Board of Contract Appeals General Services Administration Washington, D.C. 20405 _______________________________________________ MOTION FOR PROTECTIVE ORDER GRANTED IN PART: September 30, 1999 _______________________________________________ GSBCA 14732 AT&T COMMUNICATIONS INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Richard J. Conway, Robert J. Higgins, and J. Andrew Jackson of Dickstein Shapiro Morin & Oshinsky LLP, Washington, DC, counsel for Appellant. John E. Cornell, Michael Ettner, and Michael Tully, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. BORWICK, Board Judge. ORDER Respondent, General Services Administration (GSA or Government), claiming either the attorney-client privilege, the attorney work product privilege, or both, has filed a motion for protective order resisting production of ninety-five documents otherwise covered by requests for production submitted by appellant, AT&T Communications, Inc. GSA has submitted a privilege log which briefly describes each document and the privilege(s) allegedly attaching to each document. The privilege log does not, however, explain how each supposedly privileged document meets the elements of the claimed privilege. GSA's motion for protective order does argue at length that GSA's attorneys' simultaneous communications with clients and employees of GSA's independent contractor, Mitretek, should be considered covered by the attorney-client privilege and not waived by the participation of employees of the independent contractor. We grant GSA's protective order in part. We conclude that documents one, six, ten, eleven, twelve, seventy-five, seventy- six, eighty-four, eighty-five, eighty-six, eighty-seven, ninety- one, ninety-two and ninety-five, as well as parts of document two, are privileged and need not be produced. The other parts of document two and the remaining documents are not privileged and must be produced. Documents seven, eighty-eight, eighty- nine, ninety and ninety-four contain procurement sensitive or proprietary material and are to be produced under the Board's protective order. Our rules provide that any party may obtain discovery of any matter not privileged which is relevant to the subject matter involved in the pending case. Rule 115(b). We look to the Federal Rules of Civil Procedure for guidance in construing those Board rules which are similar to the Federal Rules. Rule 101(c). Federal Rule of Evidence 501 generally applies the privilege principles as developed by the common law, except where a privilege is defined by rules prescribed by the Supreme Court pursuant to statutory authority. In applying the privileges, we look to the privileges as defined by the common law and the federal rules and as applied by this Board, other boards, and federal courts. The Government, as the party asserting the privilege, has the burden of establishing that all elements of a privilege apply and that a privilege was not waived. BGW Limited Partnership v. General Services Administration, GSBCA 10501, 93-1 BCA 25244, at 125,732. In deciding whether these documents are subject to the attorney client privilege, we apply the following principles. The essential elements of attorney-client privilege are: (1) where legal advice of any kind is sought (2) from a professional legal advisor in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived. The privilege also protects communications from the lawyer to the client when such communication would reveal the substance of a confidential communication from the client. Herman B. Taylor Construction Co. v. General Services Administration, GSBCA 12915, et al., 96-1 BCA 27,958, at 139,656. See also Ed A. Wilson, Inc. v. General Services Administration, GSBCA 12596, 94-3 BCA 26,998, at 134,491; B.D. Click Co., ASBCA 25609, et al., 83-1 BCA 16,328, at 81,172-73. The communication sought to be protected must be one made to attorneys solely for the purpose of seeking legal advice. Hardy v. New York News Inc., 114 F.R.D. 633, 643 (S.D.N.Y. 1987). Agency officials' confidential discussion with their attorneys concerning strategy for responding to a contractor's claims may come within the attorney-client privilege if the elements of the privilege are otherwise met. Southwest Marine, Inc., DOTCAB 1497, et al., 87-2 BCA 19,769, at 100,029. The advice, however, rendered by an attorney acting in another capacity is not legal advice covered by the attorney-client privilege. A communication is not privileged simply because it is made by or to a person who happens to be a lawyer. United States v. Evans, 113 F.3d 1457, 1463 (7th Cir. 1997). Because the privilege is in derogation of the search for truth, it is construed narrowly. United States v. Evans, 113 F.3d at 1461. For the purpose of