Case No. VFA-0695

October 24, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: IBEW Local 125

Date of Filing: September 10, 2001

Case Number: VFA-0695

On September 10, 2001, IBEW Local 125 (IBEW) filed an Appeal from a determination issued to it on August 23, 2001, by the Bonneville Power Administration (BPA) of the Department of Energy (DOE). In that determination, BPA denied in part IBEW’s request for information filed pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. This Appeal, if granted, would require BPA to release portions of the requested information which it initially withheld.

The FOIA generally requires that documents held by federal agencies be released to the public upon request. The FOIA, however, lists nine exemptions that set forth the types of information which may be withheld at the discretion of an agency. 5 U.S.C. § 552(b); 10 C.F.R. § 1004.10(b). The DOE regulations further provide that a document exempt from mandatory disclosure under the FOIA shall nonetheless be released to the public whenever the DOE determines that disclosure is in the public interest. 10 C.F.R. § 1004.1.

I. Background

On August 2, 2001, IBEW filed a FOIA request with BPA seeking the following documents relating to the Shelton-Kitsap Project, Contract 5279:

1. Copies of bids received in response to the Shelton-Kitsap Project, including the names of the bidders, and amounts of the bids.
2. Copies of the labor classifications and pay rates of employees that will be working on the project.

On August 23, 2001, BPA issued a determination letter releasing responsive information to the Appellant. BPA, however, withheld the amounts of the bids proposed by the unsuccessful offerors to the Shelton-Kitsap Project under the FOIA Exemption 4. 5 U.S.C. § 552 (b) (4); 10 C.F.R. § 1004.10(b)(4). Exemption 4 protects "trade secrets and commercial or financial information obtained from a person [that are] privileged or confidential." Id. Relying upon Exemption 4, BPA stated that disclosure of the above information would “provide competitors with a picture of competitors’ future pricing strategies." See August 23, 2001 Determination Letter at 1. BPA also stated that the public interest in disclosing pricing information concerning unawarded contracts is slight.

On September 10, 2001, IBEW filed the present Appeal challenging BPA’s determination. Specifically, IBEW challenges the withholding of the “final dollar amount of bids that unsuccessful contractors bid on projects at BPA.” See Appeal Letter. IBEW requests that the withheld information be released.

II. Analysis

Exemption 4 permits an agency to withhold from 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 be exempt from mandatory disclosure under Exemption 4, a document supplied to the DOE on a non-voluntary basis must meet the following criteria: the document must contain either (A) "trade secrets" or (B) information which is (1) "commercial or financial," (2) "obtained from a person," and (3) "privileged or confidential." National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). Cf. Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993) (information voluntarily provided to the Government is confidential under Exemption 4 if it is the kind of information that the provider would not customarily make available to the public). Commercial or financial information is "confidential" for purposes of Exemption 4 if disclosure of the information is likely either to impair the government's ability to obtain necessary information in the future or to cause substantial harm to the competitive position of the person from whom the information was obtained. National Parks, 498 F.2d at 770.

We will analyze this case under the National Parks test described above because the contractors submitted the information in the proposals on a non-voluntary basis, as this information is required by the Department of Energy Acquisition Regulations. See 48 C.F.R. § 970.5204-22 (1992).

Under Exemption 4, BPA withheld the amounts of the bids proposed by the unsuccessful offerors. Clearly, this information is "commercial" within the meaning of Exemption 4 since the material was developed and submitted specifically for the purpose of acquiring a contract. See Tri-City Herald, 16 DOE ¶ 80,114 (1987). In addition, the information was obtained from a "person," as required by Exemption 4, since corporations are deemed "persons" for purposes of Exemption 4. See Ronson Management Corp., 19 DOE ¶ 80,117 (1989). In the context of this case, a claim of privilege is highly unlikely; however, this material may possibly be "confidential," as defined in National Parks.

As stated above, for information to be found to be "confidential," it must meet one of two tests: its release would either impair the government's ability to obtain necessary information in the future or cause substantial harm to the competitive position of the submitter. National Parks, 498 F.2d at 770. Release of this information is not likely to impair the Government's ability to obtain necessary information of this type in the future because, as stated above, it is required to be submitted under the Department of Energy Acquisition Regulations. Consequently, the sole test for establishing confidentiality of the submitted information in this case is whether its release will substantially harm the submitter's competitive position.

We note that BPA had already awarded the contract at the time that IBEW made its FOIA request. As a result, this case is in a posture different from those where a FOIA request is filed prior to the award of the contract or grant. John T. O'Rourke & Associates, 12 DOE ¶ 80,149 at 80,704 (1985). After an award has been made, the justification for withholding contract proposal information requires more thorough scrutiny because the information's release can no longer affect the bidder's competitive position with respect to the bidding process of that particular proposal. Id. Nevertheless, after reviewing the withheld material, we find that release of the bids would cause the submitters of the bids a substantial competitive injury. In its determination letter, BPA concluded that “since the bids are based upon fairly simple components, release of the bid amounts may provide competitors with a picture of competitors’ future pricing strategies.” It further concluded that unsuccessful offerors who bid on government contracts have a higher expectation of confidentiality in this type of information than successful offerors. We agree with these findings. They are consistent with our rulings in other Exemption 4 cases stating that release of material disclosing the terms of an unsuccessful bid can assist competitors to make their offers more attractive in the future by allowing them to predict their competitors’ future pricing behavior. See Siebe Norton, 11 DOE ¶ 80,113 (1993); Storage Technology Corp., 17 DOE ¶ 80,105 (1988). We therefore find that the bid amounts sought by the Appellant are confidential and were properly withheld from the proposals. Accordingly, the Appeal filed by IBEW will be denied.

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by IBEW Local 125 on September 10, 2001, Case Number VFA-0695, 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 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: October 24, 2001