Case No. VFA-0360, 27 DOE ¶ 80,105

January 23, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:Ruth Towle Murphy

Date of Filing: December 22, 1997

Case Number: VFA-0360

On December 22, 1997, Ruth Towle Murphy completed the filing of an Appeal from a determination the Manager of the Oak Ridge Operations Office (Manager) of the Department of Energy (DOE) issued to her on November 14, 1997. In that determination, the Manager partially granted a request for information that Ms. Murphy filed 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 FOIA requires that a federal agency generally release documents to the public upon request. The FOIA, however, lists nine exemptions that set forth the types of information that a federal agency may withhold at its discretion. 5 U.S.C. § 552(b); 10 C.F.R. § 1004.10(b).

In her request for information, Ms. Murphy sought a copy of the contract designated DE-AC05-95MA40110 and any modifications to that contract. In his determination, the Manager released a copy of the requested contract, but deleted “estimated costs, fixed fees, and names of key personnel in accordance with 5 U.S.C. § 552(b)(4).” Ms. Murphy contends that “only information obtained from an individual, a partnership, or a corporation, other than a government agency, qualifies under the fourth exemption” of the FOIA (emphasis in original). She argues that since both the DOE and the submitter signed the contract she seeks, in essence, the DOE obtained the contract from itself. Since Exemption 4 does not apply to documents obtained from a government agency, Ms. Murphy contends that the Manager improperly applied Exemption 4.

Analysis

Exemption 4 exempts from mandatory 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 qualify under Exemption 4, a document must contain either (1) trade secrets or (2) information that is "commercial" or "financial," "obtained from a person," and "privileged or confidential." National Parks & Conservation Ass'n. v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). In National Parks, the United States Court of Appeals for the District of Columbia Circuit found that commercial or financial information submitted to the federal government involuntarily is "confidential" for purposes of Exemption 4 if disclosure of the information is likely either (1) to impair the government's ability to obtain necessary information in the future or (2) to cause substantial harm to the competitive position of the person from whom the government obtained the information. Id. at 770; Critical Mass Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S.Ct. 1579 (1993) (Critical Mass). By contrast, information a submitter provides to an agency voluntarily is "confidential" if "it is of a kind that the provider would not customarily make available to the public." Critical Mass, 975 F.2d at 879. In choosing between these two tests, we have consistently held that a submitter involuntarily submits information in response to a request for proposals. Thus, the information is "confidential" if it meets the test set out in National Parks. See Glen M. Jameson, 25 DOE ¶ 80,191 (1996) (Jameson); Hanford Education Action League, 23 DOE ¶ 80,143 (1993).

Ms. Murphy is incorrect when she argues that the DOE obtained the withheld information from itself. Simply because the DOE signed the contract is no indication that the DOE had anything to do with the creation of the information. In fact, the submitter, NCI Information Systems, Inc., created and provided the redacted information to the DOE voluntarily for the purpose of acquiring a contract. See Industrial Constructors Corporation, 25 DOE ¶ 80,196 (1996) (Industrial); Tri-City Herald, 16 DOE ¶ 80,114 (1987).

We have carefully reviewed the redacted information and have confirmed that the DOE withheld only estimated costs, fixed fees, and the names of key personnel to implement the contract. We find that all of the redacted information is commercial information within the meaning of Exemption 4. The DOE obtained this material from a "person" as required by Exemption 4, since the FOIA considers corporate entities as persons for the purposes of that exemption. See John T. O'Rourke & Associates, 12 DOE ¶ 80,149 (1985). We also conclude that each withheld item, the estimated costs, fixed fees, and the names of key personnel, is confidential because the release of any item would substantially harm the submitter's competitive position. We have stated in the past that release of cost and financial information could be used by a competitor to undercut another firm's bids and thus effectively eliminate the disclosing firm from competition. See Industrial; International Technology Corporation, 22 DOE ¶ 80,107 (1992); U.S. Rentals, 21 DOE ¶ 80,118 (1991). In this case, for example, if the submitter released its estimated costs and fees for completing specific tasks, any competitor could easily determine how to adjust its own costs and fees to arrive at a lower contract price and plan to undercut the submitter's best price and procedures in a future bid process. Furthermore, if the DOE were to release the names of key personnel involved in the contract, a competitor could offer employment to these people in an effort to make his firm more competitive in a future bid process at the expense of the submitter. See Jameson. Accordingly, we must deny Ms. Murphy’s Appeal.

The Public Interest in Disclosure

The DOE regulations provide the DOE should release to the public material exempt from mandatory disclosure under the FOIA if the DOE determines that federal law permits disclosure and it is in the public interest. 10 C.F.R. § 1004.1. In cases involving material determined to be exempt from mandatory disclosure under Exemption 4, we do not make the usual inquiry into whether release of the material would be in the public interest. Disclosure of confidential information that an agency can withhold pursuant to Exemption 4 would constitute a violation of the Trade Secrets Act, 18 U.S.C. § 1905, and is therefore prohibited. See, e.g., Chicago Power Group, 23 DOE ¶ 80,125 at 80,560 (1993). Accordingly, we may not consider whether the public interest warrants discretionary release of the information properly withheld under Exemption 4.

It Is Therefore Ordered That:

(1) The Appeal filed by Ruth Towle Murphy on December 22, 1997, Case No. VFA-0360, is hereby denied.

(2) This is a final Order of the Department of Energy of 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 either in the district where 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: January 23, 1998