Decision
Right to Know CLG and Cork City Council
From Office of the Information Commissioner (OIC)
Case number: OIC-115565-H2B4G6
Published on
From Office of the Information Commissioner (OIC)
Case number: OIC-115565-H2B4G6
Published on
Whether the Council was justified, under section 36(1)(b) of the FOI Act, in refusing access to certain information in records relating to the provision of maintenance and caretaking works at Traveller specific accommodation
26 September 2022
On 23 August 2021, the applicant submitted a request to the Council for:
The Council did not issue a decision within the four-week statutory timeframe, thus effectively refusing the request. On 13 October 2021, the applicant sought an internal appeal of the deemed refusal of the request. In a decision dated 3 November 2021, the Council part-granted the request. Of the seven records identified as relevant to the request, one was said to be released in full and the remaining six records were released in part, with certain information redacted under sections 36(1)(b) and 37(1) of the FOI Act. On 9 November 2021, the applicant applied to this Office for a review of the Council’s decision.
In the course of the review, on foot of queries from the Investigating Officer, the Council provided this Office with another record, which I will refer to as record 8, which contained a more detailed breakdown of payments made by the Council in 2019 – 2021 to two different contractors. The Council refused to release this record under section 36(1).
The companies that provided various services to the Council (Contractor A and Contractor B) and that are referenced in the records at issue were invited to make submissions on the release of the records at issue and both did so. The applicant was also notified of material issues arising in the course of the review and invited to comment. I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the correspondence set out above, to the applicant’s comments in his application for review and in further communication with this Office, to the submissions made by the Council in support of its decision and to the submissions of the Contractors. I have also had regard to the content of the records concerned. I have decided to conclude this review by way of a formal, binding decision. In referring to the records at issue, I have adopted the numbering system used by the Council in the schedule of records it prepared when processing the request.
The applicant sought a review of information withheld under section 36 of the FOI Act (commercially sensitive information). I have therefore excluded the Council’s decision to withhold certain information under section 37 (personal information) from the scope of the review. While the Council redacted the bank account details of a contractor from the records, the basis for this was not clear. However, it seemed to the Investigator to be unlikely to be of relevance to the applicant. She proposed excluding it from the scope of the review and asked the applicant to respond if it wished for it to be included. As no response was received, I have excluded the bank account details from the scope.
This review is therefore concerned with whether the Council was justified in refusing to release record 8 and the pricing information contained within Records 4 and 5 under section 36(1) of the FOI Act.
In his submissions, Contractor B raised concerns that release of information relating to his company could pose security risks to him, his employees and/or his family. In the circumstances, I consider it appropriate to also consider whether section 32(1)(b) applies to record 8.
The Records at issue
Record 4
Record 4 is an Agreement signed on 1 November 2019 between the Council and Contractor A relating to the provision of caretaking services at five named Traveller accommodation sites. The information withheld under section 36 is contained within Schedule C to that Agreement and consists only of the annual fee, exclusive of VAT, to be paid by the Council to the service provider.
Record 5
Record 5 is a Service Agreement signed on 1 July 2016 between the Council and Contractor A for various services in relation to halting sites and control of horses. It was a one-year contract with a maximum of two extensions each for a further year on the same terms and conditions. The information redacted under section 36 is contained within the Second Schedule to the agreement and consists of fees to be paid under four different headings: Caretaking services at Cork City Council’s Traveller specific accommodation sites; Traveller Accommodation Ancillary Services; Taking Possession, Towing and Storage of Caravans; and Control of Horses Services & Provision of Animal pound. Only the fee amounts themselves have been withheld. This contract was advertised on eTenders but the award notice doesn’t appear to be available.
Record 8
Record 7, which the Council stated was released in full, contains a total figure paid by the Council per year for the relevant services from 2019 to 2021. The Investigating Officer asked the Council to provide the invoices themselves, or reports from the Council’s financial reporting system, or whatever documentation it had used to collate the total figures included in record 7. The Council provided this Office with a report listing various invoices and amounts paid for caretaking and security services at named Traveller accommodation sites in 2019, 2020 and 2021 (record 8). The Council acknowledged that the total figures in record 8 differ somewhat from the figures in record 7; it said that in creating record 7 it had incorrectly included some expenditure in those figures that was not in the category of maintenance or caretaking. Record 8 lists payments to Contractor A as well as to another third party contractor (Contractor B) who was not previously referenced in the other records 1-6. The Council confirmed that no contract existed between the Council and Contractor B as it was envisaged that this would be a short term arrangement on a week-to-week basis. The Council said that it considered record 8 to contain commercially sensitive information and was therefore exempt from release under section 36(1) of the FOI Act.
