Commission Document

Federal Communications Commission FCC 12-14

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
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DONALD J. CARNEY
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On Request for Inspection of Records
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FOIA Control No. 2011-427
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OMNIPLEX WORLD SERVICES
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CORPORATION
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On Request for Confidential Treatment
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MEMORANDUM OPINION AND ORDER

Adopted: February 1, 2012

Released: February 2, 2012

By the Commission:
1. We have before us an Application for Review filed by OMNIPLEX World Services
Corporation (OMNIPLEX)1 seeking review of a decision of the Office of the Managing Director (OMD).2
In the Disclosure Decision under review, OMD partially granted Donald J. Carney’s Freedom of
Information Act (FOIA) request3 for copies of price and technical quotations (the “quotations”) that
OMNIPLEX submitted to the Commission in a GSA Multiple Award Schedule order competition for
FCC guard services.4 OMD decided that the OMNIPLEX quotations would be released to Mr. Carney
after redaction of confidential commercial information under FOIA Exemption 4.5 In the AFR,
OMNIPLEX opposes release of the quotations, contending that a FOIA exemption statute, 41 U.S.C. §
4702 (formerly 41 U.S.C. § 253b(m)), applies. Mr. Carney opposes the AFR, both with respect to
OMNIPLEX’s suggestion that an exemption statute applies and, alternatively, with respect to
OMNIPLEX’s claimed right to review the redactions the Commission would make under FOIA
Exemption 4.6


1 Letter from William A. Turk, OMNIPLEX, to Office of the General Counsel (Sept. 7, 2011) (the AFR).
2 Letter from Chief of Staff, OMD, to Donald J. Carney, Perkins Coie (Aug. 18, 2011) (Disclosure Decision).
3 Letter from Donald J. Carney, Perkins Coie, to Deputy Managing Director (Ginsburg), OMD (June 10, 2011)
(Request).
4 Uniformed Protective Support Services (“UPF”), Sol. No. SOL10000004, Amend. 8 (Dec. 10, 2010) (request for
quotations, as amended); Order No. PUR1100051, GSA Multiple Award Sched. Contract No. GS-07F-0256L (Feb.
3, 2011) (order as placed with OMNIPLEX).
5 5 U.S.C. § 552(b)(4).
6 Letter from Donald J. Carney, Perkins Coie, to Office of the General Counsel (Sept. 13, 2011) (Opposition); see
also Letter from William A. Turk, OMNIPLEX, to Office of the General Counsel (Sept. 20, 2011) (Reply); Letter
from Nereyda Dunn, OMD, to Lisa McLeod, OMNIPLEX (June 14, 2011) (soliciting response or non-response to
Request); Letter from William A. Turk, OMNIPLEX, to Nereyda Dunn, OMD (June 23, 2011) (requesting extensive
redactions); Letter from Donald J. Carney, Perkins Coie, to Nereyda Dunn, OMD (June 30, 2011) (opposing
redaction requests). In the volley of correspondence that preceded the Disclosure Decision, OMNIPLEX had been
afforded an opportunity to suggest redactions to its quotations for commercial confidential information. In the
(continued....)

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Federal Communications Commission FCC 12-14

2. As used in this Memorandum Opinion and Order, “the order” or “order for guard services”
means the FCC’s GSA Multiple Award Schedule order for guard services made on February 4, 2011.
The order was placed after considering the “business and technical quotations” of several GSA schedule
contract holders in response to the FCC’s request for quotations (RFQ). 7 OMNIPLEX was the prevailing
competitor.
3. As discussed below, OMNIPLEX’s application is granted because the quotations, to the
extent not set forth or incorporated by reference in a contract with the Commission, must be withheld
under 5 U.S.C. § 552(b)(3) (records specifically exempted from disclosure by statute) and 41 U.S.C.
§ 4702, which precludes the release of contract proposals that are not set forth or incorporated by
reference in a contract entered into between the agency and the successful vendor that submitted the
proposal. We find that, apart from extracts of quotation information set forth in the text of the order for
guard services (and previously found to be exempt from release under FOIA Exemption 4 as confidential
commercial information), the quotations were not set forth or incorporated by reference in a contract and
are therefore not subject to release.

