Case No. VFA-0729

April 8, 2002

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Motion for Reconsideration

Name of Petitioner: Dallas D. Register

Date of Filing: March 11, 2002

Case Number: VFA-0729

On March 11, 2002, Dallas D. Register filed a Motion for Reconsideration of a Decision and Order that the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) issued on March 1, 2002. Mr. Dallas Register, Case No. VFA-0711 (March 1, 2002). The Decision and Order considered Mr. Register’s Appeal of a final determination that the Albuquerque Operations Office (DOE/AL) of the Department of Energy (DOE) issued on October 30, 2001.

I. Background

Mr. Register filed a FOIA request with DOE seeking documents related to a comparative analysis study. On October 30, 2001, the DOE/AL FOIA Officer issued a determination in response to Mr. Register’s request which indicated that DOE’s Office of Kansas City Site Operations (DOE/KC) had been unable to locate any documents that were responsive to the FOIA request. The DOE/AL FOIA Officer also indicated that:

It has been determined that the documents you are requesting are records contained in the legal files of Honeywell FM&T at the Kansas City Plant, are in the possession and control of Honeywell FM&T and are, therefore, not ?agency records’ subject to the provisions of the FOIA. ?Agency records’ are defined as records in a federal agency's possession and control at the time of the FOIA request. However, pursuant to U.S. Department of Energy (DOE) policy, records in the possession and control of a management and operating contractor, such as those mentioned above, will be made available by DOE when the contract specifically provides that such records are the property of the Government. However, the contract between the DOE and Honeywell FM&T clearly defines the records that you have requested as belonging to them and not the DOE. Accordingly, these records are also not subject to release under DOE policy.

Mr. Register appealed this determination on the grounds that the documents he requested should be in the DOE Contracting Officer’s file because they are necessary to establish the contractor’s compliance with the “substantially equivalent benefits” requirement contained in DOE’s Request for Proposal (RFP) for managing the Kansas City Plant. Mr. Register also claimed that DOE/AL should have provided the requested document to him because the contract between the contractor and DOE provides that DOE has the right to inspect and copy all records acquired or generated by Honeywell FM&T (Honeywell) under this contract. We denied Mr. Register’s Appeal, finding that the documents in question are not “agency records” subject to the FOIA, nor are they subject to release under DOE regulations. In seeking reconsideration of our decision, Mr. Register does not contend that the documents he seeks are “agency records,” but rather argues that they are records that were “acquired or generated” by Honeywell FM&T “in the performance” of its contract with the DOE, and therefore are subject to release under DOE regulations.

The DOE FOIA regulations do not explicitly provide for reconsideration of a final Decision and Order. See 10 C.F.R. ' 1004.8. However, in prior cases, we have used our discretion to consider Motions for Reconsideration where circumstances warrant. See, e.g., Nathaniel Hendricks, 25 DOE & 80,173 (1996). We will exercise that discretion here to consider the issues the Appellant raised. .

II. Analysis

As we discussed in our decision on Mr. Register’s Appeal, even if 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 that contractor provides that the records in question 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" the FOIA. 10 C.F.R. § 1004.3(e)(1).

The contract between DOE and Honeywell FM&T does have the provision described in the DOE regulations. That clause in the contract provides, in relevant part, as follows:

113. DEAR 970.5204 79 ACCESS TO AND OWNERSHIP OF RECORDS (JUN 1997) (MODIFIED)

(a) Government owned records. 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 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 process of the work or, in any event, as the contracting officer shall direct upon completion or termination of the contract.

(b) Contractor owned records. The following records are considered the property of the contractor and are not within the scope of paragraph (a) of this clause. . . .

(1) Employment related records (such as workers' compensation files; employee relations records, records on salary and employee benefits; drug testing records, labor negotiation records; records on ethics, employee concerns, and other employee related investigations conducted under an expectation of confidentiality; employee assistance program records; and personnel and medical/ health related records and similar files), and non-employee patient medical/health related records, except for those records described by the contract as being maintained in Privacy Act systems of records.

. . . .

(3) Records relating to any procurement action by the contractor, except for records that under 48 CFR 970.5204-9, Accounts, Records, and Inspection, are described as the property of the Government; and

. . . .

(d) Inspection, copying, and audit of records. All records acquired or generated by the contractor under this contract in the possession of the contractor, including those described at paragraph (b) of this clause, shall be subject to inspection, copying, and audit by the Government or its designees at all reasonable times, and the contractor shall afford the Government or its designees reasonable facilities for such inspection, copying, and audit; provided, however, that upon request by the contracting officer, the contractor shall deliver such records to a location specified by the contracting officer for inspection, copying, and audit. The Government or its designees shall use such records in accordance with applicable federal laws (including the Privacy Act), as appropriate.

