Vendors worry posting of contracts will expose proprietary data

Some vendors are concerned that the recent online publication of a contract proposal to overhaul the Recovery.gov Web site could set a precedent to publish other proposals, and they are urging the government to be cautious about disclosing corporate or national security information.

The General Services Administration released on Friday what is typically un-published pricing information, and technical and management proposals for the winning bid to renovate the Web site that monitors Recovery Act spending.

GSA, on behalf of the Recovery Accountability and Transparency Board, awarded the contract, potentially worth $18 million, to technology services company Smartronix on July 8. Open government advocates immediately called for the Obama administration to post the contracting documents to learn how the board would spend the money and to understand what taxpayers would receive in return. GSA officials worked with Smartronix to redact the contract and posted a copy of the edited version online.

The practice worries some vendors and technology lobby groups. "I'm concerned that this is the wave of the future," said Trey Hodgkins, vice president for national security and procurement policy at Tech America, an industry group in Washington.

He noted, however, that he did not find any specific problems with the Recovery.gov contract that GSA posted. Still, "Some companies have told us that they would have to forgo government work if proprietary or competitive data was not protected -- at the same levels of protection as [the Freedom of Information Act] -- as a result of any publication of contracts," Hodgkins added.

While the relatively simple contract for a Web site poses little risk of exposing competitive information, such as the supply chains of thousands of contractors, if the government were to publish contracts for a weapons system, "that could be devastating," he said.

Disclosing the location of a defense project could jeopardize national security, Hodgkins noted. In addition, the accidental publication of employee names could sabotage a company or a government project, if a competitor poaches an employee with mission-critical skills. The software and hardware systems used, "which for many companies is part of the secret sauce," should not be revealed either, he said.

As for whether the disclosure of the Smartronix contract represents greater contracting transparency, Hodgkins said he doubted the public would take the time to read the arcane and detailed documents.

Smartronix officials were unavailable for comment.

GSA officials said they do not expect to post entire contracts on the Internet in the future. "This was a case where there was an extreme amount of public interest ," said GSA spokeswoman Sahar Wali. "However, because of the amount of time that is involved in creating a redacted version of contracts, we don't intend to be publishing contracts unless it is required by regulation, law or statute."

Other contractors did not view the display of the Recovery.gov contract as problematic. "I'm always concerned about balancing the right to know with the importance of protecting proprietary business information," said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, a trade association for government contractors. "If this document is reflective of that balance, then that's a good thing."

The Bush administration followed a philosophy of withholding information unless there was a reason to disclose, but the Obama administration favors disclosure, he noted.

Chvotkin complimented GSA and the Recovery Board for posting the documents online, but was surprised by the large number of redacted sections in the technical proposal.

"You often get Swiss cheese" when contracts are redacted and released through FOIA, he said. "This is well-aged Swiss cheese."

The Sunlight Foundation, a government transparency organization, welcomed the disclosure. "I do want to say this is in fact revolutionary," said Clay Johnson, director of Sunlight Labs, an arm of the foundation that develops technologies to promote transparency and accountability in government. "I've never seen the government put out such a proposal like this. And the Recovery Board ought to be commended for that."

He said GSA should consider publishing other contracts. "I think the vendors need to deal with a new era of openness in government," Johnson added.

Sunlight unsuccessfully bid on the Recovery.gov work in June. It then offered to advise any vendor that approached the organization, and Smartronix's proposal lists the foundation as an adviser. Last week, Johnson had lunch with employees from Smartronix subcontractor Synteractive, a consulting firm that specializes in social media deployments.

"We're a watchdog organization, so we don't want to be inside the tent," he said of Sunlight's affiliation with the project. "We're happy to advise, when asked. But we're not happy to sign nondisclosure agreements because we want to be able to begin criticizing as quickly as we can [shift] to being positive."

Johnson applauded the contractors and the government for disclosing some of the pricing explanations. While much of the descriptions are darkened, nonredacted line items show that the government is paying about $8 million for the next six months, plus about $1.5 million a year for the next four years, "which isn't bad," Johnson said. GSA already had publicized that the upgrade would cost $9.5 million through January 2010 and as much as $18 million if all options were exercised through January 2014.

He also was surprised at the number of blacked out paragraphs in the technical proposal, particularly the deletion of a technical approach and planning section.

The technical approach "is sort of the meat of this proposal," he said. "How is this thing going to be built? Really, I'm not interested in stealing people's trade secrets. I think what people are interested in, is figuring out how much money the government is spending and for what."

One unredacted technical item pleased Johnson's team. The contract stated, "We are targeting Web pages specifically to the development community to be able to use Recovery.gov as a trusted and authoritative source of ARRA data. This includes creating tutorials showcasing how developers can access our powerful Web and query services to obtain the data. Developers can access our source feeds via download, via RESTful Web service discovery, via ATOM I RSS feeds, or via open reporting language (XBRL)," a data standard used by many companies to share and search financial reports.

"This capability will allow other sites to create 'informed' mash-ups" -- unofficial Web services that manipulate statistics -- "using authoritative Recovery.gov data," the document added.

In releasing other contracts, the government should be able to strike a "happy balance" between protecting competitive information and protecting taxpayers, Johnson said.