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AUDIO TECH. SERVS. v. DEPARTMENT OF THE ARMY

October 25, 1979

AUDIO TECHNICAL SERVICES LTD., Plaintiff,
v.
DEPARTMENT OF THE ARMY et al., Defendants.



The opinion of the court was delivered by: PARKER

ORDER AND JUDGMENT

Pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, plaintiff Audio Technical Services Ltd. (Audio), a disappointed bidder for a government contract, has requested from the Department of Army its evaluations of the respective bids and certain detailed aspects of the successful bidder's proposal. Recording Consultants, Inc. (RC) was the successful bidder. The Department has released substantial portions of the requested documents and withheld others. It has refused to release portions of the requested documents claiming that they are exempt from disclosure.

 The matter is presented for determination on cross-motions for summary judgment. After a consideration of the parties' points and authorities and the submitted affidavits, the Court grants summary judgment for the Army.

 I.

 There are no disputed material facts. The Department of Army issued a Request for Proposal for the design and installation of an audio recording system. Bid proposals were submitted by Audio, RC and a third company. The bid proposals were submitted with protective markings and other indications of their confidentiality. Designated Army personnel, an evaluation and selection team, analyzed and reviewed the proposals. The team then submitted recommendations to the contracting officer along with its technical evaluations and scores determined on the basis of cost and quality. Thereafter, the contracting officer made the final decision and awarded the contract to RC.

 Plaintiff Audio was the low bidder and because it did not secure the contract, immediately filed a bid protest with the General Accounting Office (GAO). Later, Audio filed a FOIA request with the Army for the documents which are the subject of this suit. The Army sent all of the relevant documents to the GAO for consideration in connection with plaintiff's bid protest. The GAO has not issued a final ruling.

 The Army released a substantial portion of the requested documents but withheld significant portions of the information sought by Audio. Specifically withheld are (1) details of the successful bidder's proposal and (2) the basic ingredients of the bid evaluations prepared by the Army technical evaluation and selection team. In denying access, the Army asserts that exemption four of FOIA protects the details of the bid proposal from disclosure and that the evaluations and recommendations of its personnel are predecisional and intra-agency material within exemption five.

 II.

 The fourth exemption of FOIA, § 552(b)(4), provides that the Act's disclosure provisions do not apply to matters which are "trade secrets and commercial or financial information obtained from a person and privileged or confidential." Under the fifth exemption, § 552(b)(5), an agency need not disclose inter- or intra-agency memoranda which would not be available to a private party in litigation with the agency.

 A.

 In determining the applicability of the fourth exemption the Court must look to the private and governmental interests involved. National Parks and Conservation Ass'n. v. Morton, 162 U.S. App. D.C. 223, 498 F.2d 765 (D.C.Cir.1974). The exemption is intended to encourage individuals to provide confidential information to the government and "(a)part from encouraging cooperation with the Government by persons having information useful to officials, section 552(b)(4) serves another distinct but equally important purpose. It protects persons who submit financial or commercial data to government agencies from the competitive disadvantages which would result from its publication." Id. at 768.

 In justification of its partial compliance with the request for the full details of RC's bid proposal the government submitted affidavits which described fully and plainly each deletion from the requested documents. The government maintains that "(t)he deleted information was based on both the Government's need to protect such information so as to not impair our ability to obtain such information in the future and the contractor's continuing desire (expressed in numerous letters to the government) to maintain confidentiality over trade secrets and proprietary data to avoid substantial harm to its competitive position." *fn1" Furthermore, the President of RC asserts, in conjunction with detailed explanation of the basis for each request for confidentiality, that release of the information "would cause substantial competative (sic) harm to RCI. . . . Information of this specific detail is not customarily released to the general public." *fn2" See National Parks and Conservation Ass'n., 498 F.2d at 766, quoting S.Rep.No. 813, 89th Cong., 1st Sess. 9 (1965): "This exception is necessary to protect the confidentiality of information . . . which would customarily not be released to the public by the person from whom it was obtained."

 Withheld from the plaintiff were the following categories of RC's bid proposal: (1) customer list; (2) RC's design recommendations and identification of prospective problem areas; (3) RC's design concepts including methods and procedures; and (4) biographical data on key RC employees. The Court agrees that disclosure of this type of information would threaten the competitive position of the submitter and clearly thwart the government's interest in obtaining such information in the future. See National Parks and Conservation Ass'n. v. Morton, supra; see also Soucie v. David, 145 U.S. App. D.C. 144, 448 F.2d 1067 (D.C.Cir.1971).

 Audio urges a different result and argues that the exemption does not apply to the withheld portions of the bid proposal. In so urging, Audio relies upon a district court holding that cost proposals should be released after the award of a contract because the "need for secrecy is no longer present . . . . Neither the successful bidder nor the protester can gain any competitive edge if the information is released." Shermco Industries v. Secretary of the U. S. Air Force, 452 F. Supp. 306, 324 (N.D.Tex.1978). Unlike a cost proposal, however, the omitted customer list and data on personnel include information important to RC's competitive position. Further, the withheld materials contain technical information with application well beyond the instant bid proposal and reflecting years of ...


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