Contractor Private Records as Public Records—Part 2: How to Protect Your Private Records from Public Disclosure
W. Robert Vezina, III and Megan S. Reynolds
Florida Transportation Builder (Winter 2022)
For years, FDOT and other public agencies have assumed and even asserted that all of a contractor’s records for a project are public records. But as explained in Part 1 of this article, the recent Florida appellate court decision in the case Holifield v. Big Bend Cares, Inc. indicates that a contractor performing road or bridge construction or maintenance work under a contract with FDOT or another public agency is not subject to public records law. Still, because the question hasn’t yet been addressed in a public construction contract case, we advised in Part 1 that every contractor take steps to protect its confidential information.
In this Part 2 of this article, we discuss the public records law exemptions that are most useful to road and bridge contractors. We also identify situations in which the private records of a contractor that is not subject to public records law still could become public records. Finally, we advise how to protect your confidential information from disclosure to the public and what to do if you receive a public records request.
Public Records Law Exemptions Useful to Road and Bridge Contractors
There are several public records law exemptions that may help the road and bridge contractor keep its confidential records from disclosure to the public. As a legal matter, an exemption does not turn a public record into a non-public record, but instead exempts a public record from the requirement that the record be made accessible to any person on request.
Most useful to contractors are the permanent exemptions for financial statements and for trade secrets. Other exemptions, like the one for sealed bids and proposals, are only temporary, meaning that the exempt information eventually becomes public record. Because multiple exemptions can apply, however, even certain information in a bid or proposal can remain permanently exempt. For example, trade-secret information contained in a proposal is exempt from public records law even after the rest of the proposal becomes public record.
Financial Statements and Other Financial Information
Any contractor that wants to bid on an FDOT construction contract exceeding $250,000 must be prequalified by FDOT. Other public agencies sometimes impose similar requirements. One FDOT requirement for qualification is that the contractor submit financial statements with its application. Whether submitted to FDOT or to another agency, financial statements submitted to obtain prequalification for road and other public works projects are permanently exempt from public records law’s access requirement.
FDOT’s contractor-qualification rules define financial statements as “annual fiscal year-end financial statements audited or reviewed by a Certified Public Accountant.” But these rules also state that to verify financial adequacy, FDOT may require the contractor to provide “additional financial information.” The rules don’t explain what kind of “additional financial information” might be required, but it’s apparent this goes beyond financial statements. The problem is there is no public records exemption for “additional financial information,” nor is there an exemption for financial statements submitted to a public agency for a reason other than qualification, such as when part of a bid or proposal. But as explained next, when the proper safeguards are taken, financial statements and other financial information can qualify as trade secrets and be entirely exempt from public access nonetheless.
Also permanently exempt from public records law’s access requirement is trade-secret information. Under Florida law, a trade secret is information (including a formula, compilation, method, technique, or process) that (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. In other words, for information to be trade secret, you must limit who has access to the information and take steps to prevent the information from becoming known to others.
Information that may qualify as trade secret includes financial statements and other financial information (including amounts of profit, loss, and overhead and the information on job cost reports and bid-preparation work papers); engineering and other technical information; and subcontractor and supplier pricing. But simply calling information a trade secret isn’t sufficient to actually make it one. Instead, the information must meet certain conditions, including that specific steps have been taken to protect it.
As explained below, to protect any confidential, potentially exempt information you submit to a public agency, you must label the information first. This is especially important with trade-secret information. A failure to clearly mark the information as trade secret prevents the information from qualifying as a trade secret. By giving the information to a public agency without the proper label, a contractor has effectively made the information available to the public. That destroys the trade-secret nature of the information, as the contractor has not made efforts that are reasonable under the circumstances to maintain the information’s secrecy.
