FOIA Post (2004): The Use of Contractors in FOIA Administration

July 29, 2004

The Use of Contractors in FOIA Administration

In recent years, the use of contractors has become an increasingly significant part of the administration of the Freedom of Information Act at growing numbers of federal agencies. This comes at a time when the numbers of FOIA requests received by many agencies, as well as across the government overall, are on the rise. See, e.g., FOIA Post, "Summary of Annual FOIA Reports for Fiscal Year 2003" (posted 7/29/04) (reporting that annual FOIA requests reached three million in the last fiscal year). To help deal with this, many departments and agencies, both large and small, now make use of contractors for various aspects of their handling of FOIA requests -- agencies such as the Department of Defense, the Department of Homeland Security ("DHS"), the Pension Benefit Guaranty Corporation ("PBGC"), the Department of State, the Department of the Interior, the National Security Agency ("NSA"), the Department of Energy, the Department of Transportation, and the Department of Justice's Executive Office for United States Attorneys.

Generally speaking, government agencies that use contractors or contract employees in their FOIA operations are satisfied with the quality of the work that they do. As a general rule, contractors are allowed to do most of the work that government FOIA employees do, but their work always is subject to ultimate approval by government employees. The legal standard governing any "contracting out" of FOIA work is that "inherently governmental functions" must be performed by government employees, while other functions may be performed by contractors. This all constitutes a big change from earlier days of the FOIA, more than two decades ago, when the use of contractors for FOIA work was less legally certain and relatively rare. See FOIA Update, Vol. IV, No. 1, at 2 (noting early efforts by some agencies to use contractors for duplication services under the FOIA, and encouraging agencies to extend "the concept of contracting out" in accordance with applicable Comptroller General decisions). By contrast, the legitimacy of using contractors generally is undisputed and the practice is relatively commonplace today.

The Scope of Contractor FOIA Work

By and large, the departments and agencies that make use of contractors in their FOIA operations give them a significant share of their total FOIA work. At the newly created Department of Homeland Security, for example, contractors perform approximately one-third of all headquarters FOIA work. The same is true at the Department of State, where contractors likewise undertake a wide range of FOIA activities. Similarly, at the PBGC, a much smaller agency, the ideal staff consists of two contractor employees out of a total of five or six FOIA personnel, and at the Justice Department's Executive Office for United States Attorneys eight out of twenty-six FOIA personnel are contractor employees. At the main FOIA office both of the Department of the Interior and of one of its sub-agencies, the Bureau of Land Management ("BLM"), contractors perform approximately half of the overall work. Surprisingly, one agency where contractor personnel play no direct role in the actual processing of FOIA requests is the Department of Energy -- an agency heavily laden with contractors elsewhere -- where contractors perform strictly clerical duties in support of FOIA processing.

Indeed, at most agencies that now use contractors to support their FOIA operations, the scope of FOIA duties performed by contractors is nearly as broad as of those performed by government employees. At DHS, subject to the final approval of a government employee, many contractor personnel perform all aspects of entry-level FOIA-request processing. This is also true of the scope of the work that contractors perform at the Department of Defense, the Department of State, the PBGC, and the Executive Office for United States Attorneys at the Department of Justice.

Some agencies further limit the scope of their contractors' FOIA-processing work. At the Department of the Interior, for example, only contract personnel who have worked there for a substantial length of time are permitted to process FOIA requests; they may view almost all documents that the government employees view, but cannot put anything down on paper without review by a government employee. At NSA, only government employees may correspond with requesters, search for or "pull" responsive records, and determine fee categories.

At the Department of Energy, as previously mentioned, contract employees are more strictly limited to performing clerical support functions in FOIA offices and none of the actual FOIA processing. By comparison, the Transportation Security Administration ("TSA"), now a part of DHS, does not allow contractors to handle documents containing sensitive information, but does not otherwise limit its contractors' duties. BLM allows its contractor to perform all aspects of FOIA processing and to see nearly all documents, but specifies that any official correspondence to the requester must bear the name of a government employee, not the contractor.

There also is a good deal of variation in whether agencies grant security clearances to contractors for FOIA purposes, but this variation usually has more to do with the nature of the documents that an agency handles than with any distinction between contractor personnel and government employees per se. Some or all contractors have security clearances at DHS, the Department of State, the Justice Department's Executive Office for United States Attorneys, the Department of Defense, the PBGC, and TSA. In the case of the Department of Defense, no FOIA contractor yet has been granted access to compartmentalized top secret information, but that might be just a matter of time. Similarly, TSA does not yet allow contractors to see sensitive documents, but this is due to the time necessary to train the contractors to handle the documents rather than specific concerns about the contractors themselves.

In sum, nearly all of the agencies that use contract personnel for purposes of FOIA administration grant them a major role in accomplishing FOIA-processing tasks and though there is some variation in the types of such work that contractors can do, the trend clearly is in favor of allowing contractors to do any work that does not require "discretionary decisionmaking." The reason underlying this limitation goes to the heart of the legal basis for contracting for support of agency activities such as the administration of the FOIA.