I. BACKGROUND

4. The instant FOIA request grew out of an earlier FOIA request made by Mr. Carney for “[t]he
entire . . . [c]ontract awarded by the FCC under Solicitation SOL10000004 . . . to Omniplex . . ., including
any proposal set forth or incorporated by reference in the contract issued by the FCC to Omniplex.”8 On
June 6, 2011, OMD found that certain passages from the FCC’s order for guard services that had been
drawn from the quotations submitted by OMNIPLEX, such as line item prices and lists of the key
personnel, were covered by the initial FOIA request but were exempt from disclosure under FOIA
Exemption 4.9 OMD also concluded that the OMNIPLEX business and technical quotations submitted on
December 15, 2010 otherwise “were not incorporated into the contract,” and therefore fell outside of the
initial FOIA request by its own terms.10 OMD thus disclosed the redacted order for guard services and its
attachments to Mr. Carney, but it did not provide him with the quotations.
5. After receiving OMD’s June 2011 Decision, Mr. Carney wrote to OMD setting forth his view
that the “[q]uotes in response to FCC Solicitation SOLI0000004 are responsive to FOIA request 2011-
289.” Mr. Carney argued that the quotations were incorporated into the order because OMNIPLEX’s
quotation prices were reproduced in the contract, and, therefore the quotes were effectively incorporated


(...continued from previous page)
Disclosure Decision, OMD identified the categories of information that it regarded as commercial confidential. In
the AFR, OMNIPLEX first asserted that FOIA Exemption 3 applied (through 41 U.S.C. § 4702), and for that reason,
stated that it did not address the specific quotation redactions that OMD sent with the decision. OMNIPLEX further
stated that in “the event that the results of this appeal allow for the release of any of OMNIPLEX's proposals,
OMNIPLEX reserves the right to separately address the specific redactions that have been proposed.”
7 Each vendor’s quotations contained substantial narratives explaining its relevant experience; past performance; key
personnel; proposed technical approach and staffing plan; and any assumptions, conditions, and exceptions
respecting the terms, conditions, and requirements of the RFQ; as well as firm fixed prices and rates for hourly
services.
8 Electronic FOIA Request of Donald J. Carney, Perkins Coie, to FCC, FOIA@fcc.gov (Apr. 6, 2011) (docketed as
FOIA No. 2011-289) (First Request).
9 Letter from Deputy Managing Director (Ginsburg), OMD, to Donald J. Carney, Perkins Coie (June 6, 2011) (June
2011 Decision).
10 Id.
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Federal Communications Commission FCC 12-14

by reference into the contract. He requested that his letter be treated as a FOIA request “for Omniplex's
Technical and Business Quotes in response to FCC Solicitation SOL10000004.”11
6. OMD treated Mr. Carney’s letter of June 10, 2011 as a new FOIA request for the quotations.
On June 14, 2011, OMD afforded OMNIPLEX an opportunity to respond to the new request, including an
opportunity to explain why any portions of these records are confidential commercial information. After
considering OMNIPLEX’s FOIA Exemption 4 assertions (submitted on June 23, 2011), and Mr. Carney’s
counterarguments to those assertions (submitted on June 30, 2011), OMD concluded in the Disclosure
Decision of August 18, 2011 that the business and technical quotations would be disclosed subject to
redaction of FOIA Exemption 4 material. Specifically, OMD determined to redact from the quotations
descriptions of: the software, techniques, and training that Omniplex has developed to meet the contract
requirements; personnel assigned to the implementation of the order, including experience; Omniplex's
projected costs and rates; information about Omniplex's performance under other contracts; and
information about Omniplex's subcontractors. It also notified Mr. Carney that it was sending the redacted
documents to OMNIPLEX for review and that it would provide Mr. Carney the final redacted documents
if and when no appeal had been filed or in the case of appeal, once the appeals process is resolved.
7. In the AFR, OMNIPLEX first asserted that FOIA Exemption 3 applied (through 41 U.S.C. §
4702), and for that reason, stated that it did not address the specific quotation redactions that OMD sent with
the decision. OMNIPLEX further stated that in “the event that the results of this appeal allow for the release of
any of OMNIPLEX's proposals, OMNIPLEX reserves the right to separately address the specific redactions
that have been proposed.” In addition to his general objection to applying FOIA Exemption 3 to the
quotations, Mr. Carney objected to affording OMNIPLEX an opportunity for comment on those
redactions if the FOIA Exemption 3 argument fails. OMNIPLEX had already been asked to state what it
regarded as qualifying for FOIA Exemption 4.

