Cinneadh
Mr X and South Dublin County Council
Ó Oifig an Choimisinéara Faisnéise
Cásuimhir: OIC-101639-C9N0M0
Foilsithe
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Ó Oifig an Choimisinéara Faisnéise
Cásuimhir: OIC-101639-C9N0M0
Foilsithe
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Whether the Council was justified in refusing access, under section 36 of the FOI Act, to four records relating to a concession agreement to manage Grange Castle Golf Course
31 March 2021
In 2013, the Council issued an invitation to tender for a service concession to manage, operate and maintain Grange Castle Golf Course (the Course). The concession was awarded to Synergy Golf Limited (Synergy Golf). In a request dated 12 October 2020, the applicant sought access to a range of information relating to the concession agreement.
In its decision dated 6 November 2020, the Council identified nine relevant records. It granted access to five records and refused access to records 2, 4, 6 and 7, under section 36(1) of the FOI Act on the ground that the records contain commercially sensitive information. The applicant sought an internal review of that decision, following which the Council affirmed its original decision. On 18 December 2020, the applicant sought a review by this Office of the Council’s decision.
I have now completed my review in accordance with section 22(2) of the FOI Act. In conducting the review, I have had regard to correspondence between the applicant and the Council as outlined above and to communications between this Office and both parties on the matter. In light of the nature and contents of the records at issue, this Office notified Synergy Golf of the review and invited it to make a submission on the matter. I have had regard to the submission it subsequently made. I have also had regard to the Public Procurement Guidelines for Goods and Services published by the Office of Government Procurement, and to the contents of the records at issue. I have decided to conclude this review by way of a formal, binding decision.
This review is concerned solely with whether the Council was justified in refusing access to records 2, 4, 6 and 7 under section 36(1) of the FOI Act.
The Records
Record 2 is an extract from Synergy Golf’s tender proposal, comprising its pricing strategy. Record 4 comprises copies of Synergy Golf’s Annual Financial Statements for the years 2014 to 2018 in respect of the Course. Record 6 is an extract from the various tender proposals, containing details of the annual fee each tenderer proposed to pay for operating the concession (the financial proposal). Record 7 is an extract from Synergy Golf’s tender proposal, containing details of the amount offered by Synergy Golf to purchase certain golf course machinery owned by the Council.
Council’s Submission
The Council said that record 2 discloses how Synergy Golf can generate additional monies from the concession during the lifetime of the agreement. It argued that this information is commercially sensitive and its release would expose trade secrets and undermine Synergy Golf’s current pricing strategy in the competitive market. It argued that the release of record 4 would very likely affect Synergy Golf’s commercial standing in the golf market and prejudice its competitive position. It argued that the release of the proposed annual concession fee (record 6) would expose trade secrets and undermine Synergy Golf’s ability to bid in future competitions/projects. Finally, The Council argued that record 7 discloses Synergy Golf’s financial standing and its ability to make competitive bids for specialised machinery required for the maintenance and upkeep of a golf course. It argued that the release of this information combined with the other financial information requested would likely result in material financial loss and prejudice the competitive position of Synergy Golf. In essence, the Council argued that subsections (a), (b) and (c) of section 36(1) apply to the various parts of the records at issue
Synergy Golf’s Submission
Synergy Golf said that the 2013 Concessionaire is currently nearing the end of its term and as such, it argued that the records sought are extremely commercially sensitive and of value to any competitor who may wish to tender and subsequently outbid Synergy Golf for future concession agreements.
Specifically, Synergy Golf said that the agreement of fees and pricing strategies (record 2) outline how it can generate additional revenue from the project. It said it does this by creating a bespoke package using a variety of sales and promotional techniques that have been developed over years of experience and a comprehensive understanding of the golf business. It argued that the details effectively amount to trade secrets and that exposing the information/trade secrets contained within the document to the general public and/or its competitors would reveal valuable Synergy Golf intellectual property in its bespoke sales and promotional techniques, and effectively expose its key competitive edge as an expert golf management company. It argued that the information in record 2 also constitutes information in relation to Synergy Golf's current pricing strategy and otherwise unavailable product information, containing detailed explanations as to how Synergy Golf proposed to meet the Council’s requirements.
In relation to record 4, Synergy Golf said that the annual statements reveal commercially sensitive performance data about the company and its direct relationship with the Council. It said the information is related purely to the financial business of Synergy Golf and the disclosure of the record would result in the operations of the private enterprise of Synergy Golf being opened to scrutiny. It further argued that exposing the information would provide a competitor with a commercially competitive advantage which would prejudice Synergy Golf’s competitive position, in respect of both the upcoming retendering of the concession, and in all future/current projects that Synergy Golf is involved in as it would expose a commercial agreement in a relatively small market.
Synergy Golf said that record 6 explicitly reveals the commercial agreement that exists between Synergy Golf and the Council. It said the bid is formulated as a result of years of experience and an expert knowledge of the golf business and that prior to submission, it is carefully and strategically analysed, risk assessed and subsequently offered. It argued that this effectively amounts to trade secrets and that exposing the information would provide a competitor with a commercially competitive advantage which would prejudice Synergy Golf’s competitive position, in respect of both the upcoming tender process with the Council, and in all future/current projects that Synergy Golf is involved in as it would expose a commercial agreement in a relatively small market. It also argued that release of the information would also jeopardise the fairness/equity of the upcoming Council tender process by revealing Synergy Golf’s previous offer, therefore allowing a rival company to simply outbid Synergy Golf and undermining the tender process requiring a competitor to arrive at an independent proposition.
