Martin Becker, Case No. VFA-0649, March 15, 2001

Case No. VFA-0649, 28 DOE ¶ 80,153

March 15, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Martin Becker

Date of Filing: February 7, 2001

Case Number: VFA-0649

On February 7, 2001, Martin Becker filed an Appeal from a final determination that the Savannah River Operations Office (DOE/SR) of the Department of Energy (DOE) issued on January 12, 2001. In its determination, DOE/SR informed Mr. Becker that it had no documents responsive to the request for information he submitted under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004.

I. Background

On September 22, 2000, Mr. Becker filed a FOIA request with the DOE/SR, seeking a copy of any lease entered into by Westinghouse Savannah River Company (WSRC) (including any subsidiaries or affiliates thereof) at Centennial Corporate Center in Aiken, South Carolina, since January 1, 1996. WSRC is the management and operating (M&O) contractor at the DOE Savannah River Site.

DOE/SR 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, Mr. Becker filed an Appeal from DOE/SR’s determination. We issued a decision on that Appeal on December 11, 2000, in which we found that DOE/SR had failed to set forth an adequate explanation as to why the lease in question was contractor-owned. Thus, we remanded the matter to DOE/SR to issue a new determination and either release any responsive documents, provide the adequate explanation that was lacking from its first determination, or provide another adequate explanation for withholding them.

DOE/SR issued a new determination on December 21, 2000, in which DOE/SR’s Authorizing Official stated,

In my original final determination dated October 26, 2000, I stated that the lease agreement was considered contractor-records. However, an oversight was made and I should have also stated that we have no documents responsive to your request. Therefore, the explanation for not releasing the documents you requested is that they do not exist. WSRC did not enter into any new leases, renewals or extensions at the Centennial Corporate Center since January 1, 1996. . . . As such, we do not have and never did have documents responsive to your request.

Letter from David G. Darugh, DOE/SR, to Martin Becker (December 21, 2000). In a subsequent letter to Mr. Becker, DOE/SR stated, “Any lease currently in place at the Centennial Corporate Center involves private interests not associated with our M&O contract between WSRC and [DOE].” Letter from David G. Darugh, DOE/SR, to Martin Becker (January 12, 2001).

On February 7, 2001, Mr. Becker filed the present appeal, arguing that the “requested lease does not involve ?private interests not associated’ with the M&O contract issued to WSRC.” Appeal at 1. Mr. Becker cites a document submitted with his appeal as evidence that

The tenant of the Centennial Corporate Center in Aiken, South Carolina, is Westinghouse Safety Management Solutions (WSMS).

WSMS is a wholly-owned subsidiary of WSRC.

WSMS is a WSRC subcontractor.

WSMS bills WSRC for reimbursement of costs incurred, including the cost of rental space, through an Inter-Work Requisition (IWR).

Appeal at 2 (footnotes omitted). Based on the above facts, Mr. Becker argues that federal regulations require “WSRC to maintain a copy of the lease between WSMS and Centennial Partners, and these lease documents are property of the Government.” Id.

II. Analysis

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). In our December 11, 2000 decision, we found that because “WSRC is not an ?agency’ for purposes of the FOIA, and [DOE/SR] has not obtained the responsive documents, . . . the lease is not an agency record” subject to the FOIA. However, we also found that the lease may be subject to disclosure under DOE regulations. Specifically, 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).”

A. Whether WSRC Possesses Records Subject to Release Under DOE Regulations

WSRC’s M&O contract with the DOE contains a provision entitled “Access to and Ownership of Records,” a standard clause which DOE regulations require be inserted in all M&O contracts. 48 C.F.R. 970.5204.3. Section I.88 of the contract states, “Except as provided in paragraph (b) of this clause, all records acquired or generated by the contractor in its performance of this contract shall be the property of the Government . . . .” CONTRACT NO. DE-AC09-96SR18500, MODIFICATION NO. M068 at 102. Thus, 10 C.F.R. § 1004.3(e)(1) requires that DOE make available to the public records that are in the possession of WSRC that are “property of the Government” under this clause.

However, as noted above, WSRC has stated that it has no document responsive to Mr. Becker’s request. The company explained that in response to the request, the

Facilities Management Group and the Procurement Group were contacted regarding leasing activities of WSRC for space in the Centennial buildings. Both groups responded there were no new leases, extensions, or renewals after 1/1/96 on space at Centennial Corporate Center. The initial lease was for the period 10/17/91 to 10/17/96, and WSRC did not exercise its 5-year renewal option. The Procurement Department was not involved with any negotiations on behalf of WSMS for its space leased in Centennial.

