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BROWNSTEIN ZEIDMAN & SCHOMER v. DEPARTMENT OF THE

December 20, 1991

BROWNSTEIN ZEIDMAN AND SCHOMER, Plaintiff,
v.
DEPARTMENT OF THE AIR FORCE, Defendant.



The opinion of the court was delivered by: STANLEY SPORKIN

 Plaintiffs brought this action to compel the Air Force to produce certain documents pursuant to the Freedom of Information Act, 5 U.S.C. § 552. The documents all relate to a contract for the purchase of computers that the Air Force made in 1988. Since no genuine issue of material fact remains in dispute, summary judgment is appropriate in this action.

 A. Factual Background

 In February of 1987, the Air Force solicited proposals for a computer procurement contract. In return, it received multiple bids, and it ultimately selected the Offer made by AT&T. A contract was then drafted and later modified. In July of 1989, the plaintiff filed a FOIA request with the Air Force seeking access to a number of documents that pertained to the selection of AT&T's offer and to the contract awarded. To date, the Air Force has produced a significant number of the documents originally requested by plaintiff. The parties agree that only five documents remain in dispute. They are as follows:

 (1) The modified unit prices listed in the "B Tables" of the Air Force Contract with AT&T.

 (2) The Source Selection Advisory Committee Report (SSAC Report).

 (3) An Amendment to the Source Selection Plan (SSP Amendment).

 (4) An Attachment to the Proposal Evaluation Guide (PEG Attachment).

 (5) Portions of the Source Selection Evaluation Board Report (SSEB Report).

 The Air Force refuses to produce the first document on the grounds that it is protected from disclosure by FOIA exemption 4, 5 U.S.C. § 552(b)(4), the exemption for confidential and financial information obtained from private parties. The Air Force refuses to produce the other four documents on the grounds that they are protected from disclosure by FOIA exemption 5, 5 U.S.C. § 552(b)(5), the statute's version of the deliberative process privilege.

 The Court will now proceed to make a decision about disclosure for each document.

 A. The Modified Unit Prices

 AT&T provided the Air Force with "B Tables" that were attached to the purchase contract for the computers. The tables break down the computers into their component parts and show a unit price for each component. The Air Force produced the "B Tables" from the contract in their original form. It also produced the later version of the "B Tables" reflecting modifications to the contract; however, in this version, it redacted the unit prices. The Air Force claims that the unit prices are confidential financial information and that their release would do substantial harm to AT&T; hence, they are protected from disclosure by FOIA exemption 4. Counsel for AT&T asserted the same position in oral argument before the Court.

 Obviously AT&T prefers not to have this information disclosed, but the plaintiff is legally entitled to receive it. In an earlier case, AT&T sought to enjoin the General Services Administration from releasing AT&T's successful bid proposal on a government procurement contract for a federal telecommunications system. They offered the same objection they do here: release of the unit prices would allow their competitors to calculate AT&T's profit margin and consequently underbid AT&T. *fn1" See AT&T v. General Services Administration, 627 F.Supp. 1396, (D.D.C. 1987) rev'd on other grounds 810 F.2d 1233 (D.C. Cir. 1987). Judge Oberdorfer rejected AT&T's argument and permitted the documents to be released. He noted that disclosure of negotiated contract prices is a cost of doing business with the government. 627 F.Supp. at 1403 citing Racal-Milgo Government Systems Inc. v. Small Business Administration, 559 F.Supp. 4, 6 (D.D.C. 1981). Furthermore, he concluded that the claim that competitors could deduce the profit margin from the unit price was highly speculative. 627 F.Supp. at 1402-3.

 Exemption 4 does not apply where the damage that the government contractor will suffer as a result of the release of confidential information is only speculative. See National Parks and Conservation Association v. Morton, 178 App. D.C. 376, 547 F.2d 673, 680 (D.C.Cir. 1976) ("Conclusory and generalized allegations are indeed unacceptable as a means of sustaining the burden of nondisclosure under the FOIA . . . .") As the Fourth Circuit noted in Acumenics Research & Technology v. Department of Justice 843 F.2d 800, 808 (4th Cir. 1988) in order to calculate the "multiplier" used by a government contractor, a competitor would have to know a great deal about labor costs. That information is not available with any degree of certainty. The Acumenics court upheld the Department of Justice's decision to release pricing information that Acumenics had submitted in a contract proposal. *fn2" The concerns expressed by AT&T in the case before this Court are equally speculative. *fn3" Accordingly, the Air Force will be ordered to release the modified unit prices that plaintiff seeks.

 B. The SSAC Report

 The Declaration of Stephen Meehan, *fn4" filed with the Court on December 20, 1990, states that the

 Source Selection Advisory Council report is a comparative analysis of the findings and rating results of the SSEB as they relate to the proposals submitted . . . and evaluative criteria which were specified in the solicitation document. Declaration at 16.

 Plaintiff claims that the SSAC Report has been incorporated into the final decision and should therefore be disclosed. To support this argument, plaintiff cites American Society of Pension Actuaries v. IRS, 746 F.Supp. 188 (D.D.C. 1990) in which the Court ordered the IRS to disclose the assumptions and calculations used to generate an estimated revenue yield from a shift in audit resources. That case, however, differs significantly from the one presented here. In ASPA, the ...


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