Husch Blackwell is representing a government contractor in a suit that seeks to have a federal judge block the Department of Defense from revealing the details of a contract worth up to $1.5 billion that the company had been awarded, saying that doing so would violate the Trade Secrets Act.
Menlo Worldwide Government Services says in its Nov. 24 complaint that DOD and the U.S. Transportation Command awarded it a contract to provide a program that addresses transportation logistics in August 2007, after a competitive process. According to the complaint, the Defense Transportation Coordination Initiative is designed to “improve the reliability, predictability and efficiency of DOD freight transportation in the continental United States through the increased use of dedicated truck schedules, cross-docking operations, better mode selection and load optimization.”
The initial three-year phase of the contract was worth approximately $525 million and has two one-year option periods worth $543 million and two one-year option periods worth approximately $567 million. If all of the options were awarded, the total value is estimated to be roughly $1.5 billion over seven years. The initial phase expired in October 2010 but U.S. Transportation Command granted the first option, extending the program through October 2011.
On July, 16, the complaint says, U.S. Transportation Command informed Menlo that Baker & Hostetler had filed a Freedom of Information Act request for a copy of Menlo’s proposal for the program. U.S. Transportation Command’s letter asked Menlo to identify portions of the proposal that should be exempt from public disclosure.
On Aug. 16, Menlo responded with a letter, arguing that the entire proposal should fall under FOIA exemptions because it includes a number of details that could be used by competitors to achieve a competitive advantage. Among those, the complaint says, are the identity of key subcontractors, information about business strategies and pricing information.
Two months later, U.S. Transportation Command released another letter, informing Menlo that it had decided to release the proposal in full, redacting only the identities of Menlo’s suppliers and employees. Among the reasons cited for reaching that decision was that Menlo had failed to state the percentage of business it receives from government contracts.
“The DCTI contract is valued at approximately $1.5 billion over seven years. That amount would be a substantial part of any company’s business, no matter how large the company is or how much revenue it derives from government contracts,” writes Brian Waagner, a Husch Blackwell partner, in the complaint. The complaint goes on to say that the DCTI contract represents approximately 97% of Menlo’s business.
The complaint asks that Judge Henry Kennedy of the U.S. District Court for the District of Columbia declare the decision to release Menlo’s proposal arbitrary and to issue a permanent injunction that would bar DOD and U.S. Transportation Command from releasing those documents.
No attorneys have entered an appearance on behalf of DOD and U.S. Transportation Command.