applying the attorney-client privilege, a client's independent contractor is not the client. Communications between the lawyer and the client's independent contractor are not covered by the attorney client privilege since that privilege only applies to communications that are between lawyer and client. Glaxo, Inc. v. Novopharm, Ltd., 148 F.R.D. 535, 539 (E.D.N.C. 1993). The presence of an attorney's tax advisor, hired by the attorney to assist in understanding financial concepts, during a client's confidential communication does not waive the privilege, United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961), but the presence of an accounting firm during an alleged confidential communication, hired by the client to provide general accounting and tax advice, waives the privilege. United States v. Adlman, 68 F.3d 1495, 1500 (2d Cir. 1995). The work-product privilege is set forth in Federal Rule of Civil Procedure 26(b)(3). That privilege, which is not absolute, protects from disclosure documents prepared in anticipation of litigation or for trial by a party or its representative (including an attorney, consultant, surety, indemnitor or agent) and are discoverable only if the party seeking the documents has a substantial need for them and is unable without undue hardship to obtain the substantial equivalent of the documents by other means. Ed A. Wilson, 94-3 BCA at 134,491. Opinion work product, material which reveals the thoughts and strategy of counsel, is given a higher degree of protection than fact work product. Documents containing opinion work product receive absolute protection absent a showing of exceptional circumstances. Miller v. Federal Express Corp., 186 F.R.D. 376, 387 (W.D. Tenn. 1999); Herman B. Taylor, 96-1 BCA at 139,657. The United States Court of Appeals for the Second Circuit has held that documents are prepared "in anticipation of litigation" when they can be fairly said to have been prepared "because of" the prospect of litigation. United States v. Adlman, 134 F.3d 1194, 1202 (2d Cir. 1998). The United States Court of Appeals for the Fifth Circuit has adopted another test, which was rejected by the Second Circuit: a document is prepared in anticipation of litigation when its primary motivating purpose was to aid in future litigation. United States v. Davis, 636 F.2d 1028, 1040 (5th Cir.); cert. denied, 454 U.S. 862 (1981); see also Hardy v. New York News, 114 F.R.D. at 644; Zulig v. Kansas City Power & Light, 1989 WL 7901 (D. Kan . 1989).[foot #] 1 ----------- FOOTNOTE BEGINS --------- [foot #] 1 This case is not reported in F. Supp. ----------- FOOTNOTE ENDS ----------- In cases involving claims filed under the Contract Disputes Act of 1978, boards have held that the filing of a claim for equitable adjustment does not necessarily establish a line of demarcation for determining whether documents created after the claim filing were prepared in anticipation of litigation. Instead, such determinations must be made on a case-by-case basis. B.D. Click Co., 83-1 BCA at 81,177. In SAE-Americon-Mid Atlantic Inc. v. General Services Administration, GSBCA 12294, 95-2 BCA 27,737, at 138,274, we concluded the documents prepared to assist the contracting officer in rendering decisions on submitted contractor claims were matters of routine contract administration for the purpose of enabling the contracting officer to write a final decision addressing the claims. Such documents are not created in anticipation of litigation and were thus discoverable. If material is work product, it retains its character as such in subsequent litigation if the same party to both the earlier and later suits claims the privilege. Federal Trade Commission v. Grolier Inc., 462 U.S. 19, 25 (1983); Doubleday v. Ruh, 149 F.R.D. 601, 605 (E.D. Cal. 1993). Having stated the principles to apply, we examine the documents. Document one is a request for legal advice from the contracting officer to GSA's Office of General Counsel (OGC) as to questions concerning answers to AT&T's interrogatories in this litigation. The request for advice is covered by the attorney- client privilege and the answers in return are covered by the work product privilege. Document two is an e-mail recitation from the Director of GSA's Service Oversight Center (SOC) to the Deputy Commissioner of the GSA's Federal Telecommunications Service (FTS) of a conversation the Director of the SOC conducted with GSA's OGC on strategy in handling Sprint's protest of the price redetermination/service reallocation seven (PR/SR-7) award. In most of the e-mail, the Director of the SOC recites GSA's counsel's general strategy in framing the motives behind Sprint's protest. This advice falls within the attorney work-product privilege. One paragraph