Mci Worldcom, Inc. v. General Services Admin.
| Decision Date | 07 September 2001 |
| Docket Number | No. 00-914(GK).,No. 00-915(GK).,00-914(GK).,00-915(GK). |
| Citation | 163 F.Supp.2d 28 |
| Parties | MCI WORLDCOM, INC., Plaintiff, v. GENERAL SERVICES ADMINISTRATION, Defendant. Sprint Communications Company, L.P. Plaintiff, v. General Services Administration, Defendant. |
| Court | U.S. District Court — District of Columbia |
Thomas Craig Wheeler, Piper Marbury Rudnick & Wolfe, LLP, Washington, DC, for Plaintiff.
Lydia K. Griggsby, Beverly M. Russell, U.S. Attorney's Office, Washington, DC, for Defendant.
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 Summary Judgment.
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.
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 11, 1999.
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.1 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.
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).
GSA acknowledged that its decision to release all pricing data for future years differed from its previous long-standing policy and practice of disclosing only current-year prices.2 GSA explained that its new policy was adopted in response to the 1997 revisions to the government procurement regulations known as the Federal Acquisition Regulations ("FAR"), 48 C.F.R. § 15.500 et seq. ("1997 FAR rewrite").3 In particular, GSA relied upon two FAR regulations concerning disclosure of "unit prices" to unsuccessful offerors, namely FAR §§ 15.503(b)(1) and 15.506(d)(2). 48 C.F.R. §§ 15.503(b)(1) and 15.506(d)(2). GSA concluded that these two regulations as revised mandated disclosure of the pricing information found in Plaintiffs' B-Tables for the remaining years of the FTS2001 Contracts.4
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.5 Accordingly, only minimal deference is due. See e.g., Caiola v. Carroll, 851 F.2d 395, 399 (D.C.Cir.1988) (); 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.
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 to unsuccessful offerors of Government contracts, provides:
(b) Postaward Notices. (1) within 3 days after the date of contract award, the contracting officer shall provide written notification to each offeror whose proposal was in the competitive range but was not selected for award. The notice shall include...
(iv) The items, quantities and any stated unit prices of each award. If the number or other factors makes listing any stated unit prices impracticable at that time, only the total contract price need be furnished in the notice. However, the items, quantities, and any stated unit prices of each award shall be made publicly available, upon request; ...
48 C.F.R. 15.503(b)(iv-v) (emphasis added). Section 15.506, which specifies information to be disclosed in postaward debriefings of offerors states:
(d) At a minimum, the debriefing information shall include -
(2) The overall evaluated cost or price (including unit prices), and technical rating, if applicable, of the successful offeror and the debriefed offeror.
48 C.F.R. 15.506(d)(2) (emphasis added).
Relying exclusively upon the foregoing language, GSA interpreted the FAR to require disclosure of Plaintiffs' B-Tables. Specifically, GSA reasoned that: (1) the B-Tables contain "unit price" information within the meaning of FAR §§ 15.503 and 15.506 and (2) FAR §§ 15.503 and 15.506 require public disclosure of all "unit price" information. As discussed below, GSA has erred on both grounds.
Plaintiffs dispute that the B-Tables constitute "unit prices" within the meaning of the FAR. Plaintiffs maintain that because the B-Tables include detailed cost breakdowns and involve millions of "pricing elements" and "pricing components," they are not "unit prices" and therefore not subject to disclosure under the FAR.
There is no standard definition of "unit price." The FAR does not provide any definition of "unit price," and case law definitions are far from illuminating. See Acumenics Research & Technology v. U.S. Dep't of Justice, 843 F.2d 800, 802 n. 1 (4th Cir.1988) (); U.S. for Use and Benefit of Sanford v. Continental Cas. Co., 293 F.Supp. 816, 822 (N.D.Miss.1968) ().
GSA urges a definition of unit price that is "the amount of public funds the Government pays for its goods and services." See Def.'s Opp'n to Sprint's Mot. for Summ....
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