The Procurement Integrity Act (PIA) generally prohibits federal employees from knowingly disclosing contractor bid or proposal information before the award of a "Federal agency procurement contract to which the information relates." See 41 U.S.C. § 2102; Federal Acquisition Regulation (FAR) Subpart 3.1. But a recent decision from the U.S. Court of Appeals for the Third Circuit highlights a gap in the statute that may raise some contractors' eyebrows: a proposal submitted for the award of a predecessor contract does not necessarily "relate to" the recompete for purposes of the PIA. This means that the PIA may not prevent disclosure of the incumbent contractor's proposal to its competitors for the next iteration of the contract. We explore the implications of this decision in more detail below.
What were the circumstances surrounding the alleged PIA violation in this case?
The case involved a government official who allegedly disclosed one company's proposal for a predecessor contract to a competitor on the recompete, partly because of what the Third Circuit stated "appears to have been … her desire to curry favor with [that company] in hopes of securing employment there in the future."
The appellant, a mechanical engineer working at the Naval Foundry and Propeller Center in Philadelphia, served as the Navy's project lead on two successive procurements for the same product—first in 2017 (the "SU22" procurement) and then in 2019 (the "SU25" procurement).[1] The court stated that she favored the awardee from the SU22 procurement, Company 1, for the SU25 award. When she learned that another offeror, Company 2, had bid on the SU25 award, she allegedly stated to other Navy personnel that the SU25 contract was "not for" Company 2 and that "if [Company 2] [messes] up this contract, I will ruin them."[2] Prosecutors later asserted that she then sent a WhatsApp message to an employee at Company 1 stating that "[l]oyalty is important to me. [Company 1] has mine. And Company 2 pissed me off with this situation."[3] The Third Circuit also wrote that the government official sent Company 1 a copy of Company 2's confidential proposal information from the SU22 procurement, including cost and pricing data and other proprietary information.
As relevant here, the official pleaded guilty to violating the PIA,[4] which prohibits the knowing disclosure of contractor proposal information "before the award of a Federal agency procurement contract to which the information relates" (emphasis added).[5]
Why did the defendant and the government disagree about whether a PIA violation occurred?
On appeal, the government official argued that the lower court had erred in accepting her guilty plea because it had misinterpreted the PIA. Specifically, the parties disagreed about whether Company 2's proposal information from the already-awarded SU22 procurement was sufficiently "related" to the SU25 procurement to violate the PIA. The prosecution broadly interpreted the statute to encompass any disclosed proposal information "related to" a pending procurement, including Company 2's SU22 and SU25 proposals for "virtually identical" products here. The government official argued the PIA only narrowly covers proposal information that Company 2 submitted as part of the pending SU25 procurement, unless the disclosed SU22 proposal information was identical to the SU25 proposal information. As a result, she argued that the appeals court should vacate her conviction and sentence since her guilty plea did not include facts meeting these criteria.
Have courts previously addressed whether disclosing information from a previous, closed procurement can violate the PIA?
The Third Circuit cited the U.S. Court of Federal Claims' (COFC) prior holding that proposal information about labor categories for an incumbent contract did not "relate" to the follow-on procurement where the plaintiff had not shown that it used the same labor categories for the new procurement.[6] The Third Circuit did not interpret COFC's holding as requiring the past and pending proposal information to be "word-for-word identical," but noted in that case, "it would be difficult to imagine how labor categories from an incumbent project could be related to an unawarded contract, absent use of identical categories."[7] While the panel cited other, similar lower court decisions distinguishing between proposal information submitted for previously awarded and future contracts,[8] it did not reference any appellate-level precedent for its holding.
How did the Third Circuit interpret the PIA in this case?
The Third Circuit held that in order to violate the PIA, proposal information for a previously awarded contract must be the "same in substance" as information submitted as part of a new procurement, "though it need not be identical."[9] It explained that the disclosed information "must have the potential to convey in substance the same information as" in the pending proposal.[10] The panel emphasized that accepting the government's broad interpretation would "eviscerate" the PIA's distinction between pre- and post-award disclosures, and that its "narrower reading aligns with the decisions of every court that has interpreted" this provision.[11] While one judge dissented, he agreed with the majority's narrow interpretation of the statute and objected primarily to the finding of "clear error" below. The Third Circuit panel thus vacated the conviction and sentence and remanded the case to the district court for repleading by the prosecutors.
If the PIA does not necessarily prohibit disclosing a contractor's old proposals, are there any other legal protections in place?
Yes, several laws may protect proposals submitted in relation to a previously awarded contract from disclosure to competitors as part of the recompete procurement. Contractors and government employees alike should be aware that conduct similar to that summarized by the Third Circuit in this case may violate other legal standards.
