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NPR 's Planet Money Crane FOIA Appeal Letter

NPR 's Planet Money Crane FOIA Appeal Letter

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Published by planetmoney
David Kestenbaum's request for a copy of the Treasury Office of Inspector General's audit report OIG-11-026, Contract Audit Regarding Crane & Company's Price Proposal in Response to Solicitation No. BEP-10-0001 (the "Audit").
David Kestenbaum's request for a copy of the Treasury Office of Inspector General's audit report OIG-11-026, Contract Audit Regarding Crane & Company's Price Proposal in Response to Solicitation No. BEP-10-0001 (the "Audit").

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Published by: planetmoney on Sep 27, 2013
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June 4, 2012Freedom of Information Act Appeal, DODisclosure ServicesDepartment of the TreasuryWashington, D.C. 20020Re: FOIA request to Treasury OIG for contract audit reportDear FOIA Officer:This is an appeal under the Freedom of Information Act, 5 U.S.C. § 552, requestingaccess to and copies of the Treasury Office of Inspector General’s (OIG) audit report OIG-11-026, Contract Audit Regarding Crane & Company’s Price Proposal in Response to Solicitation No. BEP-10-0001 (the “Audit”). I made my initial request on April 13, 2012, and a copy of myinitial request letter is attached hereto as Exhibit A.On May 15, 2012, I received a response to my request in a letter signed by R.K. Delmar,denying my request. A copy of the denial letter is attached hereto as Exhibit B.I appeal the denial of my request. The portions of the Audit that contain informationrelating to profit percentages and costs attributable to particular segments of Crane & Company’s(“Crane’s”) price proposal are not exempt from disclosure under 5 U.S.C. § 552(b)(4)(“Exemption 4”).Exemption 4 protects “matters that are … trade secrets and commercial or financialinformation obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4).However, FOIA's exemptions “do not obscure the basic policy that disclosure, not secrecy, is thedominant objective of the Act.”
 Dept. of Air Force v. Rose
, 425 U.S. 352, 361 (1976). Thus,any FOIA exemption “must be narrowly construed.”
A proper construction would requiredisclosure of the information requested. Even if similar information might be exempt in other 1
cases, the information I requested is not exempt from disclosure, because of Crane’s uniquestatus and relationship with the Department of Treasury (DOT) and the reasons set forth below.
In your denial, you explained that “businesses are considered ‘persons’ for the purpose of the [Exemption 4] definition.” While that may be true, the specific information that I amrequesting is part of a broad, comprehensive analysis that was assembled by DCAA after itretrieved the necessary information from DOT. Because DCAA did not receive the informationdirectly from Crane, but rather used the information as part of a government-generated analysisof Crane’s contract with DOT, that information was not “obtained from a person” within themeaning of Exemption 4.Courts have held that information produced by the government is not “obtained from a person” and thus does not come within the scope of Exemption 4.
See Buffalo Evening News, Inc. v. Small Bus. Admin.
, 666 F. Supp. 467, 469 (W.D.N.Y. 1987) (ordering disclosure and rejecting agency’s argument that the agency “obtain[ed] information concerning the status of …[the] loan from the small business itself … [and] merely compiles and records the data supplied  by the business through its loan payment activity”).One analogous case is particularly demonstrative. In
Philadelphia Newspapers, Inc. v. Dept. of Health & Human Serv.
, the plaintiffs sought access to results within HHS’s audit of medicare billing practices of Clinical Practices of the University of Pennsylvania (CPUP). 69F.Supp.2d 63, 65 (D.D.C. 1999). Judge Robertson explained that Exemption 4 did not apply toHHS spreadsheets that were generated from contractor-furnished raw data.
. at 66-67. Thecourt dismissed HHS’s claims that the information was obtained from CPUP because it was2
 based on CPUP’s “raw data”, holding that “[a]n audit is not simply a summary or reformulationof information supplied by a source outside the government. It also involves analysis, and theanalysis was prepared by the government.”
at 67.For the same reasons, exemption 4 does not apply to the data requested in this case. Thefact that DCAA could conceivably use information shown in the Audit to generate some of thesame information does not mean that the DCAA-generated Audit reflecting the final informationfrom Crane’s proposal and DOT’s solicitation were “submitted” by Crane. Crane is wholly anoutsider to the auditing process between DCAA and DOT, and has no control over theinformation that is discovered and published in the audit process. Similar to the information atissue in
Philadelphia Newspapers
, even though some or all of the raw data that Crane provided as part of its bid proposal was included in the Audit , the consolidation, organization, expressionand analysis of that information was prepared by DCAA. DOT has therefore not shown that therequested information was “submitted by a person.”
48 C.F.R. § 15.408
creates a legal obligation for Crane to submit its profitmargin as part of its bid proposal.
In your denial, you said that Crane “supplied its profit margin and cost informationvoluntarily as a proposal,” and that such information should be protected because that type of information is not usually made publicly available. Based on our analysis of the relevant caselaw and government procurement regulations, we conclude that you have mistakenly contended that the lower bar governing voluntarily disclosed information applies to this case.3

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