Section 36(1)(b) – Commercially sensitive information
Section 36(1)(b) provides that an FOI body shall refuse to grant an FOI request if the record concerned contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that 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". This Office 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 nature of the harm envisaged and a basis for a claim that such harm could reasonably be expected to result from disclosure of the particular information in the record(s) at issue should be shown by an FOI body or a third party relying on this provision.
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, this Office takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
There are certain situations where, although section 36(1) applies, the request shall still be granted. These situations are specified in section 36(2). Moreover, section 36(3) provides that section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than by refusing the request.
The Council’s submissions
In its submissions to this Office on records 4 and 5, the Council stated that there are a limited number of service providers in the market providing a control of horses services. It said that it is currently in the process of seeking tenders from interested service providers for a new control of horses’ service and based on past experience it does not anticipate receiving more than 2 or 3 tenders. It acknowledged that the prices in the records were more than 12 months old but stated that it was the Council’s understanding that prices for this type of service would not have varied greatly in the intervening period apart from the annual rate of inflation.
The Council stated that the tender documents and contracts contain the pricing structure for individual services being provided, specifically in relation to:
It said that the extent of the detailed pricing contained in the existing tender and contract documents if it were released would be of immense use to another provider and give them a competitive advantage.
The Council also argued that it could not facilitate the release of invoices because to do so would disclose the current provider’s pricing structure which is commercially sensitive as outlined above. However, it said that in an attempt to assist and show transparency, it had disclosed the amount paid per annum to the service provider (record 7). It concluded that that it was imperative that the service providers set prices in an open and competitive market, unencumbered by the risk of their financial information such as unit costings or price per service being disclosed. It argued that the public interest was best served by withholding the records.
In relation to record 8, the Council said that it intended to seek expressions of interests very shortly, via eTenders, for a new contract to provide caretaking services at halting sites. It said that there are very few companies in the market providing such services and it argued that the extent of the detail in record 8 would be of immense usefulness and guidance to any company given sight of this information and would give them a competitive advantage if they intended to respond to the invitation for tenders. For this reason, the Council argued that releasing the record would not be in the best interest of it getting the most economically advantageous tender.
The applicant’s submissions
In its application for review, the applicant stated that it was highly unusual for the Council to have redacted specific invoice payments on the basis of section 36 while arguing that releasing specific payment amounts would be contrary to the public interest. It argued that in the ordinary course of events, public authorities release specific amounts they were invoiced for in all sorts of circumstances, whether related to a tendered contract or not and that there is nothing secret about contractors invoicing public bodies. It said that contractors do not have the power to keep such amounts secret and that companies should be aware when they engage with State bodies that their invoicing data may be released. It argued that the public interest strongly favours release, asking how otherwise would the public know what value for money is. It said that the Council chose to give yearly global figures rather than breakdowns per invoice, but did not identify a particular harm.
In further communication with the Investigating Officer in relation to record 8, the applicant said that if companies were doing work for the Council without a contract in place, there was a public interest in this information being made available. It also noted in relation to record 7 that the Council had essentially created a new record for the purpose of responding to the FOI request rather than simply running a report from its financial management system which it suggested was possible and relatively simple.
Contractor A’s submissions
In its submissions, Contractor A said that it objected to the release of the records at issue on the basis of commercial sensitivity. It said that the agreements with the Council were entered into following a tender process in which it was successful. It said that the records were of material value to it, and that it had spent time and effort collating its financial structure and tendering to provide the services to the Council. The Contractor said that it, together with any other tendering party, had an equal opportunity to tender their proposal to the Council in a process which was transparent and fair. It said that the release of the information could reasonably be expected to result in material financial loss to it, and would unfairly prejudice it while benefiting others who could use this information when tendering in the future. It said that not only would it cause material loss, but the fairness and transparency of the tender process would be put into disrepute.
