Case No. VFA-0753

August 5, 2002

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Motion for Reconsideration

Name of Petitioner: Martin Becker

Date of Filing: July 3, 2002

Case Number: VFA-0753

Martin Becker files this Motion for Reconsideration of a Decision and Order issued by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under the Freedom of Information Act (FOIA), 5 U.S.C. §§ 552, as implemented by the Department of Energy (DOE) in 10 C.F.R. Part 1004. Martin Becker, Case No. VFA-0710, 28 DOE ¶ 80,222 (2002). As explained below, we will deny this Motion.

I. Background

The present case has a long and complex background. In September 2000, Becker requested a copy of a lease executed by Westinghouse Savannah River Company (WSRC) or its affiliates for office space at the Centennial Corporate Center in Aiken, South Carolina. In the course of a series of appeals, we found that the lease in question was executed by Westinghouse Safety Management Solutions (WSMS), a firm that contracts with WSRC to provide support for WSRC’s role as the management and operating contractor at the Savannah River Site. WSMS was a subsidiary of WSRC at the time it first executed the lease, but is now an independent firm. In addition, we found that the lease was not subject to release under the Freedom of Information Act, but was subject to release under the DOE's Contractor Records regulation, 10 C.F.R. § 1004.3(e)(1). See Martin Becker, Case No. VFA-0627, 28 DOE ¶ 80,133 (2000); Martin Becker, Case No. VFA-0649, 28 DOE ¶ 80,153 (2001); Martin Becker, Case No. VFA-0666, 28 DOE ¶ 80,187 (2001); Martin Becker, Case No. VFA-0704, 28 DOE ¶ 80,201 (2001).

On December 10, 2001, the Savannah River Operations Office (SR) released a copy of the lease to Becker, but withheld certain data pursuant to Exemption 4 of the FOIA. Exemption 4 protects from mandatory 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). The data withheld were: rate per square foot, rentable square feet (space actually rented by WSMS), lease term, expiration date, lease renewal option period, monthly rent, security deposit, phone service reimbursement, annual minimum rent, total rentable area in building, and utility reimbursement. SR asserted, pursuant to Exemption 4 case law, that the withheld data were confidential information, and were protected because release would impair the government's ability to obtain similar data in the future, and would cause competitive harm to the person from whom the information was obtained.

The present case marks the third time that Becker has appealed SR's withholding of data. In his initial Appeal of the determination, Becker argued that there was no evidence that disclosure of the responsive material would impair the government's ability to obtain future documents, and that there was no competitive harm to the lessor. We denied Becker’s Appeal and upheld SR’s withholding. Martin Becker, Case No. VFA-0710, 28 DOE ¶ 80,222 (2002).

In his second Appeal, Becker asserted that release of the withheld data was required under the Federal Acquisition Regulation (FAR). He claimed that the withheld data fell within the provisions of the FAR at 48 C.F.R. § 15.503(b)(iv), which requires the disclosure of “items, quantities and any stated unit prices” of successful competitive offers. We rejected Becker’s assertion, finding that the lease between WSMS and Centennial Partners was not entered into or awarded under a FAR-based competitive procurement.

The basis for our finding was a letter we received from Timothy Fisher, a DOE attorney at the Savannah River site, who was familiar with the contract and who stated that WSMS's lease was not subject to the FAR. We therefore concluded that the provisions of the FAR cited by Becker were inapplicable to the lease and that release of the withheld data was not mandated by the FAR. Martin Becker, Case No. VFA-0743 (June 4, 2002).

In his present Motion, Becker renews his claim that the FAR mandates disclosure of the withheld data. He now argues that “since it has been repeatedly admitted that appropriated funds are being used for the lease, the WSMS lease by definition is governed by the FAR - see 48 C.F.R. § 2.101 (?Acquisition’ and ?Contract’).(1) He later amended his Motion, first to include a claim that a contractual provision mandates release of the withheld data, and later to claim that some of the data he sought had been published in a DOE report, and that DOE had therefore waived its right to withhold it under a FOIA exemption.

II. Analysis

Applicability of the FAR

We find that Becker has misread the FAR in claiming that it applies to the information he seeks. According to the terms of the FAR, its provisions apply only to acquisitions made by the federal government, not to acquisitions made by a private entity such as WSMS. For example, the section titled "Purpose" states that "the Federal Acquisition Regulations System is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies.” 48 C.F.R. § 101.1 (emphasis added).

Furthermore, the provisions cited by Becker not only fail to support his argument, but confirm that the FAR does not apply to transactions between private entities. For example, the FAR definition of "acquisition" cited by Becker states that an acquisition is "the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease...." 48 C.F.R. § 2.101 (definition of "Acquisition") (emphasis added).

Similarly, the FAR definition of "contract" cited by Becker states that a contract is "a mutually binding legal relationship obligating the seller to furnish the supplies or services ... and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds...." 48 C.F.R. § 2.101 (definition of "Contract") (emphasis added).

Based on the definitions cited above, we find that the lease at issue is not subject to the provisions of the FAR. The lease provides a private company with office space, but it does not effect the acquisition of any supplies or services by the DOE or any other federal agency. It obligates WSMS to pay rent, but does not obligate the federal government to any expenditure of funds. The lease is an agreement between two private parties, and the provisions of the FAR have no applicability to it.(2) We therefore reject Becker's claim that the disclosure provisions of the FAR require the release of the withheld data.