Electronic Mail from Adrian Smith, WSRC, to Steven Goering, OHA (February 26, 2001). Mr. Becker contends that, because WSRC incurred costs in reimbursing WSMS for a portion of the payments WSMS made pursuant to the lease, WSRC is required by regulation to keep a copy of the lease between WSMS and Centennial Partners. We have reviewed the regulation cited by Mr. Becker,(1) which we discuss in greater detail below, and find that while it does impose certain record- keeping requirements on WSRC, the lease in question is not necessarily among the documents that the regulation requires WSRC to maintain. More importantly, the regulation directly relevant to this case, 10 C.F.R. § 1004.3(e)(1), requires DOE to make available records that are actually “in the possession” of WSRC, not records that the appellant argues ought to be in WSRC’s possession. We find that WSRC has provided us with a reasoned explanation for its conclusion that it does not have a copy of the lease between WSMS and Centennial Partners.

B. Whether WSMS Possesses Records Subject to Release Under DOE Regulations

We also asked WSMS whether any of its contracts with the DOE (or subcontracts thereto) contain the “Access to and Ownership of Records” clause, which DOE regulations also require be inserted in certain subcontracts. 48 C.F.R. § 970.5204-3(g). WSMS’s General Counsel responded, “Time limitations prevent me from providing you with an exact tally of which of our contracts contain [this clause]. A few of our many contracts would meet the threshold for its passdown.” Electronic Mail from Matt Alan, General Counsel, WSMS, to Steven Goering, OHA (February 22, 2001). Thus, to the extent WSMS acquires or generates records in the performance of any of its contracts containing the clause, those records are generally property of the Government, which 10 C.F.R. § 1004.3(e)(1) requires DOE make available to the public, subject to certain exceptions set forth in subsection (b) of the ownership of records clause.

In this case, the relevant exception is contained in subsection (b)(3), which classifies as property of the contractor “[r]ecords relating to any procurement action by the contractor, except for records that under 48 CFR 970.5232-3, Accounts, Records, and Inspection, are described as the property of the government; . . .” 48 C.F.R. 970.5204.3(b)(3). WSMS contends that the lease by which it procured office space “was executed independent of performance under any one or more DOE contracts” and in any event is a record relating to a procurement action by the contractor, and therefore is property of WSMS. Electronic Mail from Matt Alan, General Counsel, WSMS, to Steven Goering, OHA (February 22, 2001).

WSMS is clearly correct that a record acquired or generated independent of performance under a contract containing the ownership of records clause could not have been acquired or generated in the performance of that contract, and therefore could not be property of the Government under that clause. However, the information provided by WSMS does not address whether additional copies of the lease were acquired or generated in WSMS’s performance of a contract containing the relevant clause. WSMS contends that when applying the ownership of records clause to any copy of the lease, only the circumstances of the original acquisition or generation of the document, in this case the execution of the lease, are relevant. Electronic Mail from Matt Alan, General Counsel, WSMS, to Steven Goering, OHA (February 28, 2001). WSMS reasons that to the extent the lease was originally acquired or generated “independent of performance under any one or more DOE contracts,” the lease and all copies thereof fall outside of the scope of the ownership of records clause. Thus, WSMS did not provide any information on what other copies of the lease are in its possession and under what circumstances those copies were generated.

We disagree with WSMS’s interpretation of the ownership of records clause. To illustrate how a copy of the lease in question would in fact become property of the Government, we turn to the example of a copy of the lease generated in compliance with 48 C.F.R. § 970.5232-3, “Accounts, Records, and Inspection,” which we mentioned above and now quote in pertinent part:

970.5232-3 Accounts, records, and inspection.

As prescribed in 48 CFR 970.3270(a)(2), insert the following clause:

Accounts, Records, and Inspection (DEC 2000)

(a) Accounts. The contractor shall maintain a separate and distinct set of accounts, records, documents, and other evidence showing and supporting: all allowable costs incurred; collections accruing to the contractor in connection with the work under this contract, other applicable credits, negotiated fixed amounts, and fee accruals under this contract; and the receipt, use, and disposition of all Government property coming into the possession of the contractor under this contract. The system of accounts employed by the contractor shall be satisfactory to DOE and in accordance with generally accepted accounting principles consistently applied.

. . . .

(d) Disposition of records. Except as agreed upon by the Government and the contractor, all financial and cost reports, books of account and supporting documents, system files, data bases, and other data evidencing costs allowable, collections accruing to the contractor in connection with the work under this contract, other applicable credits, and fee accruals under this contract, shall be the property of the Government, and shall be delivered to the Government or otherwise disposed of by the contractor either as the contracting officer may from time to time direct during the progress of the work or, in any event, as the contracting officer shall direct upon completion or termination of this contract and final audit of accounts hereunder. Except as otherwise provided in this contract, including provisions of Clause__, Access to and ownership of records, all other records in the possession of the contractor relating to this contract shall be preserved by the contractor for a period of three years after final payment under this contract or otherwise disposed of in such manner as may be agreed upon by the Government and the contractor.