of that e-mail is not privileged--the second full paragraph of item numbered two, starting with the phrase "Sprint has characterized" and ending with the phrase "keep them happy." This portion of the e-mail is the SOC Director's characterization of Sprint's motivation in filing the protest and contains either the SOC Director's opinion of, or his repetition of Sprint's opinion of, the Department of the Treasury's willingness to complete the transition from Network B to Network A. This paragraph merely memorializes the opinions of two FTS officials speaking between themselves. There is no showing that the statements were made to the attorneys for the purpose of trial preparation. Further, nothing in the document suggests that this comment was made to attorneys for the purpose of seeking the attorneys' legal advice. This portion of the document opining about the Department of the Treasury's willingness to transition is relevant to this case, and the above noted portion of the document must be produced. Documents three and five are illegible hand-written notes. If counsel do not bother to provide legible copies of the documents for which they claim privilege, then we will deem that the party which asserted the privilege has failed in its burden of establishing the privilege. These documents must be produced. Document four is an e-mail of GSA's counsel's advice to an FTS supervisory contracting officer concerning a response to Sprint about disposition of Sprint's contractor provided equipment. This e-mail does not reveal the substance of an intended confidential client communication, nor does it reflect litigation-related matters. The Government has not established this e-mail is privileged and it must be produced. Document six is an e-mail to GSA counsel from an FTS contracting officer responsible for PR/SR matters, briefing counsel on a meeting with AT&T in May 1995. The contracting officer explicitly requests legal assistance for decisions to be made in light of the meeting with AT&T. Since the e-mail was a client communication to the attorney for the purpose of soliciting legal advice, the elements of the privilege have been met. The e-mail and the information in it appears not to have been distributed outside of FTS. The privilege has not, therefore, been waived. Document seven is a working paper dated October 31, 1996, prepared by GSA's independent contractor, Mitretek, and entitled "Analysis of Treasury Transition to Sprint." The document contains the phrase on each page "attorney client working paper." GSA's privilege log identifies this document as a risk assessment of moving Department of the Treasury IRS 800 services to Sprint from AT&T after the price redetermination and service reallocation. GSA claims attorney-client privilege for document seven and for other documents received or generated by Mitretek. That is, GSA desires that Mitretek's communication should be treated as a "client" communication with GSA attorneys. In support of this position, in its motion for protective order, GSA has submitted a copy of GSA's contract with Mitretek and the declarations of two senior officials of the FTS. Given the importance GSA attaches to this issue, it deserves expanded discussion. The contract generally defines the work expected of Mitretek in pertinent part: The contractor shall conduct analysis and provide strategic technical assistance at the policy, planning, and evaluation level to assure the continuance of fulfilling requirements for telecommunications services to Federal agencies at the lowest prices available. The contractor shall only perform work assigned by the GSA or by GSA on behalf of its customer agencies. Specifically, all work performed by the contractor shall fall within the scope of one or more of the four categories of support listed below. . : a. Telecommunications Management b. Telecommunications Service Requirements Development c. Economic and Performance Analysis d. Acquisition Support Respondent's Motion for Protective Order, Exhibit 1 at C-1 ( C.1.3.) As explained by the Assistant Commissioner, Office of Service Development, FTS: Mitre Corporation employees, now Mitretek Systems Incorporated employees[,] have been key players in nearly all of GSA's major telecommunications programs during this period.