Case No. VFA-0627, 28 DOE ¶ 80,133

December 11, 2000

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

APPEAL

Name of Petitioner:Martin Becker

Date of Filing:November 13, 2000

Case Number: VFA-0627

Martin Becker (Appellant) appeals from a determination of Department of Energy (DOE) Savannah River Operations Office (SROO) issued in response to his request for documents, which he filed pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, and the DOE implementing regulations, 10 C.F.R. Part 1004. In its determination, the DOE/SRO stated that the DOE neither owned nor possessed the documents responsive to Appellant’s FOIA request, and, therefore, could not release them. For the reasons set forth below, this appeal is granted and remanded to the SROO for a new determination in accordance with this decision.

I. Procedural History

On September 22, 2000, Appellant filed a FOIA request with the SROO, seeking a copy of any lease entered into by Westinghouse Savannah River Company (WSRC) at Centennial Corporate Center in Aiken, South Carolina, since January 1, 1996 (the lease). WSRC is the management and operating (M&O) contractor at the DOE Savannah River Site and enters into various subcontracts, such as the lease, with third parties for the purpose of fulfilling its M&O contract with the DOE.

The SROO responded with a determination letter dated October 26, 2000. The determination letter stated:

The documents responsive to your request are neither owned nor possessed by [the DOE]. Specifically, DOE’s [M&O contract with WSRC] provides:

The following records are considered property of the Contractor and are not Government documents: non-accounting records relating to any procurement action by the Contractor.

The records you have requested involve a WSRC subcontract and are thus procurement-related records of WSRC. DOE itself performed a search and we have no documents responsive to your request.

On November 13, 2000, Appellant filed this appeal from the SROO’s determination. In his appeal letter, Appellant maintains that the lease is owned by the DOE, because it is “the only document that can actually verify for DOE in accord with [Department of Energy Acquisition Regulations] that the correct amounts are being (or have been) requested from DOE by Westinghouse for lease payments, and [a]s a result, in addition to statutory possession, DOE would have actual possession of the lease after a ?reasonable’ search.”

II. Applicable Legal Principles

Unless requested material falls within one of nine statutory exemptions, the FOIA generally requires a federal agency to release its records to the public upon request. 5 U.S.C. § 552(a); 10 C.F.R. § 1004.3. See also NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978).(1) The threshold inquiry in this case is whether the documents requested are “agency records” subject to the FOIA. As enumerated by the U.S. Supreme Court in United States Dep’t of Justice v. Tax Analysts, 492 U.S. 136, 144 (1989) (Tax Analysts), two requirements must be satisfied in order for materials to qualify as “agency records” (collectively, “the Tax Analysts test”). First, an agency must either create or obtain the materials. To that end, FOIA obligates an agency to provide access to only those documents which it in fact has created and obtained, not documents the agency merely could have created or obtained. Kissinger v. Reporters Com. for Freedom of the Press, 445 U.S. 136, 151-52 (1980) (Kissinger). The FOIA does not obligate an agency to create, retain, or compile documents as a matter of course, or procure records specifically in response to a FOIA request. Id. Second, the agency must be in control of the requested materials at the time the FOIA request is made. “By control we mean that the materials must have come into the agency’s possession in the legitimate conduct of its official duties.” Tax Analysts, 492 U.S. at 145.

Even if requested documents are not “agency records” under the Tax Analysts test, however, they nevertheless may be subject to disclosure under DOE regulations. 10 C.F.R. § 1004.3(e)(1) provides that “[w]hen a contract with the DOE provides that any records acquired or generated by the contractor in its performance of the contract shall be the property of the Government, the 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).”

As will be discussed below, although the lease is not an “agency record” under the Tax Analysts test, the SROO has failed to provide an adequate explanation as to why the lease is not subject to disclosure under 10 C.F.R. § 1004.3(e)(1).

II. Analysis

A. The Lease is not an Agency Record Under the Tax Analysts Test

1. The Lease was not Created by a Government Agency

It is well settled that a private entity may be considered a government agency only where its structure and daily operations are subject to substantial federal control. See United States v. Orleans, 425 U.S. 807, 815 (1976). Although the DOE exercises general control over contractual work, it does not supervise the day-to-day operations of WSRC. Thus, the fact that WSRC participated in the creation of the lease does not render the document one created by a government agency.

2. The Lease was not in the SROO’s Possession at the Time of

Appellant’s FOIA Request

As indicated above, the FOIA obligates an agency to disclose only those documents which it in fact has created or obtained, not documents it merely could create or obtain. See Kissinger, 445 U.S. at 152. The relevant date for determining whether an agency has obtained documents is the date of the corresponding FOIA request. Id. The FOIA imposes no duty upon an agency to retain documents that have come into its possession or retrieve documents the agency once possessed. Id.