II. DISCUSSION

8. Generally, FOIA Exemption 3 exempts from mandatory disclosure matters that are
“specifically exempted from disclosure by statute,” 5 U.S.C. § 552(b)(3), and 41 U.S.C. § 4702 is a FOIA
Exemption 3 statute.12 The central matter before us is whether 41 U.S.C. § 4702 applies to OMNIPLEX’s
technical and business quotations and thus precludes their release under FOIA. Under subsection
4702(b), a “proposal in the possession or control of an executive agency may not be made available to
any person under section 552 of title 5.”13 However, the restriction does not apply to “a proposal that is


11 Letter from Donald J. Carney, Perkins Coie, to Deputy Managing Director (Ginsburg), OMD (June 10, 2011)
(regarding decision on FOIA No. 2011-289). In this letter, Mr. Carney did not object to the Exemption 4 redactions
made to the text of the order that was released to him; he objected only to OMD’s conclusion that the quotations
were not within the scope of his initial request.
12 See U.S. Department of Justice, Office of Information Policy, Statutes Found to Qualify under Exemption 3 of the
FOIA (Aug. 2011), available at, http://www.justice.gov/oip/exemption3.pdf (last visited January 9, 2012). The
document lists as an Exemption 3 statute 41 U.S.C. § 253b(m), recently recodified as 41 U.S.C. § 4702. Pub. L. No.
111-350, §§ 3, 7, 124 Stat. 3677, 3794, 3855 (2011); see also Hornbostel v. U.S. Dep't of the Interior, 305 F. Supp.
2d 21, 30 (D.D.C. 2003) (finding proposals to be properly withheld from disclosure pursuant to Exemption 3,
because statute “specifically prohibits the disclosure of ‘a proposal in the possession or control of an agency’” and
quoting 41 U.S.C. § 253b(m)), summary affirmance granted, No. 03-5257, 2004 WL 1900562 (D.C. Cir. Aug. 25,
2004).
13 In the statute, “the term ‘proposal’ means a proposal, including a technical, management, or cost proposal,
submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.” 41 U.S.C.
§ 4702(a).
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Federal Communications Commission FCC 12-14

set forth or incorporated by reference in a contract entered into between the agency and the contractor that
submitted the proposal.”14
9. We are not aware of any judicial precedent addressing what constitutes incorporation by
reference for purposes of 41 U.S.C. § 4702 (or its predecessor, former 41 U.S.C. § 253b(m)). The Federal
Circuit, however, has interpreted “incorporation by reference” in other contexts. The court has stated for
general federal contracting purposes it treats the expression as it does in patent cases, and in both contexts
“‘[t]o incorporate material by reference, the host document must identify with detailed particularity what
specific material it incorporates and clearly indicate where that material is found in the various documents
[identified].’”15 The court concludes, “the incorporating contract must use language that is express and
clear, so as to leave no ambiguity about the identity of the document being referenced, nor any reasonable
doubt about the fact that the referenced document is being incorporated into the contract.”16
10. The contract at issue here was placed using an Optional Form 347.17 The Optional Form 347
on which the current order was placed, together with its attachments, was an integrated contract that
stands by itself. The form’s list of supplies and services simply reads: “[p]rovide uniformed protective