[foot #] 2 Mitretek employees conduct market research to determine what constitutes current state of the art for commercial goods and services. They help us in defining technical requirements that are subsequently acquired by our Office of Acquisition. Mitretek employees identify procurement methods used by large commercial organizations which in turn assists us in developing acquisition strategies for our own programs. When conducting procurement, Mitretek employees assist with technical and cost evaluations as either members of the evaluation panels or technical experts. When requested, they and government team members participate with clarifications, discussions and negotiation sessions under the oversight of the contracting officer. Respondent's Motion for Protective Order, Exhibit 2 (Declaration of Bruce Brignull (Brignull Declaration) (Aug. 20, 1999)) at 1 ( 2). The declarant states that in order to receive useful legal advice, he discusses both the problem requiring legal advice and the advice with members of his program team, including Mitretek employees, and that it has been the declarant's practice to treat Mitreteks employees "the same as any other member of the program ----------- FOOTNOTE BEGINS --------- [foot #] 2 "This period" apparently refers to the acquisition and performance cycles for the FTS 2000 and FTS 2001 programs. ----------- FOOTNOTE ENDS ----------- team when seeking legal counsel from our assigned attorneys." Brignull Declaration at 2 ( 4). In much the same vein, the Assistant Commissioner, Office of Acquisition, FTS, declares: It has been my practice, and that of the Contracting Officers who work under me to treat Mitretek employees the same as any other member of the acquisition team when seeking legal counsel from our assigned attorneys. . . . . I cannot get useful legal advice from my attorneys if I cannot have a full and frank discussion of the problem with the acquisition team members responsible for the acquisition. Respondent's Motion for Protective Order, Exhibit 3 (Declaration of C. Allen Olson (Olson Declaration) (Aug. 20, 1999)) at 2 ( 3). Based upon these circumstances, GSA, citing United States v. Kovel, argues: It has also long been held that attorney-client confidentiality is not waived when the conversations include employees of the attorney who bring some special expertise (such as accounting or translation services) to the situation. "What is vital to the privilege is that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer." Extending this privilege to employees of government contractors that have a special relationship with the agency . . . is a reasonable extension of existing privilege, consistent with the direction that the Rules of Evidence be "interpreted by the courts of the United States in the light of reason and experience." Respondent's Motion for Protective Order at 7 (citations omitted.) Kovel's narrow ruling is simply not applicable since Mitretek was not hired by GSA attorneys to assist the attorneys in understanding foreign concepts necessary to effectively represent their clients. See Occidental Chemical Corp. v. OHM Remediation Services Corp., 175 F.R.D. 431, 436-37 (W.D.N.Y. 1997) (discussing scope of Kovel). Rather, Mitretek is a major programmatic contractor to the client, GSA. We do not accept the notion that for the application of the attorney-client privilege, we should treat Mitretek employees in the same manner as GSA employees. GSA's arguments expand the attorney-client privilege beyond its carefully prescribed limits explained above. GSA's attorneys provide legal services to GSA's employees in their official capacity as public servants. Thus, when GSA lawyers provide legal services to the "client," it is to GSA as an agency, and more generally, to the United States Government. In short, GSA's attorneys represent the public interest. GSA's argument that Mitretek's employees were "clients" of GSA lawyers in the same fashion as GSA employees, places the GSA lawyers in a potentially irreparable conflict of interest: if Mitretek employees are treated as "clients" of GSA lawyers, then GSA's lawyers would become, in effect, the attorneys for Mitretek, representing its private commercial interests. Who would then be available to represent GSA's interests in legal affairs between GSA and Mitretek? GSA and its officials can have no expectation of attorney- client confidentiality when its officials discuss supposedly confidential matters with Mitretek employees, no matter how close or special the contractual relationship between GSA and Mitretek has become or how great a reliance Government officials place on Mitretek for support. Regardless, the relationship remains contractual and, for purposes of asserting the attorney-client privilege, Mitretek employees are third parties. Discussions with strangers to the attorney-client relationship such as Mitretek waive the privilege. Carter v. Gibbs, 909 F.2d 1450, 1451 (Fed. Cir. 1990).