSA, and NASA advocate a judicious approach to 
establishing contract-posting requirements, one that will appropriately 
conserve resources and identify information that should be protected 
from general release to the public. Our assessment is that any contract 
posting requirement, at a minimum, should involve each of the elements 
proposed by the eighth respondent above, i.e., a high dollar threshold, 
a requirement for only the successful offeror to redact the contract 
and/or proposal that will be posted, and an incentive for the 
successful offeror to do so.
    No posting requirement can be successful without protections for 
both contractor and Government employees. Necessary protections for 
information and personnel involve, at a minimum, a FOIA analysis, which 
is time consuming and requires senior analysts and attorneys. DoD, GSA, 
and NASA are concerned, too, that the on-going efforts to identify 
protections essential for safeguarding unclassified information are not 
yet sufficiently mature that such efforts can be bypassed to establish 
a contract-posting requirement prior to guidance on unclassified 
information. To avoid inadvertent disclosures, the Government would be 
required to review contractor-redacted documents before such items are 
posted to a public Web site. The contract or contractor's proposal may 
contain information that requires protection beyond trade secrets or 
proprietary information.

II. Review of Existing Databases

    DoD, GSA, and NASA extensively researched existing contracting 
related databases, confining the search to those that are fully 
available to the general public, in order to determine the extent of 
information on Government contract actions that is currently available. 
While there are approximately nine acquisition systems available at 
https://www.acquisition.gov that capture contracting information, and 
some of the information in these systems is available to the public, 
DoD, GSA, and NASA focused on four such Web sites. These are--(1) 
FedBizOpps; (2) USASpending.gov; (3) GSA eLibrary; and (4) Federal 
Procurement Data System (FPDS).
    1. FedBizOpps. This is a publicly available Web site at https://www.fbo.gov where many of the Government's solicitations are posted. 
There are several exceptions to the posting requirement; these are 
located at FAR 5.202, e.g., disclosure would compromise the national 
security. Both active and archived solicitations are available. Each 
solicitation is identified with a procurement classification code, 
e.g., 42 is fire-fighting, rescue, and safety equipment. In addition, 
FedBizOpps includes contract award information. This Web site is where 
agencies are required to post justifications for less than full-and-
open competition (Justification and Approval, or J&A) and associated 
documentation, as well as sources-sought notices. Vendors are able to 
search for and retrieve posted J&As according to specific criteria, 
such as J&A authority, posted date range, and contract award date.
    2. USASpending.gov: This Web site was established pursuant to the 
Federal Funding Accountability and Transparency Act of 2006 (FFATA). 
FFATA required a single searchable Web site, accessible to the public--
at no cost to access--to include each Federal award. The specific 
information provided at USASpending.gov includes--
     The name of the award recipient.
     The amount of the award.
     The date the award was signed.
     The agency making the award.
     The location of the entity receiving the award.
     A unique identifier of the entity receiving the award.
     The product or service code for the supplies or services 
being purchased.
     A description of the award.
     If a modification to an existing award, the reason for the 
modification.
3. GSA eLibrary
    GSA eLibrary (formerly ``Schedules e-Library'') is the online 
source for the latest contract award information for--
     GSA Schedules;

[[Page 7526]]

     Department of Veterans Affairs (VA) Schedules; and
     Technology Contracts, including Governmentwide Acquisition 
Contracts (GWACs), Network Services and Telecommunications Contracts, 
and Information Technology (IT) Schedule 70.
    GSA eLibrary is available 24 hours a day, seven days a week to 
provide up-to-date information on which suppliers have contracts and 
what items are available, by using various search options, i.e.--
     Keywords;
     Contract number;
     Contractor/manufacturer name;
     Schedule name, Schedule number, category/sub-category 
name, or category number/special item number (SIN); or
     Technology contract name, contract number, or category 
name/number.
    GSA eLibrary also provides an alphabetical listing of available 
contractors, allowing customers to easily locate all Schedule and 
technology contracts for a particular company. An updated category 
guide is designed to facilitate searches for specific groups of items. 
Other features include:
     Access to information on millions of supplies (products) 
and services;
     Information on the latest Schedule program changes, 
including a ``News'' area;
     Access to the complete list of all GSA and Veterans 
Affairs Schedules from the ``View Schedule contracts'' link;
     Links to technology contracts--IT Schedule 70, the 
complete list of GWACs, and network services and telecommunications 
contracts;
     Links to GSA Advantage![supreg] Online Shopping for 
eBusiness and eBuy, GSA's electronic Request For Quotation (RFQ) 
system;
     Ability to download current PDF versions of Schedules;
     Ability to download contract award information in an Excel 
format by category;
     Links to contractor Web sites, email addresses, and text 
files containing contract terms and conditions; and
     Identification of Schedule contractors participating in 
cooperative purchasing and/or disaster recovery purchasing.
4. Federal Procurement Data System (FPDS)
    FPDS is an online central repository containing a searchable 
collection of Federal contracts with a potential value of $3,000 or 
more, including all subsequent modifications. It is available at https://www.fpds.gov. FPDS provides public access to many standard and custom 
reports about these actions, products/services purchased, vendor 
socioeconomic information, dates of award and completion, and dollar 
values.
    DoD, GSA, and NASA would also like to mention two other contracting 
databases--the Recovery Web site and the Federal Awardee Performance 
and Integrity Information System (FAPIIS).
    FAPIIS was established under section 872 of the National Defense 
Authorization Act of 2009, and includes specific information on the 
integrity and performance of covered Government agency contractors and 
grantees information on defective cost or pricing contractor 
convictions, terminations for default, and administrative agreements 
reached in lieu of suspension or debarment. Section 3010 of Public Law 
111-212, making supplemental appropriations for Fiscal Year 2010, 
requires the posting of FAPIIS information ``on a publicly available 
Internet Web site.''
    Also, the Recovery Web site, at https://www.Recovery.gov, was 
established pursuant to the American Recovery and Reinvestment Act of 
2009 (the Act), to foster greater accountability and transparency in 
the use of funds made available in the Act. The Web site has been 
operational since February 17, 2009. This Web site gives taxpayers 
user-friendly tools to track Recovery funds, showing how and where the 
funds are spent. In addition, the site offers the public an opportunity 
to report suspected fraud, waste, or abuse related to Recovery funding.

List of Subjects in 48 CFR Part 24

    Government procurement.

    Dated: February 3, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide Acquisition Policy.
[FR Doc. 2011-2900 Filed 2-9-11; 8:45 am]
BILLING CODE 6820-EP-P