The opinion of the court was delivered by: Kessler, District Judge.
These matters are before the Court on the Motions for Summary
Judgment of Defendant General Services Administration ("GSA"),
and upon the Cross Motions for Summary Judgment of Sprint
Communications Company, L.P. ("Sprint"), and of MCI Worldcom,
Inc. ("MCI"). These cases are consolidated for the purposes of
this Memorandum Opinion and Order. Upon consideration of the
motions, oppositions, replies, and the entire record herein, for
the reasons stated below, the Court denies Defendant's Motions
for Summary Judgment and grants Plaintiffs' Motions for
Plaintiffs, MCI and Sprint, bring this "reverse" Freedom of
Information Act ("FOIA") action to enjoin disclosure by
Defendant GSA of pricing information that was submitted in
connection with Plaintiffs' contracts to provide
telecommunications services to the Government. Plaintiffs
contend that disclosure would violate FOIA, Exemption 4,
5 U.S.C. § 552(b)(4), the Trade Secrets Act, 18 U.S.C. § 1905, and
applicable federal regulations.
A. The FTS2001 Contracts and B-Tables
The GSA, through its Federal Technology Service ("FTS"),
provides government agencies and other government related
entities throughout the world with long distance
telecommunications services. GSA currently provides these
services by means of two multi-year, long-distance contracts
known as "FTS2001 Contracts." GSA awarded one FTS 2001 Contract
to Sprint on December 18, 1998, and the other to MCI on January
Among other things, the FTS2001 Contracts require that
Plaintiffs provide various types of long distance services to
the Government for a base term of four years. GSA has the option
to renew the Contracts for up to four additional years
thereafter, making the total life of the FTS2001 Contracts eight
years. At the time of the writing of parties' briefs, Plaintiffs
were performing "Contract Year 2."
In order to obtain the FTS2001 Contracts, Plaintiffs were
required to submit detailed proposals covering a broad array of
telecommunications services to be provided to the Government,
including services for voice, data and internet. Plaintiffs also
submitted detailed pricing schedules known as "B-Tables." The
B-Tables are complex matrices in computer data base format that
contain detailed line-item pricing information. In particular,
the B-Tables contain a "break down" of the price of every call,
transmission or service into its component parts.*fn1 There
are separate B-Tables for each of the eight years of the FTS2001
Contracts, and together the B-Tables total tens of thousands of
pages of pricing data for all services and features to be
provided to the Government under the FTS2001 Contracts.
B. GSA's Decision to Release FTS2001 Contract B-Tables
On April 11, 2000, when Plaintiffs were performing Year 2 of
the FTS2001 Contracts, GSA announced that it was adopting a new
policy regarding the disclosure of pricing data. GSA informed
Plaintiffs that, pursuant to this policy, it would now publicly
disclose all "contract unit prices" contained in the FTS2001
Contracts. In particular, GSA indicated that it would disclose
Plaintiffs' B-Tables for the remaining years, or "future-years,"
of the FTS2001 Contracts (i.e., Years 3-8).
On April 18, 2000, GSA received a FOIA request from Qwest
Communications Company ("Qwest"), seeking, among other things,
all "unit pricing" information submitted by Plaintiffs in
connection with the FTS 2001 Contracts. On April 27, 2000,
Plaintiffs filed this action seeking to enjoin disclosure of
this information to Qwest for FTS2001 Contract Years 3-8. On May
5, 2000, parties entered into a stipulation whereby GSA agreed
not to release any of the contract pricing information at issue
in this litigation.
Under Fed.R.Civ.P. 56, a motion for summary judgment shall be
granted if the pleadings, depositions, answers to
interrogatories, admissions, and affidavits show that there is
no genuine issue of material fact, and that the moving party is
entitled to judgment as a matter of law. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986).
Plaintiffs' challenge to GSA's decision to disclose their
B-Tables arises under the Administrative Procedure Act ("APA").
The APA permits a person "affected or aggrieved by agency
action" to seek "judicial review thereof." 5 U.S.C. § 702. If
upon review of the administrative record, the court determines
that the agency action was "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law," then the
court "shall . . . hold unlawful and set aside" that agency
action. 5 U.S.C. § 706.
While an agency's interpretation of regulations is normally
entitled to considerable deference, Chevron U.S.A. Inc. v.
Natural Resources Defense Council, 467 U.S. 837, 844, 104 S.Ct.
2778, 81 L.Ed.2d 694 (1984), the Court will not grant such
deference in this case. The FAR is not written or prepared by
GSA, but rather is a joint product of several agencies.*fn5
Accordingly, only minimal deference is due.
See e.g., Caiola v. Carroll, 851 F.2d 395, 399 (D.C.Cir. 1988)
(deference to agency interpretation inappropriate where
regulation written and promulgated by several agencies);
Novicki v. Cook, 946 F.2d 938, 941 (D.C.Cir. 1991) (same).
MCI and Sprint challenge GSA's April 11, 2000, decision to
disclose the pricing information found in Plaintiffs' B-Tables
for FTS2001 Contract Years 3-8. As discussed below, the Court
finds that GSA's decision is arbitrary and capricious because:
(1) it is contrary to §§ FAR 15.503 and 15.506, the Trade
Secrets Act, and FOIA Exemption 4; (2) violates GSA's own FOIA
regulations; and (3) represents a departure from GSA precedent
without reasoned explanation.
A. GSA Acted Arbitrarily and Capriciously Because FAR §§
15.503 and 15.506, FOIA Exemption 4, and the Trade Secrets
Act Prohibit Disclosure of Plaintiffs' B-Tables.
GSA's principal argument is that FAR §§ 15.503(b)(1) and
15.506 require that Plaintiffs' B-Tables be publicly disclosed.
Section 15.503(b)(1), which concerns postaward notices ...