14 41 U.S.C. § 4702(c). The statute was primarily crafted by the House of Representatives as section 821b(m) of the
National Defense Authorization Act of 1997 to reduce “administrative burden on federal agencies receiving requests
for release of contractor proposals even though most if not all of the information is exempt under the FOIA
process.” H.R. Rep. 104-563, p. 327 (1996). The conference agreement incorporated a Senate “amendment
clarifying the status of those portions of contractor proposals included in a government contract.” H.R. Conf. Rep.
No. 104-724, p. 771 (1996). The clarification excepted from the nondisclosure rule a “proposal that is set forth or
incorporated by reference in a contract entered into between the agency and the contractor that submitted the
proposal.” 41 U.S.C. § 4702(c). See also U.S. Department of Justice, Office of Information and Privacy, New
Statute Protects Contractor Proposals, FOIA Update Vol. XVIII, No. 1 (1997), available as
http://www.justice.gov/oip/foia_updates/Vol_XVIII_1/ page2.htm.
15 Northrop Grumman Information Technology, Inc. v. U.S., 535 F.3d 1339, 1343-47 (Fed. Cir. 2008), quoting Cook
Biotech, 460 F.3d at 1376, and Advanced Display Systems, 212 F.3d at 1282. The Boards of Contract Appeals, such
as in Corning Const. Corp. v. Department of the Treasury, GSBCA No. 16127-TD, 2003 WL 22456725
(G.S.B.C.A.) (Oct. 29, 2003), have characterized “incorporation by reference” for general contracting purposes in a
similar fashion:
Incorporation by reference is a common practice in government contracting, routinely
recognized as an effective way to include a term, condition, or standard in the contract
without further spelling it out in the document signed by the parties. See Klinger
Constructors. Inc., ASBCA 41006, 91-3 BCA ¶ 24,218, at 121,126; Wright-Dick-Boeing,
ENGBCA 3576, 77-1 BCA ¶ 12,437, at 60,205. The term “incorporation by reference”
generally requires a reference in one document to the terms of another. Further, the
incorporating document must not only refer to the incorporated document, but also bring
the terms of the incorporated document into itself as if fully set out. Sucesion J.
Serralles, Inc. v. United States, 46 Fed. CI. 773, 785-86 (2000); Firth Construction Co.,
Inc. v. United States, 36 Fed. Cl. 268, 275 (1996).
16 Northrop Grumman, 535 F.3d at 1344.
17 See 48 C.F.R. § 53.302-347 (form reproduced). The Optional Form 347 on which the current order was placed
can be an integrated contract that stands by itself once signed by the contractor, performed upon, or made operative
by the terms of a master contracting vehicle, such as a GSA Schedule Contract. Alternatively, and often in service
contracts, the order can include terms found in attached documents or documents incorporated by reference. In GSA
schedule contracting, as was conducted here, the request for quotation (RFQ) is typically a letter RFQ to vendors
with quotation instructions and evaluation criteria. The RFQ often includes, and in this case did include, a statement
of work to be performed. Once a vendor is selected, an order is typically placed by sending an order form (here, the
Optional Form 347, with its continuation sheet, Optional Form 348) to the successful vendor. The form may append
the statement of work, sometimes with blanks filled in or negotiated items altered. Sometimes, some or all of the
RFQ attachments and/or the successful vendor’s quotation are appended to the form.
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Federal Communications Commission FCC 12-14

