                                                September 2, 1998

Memorandum

To:      Associate Solicitors
         Regional Solicitors
         Field Solicitors
         Designated FOIA Attorneys

From:    Timothy S. Elliott, Acting Associate Solicitor - Division of General Law
                               
Subject: Freedom of Information Act (FOIA) - Concession Contracts

This memorandum provides the Division of General Law's position on whether a FOIA exemption (3) statute enacted in 1996 protects from disclosure proposals submitted in connection with bids for concession permits. We have received several inquiries, as well as FOIA appeals, concerning this issue. We conclude that the exemption (3) statute does not protect such proposals from release.

Exemption (3) allows the withholding of information prohibited from disclosure by another statute only if one of two disjunctive requirements is met: the statute either "(A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld." 5 U.S.C. § 552(b)(3). A statute thus falls within the coverage of exemption (3) if it satisfies either one of the exemption's disjunctive requirements.

On September 23, 1996, Congress passed the National Defense Authorization Act for Fiscal Year 1997 (National Defense Authorization Act), Pub. L. No. 104-210, § 821, 110 Stat. 2422. Section 821 of the National Defense Authorization Act amends Section 303B of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. § 253b) (Act) to prohibit agencies from releasing certain contractor proposals under the FOIA. Section 303B of the Act thereby qualified as an exemption (3) statute under the FOIA.

As amended, the Act prohibits agencies from releasing under the FOIA any proposal "submitted by a contractor in response to the requirements of a solicitation for a competitive proposal," unless that proposal "is set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal." The effect of this prohibition is two-fold. First, it provides blanket protection for the proposals submitted by unsuccessful offerors in response to a solicitation. Those proposals, by definition, would not be "set forth or incorporated by reference in a contract entered into between the agency" and that offeror. Second, it provides protection even for proposals submitted by a successful offeror, provided that such a proposal is not actually "set forth or incorporated by reference in" the ensuing contract. Thus, the key determinant of exempt status is whether the particular proposal was actually set forth in or incorporated into the contract.

Concession contracts are awarded under the authority of the Concessions Policy Act of 1965, 16 U.S.C. § 20 (1994). The General Accounting Office has held that concession contracts are not procurements and may be awarded without utilizing the normal competitive rules applicable to the award of Federal contracts. 49 Comp. Gen. 88 (1969). It is our opinion that a proposal submitted in connection with a bid for a concession permit is not considered a procurement under the Act. There being no other statute that might prohibit their release, such proposals are not protected from disclosure under exemption (3). Despite the inapplicability of exemption (3), FOIA requests for such proposals should continue to be evaluated under exemption (4).

By copy of this memorandum, I am requesting that the Departmental FOIA Officer insure that all bureau/office FOIA Officers are made aware of our position on this matter.

cc: Departmental FOIA Officer
    Departmental FOIA Appeals Officer
    DGL Attorneys