It further argued that disclosure of the records could prejudice its competitive position in the conduct of its business. It said that the market of providing services to the Council is extremely price sensitive and accordingly, the cost of services is one of the most influential factors in awarding a contract. It said that if the records were released, the Contractor would be put at a significant disadvantage to its competitors as they would be aware of the Contractor’s pricing while the Contractor would not know theirs. It said that this had the potential of effectively providing its competitors with a minimum benchmark at which to pitch their tenders.
On the question of the public interest, the Contractor said that it saw no circumstances where the release of the information better served the public and that it in fact would undermine the process and reasoning behind the tender process. It said that when the Council invites various parties to tender for a services, it is up to those tendering to analyse the work that needs to be done and provide a quote at a price which ensures that they are fairly remunerated and the work done to a high standard. It said that the release of a minimum price benchmark would ensure that their competitors would enter a tender to provide the service at a similar or lower price. It said that the only parties to benefit would be their competitors.
With its submissions, the Contractor also attached letters it said that it had submitted with the original tenders requesting that the prices that it quoted not be disclosed under the FOI Act due to commercial sensitivity.
Contractor B’s submissions
On the matter of the applicability of section 36(1)(b), Contractor B argued that granting the request could result in competitors being advantaged.
Analysis
It is important to note at the outset that a Contract Award Notice in respect of the 2019 agreement was published on eTenders, which includes the figure that has been redacted from record 4. As the information is already in the public domain, I do not accept that the release of the information in record 4 could possibly give rise to the harms outlined in section 36(1)(b). I find that section 36(1)(b) does not apply to the withheld information in record 4.
The information redacted from record 5 contains a high level breakdown of the cost of various services to be provided by Contractor A to the Council on the basis of an agreement signed in July 2016, namely
On the matter of the information concerning the amount to be paid per horse seized/released, I note that the release fee for horses that have been seized is set by the Council, is fully recoverable to the Council and is already publicly available. As such, I find that section 36(1)(b) does not apply to that information. In relation to the remaining information at issue, it is relevant to note that the amounts in question are contained in an agreement that is now over five years old and no longer in force, and that Contractor A signed a subsequent agreement with the Council (record 4) for similar services at the same locations in 2019. This Office considers that it is entitled to have regard to the historic nature of such financial information in considering the effect of its disclosure and whether the harm tests in section 36(1)(b) have been met.
In this case, as I have outlined above, while the Council acknowledged that the amounts in the records were more than 12 months old, it said it understood that “prices for this type of service would not have varied greatly in the intervening period except for the annual rate of inflation”. It argued therefore, that the information continues to be financially relevant and of value. While I consider that a lengthy period of time has passed since the payment amounts were agreed, I must bear in mind the low standard of proof required in the second limb of section 36(1)(b). Accordingly, I am willing to accept that release of the information in record 5, apart from the horse release fee which is already publicly available,** could prejudice the competitive position of Contractor A in the conduct of its business and that section 36(1)(b) applies.
Record 8, which the Council refused in full, contains more detailed and recent pricing information, broken down by individual invoices to the Council by Contractor A and Contractor B. I accept the Council’s arguments that the extent of the detail could be useful to a company potentially tendering for this work and find that its release could prejudice the competitive position of Contractor A and Contractor B. In summary, I find that section 36(1)(b) applies to record 5 (apart from the horse release fee) and record 8.
Section 36(2)
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 set out in section 36(2) arise in this case.
Section 36(3)
Section 36(3) provides that section 36(1) does not apply where the FOI body considers that the public interest would, on balance, be better served by granting than by refusing to grant the FOI request. The public interest balancing test expressly acknowledges the potential for harm arising from the release of a record. Therefore, while release of the record might give rise to one or more of the harms identified in section 36(1) of the FOI Act, this alone does not provide a sufficient basis for concluding that the public interest would be better served by refusing the request. The public interest test involves a balancing exercise between the public interest served by granting the request and the public interest served by refusing it. The FOI body must carry out that balancing exercise, by weighing the competing interests at play in the particular circumstances of a request, and then explain the basis on which it has decided where the balance of the public interest lies.
The applicant contends that the public interest would best be served by the release of the records, in order to demonstrate value for public money. Contractor A submitted that there is no public benefit to the release of the records and that the only parties to benefit from their release would be its competitors. The Council stated that having weighed up various factors, it concluded that the public interest lay in withholding the records in order for service providers to be able to set prices in an open and competitive market without risk of this information being disclosed. In relation to record 8, it said that releasing the record would not be in the best interest of it getting the most economically advantageous tender.