Trade secrets can be difficult to establish in court, particularly because the burden is on the information’s owner to show that it took sufficient steps to try keep the information from being accessed by unauthorized persons. There are many steps a contractor can take to do this, and an exhaustive listing is beyond the scope of this article. But especially given that most improper acquisition of trade-secret information is committed by employees and business partners, some of the more important steps include:
- conspicuously labeling all documents that contain trade secrets (even internal documents) as “trade secret, proprietary, and confidential”;
- restricting access to trade-secret information to only those persons who need access to perform their job duties, including by password-protecting sensitive documents;
- establishing and enforcing company policies and procedures for handling of trade-secret and other confidential information;
- educating employees who have access to the information about their obligation to maintain the secrecy of the information (and, ideally, having them sign a nondisclosure agreement); and
- disabling departing employees’ access to company email, networks, devices, and physical facilities immediately after the employees’ departure.
Bids and Proposals
Sealed bids, proposals, and replies received by a public agency in response to a competitive solicitation are temporarily exempt from the access requirement of public records law. How long a bid is exempt depends on the circumstances. If the agency ultimately awards a contract or cancels the procurement, a bid is exempt until (1) the agency posts notice of its contract award or (2) 30 days after bid opening, whichever is earlier. But if the agency rejects all bids and concurrently provides notice of its intent to reissue the solicitation, the rejected bids are exempt until (1) the agency provides notice of an intended decision concerning the reissued solicitation or (2) the agency withdraws the reissued solicitation—with the caveat that a bid cannot be exempt for longer than 12 months after the initial rejection of all bids.
While the exemption for sealed bids, proposals, and replies protects both the competitive-bidding process and individual contractors, there is a loophole contractors should be aware of. If an agency opens proposals, sits on the contract award decision for more than 30 days, and then ultimately decides to reject all proposals and resolicit instead, there is a window—from 30 days after proposal opening to the date the agency posts notice of its intent to reject all proposals—in which proposals are accessible to the public. This means a contractor could submit a public records request for the proposals of the contractors competing for the contract and obtain these bids or proposals before the solicitation is reissued.
This is most likely to happen when the solicitation is a request for proposals or invitation to negotiate (as opposed to a solicitation for a low-bid contract), both of which require extensive evaluation by the agency and generally come with award dates that are several weeks or even months after proposal opening. And it’s one reason why a contractor should always label the trade-secret and other confidential information in its proposals before proposal submission. That way, truly confidential information cannot be made public, even during a “loophole” window.
How a Contractor’s Private Records Can Become Public Records Even Where the Contractor Is Not “Acting on Behalf of” the Public Agency
Part 1 of this article explained that a private contractor and its records are subject to public records law when performing a contract with a public agency only if (1) the agency has delegated to the contractor an actual governmental function or responsibility or (2) the contractor is “acting on behalf of” the agency. Part 1 also explained that in light of the recent Florida appellate court decision in the case Holifield v. Big Bend Cares, Inc., a contractor performing road or bridge construction or maintenance work under a contract with FDOT or another public agency most likely does not act on behalf of the agency and therefore is not subject to public records law.
Yet there are ways the records of a contractor that is not acting on behalf of an agency can become public record anyway. Generally, this can occur anytime a contractor gives its records to a public agency. Contractors should be aware of these potential pitfalls so they can act to protect their records from public disclosure to the maximum extent possible.
FDOT’s Standard Specifications
For road and bridge contractors, any contract that incorporates FDOT’s Standard Specifications for Road and Bridge Construction—which often are incorporated into local-government contracts—present two potential problems.
First, 3-9 – Public Records treats the contractor’s records as public records without regard to whether the contractor actually is subject to public records law in the first place. This specification quotes section 119.0701, Florida Statutes’ list of obligations of a contractor that is subject to public records law and states, “the Contractor shall” keep and maintain public records required by FDOT to perform the service, provide the records to FDOT upon request, and satisfy the other requirements listed in section 119.0701. Further, 3-9 provides that failure to comply with 3-9 itself is grounds for immediate unilateral termination of the contract. Thus, 3-9 effectively purports to turn a contractor’s private records into public records even if the contractor is not subject to public records law.
Second, 3-8 – Audit of Contractor’s Records and 5-12.14 – Auditing of Claims also have the potential to turn the records of a contractor that is not subject to public records law into public records anyway. Both 3-8 and 5-12.14 purport to grant FDOT a right of access, even after final acceptance, to all of a contractor’s records and all subcontractor and supplier records pertaining a given project. The problem here is that once a public agency employee views a document, the document becomes a public record, even if the agency doesn’t actually possess the document.