. . . .

(g) Subcontracts. The contractor further agrees to require the inclusion of provisions similar to those in paragraphs (a) through (g) and paragraph (h) of this clause in all subcontracts (including fixed-price or unit-price subcontracts or purchase orders) of any tier entered into hereunder where, under the terms of the subcontract, costs incurred are a factor in determining the amount payable to the subcontractor.

48 C.F.R. § 970.5232-3. Any of WSMS’s contracts that contains the above clause requires WSMS to “maintain a separate and distinct set of accounts, records, documents, and other evidence” as described in paragraph (a) of the clause. If, pursuant to paragraph (a), WSMS generated a copy of the lease and maintains that copy as part of a separate and distinct set of records, that copy is a record distinct from the original copy of the lease, and that distinct record clearly was generated by WSMS in its performance of any contract containing the ownership of records clause.

Moreover, as discussed above, the ownership of records clause specifically brings within its scope records relating to any procurement action that are acquired or generated in the performance of a contract containing the clause, if those records are of the type described in 48 C.F.R. § 970.5232- 3(d), i.e., “all financial and cost reports, books of account and supporting documents, system files, data bases, and other data evidencing costs allowable, collections accruing to the contractor in connection with the work under this contract, other applicable credits, and fee accruals under this contract . . . .” Certainly a copy of the lease generated pursuant to paragraph (a) of the “Accounts, Records, and Inspection” clause would fall within the scope of paragraph (d) of the same clause, and as such would be property of the government under the ownership of records clause.

The WSMS General Counsel offers a different interpretation, arguing that

a subcontractor's HQ lease may fall under the ?supporting documents’ language [of paragraph (d) of the “Account, Records, and Inspections” clause]. I say ?may’ because there is nothing requiring DOE or WSRC to request the lease. . . .

Consistent with our earlier discussions, DOE owns such documents solely to the extent the record is in DOE's possession.

Electronic Mail from Matt Alan, General Counsel, WSMS, to Steven Goering, OHA (March 6, 2001).

However, we see nothing in paragraph (d) of the “Account, Records, and Inspections” clause indicating that ownership of a record by the Government is dependent upon the Government having possession of the record. Indeed, the paragraph specifically refers to records that are “in the possession of the contractor . . . .” Similarly, the DOE FOIA regulation that provides access to records that are property of the Government states that it applies to “records that are in the possession of the Government or the contractor. . . .” 10 C.F.R. § 1004.3(e)(1) (emphasis added).

IV. Conclusion

We find, as explained above, that WSRC has provided a reasonable explanation for its conclusion that it does not have a copy of the lease requested by Mr. Becker. WSMS, on the other hand, has at least one copy of the lease, but claims that any and all copies of the lease are property of WSMS. The above analysis shows, by way of the example of a copy created under the “Account, Records, and Inspections” clause, that a copy of the lease certainly can be property of the Government under the ownership of records clause, and therefore subject to the DOE FOIA regulations.

Based on the foregoing, we find that any copy of the lease requested by Mr. Becker that is in the possession of WSMS and that was generated in compliance with 48 C.F.R. § 970.5232-3, “Accounts, Records, and Inspection,” is a record that is property of the Government subject to disclosure under 10 C.F.R. § 1004.3(e)(1). We will therefore remand this matter to DOE/SR, which shall, in compliance with 10 C.F.R. § 1004.3(e)(1), obtain a copy of any such record from WSMS and provide it to Mr. Becker, unless the record or reasonably segregable portions of it are exempt from public disclosure under 5 U.S.C. § 552(b). If WSMS generated no copy of the lease in compliance with 48 C.F.R. § 970.5232-3, DOE/SR shall request that WSMS identify, using our interpretation of the relevant contract clauses as set forth in this opinion, any copy of the lease that was in any other way acquired or generated by WSMS in its performance of a contract containing the relevant ownership of records clause. DOE/SR shall obtain a copy of any such record from WSMS if it finds, in accord with our analysis contained in this opinion, that the record is property of the Government. 10 C.F.R. § 1004.3(e)(1) (“DOE will make available to the public such records that are in the possession of the Government or the contractor”). DOE/SR shall provide a copy of the record to Mr. Becker, unless the record or reasonably segregable portions of it are exempt from public disclosure under 5 U.S.C. § 552(b).

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by Martin Becker on February 7, 2001, Case No. VFA-0649 is hereby granted as specified in Paragraph (2) below, and denied in all other respects.

(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: March 15, 2001

(1)The section cited by Mr. Becker, 48 C.F.R. § 970.5204-9, was removed from the regulations in December 2000, but a substantially similar section was added at 48 C.F.R. § 970.5232-3. 65 Fed. Reg. 80994, 81074 (December 22, 2000).