Whether the Department was justified in refusing access to records contained in successful tender submissions for the provision of legal services to a local authority, 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

Background

On 2 March 2017, the applicant made a request for access to "copies of the highest Tender submissions" for each Lot of tenders for the provision of legal services to local authorities within a particular region of Ireland. The applicant was an unsuccessful tenderer in the process which was managed by the Office of Government Procurement (OGP).  On 13 April 2017, the Department refused access to the records on the basis of section 36(1)(b) of the FOI Act. Following a request for an internal review, the Department affirmed its original decision on 7 June 2017.  On 18 June 2017, the applicant sought a review by this Office of the Department's decision.

In conducting my review, I have had regard to the submissions of the Department. Although invited to do so, the applicant declined to make submissions. 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.

Scope of the Review

During the review the applicant confirmed that his application to this Office was limited to 'Part B' of each successful bid only. Consequently, this review is concerned with whether the Department was justified in deciding to refuse access to the records contained in Part B of each Lot, relating to each successful bid, on the basis of section 36(1)(b) of the FOI Act. 

Preliminary Matters

The Department's decision letters fell well short of the requirements of the FOI Act in this case. For example, it did not explain to the applicant either the potential harm envisaged in  releasing the information, or the factors considered in finding that, on balance, the public interest would be better served by refusing access to the records. Section 13 of the FOI Act sets out detailed requirements as to the elements of the notification of a decision to a requester. 

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. 

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.

Analysis and Findings

Section 36(1)(b) - Commercially Sensitive Information
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 records at issue
The records concern the successful tender submissions at Part B for 'Local Government Core Legal Services', 'Code Enforcement Legal Services', 'Property and Conveyancing Legal Services', Commercial and Corporate Legal Services', and 'Full Legal Service'. 
Part B1 of each record requires the tenderer to demonstrate expertise in delivering legal services to include knowledge, skills and expertise. Part B2 refers to matters concerning lessons learned, improvement of existing processes, including innovation and "better ways of working". Part B3 requests the tenderer to propose how they would provide "Added Value Services".

The applicant's position
In his application to this Office the applicant said that he was not satisfied with the feedback he received from the OGP. He stated that he felt the feedback was generic and unhelpful. In his internal review request, he said that his firm wanted to understand the type of response required in order to learn from the process. He referred to release of the records as being in keeping with the transparency of the tendering process

The third parties' positions
The Department informed each of the successful tenderers about the applicant's request and invited them to make a submission. All of the successful tenderers objected to release of the information in the records. Each cited the commercial sensitivity of their tenders and referred to concerns about their respective competitive positions in future tender competitions, if the information in the records was released.  

The Department's position
In its submission to this Office, the Department explained that it provided the applicant with a 'standstill letter' following the conclusion of the tender competition. The letter provided details of a list of all the successful tenderers and 'qualitative scoring' concerning the scores awarded to the applicant compared to the scores awarded to each successful tender. The letter also provided a commentary on the 'Characteristics' (including a number of examples) of the responses of the applicant's submission compared to that of the successful tenderers.

The Department stated that a successful tenderer would be severely disadvantaged if the tender submissions requested were released. It said that competitors for future contracts would be in a significant advantageous position when another tender for legal services is published. It also stated that release of such records would allow a requester an insight into the organisation and operations of a direct competitor and would prejudice the competitive positions of other legal firms in their day to day business. 

The Department's position is that the information in Part B of each successful tender is commercially sensitive and that the competitive position of the winning tenderers would be prejudiced by disclosure of the information, which could give rise to the harm envisaged by section 36(1)(b).

Having examined the content of the records in Part B of each successful bid, I am satisfied that 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. Each of the three sections in Part B are clearly tailored and could not be considered generic. I accept that the detail in the records would be of assistance 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. 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
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 tenders. He does not require the prices quotes. He argued that "The structure and process utilised within all law firms is identical i.e. the delivery of legal services in a satisfactory and cost effective manner to the Client", and that his request for access to the information in the records at part B of each successful tender would not prejudice those law firms, and would be "in keeping with the overall apparent transparency of the process". 

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, as mentioned earlier, details concerning "the characteristics and relative advantages of the successful tender". However, the Department also stated that if the information sought was released, it could adversely affect the ability of the Department to attract bidders for future competitions. 

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 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 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.

As mentioned earlier, the applicant 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. I am satisfied that 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, rather than commercial entities.

I find that, on balance, the public interest would be better served by refusing access to the records at issue. 

Decision

Having carried out a review under section 22(2) of the Act, I hereby affirm the decision of the Department. 

Right of Appeal

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