Case No. VFA-0615, 28 DOE ¶ 89,129

December 1, 2000

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Appellant: Center for Public Integrity

Date of Filing: September 21, 2000

Case Number: VFA-0615

On September 21, 2000, the Center for Public Integrity (Appellant) filed an Appeal from a final determination issued on August 4, 2000 by the Department of Energy’s Office of Fossil Energy (FE). In that determination, FE continued to withhold several documents in response to a Request for Information filed by the Appellant on January 5, 2000, 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 FE to release the withheld information.

I. BACKGROUND

This Appeal arises in connection with the sale of NPR-1, commonly known as the Elk Hills Naval Petroleum Reserve, conducted by FE. On January 5, 2000, the Appellant filed a request for information with FE, seeking in pertinent part: “The names of all entities that placed bids on NPR-1, any portion thereof, and the amounts of all bids.”

On April 10, 2000, FE issued a determination letter indicating that it was withholding the names of the unsuccessful bidders and the amounts of their bids under Exemption 4 of the FOIA. April 10, 2000 Determination Letter at 1. FE contended that release of the bid amounts and identities of the unsuccessful bidders would cause substantial competitive harm to the firms that submitted the unsuccessful bids and would impair the government’s ability to obtain similar information in the future. On April 17, 2000, the Appellant filed an appeal with this office, pursuant to 10 C.F.R. § 1004.8, challenging FE's withholdings under Exemption 4. On May 19, 2000, we issued a decision and order on the Appeal in which we found that FE had failed to adequately justify its withholdings under Exemption 4. Center for Public Integrity, 27 DOE ¶ 80,277 (2000) (CPI). Accordingly, in CPI, we granted the Appeal and remanded the determination to FE with instructions requiring that office to either release the information it had withheld under Exemption 4 or issue a new determination letter containing an adequate justification of its withholdings. Id. On August 4, 2000, FE issued a new determination letter, which continued to withhold the bid amounts and identities of the unsuccessful bidders under Exemption 4. The August 4 determination also withheld the same

information under Exemption 3. The present Appeal, which contends that FE continues to improperly withhold the bid amounts and identities of the unsuccessful bidders under Exemptions 3 and 4, was filed on September 21, 2000.

II. ANALYSIS

The FOIA generally requires that records held by federal agencies be released to the public upon request. 5 U.S.C. § 552(a)(3). However, the FOIA lists nine exemptions that set forth the types of information that an agency may withhold. 5 U.S.C. § 552(b)(1)-(b)(9); 10 C.F.R. § 1004.10(b)(1)- (b)(9). These nine exemptions must be narrowly – that is, precisely – construed. Bristol-Meyers Co. v. FTC, 424 F.2d 935 (D.C. Cir.), cert. denied, 400 U.S. 824 (1970) (citing provision now codified at 5 U.S.C. § 552(d)). “An agency seeking to withhold information under an exemption to FOIA has the burden of proving that the information falls under the claimed exemption.” Lewis v. IRS, 823 F.2d 375, 378 (9th Cir. 1987). It is well settled that the agency’s burden of justification is substantial. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 861 (D.C. Cir. 1980). The only exemptions that FE claims in the present case are found at 5 U.S.C. § 552(b)(3) (Exemption 3) and 5 U.S.C. § 552(b)(4) (Exemption 4).

Exemption 3 allows the withholding of information under other statutes, but only if they meet specific criteria. See, e.g., Essential Information, Inc. v. USIA, 134 F.3d 1165, 1168 (D.C. Cir. 1998). Specifically, Exemption 3 allows the withholding of information prohibited from disclosure by another statute only if the statute either “(A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld.” 5 U.S.C. § 552(b)(3) (1994 & Supp. II 1996). The D.C. Circuit has expressly held that “a statute that is claimed to qualify as an Exemption 3 withholding statute must, on its face, exempt matters from disclosure.” Reporters Comm. for Freedom of the Press v. Department of Justice, 816 F.2d 730, 735 (D.C. Cir.), modified on other grounds, 831 F.2d 1124 (D.C. Cir. 1987), rev’d on other grounds, 489 U.S. 749 (1989). An agency must also establish that the records in question fall within the withholding provision of the non-disclosure statute. See A. Michael’s Piano v. FTC, 18 F.3d 138, 143 (2d Cir. 1994); Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1284 (D.C. Cir. 1983); Fund for Constitutional Government v. National Archives & Records Service, 656 F.2d 856, 868 (D.C. Cir. 1981); Goland v. CIA, 607 F.2d 339, 350 (D.C. Cir. 1978).