[foot #] 3 Our reasoning would also apply to any alleged attorney-client privileged material in documents prepared or received by Mitretek: thirty-four, forty- seven, forty-eight, forty-nine, fifty, fifty-one, fifty-five, fifty-seven, fifty-eight, fifty-nine, sixty, sixty-one, sixty- two, sixty-three, sixty-four, sixty-seven, sixty-eight, seventy- seven, eighty, eighty-three, eighty-eight and eighty-nine. Document seven is relevant and must be produced, but GSA may produce the material under the Board's protective order, since proprietary material is involved. Document eight is an e-mail discussion from the FTS supervisory contracting officer to FTS officials discussing the context of an anticipated cure letter to AT&T. While the e-mail references a discussion with an attorney, it does not reveal the contents of a confidential client communication for the purpose of seeking legal advice, nor does it reflect trial preparation material in anticipation of litigation. The document must be produced. ----------- FOOTNOTE BEGINS --------- [foot #] 3 We recognize that GSA, as many federal agencies, is reducing its workforce and contracting out functions that federal employees used to perform. While this may introduce certain efficiencies, the agency cannot escape one negative consequence of this process--waiver of the attorney-client privilege for its lawyers' discussions involving contractor employees. ----------- FOOTNOTE ENDS ----------- Document nine is a compilation of sporadic e-mail discussions between April 18 and June 4, 1997, among FTS officials and GSA lawyers concerning transition issues. While these discussions include attorneys, they do not reveal the contents of confidential client communications for the purpose of seeking legal advice, nor do they deal with materials prepared because of anticipated litigation. The document must be produced. Documents ten and eleven are e-mails containing counsel's opinion to clients on courses of action to take on the Sprint protest and are protected by the work product privilege. Document 12 is an e-mail between FTS officials concerning filing deadlines in the Sprint protest and reveal counsel's strategy in defending the protest. This document is protected by the work product privilege. Documents thirteen, fourteen and fifteen are e-mails, dated June 10, June 25, and June 26, 1998, and are from GSA's Senior Assistant General Counsel to FTS officials posing questions related to AT&T's then recently submitted draft claim to GSA. The e-mails are not protected by the attorney-client privilege because they do not reflect a client's confidential communication to an attorney for the purpose of seeking legal advice. Documents thirteen through sixteen are not covered by the work product privilege because, as seen from a later document (seventeen) the information sought was to be used for a briefing of the FTS commissioner, not in anticipation of litigation. Document sixteen is the preliminary answer and for the same reasons is not covered by either attorney-client or work-product privilege. Document seventeen, referencing the briefing, also shows an FTS official questioning whether Mitretek is the party to answer the question posed. Document eighteen is an e-mail from the Senior Assistant General Counsel asking FTS officials to answer certain factual questions. Document eighteen reflects counsel's opinion as to what lies at the heart of AT&T's claim, but that opinion does not reveal a confidential client communication made for the purpose of receiving legal advice so as to call the attorney-client privilege into play, nor does it reflect trial preparation necessary to invoke the work product privilege. At this stage, counsel were in the process of reviewing AT&T's draft claim. Respondent has not demonstrated that at that time litigation was imminent or anticipated or that the review was because of anticipated litigation, as opposed to preparing for receipt of AT&T's formal claim or sorting out what issues the contracting officer would need to address in a decision on the claim. Document nineteen is GSA counsel's seeking from the client sections of the FTS 2000 PR/SR-7 document and is not privileged for the same reason as document eighteen. Documents twenty through twenty-six are continuation e-mails generated by counsel's review of the claim and are not privileged for the same reasons as the earlier documents. Also, in document twenty an FTS official forwards a calculation spreadsheet to GSA's Senior Assistant General Counsel, which the Board understands is a version of a pre-existing spreadsheet that the Government has produced to AT&T. The spreadsheet is not privileged. Documents twenty-seven through thirty-six deal with efforts by FTS officials to develop factual information in response to GSA's Senior Assistant General Counsel's questions on the revenue split between AT&T and Sprint and on "peg count" issues. These documents are not privileged for the same reason that document eighteen is not privileged. Documents thirty-seven through seventy-four and eighty through eighty-two are a series of e-mail messages sent from GSA counsel to FTS officials regarding AT&T's submitted claim. GSA attorneys drafted the contracting officer's decision and the GSA counterclaim. The preparation of a contracting officer's decision is the statutory responsibility of the contracting officer. 