Case No. VFA-0307, 26 DOE ¶ 80,205

July 29, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: The Cincinnati Enquirer

Date of Filing: July 1, 1997

Case Number: VFA-0307

On July 1, 1997, The Cincinnati Enquirer (Appellant) filed an Appeal from a determination issued to it on June 13, 1997, by the Department of Energy's Ohio Field Office (DOE/OFO). That determination denied in part a request for information submitted by the Appellant under the Freedom of Information Act (FOIA), 5 U.S.C § 552, as implemented by the DOE in 10 C.F.R. Part 1004. The Appeal, if granted, would require DOE/OFO to release certain requested information.

The FOIA requires that documents held by federal agencies generally be released to the public upon request. The FOIA, however, lists nine exemptions that set forth the type of information that may be withheld at the discretion of an agency. 5 U.S.C. § 552(b); 10 C.F.R. § 1004.10(b). The DOE regulations further provide that a document exempt from mandatory disclosure under the FOIA shall nonetheless be released to the public if the DOE determines that disclosure is permitted by federal law and is in the public interest. 10 C.F.R. § 1004.1.

I. Background

On May 14, 1997, the Appellant filed a request under the FOIA in which it sought, inter alia, copies of sole-source contracts and related procurement documents concerning the Fernald Environmental Management Project (FEMP).(1) FEMP is a DOE site currently operated under a contract between the DOE and Fluor Daniel Fernald (FDF). DOE/OFO issued a determination on June 13, 1997, in which it released some documents to the Appellant but stated that its search did not extend to the files of FDF since "[u]nder the terms of the contract between DOE and FDF, all procurement records are owned by the contractor. Until DOE acquires possession of such records, they are not agency records and, therefore, are not accessible under the FOIA." Letter from Robert D. Folker, Acting Manager, DOE/OFO, to Michael P. Gallagher, Journalist, The Cincinnati Enquirer (June 13, 1997).

In its Appeal, the Appellant argues that FDF should be considered an "agency" for FOIA purposes or, alternatively, the requested documents should be considered "agency records." It therefore asserts that DOE/OFO should be required to conduct a search of FDF and release any responsive documents. See Letter from Michael P. Gallagher to Director, Office of Hearings and Appeals (July 1, 1997) (Appeal Letter).

II. Analysis

Our threshold inquiry in this case is whether procurement records between a DOE contractor and sub-contractor which were generated by and in the possession of that DOE contractor are subject to the FOIA. First, we must determine whether such records are "agency records," and thus subject to the FOIA, under the criteria set out by the federal courts. See 5 U.S.C. § 552(f). Second, records that do not meet these criteria may nonetheless be subject to release under the DOE regulations. 10 C.F.R. § 1004.3(e); see 59 Fed. Reg. 63,884 (December 12, 1994). For the reasons set forth below, we conclude that the records in question are not "agency records" and are not subject to release under the DOE regulations.

The statutory language of the FOIA does not define the essential attributes of "agency records," but merely lists examples of the types of information required to be made available to the public. See 5 U.S.C. § 552(a). In interpreting this phrase, we have applied a two-stage analysis fashioned by the courts for determining whether documents created by non-federal organizations, such as FDF, are subject to the FOIA. See, e.g., BMF Enterprises, 21 DOE ¶ 80, 127 (1991); William Albert Hewgley, 19 DOE ¶ 80,120 (1989); Judith M. Gibbs, 16 DOE ¶ 80,133 (1987) (Gibbs). That analysis involves a determination (i) whether the organization is an "agency" for purposes of the FOIA, and if not (ii) whether the requested material is nonetheless an "agency record." See Gibbs, 16 DOE at ¶ 80,595.

