Rather than exercise options under R&W’s contract the Army decided to award a new contract and sought bids.  When requested under the Freedom of Information Act (FOIA), the government divulged R&W’s bid prices for the option years to other bidders.  After awarding the new contract to SKE, R&W brought suit arguing that FOIA disclosed information involving trade secrets and other proprietary data was protected from disclosure under FOIA’s exemption 4 and the release of data prejudiced (i.e. harmed) R&W because it enabled SKE to underbid R&W for new work.

A lower Court ruled the information released under FOIA was not improper because the publicly opened bids to the incumbent contract put the information into the public domain but the CO acted improperly because it had an “overriding” duty under FAR 1.602-2 to prevent “competitive prejudice” to the incumbent.  The Appeals court agreed the FOIA exemption number 4 did not apply but reversed the ruling against the CO.  Noting that a regulation (FAR 1.602-2) that contravenes a statute (FOIA) is invalid, the appeals court ruled FOIA obligates the government to disclose non-exempt information and the CO’s “general” regulatory duty to ensure a fair competition is trumped by FOIA (R&W Flammann GmbH v. U.S. 2003 WL 21804843).

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