During the early stage design of large-scale engineering systems, design teams are challenged to balance a complex set of considerations. The established structured approaches for optimizing complex system designs offer strategies for achieving optimal solutions, but in practice suboptimal system-level results are often reached due to factors such as satisficing, ill-defined problems, or other project constraints. Twelve subsystem and system-level practitioners at a large aerospace organization were interviewed to understand the ways in which they integrate subsystems in their own work. Responses showed subsystem team members often presented conservative, worst-case scenarios to other subsystems when negotiating a tradeoff as a way of hedging against their own future needs. This practice of biased information passing, referred to informally by the practitioners as adding “margins,” is modeled in this paper with a series of optimization simulations. Three “bias” conditions were tested: no bias, a constant bias, and a bias which decreases with time. Results from the simulations show that biased information passing negatively affects both the number of iterations needed and the Pareto optimality of system-level solutions. Results are also compared to the interview responses and highlight several themes with respect to complex system design practice.