This post was written by Cody Roberts, Gunjan Talati and David Cohen.

The government is a frequent litigant as both a plaintiff and defendant on a variety of matters at any given time. Like many other litigants, the government sometimes finds itself needing litigation support. Litigation support contractors fill that need and, because of a new interim rule published February 28, 2014, the Department of Defense (“DoD”) is making it easier for such support contractors to have access to “sensitive information”—subject, of course, to certain restrictions and disclosures.

This interim rule expressly authorizes the DoD to provide its litigation support contractors with access to certain types of non-public information, provided that the litigation support contractors are required to protect that information from any unauthorized disclosure, and are prohibited from using that information for any purpose other than providing litigation support services to the DoD.

DFARS subpart 204.74, Disclosure of Information to Litigation Support Contractors, along with its associated new clauses, provides the policy governing the new subpart in a two-pronged implementation approach:

  • The DoD is authorized to release litigation information, including sensitive information, to its litigation support contractors, provided that the litigation support contractors are subject to appropriate requirements and restrictions that comply with the requirements of 10 U.S.C. § 129(d).
  • Although not required by the statute, the DoD will, to the maximum extent practicable, ensure that offerors and contractors submitting information to the DoD under solicitations and contracts will be notified that the submitted information may be disclosed to the DoD’s litigation support contractors under the aforementioned conditions.

The DoD avows that failure to issue this rule as an interim rule would severely impact the government’s ability to obtain administrative, technical or professional services, including expert or technical consultation, in support of the government during or in anticipation of litigation, thereby adversely affecting the government’s ability to successfully engage in legal proceedings.

The interim rule, on its face, could be potentially troubling to companies subject to government investigations and administrative enforcement actions. Such investigations and actions are usually highly confidential, and sensitive information is produced to the government with the understanding that it will be protected and not be made public or otherwise fall into the hands of competitors. Wider sharing of such information leads to greater concerns about breaches of confidentiality.

The DoD has attempted to ameliorate these concerns by implementing safeguards under 10 U.S.C. § 129(d) to ensure that this broad usage of sensitive information does not threaten the data owner’s competitive advantage because of the proprietary information, and to provide the data owner with legal remedies against the support contractor for any breach of those use restrictions. The section identifies “sensitive information” to mean confidential commercial, financial, or proprietary information, technical data, or other privileged information. (See 10 U.S.C. § 129(d)(b)(2)).

(See DFARS; Disclosure to Litigation Support Contractors (DFARS Case 2012-D029), 79 Fed. Reg. 11337-11339 (February 28, 2014)).

This new rule provides both an opportunity and a challenge to litigation support contractors. The opportunity is being able to handle additional information, but the challenge is ensuring that appropriate safeguards are in place. Thus, before accepting “sensitive information,” litigation support contractors should ensure they can comply with all of the government’s requirements.