1.4 Protection of Privacy & Freedom of Information (FAR Part 24)
Key Takeaways
- The Freedom of Information Act (FOIA - 5 U.S.C. 552 / FAR Subpart 24.2) requires public disclosure of executive agency records unless protected by one of 9 statutory exemptions.
- FOIA Exemption 4 protects trade secrets and commercial or financial information obtained from a person that is privileged or confidential (e.g., contractor cost breakdowns, technical proposals, overhead rates).
- Unsuccessful contractor proposals are statutorily exempt from FOIA disclosure under 41 U.S.C. 2102 and FAR 15.207.
- The Privacy Act of 1974 (5 U.S.C. 552a / FAR Subpart 24.1) applies whenever a contractor designs, develops, or operates a system of records on behalf of an agency to accomplish an agency function.
- Violations of the Privacy Act carry criminal misdemeanor fines up to $5,000 for willful unauthorized disclosure of PII or maintaining a system of records without publishing a System of Records Notice (SORN).
1.4 Protection of Privacy & Freedom of Information (FAR Part 24)
Federal acquisition operates under balancing mandates: maintaining public transparency regarding government operations while protecting sensitive commercial data, individual privacy, and deliberative agency decision-making. FAR Part 24 (Protection of Privacy and Freedom of Information) implements statutory requirements governing public records requests, business confidentiality designations, and system-of-records management.
Freedom of Information Act (FOIA) Principles (FAR Subpart 24.2)
The Freedom of Information Act (FOIA - 5 U.S.C. 552) provides that any person has a right to request access to federal agency records. Executive branch agencies must make records available upon request unless the information falls within one of 9 statutory FOIA exemptions.
Key FOIA Exemptions in Acquisition
| FOIA Exemption | Statutory Basis | Specific Acquisition Records Protected |
|---|---|---|
| Exemption 1 | 5 U.S.C. 552(b)(1) | Classified national security information and defense secrets. |
| Exemption 3 | 5 U.S.C. 552(b)(3) | Records specifically exempted from disclosure by another federal statute (e.g., 41 U.S.C. 2102 protecting unsuccessful proposals). |
| Exemption 4 | 5 U.S.C. 552(b)(4) | Trade secrets and commercial or financial information obtained from a person that is privileged or confidential (e.g., contractor cost breakdowns, overhead rates, technical designs). |
| Exemption 5 | 5 U.S.C. 552(b)(5) | Inter-agency or intra-agency pre-decisional deliberative memorandums (e.g., internal source selection board notes, draft evaluation ratings, IG draft reports). |
| Exemption 6 | 5 U.S.C. 552(b)(6) | Personnel and medical files, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy (e.g., personal resumes, Social Security numbers). |
Submitter Notification & Proposal Disclosure Rules
Mandatory Predisclosure Notification (FAR 24.202 & E.O. 12600)
When an agency receives a FOIA request for commercial or financial records submitted by a contractor, the Contracting Officer must provide predisclosure written notice to the submitter whenever the contractor designated the information as confidential commercial information (under FAR 52.212-1 or FAR 15.207) or the agency has reason to believe disclosure could cause substantial competitive harm.
- The contractor is given a specified timeframe (typically 10 business days) to submit detailed written objections specifying why the requested data constitutes protected trade secrets or confidential financial data under Exemption 4.
- If the agency overrules the contractor's objections and decides to release the records, the agency must provide written notice to the contractor prior to release, allowing the contractor opportunity to seek a court injunction under the Reverse FOIA doctrine.
Statutory Protection of Proposals (41 U.S.C. 2102 & FAR 15.207)
Under 41 U.S.C. 2102, unsuccessful contractor proposals submitted in response to a competitive solicitation are statutorily exempt from FOIA disclosure. Successful proposals may be released under FOIA, but ONLY after redacting all Exemption 4 trade secrets, proprietary technical approaches, and confidential cost/pricing data.
The Privacy Act of 1974 (FAR Subpart 24.1)
The Privacy Act of 1974 (5 U.S.C. 552a) regulates the collection, maintenance, use, and dissemination of Personally Identifiable Information (PII) maintained in federal agency systems of records (records retrieved by an individual's name or unique identifier).
Application to Contractors
When an agency contracts for the design, development, operation, or maintenance of a system of records on behalf of the agency to accomplish an agency function, FAR 24.102 mandates that the Privacy Act applies directly to the contractor and its employees. The contractor is considered an agent of the agency for Privacy Act compliance.
Mandatory Contract Clauses
- FAR 52.224-1 (Privacy Act Notification): Notifies vendors that the contract requires operating a system of records.
- FAR 52.224-2 (Privacy Act): Directs contractors to comply with statutory privacy rules and warnings.
Criminal Penalties under Privacy Act
Under 5 U.S.C. 552a(i), any contractor employee or government official who willfully discloses PII knowing disclosure is prohibited, or who maintains a system of records without publishing a mandatory System of Records Notice (SORN) in the Federal Register, is guilty of a criminal misdemeanor and subject to fines up to $5,000 per violation.
Controlled Unclassified Information (CUI)
Under Executive Order 13556 and 32 CFR Part 2002, federal agencies standardize the handling of Controlled Unclassified Information (CUI) across acquisition files. Contracting officers must ensure that solicitations and contracts incorporate appropriate CUI marking and safeguarding clauses (such as FAR 52.204-21 for basic safeguarding of covered contractor information systems).
Advanced FOIA Privileges & Deliberative Process Protection
Under FOIA Exemption 5 (5 U.S.C. 552(b)(5)), pre-decisional and deliberative agency communications are strictly protected from public disclosure. This privilege covers source selection evaluation board (SSEB) draft scoring sheets, internal technical trade-off memos, independent government cost estimates (IGCEs) prior to award, and legal advice provided by agency ethics counsel. To qualify for Exemption 5 protection, a record must be both pre-decisional (prepared prior to the final administrative decision) and deliberative (reflecting the give-and-take of the consultative decision-making process). Furthermore, Contracting Officers must ensure that any Controlled Unclassified Information (CUI) contained within acquisition files is marked in accordance with Executive Order 13556 and 32 CFR Part 2002, preventing unauthorized public release while maintaining proper administrative record-keeping.
Which Freedom of Information Act (FOIA) exemption under 5 U.S.C. 552(b) protects contractor trade secrets and confidential commercial or financial information?
Regarding Freedom of Information Act (FOIA) disclosure rules for contractor proposals, which statement is correct?
Under FAR 24.102, when does the Privacy Act of 1974 apply directly to a government contractor?
What is the maximum criminal misdemeanor penalty specified in the Privacy Act (5 U.S.C. 552a(i)) for willful unauthorized disclosure of Personally Identifiable Information (PII)?