The FOIA defines the term "agency" to include any "executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch . . . , or any independent regulatory agency." 5 U.S.C. § 552(f). The courts have identified certain factors to consider in determining whether an entity should be regarded as an agency for purposes of federal law. In United States v. Orleans, 425 U.S. 807 (1976), a case which involved a statute other than the FOIA, the Supreme Court defined the conditions under which a private organization must be considered a federal agency as follows: "[T]he question here is not whether the . . . agency receives federal money and must comply with federal standards and regulations, but whether its day-to-day operations are supervised by the Federal Government." Id. at 815. In other words, an organization will be considered a federal agency only where its structure and daily operations are subject to substantial federal control. See Ciba-Geigy Corp. v. Matthews, 428 F. Supp. 523, 528 (S.D.N.Y. 1977). Subsequently, the Supreme Court ruled that the Orleans standard provides the appropriate basis for ascertaining whether an organization is an "agency" in the context of a FOIA request for "agency records." Forsham v. Harris, 445 U.S. 169, 180 (1980) (Forsham). See also Washington Research Project, Inc. v. HEW, 504 F.2d 238, 248 (D.C. Cir. 1974); cert. denied, 421 U.S. 963 (1975) (degree of independent governmental decision-making authority considered); Rocap v. Indiek, 539 F.2d 174 (D.C. Cir. 1976).

Under its contractual relationship with the DOE, FDF is the prime contractor responsible for maintaining and operating FEMP. The Appellant alleges that because FDF (i) has an organizational structure similar to that of governmental agencies subject to the FOIA, (ii) is subject to close governmental supervision and control, including federal audit and reporting requirements, and (iii) has the power to make its own procurement decisions, it should therefore be considered an "agency" for FOIA purposes. The Appellant relies on Dong v. Smithsonian Institution, 878 F. Supp. 244 (D.C. Cir. 1995) (Dong), for the proposition that FDF is a government agency. In that case, the D.C. Circuit found that because of the high degree of governmental control of the Smithsonian Institution, the Smithsonian should be considered an "agency" subject to the FOIA.

For several reasons, we do not find the Appellant's argument persuasive. First, FDF is in no way similar to the Smithsonian Institution, the entity involved in the case on which Appellant so heavily relies. The Smithsonian was chartered by an Act of Congress, members of its Board of Directors are federal officials or selected by governmental officials, and it has extensive financial ties to the federal government. Dong, 878 F. Supp. at 248-249. While there are extensive financial ties between FDF and DOE, the other facts are not true for FDF. Further, this Office has frequently held that management and operating contractors are not "agencies" for FOIA purposes. See, e.g., Diane C. Larson, 26 DOE ¶ 80,112 (1996) (Westinghouse Hanford Company); William Kuntz III, 25 DOE ¶ 80,157 (1995) (Lockheed Martin Corporation); Cowles Publishing Co., 24 DOE ¶ 80,102 (1994) (Battelle Memorial Institute). The Appellant has shown neither that these cases should be overruled nor that the present case is significantly different from them. Like those other cases, the DOE obtained FDF's services and exercises general control over the contract work, but it does not supervise FDF's day-to-day operations. Therefore, FDF does not meet the test set forth in the Orleans and Forsham decisions and we therefore conclude that FDF is not an "agency" subject to the FOIA.

Although FDF is not an agency for the purposes of the FOIA, its records which are responsive to the Appellant's request could become "agency records" if they were obtained by the DOE and were within the DOE's control at the time the FOIA request was made. Department of Justice v. Tax Analysts, 492 U.S. 136, 144-46 (1989) (Tax Analysts); see Kissinger v. Reporters Comm. for Freedom of the Press, 445 U.S. 136 (1980); Forsham, 445 U.S. at 182. In this case, the documents in question had not been obtained by the DOE and were not in the agency's possession at the time of the Appellant's request.(2)