In this case, the SROO stated in its October 26, 2000 determination letter that it found no documents responsive to Appellant’s September 22, 2000 FOIA request. In addition, in late November 2000, this office contacted officials from the Site Services Division (SSD) and Contracts Management Division (CMD), who confirmed that their searches of their respective offices failed to uncover the lease. Telephone Conversations with Ron Jernigen, Tom Reynolds and Larry Snyder, Nov. 22, 2000; Telephone Conversation with Tom Reynolds, Nov. 27, 2000.

Appellant contends that because the lease is the “only” document that the SROO can use to verify reimbursement of allowable expenses in accordance with Department of Energy Acquisition Regulations [DEAR](2), the SROO should have obtained and filed a copy of the lease. Telephone Conversation with Martin Becker, Nov. 15, 2000. Furthermore, Appellant maintains, even if the SROO does not physically possess a copy of the lease, it has “statutory possession” and could have “actual possession of the lease after a ?reasonable’ search.(3) Appeal Letter dated Nov. 13, 2000.

According to the Deputy Director of the CMD, however, the SROO verifies allowable expenses through use of a computerized database known as the Procurement Control System (PCS). Telephone Conversation with Tom Reynolds, Nov. 22 and 27, 2000. WSRC’s Purchasing Department enters information from the lease into the PCS, which it then transfers to WSRC’s Accounting Department. Id. The Purchasing Department, not the Accounting Department, maintains a copy of the lease. Telephone Conversation with Tom Reynolds, Nov. 27, 2000. The Accounting Department uses the PCS data to seek payment from the SROO. Id. See also Telephone Conversation with Tim Fischer of the SROO Office of Chief Counsel, Nov. 28, 2000.

The SSD and CMD officials concede that they had obtained a copy of the lease for approval purposes in 1996, when the lease was in development, but maintain that they did not have a copy within their possession and control at the time of Appellant’s FOIA request. Telephone Conversations with Ron Jernigen, Tom Reynolds and Larry Snyder, Nov. 22, 2000; Telephone Conversation with Tom Reynolds, Nov. 27, 2000. The Deputy Director of the CMD further indicated that the approval copy of the lease initially may have been retained in CMD files, but because the files are purged every two years as a matter of course, the copy probably was discarded in 1998. Telephone Conversations with Tom Reynolds, Nov. 22 and 27, 2000.

Based on the foregoing, we find that the SROO did not have a copy of the lease on the date relevant to the Tax Analysts test, i.e., at the time of Appellant’s FOIA request. The SROO has found it acceptable to rely upon the PCS, not solely the lease, in verifying allowable expenses. Regardless of whether the SROO has actual ownership of the lease under the DEAR, it has chosen not to exercise its authority to obtain a copy of the lease, and the FOIA does not require an agency to retrieve a responsive document merely because it can. See Kissinger, supra.

Because WSRC is not an “agency” for purposes of the FOIA, and the SROO has not obtained the responsive documents, we conclude that the lease is not an agency record under the Tax Analysts test.

B. The Lease May be Subject to Disclosure Under DOE Regulations

Although the lease is not an “agency record” under the Tax Analysts test, it may be subject to disclosure under DOE regulations. 10 C.F.R. § 1004.3(e)(1) states, “[w]hen a contract with the DOE provides that any records acquired or generated by the contractor in its performance of the contract shall be the property of the Government, the 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).”

Section H.27(a) of the M&O contract states, “[except for records defined as contractor-owned,] all records acquired or generated by the Contractor in its performance of this contract shall be the property of the Government.” As the SROO’s determination letter indicates, Section H.27(b)(3) defines contractor-owned records as including, inter alia, “non-accounting records relating to any procurement action by the contractor.”

As an initial matter, we find, and the SROO has not disputed, that the lease is a record acquired or generated by WSRC in its performance of the M&O contract. WSRC generated and entered into the lease for the purpose of fulfilling its obligations under the M&O contract. On that basis alone, the lease could be subject to disclosure under 10 C.F.R. § 1004.3(e)(1).

The SROO contends, however, that the lease falls squarely within Section H.27(b)(3) as a “contractor-owned,” “non-accounting record,” and, as such, is specifically excepted from Section H.27(a). Therefore, according to the SROO, the lease is outside the purview of 10 C.F.R. § 1004.3(e)(1) and not subject to its disclosure provisions. Determination Letter, Oct. 26, 2000.