41 U.S.C. 605(a) (1994). The Federal Acquisition Regulation (FAR) provides that a contracting officer is to "prepare a written decision" which contains specified elements. 48 CFR 33.211(a)(4) (1998). Here, in documents thirty-seven through seventy-three, the attorneys were acting as the contracting officer's ghostwriters. While so engaged, they were not providing legal advice or services. Indeed, instead of the client coming to the lawyers for legal advice, the e-mails reflect the lawyers consulting with the FTS officials for factual information to enable them to draft the decision. Therefore, the information provided by the FTS officials (and Mitretek) is not privileged communication for the purpose of seeking legal advice or legal services. The drafts of the contracting officer's decisions prepared by the attorneys are not covered by the attorney work product privilege, because the purpose of those documents was to fulfill the CDA's and FAR's requirements of preparation of the contracting officer's decision in this matter. They were not prepared because of litigation. Document seventy- four is counsel's discussion of the timing of the contracting officer's decision. This document is not covered by the work product privilege, again, since it was not prepared because of litigation. In documents seventy-five and seventy-six the FTS Assistant Commissioner seeks specific legal advice from the attorneys about the contents of the claim, and the attorneys provide that advice. It is clear that the client intended the communication to be confidential because it was marked "attorney/client privileged information." Here, the FTS Assistant Commissioner sought counsel from the attorneys instead of input as the contracting officer's assistant. The attorneys' answers, which contain a summary of the client's questions, would reveal the substance of the protected communications. Documents eighty-four, eighty five and eighty- six are e- mail messages dated October 20, October 23, and October 29, 1998, from GSA's Senior Assistant General Counsel to Mitretek posing hypothetical questions concerning matters asserted in the contracting officer's final decision of October 2, 1998, and GSA's counterclaim. On October 19, AT&T filed an appeal of the October 2 decision at this Board. These messages are covered by the work product privilege since litigation had begun and the obvious purpose of the communication was litigation preparation. The work product privilege is not waived by transmission to a third party because, as we have seen, work product may be prepared by a party's representative or consultant, such as Mitretek. Document eighty-seven is counsel communication with clients and Mitretek, suggesting approaches to discovery for AT&T, and is also covered by the work product privilege. Documents eighty-eight and eighty-nine are attorneys' communication of March 16 and May 11, 1994, with Mitre (Mitretek's corporate predecessor) concerning the FTS2000 contract transition issues. Document ninety concerns evaluation issues in the PR/SR-7 process discussed with GSA attorneys, their clients and Mitre. Document ninety-four is an April 13, 1994, status meeting with GSA attorneys, their clients and Mitre. For the reasons stated for document seven, these documents are not covered by the attorney-client privilege. However, since the documents are procurement sensitive, they will be produced under the Board's protective order. Respondent does not claim the work product privilege for these documents. Documents ninety-one, ninety-two and ninety-five are GSA's counsel's communications with their clients and Mitretek concerning litigation issues in the Sprint protest. They are protected by the work product privilege for the reasons stated for the privileged portion of document two. Decision GSA's motion for protective order is GRANTED IN PART. The following documents need not be produced: one, the described parts of two, six, ten, eleven, twelve, seventy-five, seventy- six, eighty-four, eighty-five, eighty-six, eighty-seven, ninety- one, ninety-two and ninety-five. The other parts of document two and the remaining documents are not privileged and must be produced. Documents seven, eighty-eight, eighty-nine, ninety and ninety-four are to be produced under the Board's protective order. ____________________________ ANTHONY S. BORWICK Board Judge