Six Essential Tips for Handling Procurement Information for Government Contractors

In celebration of the release of the 6th Edition of the Government Contracts Compliance Handbook, we’re sharing six essential tips for government contractors to navigate the intricacies of handling procurement information. Compliance with procurement information handling is critical, as mishandling sensitive information can lead to severe penalties under the Procurement Integrity Act (PIA) and other regulations. This article offers guidance on preventing unauthorized disclosures and ensuring that your organization complies with federal requirements, demonstrating our expertise as a top resource for contractors seeking legal counsel.

1. Understand the Scope and Purpose of the Procurement Integrity Act (PIA)

The Procurement Integrity Act (PIA) is the foundation of procurement information regulations, aiming to protect the federal procurement process's fairness and integrity. The PIA prohibits disclosing or receiving sensitive procurement information before a contract is awarded. This includes “contractor bid or proposal information” and “source selection information,” which covers data like bid prices, technical evaluations, and rankings of bids. Familiarity with the PIA’s restrictions is essential, as violations can result in criminal, civil, and administrative penalties not only for government officials who disclosed procurement information, but also for contractors and individuals that obtained procurement information. 

To align with these requirements, government contractors should educate key personnel on the PIA’s scope, ensuring all team members involved in procurement understand their obligations and the consequences of receipt of unauthorized disclosures.

2. Mark Sensitive Information Submitted to the Government Appropriately

“Contractor bid or proposal information” is information submitted to a federal agency in connection with a bid or proposal to enter into a federal agency procurement contract, including cost or pricing data, indirect costs and direct labor rates, proprietary information if marked as such by the contractor, and other information marked by the contractor as “contractor bid or proposal information.” Thus, in order to ensure that a contractor’s procurement submissions are covered by PIA protections, it is critical for contractors to label submittals as “contractor bid or proposal information” where applicable. 

Additionally, contractors should establish clear protocols for accessing, sharing, and storing marked information, including limiting access to only those who require it for specific roles. Implementing rigorous document handling procedures, including using secure digital storage systems, helps safeguard procurement information and reduces the risk of inadvertent disclosure.

3. Avoid During Employment Discussions

The PIA also covers interactions between government officials and contractors during employment discussions. Contractors must exercise caution when discussing employment opportunities with current federal agency officials. PIA and OCI rules place substantial restrictions on federal officials involved in a procurement process seeking employment with a contractor bidding on the contract, including disclosure obligations and mitigation measures. 

Contractors must refrain from any employment discussions with current federal officials engaged in relevant procurement activities, as violations can lead to penalties, including disqualification of the contractor from procurements. A clear policy on employment discussions with federal officials helps mitigate this risk, ensuring compliance with the PIA and OCI regulations.

4. Protect Against Unauthorized Access to Procurement Information

Unauthorized access to procurement information can occur within or outside the organization, so contractors should take proactive steps to secure sensitive data. This includes implementing access controls, such as password protection, secure file-sharing methods, and physical security measures for sensitive documents. Establishing security protocols prevents unauthorized individuals from accessing information that could compromise the procurement process’s fairness. 

Additionally, contractors should conduct regular audits to ensure these controls are effective and that all sensitive data is adequately protected. By proactively safeguarding procurement information, contractors reduce the risk of violations that could lead to severe penalties.

5. Establish Procedures for Reporting and Responding to Potential Violations

The PIA outlines specific procedures for addressing potential violations. Establishing an internal reporting system helps ensure that potential issues are escalated promptly and addressed within the required timeframe. Contractors can also consider appointing a compliance officer to oversee the handling of procurement information and facilitate prompt reporting of potential violations. 

Having a response plan in place for potential violations, including internal investigations and corrective actions, helps contractors maintain compliance and prevent future incidents. This also demonstrates to government agencies that the contractor is proactive in addressing compliance issues.

6. Stay Informed of Penalties for Non-Compliance

Understanding the penalties for non-compliance with the PIA and related regulations is essential for government contractors. Penalties can range from criminal charges, including fines and imprisonment for knowing violations, to civil and administrative penalties. For instance, knowingly obtaining or disclosing source selection or contractor bid information before a contract is awarded can result in criminal fines and imprisonment of up to five years, depending on the nature of the violation. Civil penalties include substantial fines, while administrative consequences can lead to contract cancellation or suspension from future government contracting. 

 By staying informed of these consequences and educating employees about the importance of compliance, contractors reinforce a culture of accountability and reduce the likelihood of costly compliance breaches. 

These six essential tips, rooted in the principles of the Government Contracts Compliance Handbook, offer a framework for handling procurement information responsibly. As government contractors operate in an environment of heightened scrutiny, adhering to these guidelines supports compliance with federal requirements and fosters trust with contracting agencies. Our practice group is committed to helping contractors navigate these complex compliance landscapes, ensuring your organization can handle procurement information effectively and ethically.