The opinion of the court was delivered by: ROYCE C. LAMBERTH
Prior to appeal this court permanently enjoined defendant National Aeronautics & Space Administration ("NASA") from disclosing, pursuant to a Freedom of Information Act ("FOIA") request, information in a contract between NASA and McDonnell Douglas Aerospace ("MDA"). The contract between the two parties covered Delta II rockets and related launch services, while the injunction covered only specific line item prices ("CLINs") within the contract. This court orally ruled from the bench on January 24, 1992, that NASA's decision to release the CLINs was arbitrary and capricious because the information came within exemption four of FOIA, 5 U.S.C. § 552(b)(4) (exempting "trade secrets and commercial or financial information obtained from a person and privileged or confidential"), as that exemption was construed in National Parks and Conservation Association v. Morton, 162 U.S. App. D.C. 223, 498 F.2d 765 (D.C. Cir. 1974).
National Parks established a two-part test to determine when financial or commercial information in the government's possession is confidential under exemption four of FOIA. Commercial or financial information is confidential under National Parks if its disclosure is likely to (1) impair the government's ability to obtain necessary information in the future, or (2) cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770. In the present case, the court found that the administrative record compiled by NASA supported MDA's claim of substantial competitive harm. The court granted plaintiff's motion for summary judgment and entered a permanent injunction forbidding NASA from releasing the disputed CLINs.
NASA appealed this decision, and during the pendency of NASA's appeal the D.C. Circuit created a new test for certain FOIA exemption four cases in Critical Mass, 975 F.2d at 879. Critical Mass held that financial or commercial information provided to the government on a voluntary basis is "confidential" for the purposes of FOIA exemption four if it is of a kind that would customarily not be released to the public by the person from whom it was obtained. Id. Critical Mass limited the scope of National Parks to exemption four cases where the information sought under FOIA was required by the government.
The first issue before the court is whether the exemption four analysis previously applied in this case under National Parks is altered by the Circuit Court's holding in Critical Mass.
In Critical Mass a public interest organization made a FOIA request to obtain reports voluntarily provided to the Nuclear Regulatory Commission (NRC) by a private nuclear industry group. Id. at 874. The private reports included candid comments and evaluations from nuclear power plant employees, and were provided to the NRC on a purely voluntary basis with the understanding they were not to be disclosed without the group's consent. The Court of Appeals concluded that because the sensitive reports were (1) voluntarily submitted to the NRC by private entities and (2) candid assessments not customarily released to the public, they qualified as exempt from disclosure under FOIA exemption four.
Borrowing from its earlier observations in National Parks, the court in Critical Mass emphasized its concern for "encouraging cooperation with the Government by persons having information useful to officials". Id. at 878. The court stressed the government's interest in ensuring the "continued availability" of information that is volunteered, and the desire to avoid hindering "the ability of the Government to make intelligent, well informed decisions". Id.
The crux of the issue is whether the information requested under FOIA -- namely, price elements of a contract -- was required by the government. Plaintiff contends that MDA's submission of a proposal for, and its entry into, the Delta II contract were obviously voluntary acts. The plaintiff's argument, however, is inapposite. The issue is not whether MDA was required to contract with NASA -- no one disputes that the process of offer and acceptance giving rise to contractual obligations is voluntary. The focal point here is the information itself, and NASA required that the contract itemize the prices for specific services. Not only is it clear in this case that the prices in the contract were essential and required, but precedent from other judges of this court supports the conclusion that pricing information necessary for a government contract is considered involuntary for a FOIA exemption four analysis.
In Chemical Waste Management, Inc. v. O'Leary, 1995 U.S. Dist. LEXIS 2586, No. 94-2230 (D.D.C. Feb. 28, 1995), Judge Johnson, applying a Critical Mass analysis, upheld an agency decision that unit price information in a government subcontract was not voluntary. In holding that unit price information was involuntary, Judge Johnson concurred that the bid "would not have won plaintiff the subcontract" without the prices, and that the offeror "had no choice but to submit the unit price information once it chose to submit its proposal". Id. at 8. Like the plaintiff in Chemical Waste, MDA was required to tell the government what it was going to charge for various goods and services if it was going to be awarded the government contract.
Additionally, none of the prevalent policy concerns addressed by the court in Critical Mass are present in this case. Unlike the NRC in Critical Mass, NASA does not need to "encourage cooperation" to receive the information at issue. MDA is not doing the government a favor by providing the most basic information in a contract -- price. Nor is there a concern in this case of ensuring the "continued availability" of the type of information at issue. The launch industry is a multi-million dollar market, and if the contractors want to win lucrative government contracts they must provide NASA with specific pricing elements for their goods and services.
Plaintiff also attempts to gain support from this court's memorandum opinion in McDonnell Douglas Corp. v. NASA, No. 93-1540 (RCL) (D.D.C. Nov. 17, 1993) ("McDonnell II"). In that case, a FOIA request was made for the comments submitted by MDA to justify nondisclosure of the CLINs at issue in this case. In McDonnell II, however, different information was at issue, and it was clear that the comments from MDA were voluntarily submitted to NASA. Furthermore, the type of voluntary information in McDonnell II was exactly the type of information that the court in Critical Mass contemplated as being protected from disclosure by FOIA exemption four. MDA submitted explanations to help NASA make the right decision regarding disclosure of the information at issue. NASA. did not require McDonnell Douglas to provide comments, nor did the agency specifically require certain information to be included in the voluntary comments.
NASA contends that there is not enough information in the record relating to the contractual process between NASA and MDA for the court to determine if the price elements at issue were voluntary. But the contractual process for achieving the final prices is not at issue. How the final prices for the contract were arrived at, whether from a firm offer or a process of negotiation, is inconsequential for this analysis. ...