Under 3-8, which addresses FDOT’s general audit rights, the records a contractor must make available to FDOT include but are not limited to books of account, supporting documents, and papers FDOT “deems necessary to ensure compliance with the provisions of the Contract Documents.” Failure to comply with 3-8 can result in disqualification or suspension from bidding or working as a subcontractor on future FDOT projects. Under 5-12.14, which applies when a contractor submits a 5-12 claim for extra time or compensation, the records a contractor is required to provide FDOT include but are not limited to vendor rental agreements, subcontractor invoices, job cost reports, job payroll ledgers, general ledgers, subsidiary ledgers, cash-disbursement journals, financial statements, income tax returns, records reflecting profit and loss, and records used for bid preparation. So with audits, too, a contractor’s private records can become public records.
Other instances where the private records of a contractor that is not acting on behalf of a public agency can become public record are in litigation and in the DRB process. In Florida, both court proceedings and administrative proceedings are public events. With certain exceptions, the right to access public records extends to records filed with a court or administrative tribunal. Unless certain precautions are taken, private records become public records where the records are filed with or otherwise given to a court or administrative tribunal—say, as a motion, hearing, or trial exhibit.
Private records also can become public records in litigation with a public agency where the records are provided to the agency as part of the “discovery” process or in a DRB proceeding in which the records are provided directly to FDOT. If a contractor is in litigation with a public agency like FDOT—for example, in a breach-of-contract action or a bid protest—private documents provided to the agency in the discovery process become public record. Additionally, FDOT has taken the position that it can require a contractor to produce documents during a DRB proceeding.
Whether in litigation, the DRB process, an audit by FDOT or another public agency, or any other instance in which you submit your private records to an agency, the only surefire way to keep such a record from being subject to disclosure as a public record is to obtain a court order ruling that the record falls under an exemption to public records law’s access requirement. For road and bridge contractors, this most likely would be through the trade-secret exemptions in sections 119.0715(2) and 815.045, Florida Statutes.
How to Protect Confidential Information in a Public Record from Access by the Public
To protect any type of confidential information, steps must be taken before you share the information with any public agency. With both trade secrets and any other information you don’t want an agency disclosing to the public, it’s critical that you properly label the information as such and identify the statutory public records exemption in a conspicuous manner before you give the information to the agency.
To properly label trade-secret or other exempt information, you should clearly label each page of the document, whether or not the page contains exempt information, with a designation like “Contains trade-secret information exempt under sections 119.0715(2) and 815.045, Florida Statutes, from disclosure under public records law.” If you contend any other exemption applies, like the exemption for financial statements submitted as part of an application for qualification, be sure to identify that specific statute (in this instance, section 337.14(1), Florida Statutes) instead or as well, as appropriate.
It’s also wise to include with your submission to the public agency a cover email or letter notifying the agency that the document submitted contains trade-secret or other confidential information, identifying which of the document’s pages or sections contain the information, and citing the specific statute or statutes that make the information exempt. In fact, many solicitations require this. The letter will serve as written evidence of your intention that the information be exempt and that you timely notified the agency of this fact. Verbally notifying an agency employee that the information is confidential and exempt is insufficient to prevent the information’s being made available to the public.
What to Do if You Receive a Public Records Request for Your Records
If you receive a public records request for your private records—whether from FDOT, another public agency, or a member of the public—you should not simply assume that because you probably aren’t subject to public records law, you have no obligation to respond. Rather, you should act immediately to protect yourself from liability. The first step upon receiving a public records request should be promptly seeking legal advice from an attorney versed in public records law.
Even if a contractor is subject to public records law, because the law requires the requestor to submit the public records request directly to the agency, a contractor has no legal obligation to take any action in response to a request directly submitted to the contractor by a member of the public. The sensible response, however, is to notify the requestor in writing that the request must be submitted to the agency instead so the requestor won’t think the request is in the process of being fulfilled when it’s not. You also may want to inform the requestor that you’re not subject to public records law—but don’t expect that to necessarily be the end of it, as the agency may disagree and turn around and give the request right back to you for fulfillment.