In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. Section 11(3) provides that, in performing any function under the FOI Act, an FOI body must have regard to, among other things, the need to achieve greater openness in the activities of FOI bodies, to promote adherence to the principle of transparency in government and public affairs, the need to strengthen the accountability of FOI bodies, and the need to inform scrutiny, discussion, comment and review by the public of the activities of FOI bodies.
However, it is important to note that in The Minister for Communications, Energy and Natural Resources and the Information Commissioner & Ors [2020] IESC 57 (the Enet judgment), the Supreme Court found that a general principle of openness does not suffice to direct release of records in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”. It also found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request. It stated that “… the scheme of the Act is to make the refusal of certain records mandatory, unless the public interest could, following an analysis of the contents, rationally be said to lead to the conclusion that disclosure of the records is in the public interest by reason of their contents.”
The Supreme Court went on to state that the public interest test involves a “weighing of the respective private and public interests in the analysis of the records at issue”. In this regard, it did not disturb the guidance the Court had previously given in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v. the Information Commissioner [2011] IESC 26, in which it noted that a public interest should be distinguished from a private interest.
In this case, I am of the view that it is relevant to consider established public policy in relation to public procurement and tender competitions. The Government’s National Public Procurement Policy Framework, available on the website of the Office of Government Procurement (OGP) at https://ogp.gov.ie/national-public-procurement-policy-framework/ , sets out the overarching policy framework for public procurement in Ireland and comprises five strands, including “General Procurement Guidelines for Goods and Services”. The Office of Government Procurement has produced guidelines to promote best practices and consistency of application of public procurement rules in relation to the purchase of goods and services. These are available at: https://www.gov.ie/en/publication/c23f5-public-procurement-guidelines-for-goods-and-services/ . The Guidelines make specific reference to the FOI Act and provide as follows:
“Bodies subject to Freedom of Information Legislation are required to provide the following details in relation to public procurement under the Model Publication Scheme, published by the Department of Public Expenditure and Reform in July 2016:
I accept that the information redacted from record 5 is part of an agreement that was signed on 1 July 2016 which may have predated the publication of the Model Publication Scheme. Nevertheless, the National Public Procurement Policy Framework sets out the procurement procedures to be followed by Government Departments and State Bodies under national and EU rules and it seems to me that the Framework, the Guidelines, and the Model Publication Scheme reflect a Government policy of ensuring transparency in relation to the value of contracts awarded. While no tender related records are subject to release or exemption on a class basis, it is my view that the National Public Procurement Policy Framework highlights a recognised public interest in the disclosure of certain elements of a successful tender after the award of a contract, including the value of the contract awarded.
Moreover, the disclosure of the value of contracts or agreements such as the ones at issue in this case also serve to meet the requirements imposed on FOI bodies by section 11(3) of the Act, namely the requirement to have regard to need to achieve greater openness and accountability in the activities of FOI bodies, and the need to inform scrutiny, discussion, comment and review by the public of the activities of FOI bodies. The information at issue is the amount of public money paid to contractors for specific services provided. Amongst other things, it seems to me that the disclosure of the amount paid by the Council is 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.
I should add that this does not mean that no information relating to amounts paid by an FOI body for services provided can be withheld under section 36(1). For example, it seems to me that the public interest would not generally be better served by releasing information such as the detailed pricing structure of a tender or a detailed, itemised breakdown of payments made. I accept that the release of such information could, indeed, cause more significant harms to service providers and to the tendering process itself. With these principles in mind, I find that, given the nature of the information at issue in record 5 and given also the historic nature of the information, the public interest would, on balance, be better served by the release of that information.
The Investigating Officer also sought additional information from the Council as to what some of the invoiced amounts contained in record 8 referred to, where it was not immediately apparent from the record itself. Most of the invoices listed in record 8 from Contractor A are for caretaking services, with the amounts invoiced in line with what was agreed in the contracts contained in records 4 and 5. In addition, the invoices are for alarm and keyholding services, as well as for a number of one-off ancillary services. The majority of invoices listed from Contractor B relate to electricity. The Council explained that the contractor sold electricity cards to residents for which it charged the Council an hourly rate. From the way the figures are presented in the record, no hourly rate is evident. Three other invoices are listed for ‘extra’ services which the Council explained were additional callouts for various issues; again it said that an hourly rate applied but the actual rate is not apparent from the record.
