If your company's bid or proposal information has been requested under the California Public Records Act (CPRA), you may be worried about sensitive information becoming public. The CPRA, found in Government Code §§ 7920 et. seq., is designed to promote transparency by allowing the public access to government records. However, not all records are disclosable, particularly when it comes to sensitive business information, including trade secrets and financial data.
What Information Can Be Withheld?
While the CPRA encourages the release of public records, certain exceptions exist to protect confidential business data. In particular, the law recognizes that some commercial and financial information included in proposals must remain private. As a general rule, contracts with State or local agencies are typically considered public records, as the public has a right to know how government funds are being spent. This principle was confirmed in Cal. State Univ., Fresno Ass'n., Inc. v. Superior Court, 90 Cal.App.4th 810 (2001), where the court held that public records serve the public interest by ensuring that government resources benefit the community at large, not just a select few.
However, commercial or financial information that was submitted in confidence as part of a proposal is usually not subject to disclosure. This is especially true for information shared during pre-contract negotiations, which is often protected under corporate privacy, trade secret laws, or the deliberative process privilege (Government Code §§ 6254(a) and (h); §6255).
Post-Award Disclosure of Proposal Information
Even after a contract is awarded, not all information in a proposal becomes publicly available. The commercial and financial details in a proposal can remain protected if:
- The information qualifies as a trade secret under California's Uniform Trade Secrets Act (Civil Code § 3426 et seq.).
- It involves sensitive financial data that falls under privacy protections such as those outlined in Government Code §6254(k) or tax privacy laws (Revenue & Taxation Code §19542).
- The public interest in nondisclosure outweighs the public interest in disclosure, based on the CPRA's balancing test (Government Code §6255).
For example, while the public has a legitimate interest in ensuring taxpayer dollars are used effectively, the disclosure of confidential pricing strategies or performance methodologies could harm the competitive standing of the company that submitted the proposal. Courts have recognized this tension and have provided protections for sensitive business information to ensure fair competition in the marketplace.
Protecting Your Information Under CPRA
If your proposal contains confidential information, you can request that the agency withhold specific details from disclosure. To do so, you'll need to show that the information is protected under the CPRA's exemptions, such as trade secrets or confidential financial data. This is particularly important if your bid includes commercially valuable information that could be exploited by competitors if made public.
The CPRA's balancing test (Government Code §6255) plays a key role in these cases. Under this test, the public agency must decide whether the public interest served by nondisclosure clearly outweighs the public interest served by disclosure. The burden of proof is on the proponent of nondisclosure to demonstrate a clear overbalance on the side of confidentiality
Next Steps for Your Company
If you've been notified that your company's bid or proposal information has been requested under the CPRA, it's important to act swiftly. Legal counsel can help you navigate the CPRA's exemptions and present a strong case for why certain information should not be disclosed. Courts have upheld the protection of trade secrets and sensitive financial data when companies take reasonable steps to keep that information confidential. With the right legal approach, you can protect your trade secrets and other confidential business data, ensuring that your competitive edge remains intact.
* This article is provided for information purposes only. It does not constitute legal advice. It is not intended to form an attorney-client relationship. Any legal advice should be sought from an attorney. *
