Decision
Mr X and the Department of Public Expenditure and Reform (2014 FOI Act)
From Office of the Information Commissioner (OIC)
Case number: 170377
Published on
From Office of the Information Commissioner (OIC)
Case number: 170377
Published on
Whether the Department was justified in refusing access to records contained in a successful tender submission for the provision of recovery and towing services, under section 36(1)(b) of the FOI Act
8 March 2018
On 3 November 2016, the applicant made a request for access to the original tender that was submitted by the successful tenderer for the provision of recovery and towing services in a particular area. The applicant was an unsuccessful tenderer in the process which was managed by the Office of Government Procurement (OGP).
On 24 November 2016, the Department refused access to the records on the basis of section 36(1)(b) of the FOI Act. It said that the public interest in granting the request did not outweigh the commercial sensitivity of the tender submission. Following a request for an internal review, the Department affirmed its original decision on 31 January 2017. On 25 July 2017, the applicant sought a review by this Office of the Department's decision.
In conducting my review, I have had regard to the submission of the Department. The applicant was invited to make a submission but none was received. I have also had regard to correspondence between the applicant and the Department, to the content of the records at issue and to the provisions of the FOI Act. I consider that the review should now be brought to a close by the issue of a formal, binding decision.
This review is concerned with whether the Department was justified in deciding to refuse access to the records on the basis of section 36(1)(b) of the FOI Act. I have no remit to examine the applicant's complaints about the award of the contract or about the services provided, except insofar as these might be relevant to public interest considerations.
In his letter of application to this Office the applicant provided reasons for making his request. Section 13(4) of the Act requires that, subject to the Act, any reasons a requester gives for making a request shall be disregarded. This means that the applicant's motivation cannot be considered except insofar as this might be relevant to the consideration of public interest provisions.
Section 18 of the FOI Act provides that if it is practicable, records may be granted in part, by excluding the exempt material. Section 18 shall not apply if the copy of the record provided would be misleading. This Office takes the view that the provisions of section 18 do not envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, this Office is not in favour of the cutting or "dissecting" of records to such an extent. Being "practicable" necessarily means taking a reasonable and proportionate approach in determining whether to grant access to parts of records.
It is important to note that under section 22(12)(b) of the FOI Act, a decision to refuse to grant a request shall be presumed not to have been justified unless the body satisfies the Commissioner that its decision was justified. This places the onus on the Department of satisfying this Office that its decision in respect of the records was justified.
Section 36(1)(b) is a mandatory exemption that must be applied to certain types of information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation. The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release.
The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". The Commissioner takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.
The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the "could reasonably be expected" test in the first part of this exemption. However, the Commissioner takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
In the High Court case of Westwood Club v The Information Commissioner [2014] IEHC 375, Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position. I must also be mindful of the interests of the third party to whom the information relates. As mentioned above, the standard of proof required in the second part of the section 36(1)(b) is relatively low, in the sense that the test is not whether prejudice is certain to materialise but whether it could do so.
In his letter of application to this Office, the applicant stated that his company had previously provided recovery and towing services in the area but that following the tendering process in 2015, a new contract for those services was awarded to another company. He argued that in view of his concerns about the delivery of the service involved and the losses his business has suffered, there is a public interest in granting his request.
The Department's position is that the information is commercially sensitive and that the competitive position of the winning tenderer would be prejudiced by disclosure of the information, which could give rise to the harm envisaged by section 36(1)(b).
In its submission, the Department stated that OGP awarded the 'framework agreement' to the successful tenderer (the third party) following a comprehensive evaluation process. It stated that if the successful tender was provided to competitors, expenditure on the framework agreement by public sector bodies would be impacted and would put competitors in a significantly advantageous position when the next tender for the area is published. The Department also stated that the tender contains sensitive aspects of the third party's business and release of the tender submission would negatively affect the third party's ability to compete for other public or private sector contracts or framework agreements. The Department also said that as a result of the request from the applicant, it contacted the third party, who stated that he did not want the information released.
Having examined the content of each section of the record, I am satisfied that most of the information is of a type that may be of use to competitors and as such, release of the record could prejudice the competitive position of the third party. I accept that the detail in the record would be of assistance to competitors. The content of each section of the record is clearly tailored and could not be considered generic. Indeed, it could be argued that even disclosure of the format of the submissions could be of use to competitors. The Commissioner accepts, as a general proposition, that detailed information about a successful tenderer's approach to a particular project is commercially sensitive.
I accept that some information in sections of the record, of itself, is not commercially sensitive. However, as I have outlined above, the requirement under section 18 to grant partial access to records, where practicable to do so, does not apply if the copy of the record as released would be misleading. In my view, it would not be practicable to release a redacted version of the records without them being misleading. The redacted version would contain little or no information that would provide any reasonable indication as to the basis for the evaluation of the tender. I also note that a substantial amount of the tender includes the personal information of employees and other individuals. Accordingly, I find that section 36(1)(b) applies to the records at issue.
