Decision
Mr X and Clare County Council
From Office of the Information Commissioner (OIC)
Case number: 160242
Published on
From Office of the Information Commissioner (OIC)
Case number: 160242
Published on
Whether the Council was justified in refusing access to certain records contained in a successful tender submission for legal services, under section 36(1)(b) of the FOI Act
Conducted in accordance with section 22(2) of the FOI Act, by Elizabeth Dolan, Senior Investigator, who is authorised by the Information Commissioner to conduct this review
09 December 2016
On 22 September 2015, the applicant made a request for access to a number of records relating to a tender process carried out by Clare County Council for legal services. The applicant was an unsuccessful tenderer in the process. On 20 October 2015, the Council granted access in full and in part to a number of records and withheld in full, or in part, certain records on the basis of section 36(1)(b) of the FOI Act. On 13 November 2015, the applicant sought an internal review of the decision to refuse access to a record identified as "Record R44...and details of the Tender submission...". On 3 December 2015, the Council affirmed its original decision. On 2 June 2016, the applicant sought a review by this Office of the Council's decision.
I consider that this review should now be brought to a close by the issue of a formal, binding decision. During the course of this review, this Office invited the Council, the applicant and the successful tenderer, as an affected third party (the third party), to make submissions. Submissions were received from the Council and the third party and the applicant made comments in his application for review. In conducting this review, in addition to the submissions received, I have had regard to the contents of the relevant records, to the correspondence between the Council and the applicant, and to the correspondence between this Office, the applicant and the Council on the matter. I have also had regard to the provisions of the FOI Act.
The applicant confirmed to this Office that the record at issue in this review is "Record R44...and details of the Tender submission..." but did not provide information on specific records related to those 'details'. However, in his internal review request to the Council, the applicant identified two award criteria within record 44. In his application to this Office, the applicant accepted that certain parts of record 44 should be redacted. He also noted that the Council was refusing to release "the rest of the bid [tender]" and focussed specifically on one award criterion only in his application. Having examined the complete record and taking into consideration the criteria within record 44 specifically identified by the applicant, I have decided that the records which are the subject of this review are two award criteria, details of which are provided later in this decision. During the course of this review, the Council confirmed that it would release pages 1-4 of record 44.
Consequently, this review is concerned with whether the Council was justified in deciding to refuse access to the remaining parts of record 44, on the basis of section 36(1)(b) of the FOI Act.
It should be noted that the courts have found that, under FOI, records are released without any restriction as to how they may be used and, thus, FOI release is regarded, in effect, as release to the world at large.
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. While the applicant is obviously very dissatisfied with the tender result and with certain aspects of the Council's handling of the matter, this review is not concerned with the Council's administration.
From the information provided, it appears that the Council did not consider the public interest balancing test required under the exemption at section 36 in either its original or internal review decisions. I would remind FOI bodies of their obligation under section 13 of the FOI Act to provide reasoned decisions. I encourage decision-makers to use the FOI resources available, including guidance on the FOI Act published by the Central Policy Unit of the Department of Public Expenditure and Reform and by this Office, to assist them in their decision-making process.
Section 18(1) of the Act provides that if it is practicable to do so, access to an otherwise exempt record shall be granted by preparing a copy, in such form as the body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). The Commissioner takes the view that neither the definition of a record under section 2 of the Act nor the provisions of section 18 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, the Commissioner 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.
Section 22(12)(b) of the FOI Act provides that 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. In the normal course, failure by the body to justify its decision is sufficient for this Office to find that the body had not justified its refusal to release certain records.
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.
The applicant's position
As mentioned above, in his internal review request to the Council, the applicant referred to two particular award criteria, within the record under review, to which the Council refused access. The applicant identified what is described in the tender as "Award Criteria 1. Understanding the legislative and regulatory environment in which Clare County Council operates.", and "Award Criteria 4. Technical merit of human resources". The applicant stated that "We fully accept that the pricing schedule...would fall under the heading of Commercially sensitive..."However, he argued that he should be able to view that part of the winning tender ('Award criteria 1') and stated that he failed to see how release of that record could result in a material financial loss to the third party. The applicant noted that other public bodies had provided access to records of winning tenders relating to other competitions, and that the third party's "demonstration of the Legal Environment ...is surely a matter of general legal knowledge and has absolutely nothing to do with Commercial sensitivities".
In his letter of application to this Office, the applicant noted that in 2006 the Council also held a tender for legal services and that the "entire document...includ[ing] the winning pricing structure" was provided in unredacted form to him. The applicant stated that in 2015 his legal firm and that of the third party, were both involved in a similar legal services tender competition, held by another local authority and that his firm was successful in that competition. He said that the two processes mirrored each other and the assessment panel had given very positive feedback.
The Council's position
The Council stated that it awarded its contract for legal services on the basis of the most economically advantageous tender and that only two tenders (the applicant's and the third party's) were considered in the competition. The Council argued that the information in the award criteria is commercially sensitive and that all criteria were central to its overall decision on the successful tenderer.
The Council stated that it used a private procurement services company in its tendering process. It also stated that the tendering process criteria applied by the procurement services company is similar to that of other procurement services companies, used by other public bodies.
During the course of this review, the Council explained that separate to its own legal service tender, the Office for Government Procurement (OGP) ran a competition in 2016 to establish a framework for the national provision of legal services to the public sector. The result is that several legal firms (including both the applicant and the third party) were successful in being included in a list of preferred tenders who are eligible to participate in future tender competitions run by OGP for specific legal services within their region. The framework is initially valid until 2018.
The Council argued that if the applicant received a copy of the winning tender, including award criteria 1 and 4, he would have a significant advantage over the third party. It said that this would result in a "material financial loss" to the third party, and that release of the information requested would provide the applicant with a significant competitive advantage in future competitions.
The Council's position is that the information is commercially sensitive and that the competitive position of the winning tenderer (the third party) would be prejudiced by disclosure of the information, which could give rise to the harm envisaged by section 36(1)(b).
The Third Party submission
The third party also stated that the information requested is commercially sensitive. It said that provision of the information to the applicant, as a potential competitor in future tenders, will put it (the third party) at a significant competitive disadvantage.
Having examined the content of the 'Award Criteria 1' and 'Award Criteria 4' records, 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 records could prejudice the competitive position of the third party. I accept that the detail in the records would be of assistance to competitors. In particular, the content of Award Criteria 1 is clearly tailored and could not be considered generic. 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 the records, of itself, is not commercially sensitive. For example, general information about the Partners and other employees of the third party is currently available on its website. 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 award criteria. 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.
Section 36(3) The Public Interest
In its submission to this Office, the Council acknowledged the public interest in enhancing openness, transparency and accountability and value for money in the use of public funds. However, it stated that the successful tenderer should not be unduly impeded in the effective pursuit of its business.
The applicant did not refer to the public interest in his letter of application. However, he noted that the Council "should be willing to defend their position openly and allow us to view both [tender] submissions".
Tenders and Commercially Sensitive Information
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 applicant is clearly unhappy with the decision of the Council. However, he has been made aware of the nature of the service being tendered for and of substantial details concerning criteria, marking and feedback in the process. Much of the applicant's submissions concern comparisons between the Council's competition and the result of the similar competition in another local authority.
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.
I cannot accept the applicant's argument that the content of 'Award Criteria 1' is "a matter of general legal knowledge". It seems to me that the information provided identified and addressed particular issues facing the Council. Indeed, the applicant conceded that this was most likely to be the case.
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 Council 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 is available relating to the tender process itself, 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.
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 Council.
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