In its August 4, 2000 determination letter, FE claims that section 303B(m) of the Federal Property and Administrative Services Act of 1949 (FPASA), as amended, that was added by section 821 of the National Defense Authorization Act for Fiscal Year 1997, specifically prohibits the release of the requested information under the FOIA. (1)

That section provides:

(b) CIVILIAN AGENCY ACQUISITIONS.--Section 303B of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253b) is amended by adding at the end the following new subsection:

"(m) PROHIBITION ON RELEASE OF CONTRACTOR PROPOSALS.--(1) Except as provided in paragraph (2), a proposal in the possession or control of an executive agency may not be made available to any person under section 552 of title 5, United States Code.

"(2) Paragraph (1) does not apply to any proposal that is set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal.

"(3) In this subsection, the term 'proposal' means any proposal, including a technical, management, or cost proposal, submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.".

Pub. L. 104-201, § 821. (2)

FE’s claim has considerable force. It is clear that this statute is a withholding statute under 5 U.S.C. § 552(b)(3)(A). It does more than set criteria permitting withholding. Instead it forbids agencies to disclose the materials it covers. Moreover the prohibition is structured broadly to impose its threshold prohibition on “any” described proposal, and then specifies a narrowly-described exemption from the statutory prohibition. Finally there is no doubt from the statute’s text that, in adopting it, Congress intended to affect disposition of FOIA requests because the operative prohibition is directed explicitly to “ma[king] available [the described information] to any person under section 552 of title 5, United States Code.”

FE has argued convincingly that section 821 applies to the bids at issue in the present case. FE concluded that all the elements prescribed in this statute are met in the case of the NPR-1 bids. August 4, 2000 Determination Letter at 9. According to FE, the NPR-1 bids are “proposals” as that term is defined in the Act since each bid, in this context, was a “proposal” to enter into a contractual relationship with the government for the sale of a specific property. Id. Further, the bids were submitted “in response to the requirements of a solicitation for a competitive proposal,” and those bids “were in the possession or control of the Department as the statute requires.” Id. Finally, the unsuccessful bids for NPR-1 were not set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal. Id. at 10. The bidder’s name as well as the bid amount formed part of each proposal as that term is used in the statute. Id. Therefore, FE maintains, the statute prohibits the public release of the unsuccessful bidders’ names and bid amounts because this information was contained in each offeror’s “proposal” submitted “in response to” a competitive “solicitation.” Id.

The Appellant challenges FE’s reliance on section 821 to withhold the NPR-1 bids under Exemption 3 on the ground that “the scope of that provision does not extend to sales of government property.” September 21, 2000 Appeal at 3. The Appellant asserts that the statute must be read in the context of the statutory scheme of which it is a part, and notes that the first section of the FPASA subchapter containing this provision reads: “The purpose of this subchapter is to facilitate the procurement of property and services.” Id. Further, the Appellant argues that sales of government property are governed generally by a separate section of the FPASA, codified at 40 U.S.C. § 484 (disposal of surplus property). Based on its assertion that the meaning of the statute, and therefore, its applicability to the NPR-1 bids, is controlled by the placement of section 821 in the FPASA rather than by the actual text of the provision, the Appellant maintains that section 821 “falls well short of the Exemption 3 standard that withheld information be ?specifically exempted from disclosure by statute. . . .’” 5 U.S.C. § 552(b)(3) (emphasis added).

FE’s August 4 determination carefully considered whether the application of section 821 to the NPR- 1 bids was precluded because they were generated by a sale of government property rather than a government procurement of goods or services. In support of its interpretation of the statute, FE cites several factors that “counsel against a construction . . . that would limit its application to the acquisition of goods and services by the Government.” August 4, 2000 Determination Letter at 10. To begin with, there is the text of the provision itself. FE points out that “[n]owhere does [the text] describe its application as being directed to ?procurements’ or ?acquisitions.’” Id. FE notes that the provision employs terms that define its reach, e.g., “proposal,” “contract,” “solicitation,” and “competitive proposal,” and acknowledges that this statutory usage suggests “prominent elements of the typical process by which the Government seeks goods or services from the commercial sector.” Id. But nowhere does this text confine itself to procurement proposals. In fact, the text states, “the term 'proposal' means any proposal . . . submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.” FPASA § 303B(m)(3), as added by section 821 (emphasis added). According to FE, the fact that no such linkage to the procurement process was specified in the broad definition of “any proposal” used in the Act means that Congress did not intend to limit its applicability to acquisitions. August 4, 2000 Determination Letter at 11. In support of this view, FE points out that elsewhere in the FPASA, where Congress sought to confine the term “proposal” to acquisitions, it did so explicitly, e.g., in 41 U.S.C. § 253(j)(1)(A), (j)(2)(A), and (j)(2)(B)(ii). Therefore, according to FE, Congress’s use of the broad “any proposal” language of section 821 indicates that Congress legislated more broadly than just to govern acquisitions.