A public records request coming from FDOT or another public agency with which you’ve contracted presents a more complicated scenario. The agency could be simply passing through a request from a member of the public or the agency could be the original requestor, as agencies have been known to make public records requests. You’ll need to decide whether to challenge the agency’s assumption that you’re subject to public records law—which might affect your contract and might require you to obtain a court ruling on the question. If you decide to provide your records instead, be aware that a contractor acting on behalf of a public agency is obligated to provide only those requested records not already in the agency’s possession.
Because no Florida court has determined whether a road and bridge contractor performing construction or maintenance work under a contract with FDOT or another public agency is subject to public records law, the prudent contractor will act as if its private records are public records. The contractor will avail itself to the maximum extent possible of the various statutory exemptions from public records law’s access requirement whenever providing information to a public agency—especially when providing financial or other potentially trade-secret information. The contractor will take steps to ensure its confidential information—like job cost reports, bid-preparation work papers, and subcontractor pricing—can be accessed only by a limited number of authorized persons within the company, increasing the likelihood that the confidential information actually constitutes a trade secret. The contractor also will take steps to protect its private records before filing the records in court or an administrative tribunal or providing the records to a public agency in the course of litigation, the DRB process, an audit, or any other circumstance. Finally, the contractor that receives a public records request will immediately seek legal advice.
 Holifield v. Big Bend Cares, Inc., 326 So. 3d 739 (Fla. 1st DCA 2021), rev. denied, No. SC21-1511, 2022 WL 898209 (Fla. Mar. 28, 2022).
 § 119.011(8), Fla. Stat. (defining exemption as “a provision of general law which provides that a specified record or meeting, or portion thereof, is not subject to the access requirements of s. 119.07(1), s. 286.011, or s. 24, Art. I of the State Constitution”).
 § 337.14(1), Fla. Stat.
 § 337.14, Fla. Stat.
 §§ 119.071(1)(c), 337.14(1), Fla. Stat.
 Fla. Admin. Code R. 14-22.011(4)(i).
 See, e.g., Fla. Admin. Code R. 14-22.002(2)(c)8; Fla. Admin. Code Rule 14-22.005(8).
 §§ 119.0715(2), 815.045, Fla. Stat.
 § 688.002(4), Fla. Stat.
 See, e.g., Sepro Corp. v. Fla. Dep’t of Envtl. Protection, 839 So. 2d 781, 784, (Fla. 1st DCA 2003).
 § 119.071(1)(b)2, Fla. Stat.
 § 119.071(1)(b)3, Fla. Stat.
 See, e.g., B&S Utils., Inc. v. Baskerville–Donovan, Inc., 988 So. 2d 17 (Fla. 1st DCA 2008).
 See, e.g., Holifield, 326 So. 3d at 741; see also W. Robert Vezina, III & Megan S. Reynolds, Contractor Private Records as Public Records – Part 1: A Giant Leap in the Right Direction, Fla. Transp. Builder (Fall 2022).
 Holifield, 326 So. 3d 739.
 Vezina & Reynolds, supra note 15.
 Examples of administrative proceedings are bid protests, disputes over FDOT qualification, and licensure disputes.
 Barron v. Fla. Freedom Newspapers, Inc., 531 So. 2d 113, 116 (Fla. 1988); Op. Att’y Gen. Fla. 83-52, at *3 (1983); cf. Dep’t of Agriculture & Consumer Servs. v. Tampa Maid Foods, LLC, No. 20-5566, 2021 WL 1536185, at *2 (Fla. DOAH Jan. 4, 2021) (Procedural Order).
 Barron, 531 So. 2d at 116; Agency for Health Care Admin. V. S. Broward Hosp. Dist., 206 So. 3d 826, 829 (Fla. 1st DCA 2016) (Wetherell, J., concurring); Fla. R. Gen. Prac. & Jud. Admin. 2.420(a); see also City of Miami v. Post–Newsweek Stations Fla., Inc., 837 So. 2d 1002 (Fla. 3d DCA 2002).
 See, e.g., Sepro, 839 So. 2d at 784.
 Cities, counties, and public agencies may make public records requests, as they are persons within the meaning of public records law.
§ 119.0701(3)(a), Fla. Stat.