(e) Applicability. Paragraphs (b), (c), and (d) of this clause apply to all records without regard to the date or origination of such records.

. . . .

(g) Subcontracts. The contractor shall include the requirements of this clause in all subcontracts that are of a cost reimbursement type if any of the following factors is present:

(1) The value of the subcontract is greater than $2 million (unless specifically waived by the Contracting Officer);

(2) The contracting officer determines that the subcontract is, or involves, a critical task related to the contract; or

(3) The subcontract includes 48 CFR 970.5204-2, Integration of Environment, Safety, and Health into Work Planning and Execution, or similar clause.

Contract No. DE-AC04-01AL66850 at H-173 to -75.

In our Appeal decision, we found that the above clause would not apply to the records sought by Mr. Register because those records were not acquired or generated by the contractor in the performance of the contract. This finding was based on information from counsel for DOE/KC “that the documents at issue were not paid for by DOE funds but were paid for by Honeywell’s main office.” In his Motion for Reconsideration, Mr. Register states,

It is my position that the OHA failed to adequately pursue my claim that there were two total compensation studies prepared under the direction of Honeywell FM&T/KC and that no documents were provided by Honeywell to the DOE to substantiate their verbal claim that the requested documents had been prepared and funded by Honeywell Corporate funds.

Motion at 1.

For purposes of ruling on Mr. Register’s Motion, we need not decide whether there were in fact “two total compensation studies,” though DOE/KC states that it is aware of only one. And while we have no reason to question DOE/KC or Honeywell FM&T’s statements regarding the funding of the study (or studies), proving the truth of those statements is not necessary to our decision. As we explain below, even assuming there are two studies as described by Mr. Register, and regardless of who prepared or funded the studies, those studies would, because of their subject matter, be defined as property of Honeywell FM&T under the contract clause quoted above.

Mr. Register’s Motion describes one study “prepared to verify the value of the Honeywell total compensation of members [of] the Facility and Utility Engineering Department . . . identified to be outsourced through a service subcontract to a local Architect and Engineering firm,” and a second study “prepared to verify that the total compensation provided to the former Honeywell employees outsourced by subcontract met the ?substantially equivalent’ requirements of” the contract between DOE and Honeywell FM&T. Motion at 1.

As described by Mr. Register, both studies are the property of the contactor. The documents fall under subparagraph (b)(1) and (b)(3) of the clause quoted above, because they are “[e]mployment related records (such as . . . records on salary and employee benefits; . . .” and “[r]ecords relating to any procurement action by the contractor.(1) Mr. Register states that both studies were prepared to “verify . . . the total compensation” of employees, and in that respect both would be “employment related” and concern “salary and employee benefits.” And because Mr. Register describes both studies as related to “outsourc[ing] through a service subcontract to a” local firm, both studies would have related to the procurement action through which this outsourcing was accomplished.

Paragraph (b) of the clause states that documents described under any of its subparagraphs “are considered the property of the contractor and are not within the scope of paragraph (a) of this clause. . . .(2) Thus, the contract explicitly provides that documents such as those Mr. Register is seeking are not government-owned records, and therefore would not be subject to release under DOE regulations.(3)

For the above-stated reasons, Mr. Register’s Motion for Reconsideration will be denied.

It Is Therefore Ordered That:

(1) The Motion for Reconsideration filed by Dallas D. Register on March 11, 2002, Case No. VFA-0729, 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 provision 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 Appeals

Date: April 8, 2002

(1) Subparagraph (b)(3) states that it does not apply to records that under 48 CFR 970.5204-9, Accounts, Records, and Inspection, are described as the property of the Government. Under 48 C.F.R. 970.5204-9, “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, . . .” Contract No. DE-AC04-01AL66850 at I-94. However, as this contract clause pertains to the requirement that the contractor “maintain a separate and distinct set of” records for accounting purposes, we do not agree with Mr. Register that the studies he seeks would fall within the scope of the clause. Id.

(2) Mr. Register further contends that paragraphs (d) and (e) of the ownership of records clause apply to the records at issue. While these paragraphs may apply to the records sought by Mr. Register, they are nonetheless not helpful in determining whether those records fall within the scope of paragraph (a).

(3)Mr. Register also argues that the studies he seeks may have been provided to the subcontractor to whom work was outsourced. It is possible that this subcontract contains the ownership of records clause since paragraph (g) of the clause, as quoted above, requires that the ownership of records clause be included in certain subcontracts. However, even if this were the case, the provisions of paragraph (b) of the clause would still apply to exclude the studies from the scope of paragraph (a).