Case No. VFA-0304, 26 DOE ¶ 80,202

July 18, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Tri-State Drilling, Inc.

Date of Filing: June 23, 1997

Case Number: VFA-0304

On June 23, 1997, Tri-State Drilling, Inc. (Appellant) filed an Appeal from a final determination issued on June 17, 1997 by the Department of Energy's Bonneville Power Administration (BPA). In that determination, BPA withheld several documents in response to a June 4, 1997 Request for Information filed by the Appellant under the Freedom of Information Act (FOIA), 5 U.S.C. § 552(b), as implemented by the DOE in 10 C.F.R. Part 1004. This Appeal, if granted, would require the BPA to release the withheld information.

I. BACKGROUND

This Freedom of Information Act Appeal arises from a procurement action conducted by the BPA. The procurement in question was intended to obtain "Concrete Footings for Tower 110/4." Apparently the contract was awarded to the Appellant. On June 4, 1997, however, the Appellant submitted a FOIA request to BPA seeking copies of the unsuccessful bids for this contract. On June 17, 1997, BPA issued a determination in which it withheld each of the documents requested by the Appellant in their entirety under FOIA Exemption 4. BPA contended that release of the unsuccessful bids would cause substantial competitive harm to the firms that submitted the unsuccessful bids and would impair BPA's ability to obtain similar information in the future.

II. ANALYSIS

Exemption 4 permits an agency to withhold from public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4); 10 C.F.R. § 1004.10(b)(4). In order to be exempt from mandatory disclosure under Exemption 4, a document supplied to the DOE on a non-voluntary basis must meet the following criteria: The document must contain either (A) "trade secrets" or (B) information that is (1) "commercial or financial," (2) "obtained from a person," and (3) "privileged or confidential." National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). Commercial or financial information is "confidential" for purposes of the National Parks test if disclosure of the information is likely to either impair the government's ability to obtain necessary information in the future or cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770. However, information provided to the government on a voluntary basis is subject to a broader standard of confidentiality under Exemption 4. That type of information is confidential if it is the kind of information that the provider would not customarily make available to the public. Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993). Information required to be submitted in order to obtain a DOE contract is considered to be submitted on a non-voluntarily basis for Exemption 4 purposes. Milton L. Loeb, 23 DOE ¶ 80,124 (1993). Therefore, its withholding must be analyzed under the National Parks test.

BPA has failed to explain why it determined that release of the withheld information could reasonably be expected to cause harm to the competitive position of the unsuccessful bidders. Accordingly, we are unable to determine whether this determination was appropriate. We are similarly unable to determine BPA's rationale for concluding that release of the unsuccessful bids would impair the government's ability to obtain similar information in the future.

A determination letter must be sufficiently informative to allow the requester to ascertain whether the claimed exemptions under which the documents were withheld reasonably apply to the documents, and to formulate a meaningful appeal. See, e.g, James L. Schwab, 22 DOE ¶ 80,164 (1992); Harold Fine, 17 DOE ¶ 80,136 at 80,588 (1988); Arnold & Porter, 12 DOE ¶ 80,108 at 80,527 (1984). The determination letter issued to the Appellant on June 17, 1997 by the BPA meets neither of these two requirements.

Accordingly, we are remanding this matter to the BPA. On remand, BPA should either (1) release the requested information to the Appellant or (2) provide a detailed explanation of why it found that the release of the unsuccessful bids would cause substantial competitive harm to their submitter or impair the government's ability to obtain future bids.

We note also that the unsuccessful bids were apparently withheld in their entirety. The FOIA requires that "[a]ny reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection." 5 U.S.C. § 552(b). However, segregation and release of non-exempt material are not necessary when it is inextricably intertwined with the exempt material, such that release of the non-exempt material would compromise the confidentiality of the withheld material. Lead Industries Association v. OSHA, 610 F.2d 70, 83-86 (2d Cir. 1979).

It would be unusual if release of all of the information contained in the unsuccessful bids would either cause substantial competitive harm or impair the ability of the Government to obtain future bids for goods and services. However, the determination letter does not indicate that any attempt to segregate and release non-exempt information. Accordingly, on remand, BPA must conduct an additional review of any information it seeks to withhold from the Appellant in order to determine whether it contains information that can be segregated and released to the public.

III. CONCLUSION

For the reasons set forth above, we are granting this Appeal in part, and remanding it to the Bonneville Power Administration.

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by Tri-State Drilling, Inc., on June 23, 1997, Case Number VFA-0304, is hereby granted in part as specified in Paragraph (2) below, and is denied in all other aspects.

(2) This matter is hereby remanded to the Bonneville Power Administration, which shall promptly issue a new determination in accordance with the instructions set forth in the above Decision and Order.

(3) This is a final order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to 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: July 18, 1997