However, the Appellant relies on Burka v. Department of Health & Human Serv., 87 F.3d 508 (D.C. Cir. 1996) (Burka) and Chicago Tribune Co. v. Department of Health & Human Serv., 1997 U.S. Dist. LEXIS 2308 (N.D. Ill. Feb. 26, 1997) (Chicago Tribune) for the proposition that the requested records are within DOE's control. In Burka, four factors were used to determine whether a record in a private contractor's possession was an "agency record" because sufficient agency control was present: (1) the intent of the document's creator to retain or relinquish control over the records; (2) the ability of the agency to use and dispose of the record as it sees fit; (3) the extent to which agency personnel have read or relied upon the document; (4) the degree to which the document was integrated into the agency's record system or files. Burka, 87 F.3d at 515. In Burka and Chicago Tribune, it is clear that the agency controlled the requested information in a myriad of ways that are not present in this case. In Burka, the agency ordered creation of the materials, planned to take physical possession at the conclusion of the project, intended to disclose the information and read and relied on the requested information to write articles and develop agency policy. In Chicago Tribune, the government ordered the contractor to produce analyses from the requested information, owned the underlying data comprising the requested information, instituted a panel to resolve ambiguities in the requested information and published articles based on the requested information. None of these control-indicating facts has been shown to be present in the case at issue. As explained infra, the procurement records relevant to this case were explicitly excluded from the DOE's ownership and ability to dispose of such records and have remained exclusively in the contractor's control. Accordingly, the requested procurement records in this case do not qualify as "agency records" under the test set forth by the federal courts. See Tax Analysts, 492 U.S. at 145-46; see also Forsham, 445 U.S. at 185-86.

Even if a contractor-acquired or contractor-generated record fails to qualify as an "agency record," it may still be subject to voluntary release if the contract between the DOE and that contractor provides that the document in question is the property of the agency. The DOE regulations provide that "[w]hen a contract with DOE provides that any records acquired or generated by the contractor in its performance of the contract shall be the property of the Government, DOE will make available to the public such records that are in the possession of the Government or the contractor, unless the records are exempt from public disclosure under 5 U.S.C. § 552(b)." 10 C.F.R. 1004.3(e)(1).

We therefore next look to the contract between DOE and FDF to determine the status of the withheld records. That contract states:

Except as provided in paragraph (b) below, all records acquired or generated by the Contractor in its performance of this contract shall be the property of the Government and shall be delivered to the Government . . . .

Contract DE-AC24-92OR21972, Modification No. M053, Section H, Clause H.20. Paragraph (b) excludes from this provision "all records related to any procurement action by the contractor." Thus, because procurement records are not among the records which are property of the Government under

the DOE's contract with FDF, these records are not subject to release under the DOE regulations.(3) Id. at Clause H.20(b)(7).

For the reasons set forth above, we find that the records sought by the appellant are neither "agency records" within the meaning of the FOIA, nor subject to release under DOE regulations. Accordingly, the Appeal should be denied.

It Is Therefore Ordered That:

(1) The Appeal filed by the Cincinnati Enquirer on July 1, 1997, Case Number VFA-0307, is hereby denied.

(2) 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: July 29, 1997

(1)1/ A sole-source contract is one that is entered into without first taking bids from competitors.

(2)2/ OFO has informed us that some contracts between FDF and its subcontractors over a certain dollar amount are approved by the DOE. However, all copies of such contracts are then immediately returned to the contractor. Thus, while some responsive documents may have once been in the DOE's possession, any such documents had been returned by the time of the Appellant's request. See Record of Telephone Conversation between Dawn Goldstein, Staff Attorney, Office of Hearings and Appeals, and Marian Schomaker, FOIA Officer, DOE/OFO (July 8, 1997).

(3)3/ The Appellant notes that 10 C.F.R. § 1004.3(e)(3) does not affect "DOE's rights under contract to obtain any contractor records and to determine their disposition including public dissemination. " See Appeal Letter at 4 (emphasis added by OHA). However, while DOE may inspect and copy the contractor-owned documents at issue here, it has no such contractual right to dispose of the documents or to publicly disseminate them.

The Appellant also refers to the statement in 10 C.F.R. § 1004.3(e)(3) that the policies stated in this paragraph "will be applied by DOE to maximize public disclosure of records that pertain to concerns about the environment. . . ." See Appeal Letter at 4. However, that statement does not confer either ownership or a right of disposition of contractor documents upon DOE. The statement is instead referring to an important DOE policy concern to be considered in the case of DOE-owned records.