Case No. VFA-0509, 27 DOE ¶ 80,224

August 27, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Coalition for Fair Contracting, Inc.

Date of Filing: July 22, 1999

Case Number: VFA-0509

On July 22, 1999, the Coalition for Fair Contracting, Inc. (Coalition) filed an Appeal from a determination issued to it on June 7, 1999, by the Nevada Operations Office (NV) of the Department of Energy (DOE). The determination concerned a request for information that the Coalition submitted pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the Department of Energy (DOE) in 10 C.F.R. Part 1004. The Appeal, if granted, would require NV to release the requested information.

I. Background

On April 27, 1999, the Coalition filed a FOIA request with NV, seeking documentation pertaining to Solicitation WAMO-BN-97, Aerial Measurement Operations at Andrews Air Force Base, Maryland. Specifically, the Coalition sought: (1) a list of all the subcontractors and independent contractors to include, if available, company addresses and the general type of work to be performed on this project, (2) the “number” of labor standard interviews conducted on this project by anyone to date, (3) copies of the certified payroll records conducted on this project by anyone to date, and (4) the dollar amount of the total project. See April 27, 1999 Request. In a determination letter, NV responded that DOE did not possess or own the requested documents. See NV Determination Letter at 1. Rather, the records requested related to a procurement action by Bechtel Nevada (BN), the management and operating (M&O) contractor for NV. Id. According to NV, pursuant to the M&O contract with the DOE, all records related to any procurement action by BN are considered the property of BN. Id. The Coalition appealed this determination, asserting that the requested records should be considered agency records. Id.

II. Analysis

Our threshold inquiry in this case is whether the material requested can be considered “agency records” and thus subject to the FOIA, under the criteria set out by the federal courts. Cf. 5 U.S.C. § 552 (f) (describing the scope of the term “agency” under the FOIA). Records that do not meet these criteria can 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 that they are also 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 agencies must make available to the public. See 5 U.S.C. § 552(a). In interpreting this phrase we have applied a two-step analysis fashioned by the courts for determining whether documents created by non-federal organizations, such as BN, are subject to the FOIA. See, e.g., International Brotherhood of Electrical Workers, 27 DOE ¶ 80, 152 (1998); 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.

A. BN Is Not An Agency Under the FOIA

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 we should regard an entity as an agency for purposes of federal law. In United States v. Orleans, 425 U.S. 807 (1976), a case that 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 DOE, BN is the contractor responsible for maintaining and operating NV. While DOE obtained BN’s services and exercises control over the contract work, it does not supervise the day-to-day operations of BN. See Memorandum from Michael Brown, NV, to Kimberly Jenkins-Chapman, OHA Staff Attorney (August 6, 1999). We therefore conclude that BN cannot be considered an “agency” subject to the FOIA.

B. The Records Were Not Within DOE’s Control at The Time Of Request

Although BN is not an agency for the purposes of the FOIA, its records which are relevant to the Coalition’s request could become “agency records” if DOE obtained them and they were within DOE’s control at the time the Coalition made its FOIA request. Department of Justice v. Tax Analysts, 492 U.S. 136, 144-46 (1989); see Kissinger v. Reporters Committee for Freedom of the Press, 445 U.S. 136 (1980); Forsham, 445 U.S. at 182. In this case, NV has informed us that the information that the Coalition seeks, with the exception described below, was not in the agency’s control at the time of the Coalition’s request. See Record of Telephone Conversation Between Michael Brown, NV, and Kimberly Jenkins-Chapman, Staff Attorney, OHA (August 17, 1999). Based on the facts, the responsive documents, other than the certified payroll records, clearly 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.

C. The Contract Provides That Procurement-Related Records Are Contractor Property

Even if the contractor-acquired or contractor-generated records fail to qualify as “agency records,” they may still be subject to release if the contract between DOE and the contractor provides that they are 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 next look to the contract between DOE and BN to determine the status of the requested records. The contract provides that all records “acquired or generated” by the contractor in its performance of the contract shall be the property of DOE “[e]xcept as provided in paragraph b . . .” Contract DE- AC08-96NV11718 (September 23, 1995), Section H.32, Paragraph (a). Paragraph (b) of the DOE- BN contract states that all records related to any procurement action by BN are considered the property of the Contractor. Because the documents at issue are related to a procurement action by BN, we find that the requested records are not agency records and thus not subject to release under DOE regulations.

D. Certified Payroll Records Are Agency Records

We note however that the Coalition requested copies of certified payroll records. It appears that these records are agency records because they were in the possession of NV at the time of the request. BN is required to submit these records to the agency for the purpose of complying with the Davis-Bacon Act. See Memorandum from Michael Brown, NV, to Kimberly Jenkins-Chapman, OHA Staff Attorney (August 18, 1999). In addition, these records were in NV’s control at the time the Coalition made its FOIA request. Therefore, we shall remand this matter to NV to either release to the Coalition the requested certified payroll records or to issue a new determination adequately supporting the withholding of these documents. If a new determination is issued, NV should include a statement of the reason for denial, a specific explanation of how an exemption applies to the documents withheld and a statement why discretionary release is not appropriate. See 10 C.F.R. § 1004.7(b)(1). NV should further review each document for the possible segregation of non-exempt material. See 10 C.F.R. § 1004.7(b)(3).

It Is Therefore Ordered That:

(1) The Appeal filed by the Coalition of Fair Contracting, Inc, OHA Case No. VFA-0509, on July 22, 1999, is hereby granted in part as set forth in Paragraph (2) and denied in all other respects.

(2) This matter is hereby remanded to the Nevada Operations Office of the Department of Energy which shall either release the certified payroll records withheld in its June 2, 1999 Determination or issue a new determination in accordance with the instructions set forth above.

(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: August 27, 1999