Legal Basis for Contracting

The legal basis for contracting is the Office of Management and Budget's policy statement of September 23, 1992, regarding the meaning of "inherently governmental functions," as revised just last year. See OMB Circ. No. A-76, Rev. (May 29, 2003) (revising Office of Federal Procurement Policy Letter 92-1, Sept. 23, 1992, "Inherently Governmental Functions"). This governmentwide policy "circular" directs government agencies to classify all government activities as either "commercial" or "inherently governmental." Id. Pursuant to it, government employees must perform all "inherently governmental" activities -- and for activities classified as "commercial," departments and agencies must give the task to whoever will most inexpensively and efficiently perform it. Id.

The recently updated circular differs from the original OMB circular of 1992, which did not mandate that commercial activities be performed by outside contractors, but merely stated that it was permissible for contractors to perform such activities. See OMB Office of Federal Procurement Policy Letter 92-1, Sept. 23, 1992, "Inherently Governmental Functions." The 1992 circular stated that any part of FOIA administration that requires the exercise of agency "discretion" is an "inherently governmental activity." Id. FOIA offices thus logically proceed on the assumption that at least some of the work involved in FOIA processing is, of course, "inherently governmental." Accord FOIA Update, Vol. IV, No. 1, at 2 (citing, e.g., Comp. Gen. Decisions No. B-205151, Mar. 1, 1982, and No. B-166506, Oct. 20, 1975).

In surveying agencies on their use of contractors for purposes of FOIA administration, the Office of Information and Privacy has found that departments and agencies vary widely in their understanding of the legal basis for such contracting. DHS generally regards FOIA processing as an inherently governmental function, and the FOIA work performed by its contractors is specifically limited so as not to include any discretionary decisionmaking. Similarly, the Department of Defense, BLM, the Department of State, and the Department of Transportation act based upon the premise that FOIA decisionmaking, as opposed to "simple" processing of requests, is inherently governmental. The FOIA offices at the Justice Department's Executive Office for United States Attorneys, the Department of the Interior, and NSA operate likewise; though not specifically aware of the OMB circular in relation to FOIA work, each knew that government and nongovernment actors were different in that all work performed by a contractor must be reviewed by a staff supervisor. Other agencies were essentially unaware of the exact legal basis for using contractors for FOIA work, however, which suggests that the use of contractors in FOIA work is becoming so commonplace that the authority for agency activity in this area now stands unquestioned as a general rule.

Quality of Work

Overall, the departments and agencies that rely on contractors in their administration of the FOIA generally are pleased with the quality of FOIA work done by their contractors. In fact, subject to budgetary constraints, many of them would like to hire more contractors. All of the agencies surveyed by OIP except one, BLM, described their contractors' performance as either "good" or "excellent." In the case of BLM, the first contractor that it used performed well, but the second contractor did not meet quality standards and was terminated. In contrast, BLM's parent agency, the Department of the Interior, is so satisfied with the work of its FOIA contractors elsewhere in the agency that it would like to hire some of them as full-time permanent employees if it were possible. (It is not uncommon for agency FOIA personnel to begin working for an agency as a contract employee and then be hired by that agency as a permanent employee; indeed, one of OIP's senior attorneys first worked for the Justice Department as a contract employee in the Department's Civil Rights Division.)

The Department of Transportation, for its part, has found that the incentives created by free market competition between contractors and the ease of arranging for and terminating the services of contractors seems to yield competitive work from contractors in comparison to government employees. Further, that agency, as well as DHS, BLM, and the PBGC, all have found that FTE limitations sometimes oblige them to use contractors rather than government employees. This has been especially true at DHS, which as a new federal department is suffering "growing pains" regarding the balance between its authorized staffing levels and its budgetary allocations. Nevertheless, according to DHS as well as other agencies, using government employees for FOIA work is still preferable to using contractors, all things being equal. In that vein, at least one agency, the PBGC, has observed that Congress sometimes seems to be more willing to provide additional administrative funding for private contractors than for new FTE government positions.

Perhaps the best indication of both the quality and the ubiquitousness of contractors in the FOIA realm can be found in the fact that their use has become the subject of attention in the training programs of the American Society of Access Professionals (ASAP), which at its 2004 Annual Symposium held this past week devoted a lengthy segment to the topic of "The Contractors." The moderator of this session, former ASAP president William G. Ferroggiaro, readily speaks of his long familiarity with the successful use of contractor personnel in the main FOIA office of the Department of Defense, for example. Coincidentally, it was that FOIA office that this past summer responded to an urgent governmentwide request by OMB's general counsel for suddenly needed assistance with OMB's FOIA processing -- by "detailing" one of its most experienced contract employees to OMB to meet that need.

Conclusion

Thus, for a variety of reasons, perhaps most especially due to recent movements toward privatizing the work of government in general, the use of contractors in the processes of FOIA administration now has become a large part of the FOIA landscape and is likely to remain so for some time to come. As this trend continues, OIP will continue to examine it through presentations of "best practices" reviews of this relatively new aspect of FOIA administration. Any agency wishing to be profiled on its use of contractor personnel, as a model for other agencies, should contact OIP with details of its own experience in this regard.

This FOIA Post article was prepared by Office of Information and Privacy law clerks Jennifer C. Ellis and Sean O'Neill.  (posted 9/30/04)

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