Section 36(1) is subject to section 36(2) and is also subject to a public interest balancing test as set out in section 36(3). Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arises in this case.
This leaves me to consider, under section 36(3), whether the public interest would, on balance, be better served by the release of the records.
The Department acknowledged the public interest in enhancing openness, transparency and accountability and value for money in the use of public funds. It stated that it provided the applicant, as an unsuccessful tenderer, with information about the outcome of the tender process, including details under a number of headings concerning "the characteristics and relative advantages of the successful tender".
In his letter of application to this Office, the applicant said that there is a public interest in granting his request, and that he ought to be entitled to view the details of the successful tender. He implied that the tender details might not reflect the reality of the service delivery. However, he has been made aware of the outcome of the tender process and was provided with substantial details concerning criteria, marking and feedback in that process.
In an early decision (case number 98188 - Mr. Mark Henry and the Office of Public Works- available on www.oic.ie), the former Commissioner summarised his views on release of records relating to a tender competition, one of which concerned the issue of commercial sensitivity. The Commissioner stated that:
"other successful tender information which is commercially sensitive (for example, details of the internal organisation of a tenderer's business, analyses of the requirements of the public body, or detailed explanations as to how the tenderer proposed to meet these requirements) may remain confidential. Disclosure in the public interest ordinarily would not be required, unless it were necessary to explain the nature of the goods or services purchased by the public body".
The Commissioner stressed, however, that no tender-related records are subject to either release or exemption as a class; therefore, each record must be examined on its own merits. The Department said that all aspects of the tender submission (both cost and non-cost) define the commercial offering of the successful tenderer. In examining the record, I note that it has five sections, one of which has sub-sections.
Of those sections, two relate to third parties, one concerns 'Qualification' and 'Award' criteria, a fourth section refers to pricing, and the final section refers to 'legal matters'. The detail in the tender includes security, technical, risk management as well as cost proposals.
The judgment of the Supreme Court, issued in July 2011, in the case of The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v The Information Commissioner[2011] 1 IR. 729, [2011] IESC 26 (the Rotunda judgment), outlined the approach the Commissioner should take when balancing the public interest.
Following the approach of the Supreme Court, a public interest ("a true public interest recognised by means of a well-known and established policy, adopted by the Oireachtas, or by law") must be distinguished from a private interest.
In considering where the balance of the public interest lies, I accept that there is a legitimate public interest in persons being able to conduct commercial transactions without fear of suffering commercially as a result.
However, there is, as the Department acknowledged, a strong public interest in the enhancement of openness, transparency and accountability in public bodies. Indeed, I am conscious that section 11(3) of the FOI Act requires public bodies, in performing functions under the Act, to have regard to, among other things, the need to achieve greater openness in their activities, to promote adherence by them to the principles of transparency in government and public affairs, and to strengthen their accountability.
I note that a significant amount of information relating to the tender process itself has been made available, including the evaluation and scoring methodology and the identity of the successful tenderer. Thus, the public interest in openness and transparency has been served to some degree by the provision of that information. While full disclosure of all records would clearly enhance transparency around the tender process, it seems to me that a balance must be struck between the competing interests. It is noteworthy that the FOI Act is concerned with enhancing accountability and transparency of public bodies, not commercial entities.
In this case, the tender submissions contain detailed information about the company concerned including its pricing strategies and the expertise and qualifications of its team and subcontractors. This information primarily concerns the company itself, rather than the operations of public bodies, and in my opinion, the public interest on balance favours the protection of such information. In relation to the public interest in enhancing openness, transparency and accountability in relation to the use of public funds, this Office generally takes the view that the advantages, in terms of openness and accountability, of disclosing successful tender prices outweigh the possible harm to the tenderers and to the tender process. Such disclosure serves as a significant aid to ensuring effective oversight of public expenditure, to ensuring the public obtains value for money, to preventing fraud and corruption and to preventing the waste or misuse of public funds.
In this case, however, I note that the tenderers were not required to provide an overall cost for the service to be provided, nor would it have been practicable to do so given the uncertainty around the level of the services that might ultimately be provided. As such, the tender was appraised on the basis of estimated numbers of vehicles and other scenarios with unit costs or rates per day/month etc. being provided.
In my view, the disclosure of the quoted rates and costs of the specified tasks would not serve to allow for such a level of oversight of public expenditure that the public interest would be better served by release, to the detriment of the commercial position of the successful tenderers. I note, for example, that it is simply not possible to determine how much the services provided will ultimately cost. On the other hand, release of the detailed pricing structure would, in my view, be of benefit to competitors such that release could unduly prejudice the commercial position of the successful tenderer.
As regards whether the terms of the contract are being fulfilled, it seems to me that if there are allegations that the service is not being properly provided in accordance with the terms, it is a matter for the Contracting Authority to investigate the matter.
I find that, on balance, the public interest would be better served by refusing access to the records at issue.
Having carried out a review under section 22(2) of the Act, I hereby affirm the decision of the Department.
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Elizabeth Dolan
Senior Investigator