Services in accordance with the statement of work and the attached schedule of services.” It does not
incorporate by reference OMNIPLEX’s business or technical quotation.
11. Attachment 7 to the request for quotation was a detailed schedule of services containing
blanks that competing vendors filled in with unit and total prices and rates. Attachment 7 was not
included as an attachment to the order, however. Instead its content was partially reproduced as a
continuation sheet to the Optional Form 347, providing more detailed pricing than the base form, with
figures drawn from OMNIPLEX’s quotation. Key personnel information drawn from the technical
portion of the vendor’s quotation was also reproduced in the order. These pricing figures, associated
explanatory notes, and list of key personnel are the only parts of OMNIPLEX’s business or technical
quotation contained in the order for guard services. This inclusion was done by setting forth language
from the quotation in the order, not through incorporation by reference.
12. Mr. Carney argues that incorporation of the business and technical quotations occurred by
implication because certain information was drawn from that quotation to complete pricing or key
personnel blanks. He also argues that because the FCC’s contracting office considered the technical
quotation in deciding to place the order with OMNIPLEX, the entire quotation was incorporated. But the
exception in 41 U.S.C. § 4702(b) is narrower than Mr. Carney suggests; it allows disclosure (absent some
other grounds for withholding) not of any proposal that is drawn upon or considered by an agency, but
only of “a proposal that is set forth or incorporated by reference in a contract entered into between the
agency and the contractor that submitted the proposal.” If Mr. Carney’s arguments were to be accepted,
they would eviscerate section 4702’s limited exception for incorporated proposals by expanding it to
include essentially all proposals of awardees. Finally, Mr. Carney’s position is at odds with the general
rule that incorporation by reference should be clear.18
13. Mr. Carney also asserts that OMD suggested by its actions, and the contractor at one point
stated outright,19 that OMNIPLEX’s final quotations were incorporated into the order. Significantly Mr.
Carney does not assert that these statements preclude the Commission from concluding in this AFR
proceeding that FOIA Exemption 3 applies here. For that reason alone, we need not consider this
argument. If we did consider the argument, we would find separate and independent grounds for rejecting
it. Contrary to Mr. Carney’s argument, although OMD previously relied on FOIA Exemption 4, it found
in its June 2011 Decision that “Omniplex's Technical and Business Quotes that were contained in its
initial proposal in response to the RFQ . . . were not incorporated into the contract itself.”20 Further, as
Mr. Carney implicitly recognizes, OMNIPLEX’s position could not bind the Commission, and we
conclude that it would be inappropriate to release documents that are barred from release 41 U.S.C.
§ 4702(b).
14. Accordingly, we find that OMNIPLEX’s quotations are exempt from disclosure under 5
U.S.C. § 552(b)(3) and 41 U.S.C. § 4702, except to the extent that they were set forth in the order for
guard services.21 Such parts of the quotations as were included in the text of the order for guard services
were previously found by OMD to be exempt from disclosure under FOIA Exemption 4 and that decision
has become final and not subject to further review. Given these conclusions, Mr. Carney’s objections


18 See supra note 15 (and associated text).
19 Opposition at 2; see Letter from William A. Turk, OMNIPLEX, to Nereyda Dunn, OMD (Aug. 22, 2011) (where
Omniplex states that it did “not believe that any proposal prior to the final one submitted on December 15, 2010 was
incorporated into the contract.”).
20 See June 2011 Decision (emphasis added).
21 Even if section § 4702 were somehow found not to apply in these circumstances, the Commission would, in that
event, be responsible for reaching a final determination as to FOIA Exemption 4 coverage of the quotations. See,
e.g., Raher v. FBI, 759 F.Supp.2d 1148, 1162-1163 (D.Or. 2010).
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Federal Communications Commission FCC 12-14

about affording OMNIPLEX further opportunity for comment on proposed redactions to its quotations
need not be addressed.22

III.

ORDERING CLAUSE

15. Accordingly, IT IS ORDERED that the Application for Review filed September 7, 2011 by
OMNIPLEX IS GRANTED. Mr. Carney may seek judicial review of this action pursuant to 5 U.S.C.
§ 552(a)(4)(B).23
16. The officials responsible for this action are the following: Chairman Genachowski and
Commissioners McDowell and Clyburn.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary


22 Opposition at 2; see supra ¶ 7.
23 We note that as part of the Open Government Act of 2007, the Office of Government Information Services
(OGIS) was created to offer mediation services to resolve disputes between FOIA requesters and Federal agencies as
a non-exclusive alternative to litigation. Using OGIS services does not affect Mr. Carney’s right to pursue litigation.
Mr. Carney may contact OGIS in any of the following ways:
Office of Government Information Services
National Archives and Records Administration
8601 Adelphi Road - Room 2510
College Park, MD 20740-6001
E-mail: ogis@nara.gov
Telephone: 301-837-1996
Facsimile: 301-837-0348
Toll-free: 877-684-6448.
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