As FE correctly notes, the placement of this provision in the FPASA, which deals prominently with procurements, does not defeat its construction of the statute, since the FPASA also deals with government property sales. August 4, 2000 Determination Letter at 11. The particular legislative history which we have reviewed also contains no suggestion that section 821 was intended to be confined to contractor proposals made in acquisitions. In fact, as FE points out, the relevant portion of the House report states that the legislation’s objective was to relieve the “significant administrative burden on federal agencies receiving [FOIA] requests for release of contractor proposals . . .” to “allow federal agencies to dispense with the lengthy line-by-line reviews which are presently required. . . .” H.R. Rep. No. 104-563 at 327 (1996). Withholding the information sought here would be in harmony with that purpose.

The critical difference between the positions urged by FE and the Appellant in this case is their construction of section 821. FE focused on the text, which uses the broad language discussed above, including the term “any proposal.” The Appellant does not contest FE’s reading of the text, for it is clear that the plain meaning of the text would justify withholding the unsuccessful NPR-1 bids under Exemption 3. As noted above, the Appellant bases its narrow interpretation of the statute not on its text but on a comparison of the titles of the various sections of the FPASA, and the placement of the provision in a section dealing with procurement. These factors, rather than the language of the actual text of section 821, guide Appellant’s position .

The Appellant’s reliance on the title of the subchapter where the provision appears, rather than the plain meaning of the text, cannot be sustained. “[T]he title of a statute . . . cannot limit the plain meaning of the text. For interpretive purposes, [it is] of use only when [it] shed[s] light on some ambiguous word or phrase.” Pennsylvania Department of Corrections v. Yesky, 524 U.S. 206, 212 (1998), quoting Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 528-529 (1947). “[Headings and titles] are but tools available for the resolution of a doubt. But they cannot undo or limit that which the text makes plain.” Trainmen at 529; accord, United States v. Minker, 350 U.S. 179, 185 (1956). Nor does an inference, drawn from section 821's placement in the FPASA, that Congress had in mind only acquisition transactions create an ambiguity that would warrant resort to the statute’s headings and titles to narrow its plain text. Even if that inference were correct, “that Congress did not envision” application of section 821 to sales transactions “is irrelevant” “in the context of an unambiguous statutory text. . . . [T]he fact that a statute can be applied in situations not expressly anticipated by Congress does not demonstrate ambiguity. It demonstrates breadth.” Pennsylvania Department of Corrections, 524 U.S. at 212, quoting Sedima, S.P.R. L. v. Imrex Co., 473 U.S. 479, 499 (1985) (internal quotations omitted).

In the present case there is no ambiguity, and we find that since Congress did not limit the applicability of the term “any proposal” in this provision to acquisitions, the language of section 821 clearly covers the competitive proposals containing the unsuccessful bids to purchase NPR-1 that DOE solicited pursuant to the National Defense Authorization Act for Fiscal Year 1996. Congress has spoken plainly to forbid their release. Therefore, we find that the records at issue were properly withheld under Exemption 3. Because our finding that the unsuccessful bids for NPR-1 may be withheld under Exemption 3 controls the disposition of the present Appeal, we will not also analyze the issues and arguments raised by the Appellant concerning Exemption 4.

III. CONCLUSION

We have found that FE is required to withhold unsuccessful bidders’ identities and the amounts of their bids under section 821 and therefore may withhold this information under Exemption 3. Since this information should not be released under the FOIA, the present Appeal will be denied.

It Is Therefore Ordered That:

(1) The Appeal filed by the Center for Public Integrity, Case No. VFA-0615, 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: December 1, 2000

(1) Section 303B(m) is codified at 41 U.S.C. § 253b(m). For sake of clarity of provenance it is cited hereinafter as section “821” or the “Act.”

(2)Section 821 also added an identical restriction to 10 U.S.C. § 2305. These new restrictions nonetheless were placed in the Authorization Act’s subtitle dealing with “other matters” rather than its subtitle dealing specifically with “acquisition management.” Compare 110 Stat. 2603 with 110 Stat. 2609 (1996).