In support of the SROO’s position, its Office of Chief Counsel (OCC) notes that it is WSRC’s Purchasing Department that keeps the lease on file, while the Accounting Department utilizes PCS data. Telephone Conversations with Tim Fischer, Nov. 15 and 28, 2000. The OCC contends that because the Accounting Department processes allowable expenses, the lease would be subject to disclosure only if the Accounting Department maintained a copy of it. Id. If anything, argues OCC, it is the PCS data used by the Accounting Department, not the lease, which constitute an accounting record. Id.

We are not persuaded by SROO’s argument. Although it may be true that, under the M&O contract, “non-accounting,” “contractor-owned” records are not subject to disclosure, the SROO has failed to provide an adequate explanation in support of its position that the lease fits within that category. The distinction OCC attempts to make between WSRC’s Accounting and Purchasing Departments is entirely its own creation and irrelevant for purposes of 10 C.F.R. § 1004.3(e)(1). Regardless of where the lease is kept within WSRC’s organization, the lease provides direct support for the accounting information in the PCS that WSRC uses to seek payment of allowable expenses from the SROO.

Indeed, contrary to the SROO’s assertion in its determination letter, the fact that the SROO does not have the lease in its physical possession is also irrelevant for purposes of the DOE regulations. 10 C.F.R. § 1004.3(e)(1), unlike the Tax Analysts test, does not require that a record be created or obtained by an agency in order for it to be subject to disclosure. Under the plain language of that regulation, records “in possession of the Government or contractor” and designated as property of the government shall be made available to the public, unless a FOIA exemption applies. The DOE regulations do not distinguish contractor-owned records from government-owned records-- and the M&O contract does not distinguish accounting records from non-accounting records-- depending upon where the records are kept.

Finally, we note that an argument can be made that the lease in fact is an accounting record. Section I.79(d) of the M&O contract provides that “all financial and cost reports, books of account and supporting documents . . . and other data evidencing costs allowable, [and] collections accruing to the Contractor in connection with the work under this contract . . . shall be the property of the Government . . . .” (emphasis added). WSRC’s Purchasing Department enters information into the PCS directly from the lease. It is reasonable to conclude, and the OCC concedes, that the lease is a “supporting document” to WSRC’s books of account and evidences costs allowable, i.e., lease payments. Telephone Conversation with Tim Fischer, Nov. 28, 2000.(4) It seems to stretch reasonable interpretation of the M&O contract too far to find that the lease supports WSRC’s books of account under Section I.79(d) but is a “non-accounting”record under Section H.27(b)(3).

IV. Conclusion

Based on the foregoing, we find that the lease is a record acquired or generated by WSRC in its performance of the M&O contract, and as such, may be subject to disclosure under 10 C.F.R. § 1004.3(e)(1). Furthermore, the SROO has failed to set forth an adequate explanation as to why the lease is excepted from 10 C.F.R. § 1004.3(e)(1) as a “contractor-owned,” “non-accounting” record. Therefore, this matter will be remanded to the SROO to issue a new determination. In its determination, the SROO must release any responsive documents, provide an adequate explanation as to why the documents are contractor-owned, or provide another adequate explanation for withholding them.

It Is Therefore Ordered That:

(1) The Freedom of Information Act appeal filed by Martin Becker on November 13, 2000, Case No. VFA-0627 is hereby granted as specified in Paragraph (2) below.

(2) This matter is hereby remanded to the Savannah River Operations Office to issue a new determination in accordance with the instructions set forth in this 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 the provisions of 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought

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 Appeal

Date: December 11, 2000

(1)“Records” includes “all books, papers, maps, photographs, machine readable materials, or other documentary materials, regardless of physical form or characteristics made or received by an agency of the United States Government under Federal law or in connection with the transaction of public business.” Forsham v. Harris, 445 U.S. 169, 183 (1980). It is undisputed that the lease at issue in this case constitutes a “record” for purposes of the FOIA.

(2)Department of Energy Acquisition Regulations, 48 C.F.R. § 970.52 et seq., set forth uniform acquisition policies and model language to be incorporated in DOE management and operating contracts. Under the M&O contract, which incorporates DEAR language, WSRC may seek reimbursement of expenses incurred under subcontracts, such as the lease, entered into for the purpose of fulfilling M&O obligations.

(3)”We assume that by stating that the DOE has “statutory possession” of the lease, Appellant means to assert that the lease is property of the DOE under its M&O contract with WSRC, which incorporates DEAR language.

(4)OCC further argues, however, that Section I.79(d) should be construed as designating only primary supporting documents as property of the government. Otherwise, OCC contends, almost every record related to a subcontract “except negotiation notes” would be subject to disclosure. Telephone Conversation with Tim Fischer, Nov. 28, 2000. This is a burden- related argument and does not control here. We also note that this argument rests upon OCC’s unsupported position that the lease does not provide direct support for WSRC’s allowable expenses.