Finally, in relation to record 7, Synergy Golf said that the knowledge required in connection with the sourcing and provision of appropriate machinery, at a competitive price, has been developed over years of experience and a comprehensive understanding of the golf business and that the details effectively amount to trade secrets.
It further argued that the release of the information poses a significant risk to Synergy Golf as a company as by utilising a process of elimination and combining the information with Synergy Golf’s accounts available via the CRO, a competitor would be able to easily calculate Synergy Golf’s primary set up costs at the beginning of a concession/ project. It argued that this inside information in relation to project set-up costs would prejudice Synergy Golf’s competitive position and/or prejudice the conduct or outcome of contractual or other negotiations in both the current and future tenders. It argued that exposing the information would provide a competitor with a commercially competitive advantage which would prejudice Synergy Golf’s competitive position in respect of both the tender process
currently underway with the Council, and in all future/current projects that Synergy Golf is involved in as it would expose a commercial agreement in a relatively small market.
Section 36(1)
Section 36(1) provides that an FOI body shall refuse to grant a request if the record concerned contains,
(a) trade secrets of a person other than the requester concerned,
(b) 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, or
(c) information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates.
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.
In essence, both the Council and Synergy Golf argued that one or more of the subsections of section 36(1) apply to all of the information at issue. Given the nature of the information at issue and the arguments made, I accept this to be the case. However, that is not the end of the matter as I must proceed to consider whether the public interest would, on balance, be better served by granting rather than by refusing the request, pursuant to section 36(3).
Public Interest - Section 36(3)
The public interest balancing test in section 36(3) expressly acknowledges the potential for harm arising from the release of a record. Therefore, the fact that release of the record might give rise to one or more of the harms identified in section 36(1) does not, of itself, 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 consider or assess the competing interests that must be weighed in that balancing exercise and explain the basis on which it has decided where the balance of the public interest lies.
In essence, the Council argued that the public interest would not be better served by the release of records that would affect Synergy Golf’s standing in the golf market and that would have a negative impact on any future competitions/projects in the future. Synergy Golf argued that no positive public interest would be served by the disclosure of the records.
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 an FOI body must have regard to the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principles of transparency in government and public affairs and the need to strengthen the accountability and improve the quality of decision making 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 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.”
I have examined the Invitation to Tender that the Council issued in this case. Its purpose was to seek detailed tender proposals for the Concession from companies that pre-qualified and were shortlisted. Among other things, it provided as follows:
The Invitation to Tender also contained the following in its instructions to tenderers:
“Tenderers are asked to consider if any of the information supplied by them in response to this request for tenders should not be disclosed because of its sensitivity. If this is the case, tenderers should specify the information that is sensitive and the reasons for its sensitivity. [The] Council cannot guarantee that any information provided by tenderers, either in response to this tender or in the course of any contract awarded as a result thereof, will not be released pursuant to [the] Council’s obligations under law, including the Freedom of Information Acts 1997 and 2003, EU and Irish Government Procurement Procedures or in response to questions, debates or other parliamentary procedures in or of the Oireachtas (the Irish Parliament).”
The Government’s National Public Procurement Policy Framework, available on the website of the Office of Government Procurement (OGP) sets out the overarching policy framework for public procurement in Ireland, including the procurement procedures to be followed by Government Departments and State Bodies under national and EU rules. The OGP has published “Public Procurement Guidelines for Goods and Services”. The Guidelines 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:
While I accept that the tender process in this case was completed before the publication of the Model Publication Scheme, it seems to me that the Scheme is reflective of a general Government policy of transparency in relation to the value of contracts awarded. In my view, that policy is of relevance to the Tender issued by the Council in this case for service concession to manage, operate and maintain the Course.
Furthermore, the general approach of this Office to tender records is well settled. In Case 98188, a decision which this Office issued in 2001, the then Commissioner, while noting that no tender-related records are subject to either release or exemption as a class and that each record must be examined on its own merits in light of the relevant circumstances, provided a general summary of his views regarding records relating to a tender competition, as follows:
In the circumstances of this particular case, I find that the public interest would be better served by the release of that part of record 6 comprising Synergy Golf’s financial proposal, with the exception of the name of the company official who signed the record and the mobile phone number contained therein, which I find to be exempt under section 37 of the Act. That section provides for the protection of personal information relating to third parties. In finding that the public interest would be better served by the release of that part of record 6, I have also had regard to the fact that the information at issue is now seven years old. In my view, the impact of the release of such information on Synergy Golf would be quite limited. I also consider that the information is sufficiently dated such that it can have no significant impact on the future tendering of the concession.
On the other hand, I find that the public interest would be better served by withholding the remaining information. It is worth stating that as a general principle, the purpose of the FOI Act is to achieve greater openness and accountability in the activities of public bodies. It was not designed as a means by which the operations of private enterprises were to be opened up to similar scrutiny. In essence, the release of records 2 and 7 would involve the disclosure of Synergy Golf’s pricing strategy. While the details of the offer made by the company for the purchase of plant and machinery did not form part of the tender evaluation process, nor is there any indication in the records that the offer was accepted by the Council. I see no positive public interest in the release of the financial statements of Synergy Golf, or of the release of the financial proposals submitted by the unsuccessful tenderers.
Having carried out a review under section 22(2) of the FOI Act, I hereby vary the decision of the Council in this case. I direct the Council to release that part of record 6 comprising Synergy Golf’s financial proposal, with the exception of the name of the company official who signed the record and the mobile phone number contained therein.
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 applicant 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