As the section of the FAR implementing the PIA states, "[a]gency officials are reminded that there are other statutes and regulations that deal with the same or related prohibited conduct" as the PIA. FAR 3.104-2(b). The FAR then lists several "example[s]," including the fact that FAR "Parts 14 and 15 place restrictions on the release of information related to procurements and other contractor information that must be protected under 18 U.S.C. 1905," that "[r]elease of information both before and after award (see 3.104-4) may be prohibited by the Privacy Act (5 U.S.C. 552a), the Trade Secrets Act (18 U.S.C. 1905), and other laws," and that "[u]sing nonpublic information to further an employee's private interest or that of another and engaging in a financial transaction using nonpublic information are prohibited by 5 CFR 2635.703." See id.
In addition, the Freedom of Information Act (FOIA)—about which Venable has previously written—exempts from disclosure via public record request "trade secrets and commercial or financial information obtained from a person and privileged or confidential[.]"5 U.S.C. § 552(b)(4). Note, however, that the government may effectively forfeit this protection, which frequently applies to contractor's data, by disclosing such information to the public (a topic discussed here).
Finally, and though this is not an exhaustive list, other aspects of procurement law may limit or preclude disclosure of proposal information in the government's possession. For example, the FAR states that "Government business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none." FAR 3.101-1; see also FAR 1.102-2, FAR 1.602-2. Selectively releasing information to one offeror such that it has an advantage in a competitive procurement may violate this requirement, even if that was not the government's intent.[12] Receipt of another company's competitively advantageous information from the government may also create an organizational conflict of interest that can disqualify the recipient from competition for award of a federal contract. See generally 90 Fed. Reg. 4376 (Jan. 15, 2025) (proposed rule codifying standards for conflicts of interest generated by multiple scenarios, including unequal access to information).
Thus, while the Third Circuit's decision identifies one way in which the government's disclosure of one company's previously submitted proposal to another may not violate the PIA, it does not mean that such disclosure is necessarily lawful, or that affected parties would lack a cause of action or legal remedies.
[1] See United States v. Schuster, No. 24-2942, 2026 WL 100043 (3d Cir. Jan. 14, 2026). All facts stated herein are as recounted by the Third Circuit.
[2] Id. at 2.
[3] Id.
[4] 41 U.S.C. § 2102(a).
[5] A separate part of the PIA, 41 U.S.C. § 2105(a), makes violating Section 2102(a) a criminal offense if the disclosure was done "for anything of value or to obtain or give a person a competitive advantage in the award of a Federal agency procurement contract."
[6] See Abacus Tech. Corp. v. United States, 164 Fed. Cl. 199, 221 (2023).
[7] Schuster, 2026 WL 100043, at *6.
[8] See SAGAM Securite Senegal v. United States, 154 Fed. Cl. 653, 663 (2021) ("Simply put, according to these provisions, a procurement official may not disclose one bidder's competition-sensitive proposal features, as enumerated in section 2101(2), to a competing bidder in an ongoing procurement."); Insight Pub. Sector, Inc. v. United States, 157 Fed. Cl. 416, 429 (2021) (disclosing information that is "directly related to, and occurred prior to" the award of a contract would violate § 2102(a)); United States v. Kuciapinski, 434 F. Supp. 3d 939, 950 (D. Colo. 2020) ("The Court agrees in the general sense that one cannot violate § 2102, and therefore cannot conspire to violate it, if the 'conspiracy' relates to information about an already-awarded contract.").
[9] Schuster, 2026 WL 100043, at *4.
[10] Id.
[11] Id. at 5.
[12] See, e.g., Sytronics, Inc., B-297346, Dec. 28, 2005, 2006 CPD ¶ 15 at 8 (agency's discussions "improperly favored" one offeror "to the detriment of" another when agency advised former "that its high price 'appeared high,' while it advised" the latter "that its low price 'appeared excessive'" compared to government estimates); SeaSpace, B-241564, Feb. 15, 1991, 91-1 CPD ¶ 179 ("discussion question singled out one offeror—Global—for notice of the agency's apparent preference for a more powerful computer"); Chemonics Int'l, Inc., B-282555, July 23, 1999, 99-2 CPD ¶ 61 at 8-9 ("advising" one offeror but giving "no similar information to" another, and giving one offeror "detailed evaluations … including specific suggestions and examples" but "[n]o similar agency input" to another was "facially unequal"); MSI, A Div. of the Bionetics Corp., B-243974 et al., Sept. 17, 1991, 91-2 CPD ¶ 254 (discussions unequal where "only the awardee was informed that" certain parts "would be furnished at government expense," causing another offeror to propose "costs in excess of a $1 million for the" parts while awardee "reduced its proposed costs for the parts to $0").