The government has an implied duty to disclose information during the solicitation phase that is vital to the development of pricing or performance under the contract. If the government fails to disclose such vital information, it may be held liable for breach of contract under the superior knowledge doctrine. To be successful in such claims, the contractor must present specific evidence that it: (1) undertook performance without vital knowledge of a fact that affects performance costs or duration; (2) the government was aware that the contractor had no knowledge of and had no reason to obtain such information; (3) any provided specification either misled the contractor or did not put it on notice to inquire; and (4) the government failed to provide the relevant information. If the contractor produces evidence that satisfies these four conditions, the government is deemed to be in breach of contract for nondisclosure of vital information, and the contractor may recover damages for any resulting delays or increased costs of performance.

In Marine Industrial Construction, LLC v. United States, 158 Fed.Cl. 158 (2022), the Court of Federal Claims (COFC) held the government liable for withholding vital information impacting contract performance and costs. The U.S. Army Corps of Engineers (USACE) had awarded the contract in question for hydraulic dredging at the Quillayute River Waterway in La Push, Washington. The agency procured dredging services for the waterway every two to three years, with the 2014 solicitation in question markedly different from previous years. A portion of the waterway known as the boat basin, which had not been fully dredged since 1982, was added to the scope of the 2014 solicitation. Additionally, in an effort to shift from design-based specifications to performance-based specifications and to increase competition, the government removed warnings that the waterway may contain man-made debris, such as sunken boats, fishnets, machinery, and steel trolling wire. The solicitation also specifically stated that the government had no knowledge of any artificial obstructions, wreckage, or other materials that would require additional equipment for economical removal.

The government’s disclosure of proprietary information to third parties may form the basis of a pre-award protest when an agency improperly incorporates the information in a solicitation. To be successful in such pre-award protests, the protester must provide clear and convincing evidence that its proprietary rights were violated. The protester must demonstrate that the proprietary information was marked as such or that it was disclosed to the government in confidence. Additionally, the protester must show that the preparation of the information involved significant time and expense and that it contains material or concepts that cannot be independently obtained from publicly available literature or common knowledge. Protest adjudicative forums, such as the Government Accountability Office (GAO), will not sustain a protest based on improper disclosure of proprietary information unless the protester satisfies both elements. That is, such a protest will be denied if the protester fails to appropriately mark proprietary information in its submissions to the government, or if the information consists solely of ideas or concepts that are obvious and not innovative or unique.

In B-416685.6, a bid protest decision issued on May 4, 2020, the GAO denied a protest alleging that the government improperly disclosed proprietary information from an unsolicited proposal in a solicitation because the information was not innovative or unique. The protest involved certain systems on the Navy’s UC–35C aircraft, which were similar to systems on an older UC–12W aircraft. In 2010, after delivery of six UC–12Ws, the Navy had discovered that the aircraft's engines exceeded the maximum allowable Internal Turbine Temperature (ITT). The Navy leased expensive spare engines to keep the aircraft operational before developing an engine aural tone warning system in the 2011-2012 timeframe to resolve the ITT issue. The new warning system provided an audible tone to alert the aircrew when engine temperatures approached the allowable limits. As a direct result of the aural tone system, the Navy no longer needed the expensive spare engines to keep the UC-12W aircraft operational.

The General Services Administration (GSA) Federal Supply Schedule (FSS) program provides federal agencies with a streamlined process for acquiring commercial goods and services. The GSA awards indefinite-delivery contracts after following the contractor responsibility requirements outlined in the Federal Acquisition Regulation (FAR). Under FAR 9.1, contracting officers (COs) must determine a prospective contractor’s responsibility, or capability to perform, before awarding a contract. The requirement for an affirmative responsibility determination applies to the award of the FSS contract, not to orders placed under it. This is because responsibility determinations must be made for prospective contractors rather than existing ones, and the GSA makes an affirmative responsibility determination before the contractor’s overarching indefinite-delivery FSS contract is awarded. This approach is consistent with the regulatory framework governing responsibility determinations, which renders the concept of responsibility inapplicable once a contract has been awarded. However, if the CO nevertheless elects to make a responsibility determination before placing an FSS order, he must do so in a reasonable manner.

The government provides contractors with a variety of information during the solicitation process before a contract is awarded. Such information may be furnished through pre-award conferences, questions and answers, solicitation attachments, specifications, diagrams, drawings, contract provisions, etc. When the government misstates material facts during the contract formation process, it may later be liable under express provisions of the contract or for breaching an implied warranty that it furnishes correct information. In this regard, when the government provides incorrect representations and directs or expects prospective offerors to base their contract pricing on those misrepresentations, the government is responsible for any losses the contractor suffers as a result of its reliance on that information. In other words, when the government instructs offerors to base their pricing on data it furnishes, it assumes responsibility for ensuring that the data accurately reflects the conditions the contractor will encounter during performance. In such cases, as long as the contractor can demonstrate that the government's information was incorrect, it need not prove the government's intent to deceive or bad faith. Furthermore, the contractor may also not need to prove that the incorrect information was inadequately or negligently prepared.