Having carefully examined record 8 with the same principles in mind as I have set out in relation to record 5, above, I find that record 8 should be released. It seems to me that, the record does not reveal unit pricing, hourly rates or other pricing structures in any sufficiently detailed or consistent way that could be usefully informative to potential competitors such that it could cause harm to the two contractors in the context of future tendering competitions, or indeed cause harm to the tendering process itself.
I note that Contractor B began delivering services to the Council in what was envisaged as a short-term arrangement, without a tendering process. While I have identified a recognised public interest in the disclosure of certain elements of a successful tender after the award of a contract, it does not seem to me that the absence of a contract in this instance undermines that recognised public interest, particularly having regard to the total amount paid to Contractor B in the time period. In fact, if anything, the lack of a tender or contract would seem to me to strengthen the argument in favour of release, to ensure effective oversight of public expenditure, to ensure the public obtains value for money, to prevent fraud and corruption and to prevent the waste or misuse of public funds.
In accordance with section 36(3), therefore, I find that the public interest would, on balance, be better served by releasing than refusing the information at issue.
Section 32 – Law enforcement and public safety
As stated previously, in his submissions to this Office, Contractor B expressed concerns that the release of information relating to his company could put him, his employees and/or his family in danger. I therefore find it appropriate to consider the applicability of section 32(1)(b), which provides for the refusal of a request where access to the record concerned could reasonably be expected to endanger the life or safety of any person, to the information in record 8 relating to his company.
Section 32(1)(b) is not a commonly used exemption. This Office takes the view that the exemption should not be applied without careful consideration having been given as to whether the expectation set out in the subsection is a reasonable one in all the circumstances and that it should only be invoked in circumstances of the most serious nature. An assessment of the expected consequences of releasing particular records in terms of endangering life or safety is required. It is not necessary, or indeed possible, to establish that such physical harm will occur, but there must be a reasonable expectation of such harm arising.
In its submissions to this Office, the Council said that due to circumstances beyond the control of the Council and the main contractor, a situation arose whereby the main contractor was not in a position to continue to provide caretaking services at one of the sites. It said it sought expressions of interest from several other potential site service providers to provide a service on a temporary basis at that site. It said there was limited interest in the provision of a temporary service and that Contractor B was the only company interested in doing so. It said Contractor B is currently providing the service on a week to week basis and that no contract exists between the parties. It said it intends seeking fresh tenders for a caretaking service at all sites and is at an advanced stage in the process.
Contractor B argued that release of the information relating to his company in record 8 could result in the company owner’s home and family being attacked. He gave details of previous incidents that had occurred in the course of the provision of the services, including threats made to his staff and at his home. This Office asked the Council to comment specifically on the matter. It said that the Contractor carried out its work in unmarked vehicles and that staff do not wear clothing that identifies the name of the company. The applicant was invited to comment and he said that it was not unknown that certain contractors were providing these services on behalf of the Council, and he could not see how the conditions for section 32 could be met.
Having had regard to the nature of the incidents described by the Contractor and that services are currently provided in a manner which does not identify the name of the company, I find that this expectation of harm occurring further to the release of the company’s name to be reasonable and that section 32(1)(b) applies to this information. I find, however, that it does not apply to the other financial details in the record relating to Contractor B.
The public interest test in section 32(3) is limited to certain specified circumstances specified in paragraph (a)(i) or (a)(ii). If any of those circumstances exist and the FOI body considers that the public interest would, on balance, be better served by granting the request, then the exemption at section 32(1) does not apply. I am satisfied that neither paragraph (a)(i) nor (a)(ii) apply.
Having carried out a review under section 22(2) of the FOI Act, I hereby vary the Council’s decision. I find that the Council was not justified, under section 36(1)(b), in refusing to release pricing information contained in records 4, 5, and 8. I find that the name of Contractor B’s company in record 8 is exempt under section 32(1)(b).
I direct the release of the pricing information redacted from records 4 and 5, and record 8 in its entirety apart from the name of Contractor B.
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 by the requester not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.
Stephen Rafferty, Senior Investigator