Case No. VFA-0241, 26 DOE ¶ 80,142

December 6, 1996

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Appellant: Bechtel National, Inc.

Case Number: VFA-0241

Bechtel National, Inc., (Bechtel) files this appeal under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. Pursuant to the FOIA, Bechtel had requested a copy of a contract between the Department of Energy and Fluor Daniel Hanford (FDH). Bechtel's request was processed by the Department's Richland Operations Office (Richland). In response, Richland released the text of the entire contract except for substantial portions of one clause, identified in the contract as "Clause H.52." Bechtel's appeal, if granted, would require Richland to release the full text of Clause H.52.

Background

The FOIA generally provides that any person has a right of access to federal agency records, except to the extent that the records (or portions of them) are protected from disclosure by one of nine exemptions or three special law enforcement exclusions. Only one of these exemptions, Exemption 4, is at issue in this case. Exemption 4 protects from mandatory disclosure "trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential." 5 U.S.C. § 552(b)(4).

The Department announced it had awarded FDH the contract to manage the Department's Hanford site on August 6, 1996. The contract includes a "contractor-controlled insurance program" ("CCIP"). The Department publicized the CCIP in a fact sheet, describing the program as having the contractor "assume third-party liability for

[the] first $50 million.(1) Details of the CCIP are set out in Clause H.52.

Richland received the request from Bechtel for a copy of the contract on September 3, 1996.(2) The portion of Clause H.52 released by Richland is as follows:

H.52 CONTRACTOR CONTROLLED INSURANCE PROGRAM

A. The Contractor shall procure, at no cost to the DOE, a Contractor Controlled Insurance program (CCIP), as set forth in the Contractor's proposal dated [DELETED] to the extent available on a commercially reasonable basis. Generally the coverage will include [DELETED]. The Contractor supports the DOE's effort to improve their insurance program by the collection of insurance claim statistics and information. They will assist the DOE by complying with the insurance reporting requirements as defined by DOE's new draft Order 350.1.

B. [DELETED]

C. [DELETED]

D. This clause does not apply to liabilities covered by the Nuclear Hazards Indemnity Agreement.

Richland's determination letter on Bechtel's request was issued by Karen K. Randolph, Director of Richland's Office of External Affairs. In the determination letter, Randolph informed Bechtel that FDH had been given an opportunity, pursuant to 10 C.F.R. § 1004.11(c), to identify parts of the contract that it believed to be protected from disclosure under the FOIA, and to provide a basis for any such claim. Randolph stated that she and her staff had reviewed FDH's claims, and concluded that portions of Clause H.52 should be deleted from the released copy pursuant to FOIA Exemption 4, 5 U.S.C. § 552(b)(4). Randolph explained that:

Exemption 4 of the FOIA was meant to protect the disclosure of proprietary information. If the deleted portions were released it would reveal FDH's proposed insurance program. This program is currently being negotiated with underwriters.(3)

Analysis

The analysis of whether material can be withheld under Exemption 4 is a complex task, in which we must consider judicial precedents and Departmental regulations. See Industrial Constructors Corporation, 25 DOE ¶ 80,196 (1996). For example, the Departmental regulations provide the following criteria for deciding if material can be withheld under Exemption 4:

(1) Whether the information has been held in confidence by the person to whom it pertains;

(2) Whether the information is of a type customarily held in confidence by the person to whom it pertains and whether there is a reasonable basis therefor;

(3) Whether the information was transmitted to and received by the Department in confidence;

(4) Whether the information is available in public sources;

(5) Whether the disclosure of the information is likely to impair the Government's ability to obtain similar information in the future; and

(6) Whether disclosure of the information is likely to cause substantial harm to the competitive position of the person from whom the information was obtained.

10 C.F.R. § 1004.11(f).

The determination letter from Richland, cited above, claims that the full text of Clause H.52 is "proprietary" and that disclosure of the withheld portions would reveal FDH's proposed insurance program while negotiations with underwriters are in progress. This explanation does not address the criteria we must consider under case law and Departmental regulations. In addition, although we have discussed this matter with personnel at Richland, we have not received any further justification for withholding.

Both the FOIA and DOE regulations require reasonably specific justification for withholding documents or portions of documents. Mead Data Central v. Dep't of the Air Force, 566 F.2d 242 (D.C. Cir. 1977); Data Technology Industries, 4 DOE ¶ 80,118 (1979). Richland's determination, however, is not sufficiently specific for us to make a reasoned finding whether Clause H.52 merits protection under Exemption 4. Cf. Larson Associated, 25 DOE ¶ 80,204 (1996); Association of Public Agency Customers, 25 DOE ¶ 80,200 (1996). We will therefore remand this matter to Richland for a new determination, either releasing the text of Clause H.52 or providing adequate justification for withholding it in whole or in part.

It Is Therefore Ordered That:

(1) The appeal filed by Bechtel National, Inc., Case No. VFA-0241, is hereby granted as set forth in Paragraph (2).

(2) This matter is hereby remanded to the Richland Operations Office for processing in accordance with the instructions provided in this Decision.

(3) This is a final order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to the provisions of 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought in the district in which the requester resides or has a principal place of business; or in which the agency records are situated; or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: December 6, 1996

(1) "Project Hanford Management Fact Sheet," available on the World Wide Web at http://www.hanford.gov/phmc/fact-2.htm.

(2) Bechtel also requested a copy of notes made by a Bechtel representative during contract debriefing. Richland did not release the notes, stating they had been destroyed immediately after the debriefing. Bechtel has not raised the issue of the notes in this appeal.

(3) Determination letter from Randolph to Sandra P. Ogden, Bechtel National, Inc., dated October 1, 1996.