Release under Contractual Provisions

Becker amended his present Motion to include a claim that the data withheld by SR in must be disclosed under the terms of the contract between the DOE and WSRC. In support of his claim, Becker cites Paragraph H.40 of the contract, headed "Release of Subcontractor Information." The paragraph states:

The purchasing system ... must provide for notification to bidders/offerors that an abstract of bids/offers/proposals containing the names of bidders/offerors and the lump sum or unit prices submitted will be released after award to any interested party.... In no event will the Contractor release other information regarding a bid/offer/proposal without the written permission of the submitting firm.

The applicability of this paragraph depends on whether the data withheld by SR in this case - rate per square foot, rentable square feet (space actually rented by WSMS), lease term, expiration date, lease renewal option period, monthly rent, security deposit, phone service reimbursement, annual minimum rent, total rentable area in building, and utility reimbursement - fall within the definition of unit prices. We find they do not.

In the letter cited above, Fisher, the attorney at SR, stated that "the lease terms sought by Mr. Becker are not ?unit prices’ as contemplated by the FAR and routinely contained in a bid for a government contract.... The cases in which courts have released contract prices or costs have relied on the fact that unit prices are made up of so many variables that it would make it extremely difficult or impossible to derive specific information that could cause competitive harm."

We agree with Fisher's position. As we have stated previously,

... courts have held that the release of "unit prices" would not provide information that would competitively harm the submitter of the information because the unit prices are themselves composed of many components which would still remain hidden or are highly variable. See, e.g., Pacific Architects & Engineers v. Department of State, 906 F. 2d 1345 (9th Cir. 1990); Acumenics Research & Tech., Inc. v. Department of Justice, 843 F. 2d 800 (4th Cir. 1988). Unlike those cases, the rental fees ... would constitute a single price element of [the submitter's] cost....

B.P. Exploration, Inc., Case No. VFA-0503, 27 DOE ¶ 80,216 (1999).

The data requested by Becker are not composed of many components, but are individual cost elements. They are therefore not unit prices, and not subject to release under the contractual provision cited by Becker. See also Burns Concrete, Inc., Case No. VFA-0284, 26 DOE ¶ 80,185 (1997).

Waiver

In his second amendment to his Motion, Becker claimed that the DOE had waived its right to withhold the data under Exemption 4 because it had previously disclosed the data. Becker's claim is based on the principle that if an agency has previously disclosed certain data, it may have waived its ability to later withhold the data under a FOIA exemption. Carson v. United States Department of Justice, 631 F.2d 1008, 1016 n.30 (D.C. Cir. 1980) (Carson). Determining whether such a waiver has been made requires a careful analysis of the specific nature of, and circumstances surrounding, the prior disclosure involved. Carson, 631 F.2d at 1016 n.30.

The threshold consideration is whether the prior disclosure matches the exempt information in question. If the requested information differs in some material respect from that which the requester claimed had been released previously, then no waiver has occurred. The burden is on the requester to establish that the requested information is duplicative of the disclosed information. Ashfar v. Department of State, 702 F.2d 1125, 1132 (D.C. Cir. 1983) (Ashfar).

In claiming the withheld information was previously disclosed, Becker cites a report issued by the DOE's Office of the Inspector General, titled "Privatization of Safety Management Practices at the Savannah River Site," report number DOE/IG-0559, issued June 18, 2002. Appendix 2 of the report includes a table headed "Comparison of Actual Cost to Recommended Cost." The table shows actual costs billed by WSMS from 1998 to 2001, divided among four categories: "Direct Labor," "Indirect Labor," "WSRC Support," and "Subcontract Cost." These categories are not broken down further. A second table shows estimated costs for WSRC if equivalent work had been performed in-house, rather than subcontracted to WSMS. A footnote to the second table states that "other indirect costs include items such as computer hardware and software, indirect support subcontracts, rent/leases, travel, division overhead, and facilities and utilities costs." Referring to this section, Becker asks whether "the public disclosure of category costs that reference the inclusion of rent/leases and facilities costs for WSMS provides a basis for the release of the WSMS leases that I have requested?"(3)

We find that Becker's claim of waiver is unfounded. The category of "Indirect Costs" includes "rent/leases" among a number of other unrelated costs. There is no ascertainable method for calculating the lease data that Becker is requesting. Thus, the table is not duplicative of the withheld data, and, under the Ashfar decision, no waiver has occurred.

III. Conclusion

As discussed above, we find that the lease between WSMS and Centennial Partners is not subject to the FAR, and that the disclosure provisions of the FAR are therefore inapplicable to it. In addition, we find that the withheld data are not subject to mandatory release under the terms of the contract between the DOE and WSRC. Finally, we find that the publication of the data in the Inspector General's report cited by Becker does not waive the DOE's right to invoke a FOIA exemption for the material withheld from the lease. We will therefore deny Becker's Motion for Reconsideration.

It Is Therefore Ordered That:

(1) The Motion for Reconsideration filed by Martin Becker, Case No. VFA-0753, 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: August 5, 2002

(1)” Whether WSMS received "appropriated funds" is an open question. We have made no finding on the issue, but found rather that "WSMS pays rent on the lease while performing its contract with WSRC, and receives reimbursement for at least part of the rent under the terms of that contract.... WSRC then charges the costs that it pays to WSMS to DOE, under the terms of its contract with the agency..." Martin Becker, 28 DOE ¶ 80,187 (2001).

(2) As explained in the previous footnote, WSMS is compensated by the DOE, through WSRC, for some portion of the rent it pays to Centennial Partners. However, WSMS is obligated to pay rent whether it receives federal funding or not.

(3) E-mail from Martin Becker to the OHA, dated July 3, 2002.