prices." 40 U.S.C. § 542; see also 41 C.F.R. §§ 1-4.1001, 9-4.1001. Procurement needs are publicized in accordance with 41 C.F.R. subpart 1-1.10, which, for A/E procurement actions with fees over $ 10,000, requires that a notice of intention to contract be published in the Commerce Business Daily, a government publication. 41 C.F.R. § 1-1.1003-1(a), -3(c). The notice must contain a "brief statement" concerning the location of the project and the scope of service required, as well as (where applicable) the relative importance of the "significant evaluation factors," the construction cost limitation, and construction schedule limits. 41 C.F.R.§ 1-1.003-7(b)(9). The Act, at § 543, directs that an agency head shall commence the procurement of A/E services by soliciting from firms annual statements of their qualifications and performance data. DOE offices that regularly procure A/E services are to collect and maintain current files on A/E firms: these files are to contain Standard Forms 254 (the annual statements of qualifications) and may also include information from other sources, such as appraisals of previous projects awarded to the particular firms. 41 C.F.R. §§ 9-4.1004-50, -53.For each proposed project, then, the agency head is to evaluate the statements in the firms' files, together with Standard Forms 255, which indicate interest in a particular project. 40 U.S.C. § 543; 41 C.F.R. § 9-4.1004-53.
After the agency head considers the material in the appropriate files, he selects no less than three firms for discussions. 40 U.S.C. § 543; 41 C.F.R. § 9-4.1004-51(a). These discussions are to consider "anticipated concepts and the relative utility of alternative methods of approach for furnishing the required services...." 40 U.S.C. § 543; 41 C.F.R. § 9-4.1004-52. "These discussions may be used to obtain additional qualification, performance, and management data, and other information needed to properly apply the evaluation criteria and evaluate the firms under consideration. 41 C.F.R. § 9-4.1004-52.
Next, pursuant to evaluation criteria established and published by him, the agency head selects, in order of preference, no less than three of the firms deemed to be the most highly qualified to provide the needed services. 40 U.S.C. § 543. The relevant evaluation criteria are found at 41 C.F.R. § 9-4.1004-3.
The relevant portion of § 543 of the Brooks Act and the DOE regulation
governing the discussions to be held with various firms provide that the discussions will include an exploration of various concepts and alternative approaches, and that the discussions may be used to obtain information needed to evaluate the firms. This information is relevant to, inter alia, the experience and competence of the firm, and the skills and abilities of its personnel, evaluation criteria set forth at 41 C.F.R. § 9-4.1004-3(a)(2) and (b)(1). As such, a firm's creativity is a factor that the agency may consider at the discussion stage, and the disclosure of CDRs at or before that point most certainly would render inquiries as to this factor meaningless. Plaintiff suggests that disclosure of CDRs during the selection process could benefit the government because "[the] more knowledge that architect-engineer firms have as to the detailed scope of the project, the more likely they are to assign the personnel in their organization best qualified to perform the work," and, as a consequence, the firms' Standard Form 255 submissions regarding particular projects would provide more meaningful information as to a firm's particular abilities relevant to a certain project. Pl. Mem. at 7. Whether plaintiff's suggested method would result in a selection process superior to the status quo is not for this Court to decide: DOE is entitled to exercise its discretion without undue judicial intervention in areas in which it has special expertise, and the agency's particular choice as to how, consistent with the statute, it will accumulate and evaluate the information presented to it, is one such matter best left to it. See Merrill v. Federal Open Market Committee, 516 F. Supp. at 1033.
As such, the CDRs may properly be withheld through the entirety of the selection process.
The agency contends that the portion of the CDRs relating to cost estimates must be kept confidential even after the selection is made and the remainder of the reports need not be withheld as disclosure would impinge upon DOE's negotiation posture with the selected contractor. Plaintiff, in response, argues that there is no basis to keep this information confidential because "the pricing information is too coarse and stale to be of use in the procurement process." Pl. Mem. at 7. Moreover, plaintiff argues, since statutes and regulations prohibit the agency from negotiating with more than one firm at a time, the procurement procedure involves no price competition and, therefore, there is no reason for the agency to keep its cost estimates secret. Hack Affidavit at P25.
Again, it is essential to examine the statutory and regulatory authority guiding the negotiation process to determine whether the DOE's asserted need for confidentiality is valid.
The Brooks Act at 40 U.S.C. § 544(a) and DOE regulations at 41 C.F.R. § 9-4.1005 direct the agency to attempt to negotiate a contract with the firm found to be the "highest qualified" under the selection process, at a compensation determined to be "fair and reasonable to the Government." If the agency is unable to negotiate a satisfactory contract, negotiations with that firm are terminated and the agency then commences negotiations with the second most qualified firm. 40 U.S.C. § 544(b); 41 C.F.R. § 9-4.1005. The agency turns to negotiate with the next most qualified firms, in succession, should negotiations prove fruitless, and should the list of selected firms be exhausted, the agency must return to the selection process and choose additional firms with whom to negotiate, again one by one. 40 U.S.C. § 544(c); 41 C.F.R. § 9-4.1005. Before negotiations are begun, the appropriate procurement official must develop an independent government estimate of the cost of the required services, based on a "detailed analysis" of the costs that the work is likely to generate. 41 C.F.R. § 9-4.1005.In forming the estimate, these factors must be considered: the estimated value of the services to be rendered and the scope, complexity, and nature of the project. Id. The contracting officer uses the independent government estimate and the selected firm's proposal in negotiating the "fair and reasonable" price. 41 C.F.R. § 9-4.1005.
It is obvious that although firms do not engage in competitive bidding among themselves, the selected firm and the agency do indeed bargain over the contract price. Moreover, it is clear that the price information that the agency generates itself is a factor crucial toward the agency's establishment of its bargaining position. There can be no doubt that were cost estimates made public the agency would not be on equal footing with the selected firm at the bargaining table. Requiring the agency to tip its hand by compelling the disclosure of its cost estimates could destroy all incentive a firm would have to propose a lower price. As such, the cost estimates contained in the CDRs are confidential commercial information to which the privilege in Open Market applies, and therefore which may be withheld until the contract for the project has been let. The agency seeks to withhold the information in the CDRs no longer than it properly may.
Consequently, plaintiff's motion for summary judgment shall be denied, and defendant's motion granted.
An appropriate Judgment accompanies this Memorandum Opinion.
In accordance with the Memorandum Opinion of this date, judgment shall be and hereby is entered in favor of defendants United States Department of Energy, Charles Duncan, Secretary of Energy; George B. Breznay, Acting Director, Office of Hearings and Appeals, Department of Energy; and W. R. McCauley, Jr., Authorizing Official, Department of Energy, and against plaintiff Samuel Lewis Hack.