Records relating to tender for supply of services - whether information given in confidence - section 26(1)(a) - whether disclosure would constitute a breach of an equitable duty of confidence - section 26(1)(b) - whether commercially sensitive information - section 27(1)(b) - whether names and positions of individuals involved in the tender competition qualify as personal information - section 28(1) - public interest.
The requester sought access to records relating to the tender competition for appointment of advisors to the Minister for Finance on the sale of ICC Bank. The Department refused the request in part on the grounds listed above, but during the review, withdrew its claim for exemption under section 26(1)(a) without prejudice to its position on whether or not there was a mutual understanding of confidence in relation to the tenders.
The Commissioner considered his findings in Case Number 98188 and its predecessor, Case Number 98049, involving tenders for the supply of goods, generally applicable to tenders for the supply of services. He found that a reference in the Request for Tenders document acknowledging the risk of disclosure by law of information that the Department and the tenderers may otherwise have intended to keep confidential did not preclude a mutual understanding of confidence with respect to the tenders for the purposes of section 26(1)(a). Nevertheless, with respect to the fee and payment information in the contract for services between the Minister and the successful tenderers, the Commissioner found that once the successful tenderers' proposed fees became the contract rates, the Department could not reasonably be expected to keep that information or any of the other contract terms confidential in the absence of exceptional circumstances. In accordance with his conclusions in Case Number 98188, he found that, when the contract was awarded, the successful tender information lost confidentiality with respect to the fee rates and other details necessary to understand the nature of the services contracted for. He concluded that section 26(1) did not apply. Moreover, while he accepted that the details of the fee structures, including details about what the fees did or did not include, and the terms of payment could be of interest to competitors and, if released, could be harmful to the competitive position of the affected parties, he nevertheless found that, on balance, the public interest was better served by the release of this information in light of the significant need for openness and accountability in relation to the contract. Section 27(1)(b) therefore did not apply.
The Commissioner found that the remainder of the contracts with the successful tenderers should also be released. In relation to the Department's claim for exemption under section 28, the Commissioner found that the second exclusion from the definition of "personal information" at section 2 applied to the names and positions of the project team, as well as the representatives of the successful tenderers who signed the contract. In any event, as he did not accept that there could be a mutual understanding of confidence in relation to the contract terms or signatories to a government contract, he was not satisfied that section 28(1) applied to any of the information in the contracts. In the circumstances of this case, he also did not accept that section 27(1)(b) applied to the names and positions of the project team, particularly as the proposed teams of the tenderers were among the key determinants in the selection process.
The Commissioner rejected the suggestion that the successful tender document as a whole qualified for exemption and also directed the release of the fee information of the initially successful tenderers, who had to withdraw from the appointment due to a conflict of interest on the part of one of the parties. In the circumstances, the Commissioner also found that the conflict of interest statement in the tender was not exempt under section 26(1) or 27(1)(b). However, in accordance with Case Number 98188, he accepted that, generally speaking, undisclosed, detailed information about a successful tenderer's business, understanding of and approach to a particular project, and approach to tendering in general remains confidential and commercially sensitive following a tender competition. Where relevant objections are made, such information may qualify for exemption under sections 26(1) and 27(1). As stated in Case Number 98188, disclosure of confidential, commercially sensitive information in the public interest ordinarily would not be required, unless it were necessary to explain the nature of the goods or services paid for by the public body. In this case, the Commissioner found that the assessments of the successful tenderers were adequate to satisfy the public interest in openness and accountability in relation to the selection process.
The Commissioner also generally accepted that the names and positions of, and other identifying information about, individuals put forward as members of the proposed project team, but who were not named as such in the contract for services, qualified as personal information within the meaning of the Act. He did not accept, however, that a reference to a Director or Executive of a company or a Partner of a law firm acting solely in his or her representative capacity for and on behalf of the company or firm in a tender for a public contract was personal information, as such a reference is about the company or firm, not the individual.
Having regard to the provisions of section 34(12)(b), the Commissioner found that sections 26(1) and 27(1)(b) did not apply to the tender documents of the unsuccessful tenderers who failed to raise any objections to the release of the records in question. The Commissioner also found that the total tender price of one of the unsuccessful tenderers did not qualify for exemption under section 26(1) or section 27(1)(b), because no harm or detriment arising from disclosure was identified. However, where relevant objections were raised, the Commissioner found that the Department was justified in refusing access to details of the unsuccessful tenderers' fee structures, businesses, understanding of and approach to the project, as well as team details. The Commissioner also found that the assessments of all but the highest-placed tenderers were exempt under section 27(1)(b).
The Commissioner accepted that the undisclosed details relating to the conflict of interest, such as the nature of the conflict, how it came to light, and how the initially successful tenderers proposed to deal with it, were commercially sensitive for the purposes of section 27(1)(b) in that they could reveal damaging information about the business practices of the initially successful tenderers which could, in turn, harm their competitive positions. The Commissioner stated that the public interest in relation to the conflict of interest lay in ensuring the proper conduct of the tender process by the Department rather than the conduct of the tenderers.
The Commissioner varied the decision of the Department.
Our Reference: 99183
21.01.2003
Mr. Patrick D. Rowan
Dear Mr. Rowan
I refer to your application for a review of the decision of the Department of Finance, dated April 1999, to refuse your request in part under the Freedom of Information Act, 1997 ("the FOI Act"), for records relating to the tender competition for appointment of advisors to the Minister on the sale of ICC Bank. Please accept my apologies for the delay which has arisen in dealing with your application.
I have now completed my review of the Department's decision in accordance with section 34(2) of the FOI Act. In carrying out that review, I have had regard to submissions from the Department and the affected third parties, your brief submission referencing your application for review, and also your telephone conversations with Ms. Melanie Campbell, Investigator, in relation to this case. I have also examined the records at issue.
I note that, in letters dated 22 November 2001 and 3 December 2001, Ms. Campbell identified the records, or parts thereof, that initially were under review. As you know, the Department stated in its submission that it is willing to release additional records, or parts thereof, in the public interest. The Department has also withdrawn its claim for exemption under section 26(1)(a) in relation to all of the records under review. Letters of notification were issued to the relevant third parties in this case in relation to these and other records under review which affect their interests. In response, the relevant third parties have stated that they have no objection to the full release of records number 18, 49, 51, 64, 69, 75, 101, 112, 115, and 128, though records 49, 51, 69, and 101 were not proposed for full release by the Department. Some of the relevant third parties have also stated that they have no objection to the partial release of additional records affecting their interests.
In addition, the affected third party named in record number 19 has stated that he has no objection to the release of this record. The Department proposes to release record 19 insofar as it relates to ICC Bank. I am satisfied that the remaining part of the record does not fall within the scope of the FOI request underlying this review.
No response was received from two of the unsuccessful tenderers, Chase Manhattan Bank and Bear Stearns and Co., Inc., in relation to the records affecting their interests. Individuals named in four of the records under review, including record number 122(b), also did not respond to the letters of notification issued to them.
Where both the Department and the affected third party have affirmatively agreed to the release of a record, I no longer consider that record to be within the scope of the review. Where an affected third party has stated that it has no objection to the release of a record, or part thereof, that was not proposed for release by the Department, the record remains within the scope of the review, but due weight will be accorded to the affected third party's statement of no objection. Similarly, in relation to the affected third parties who did not respond to the letters of notification issued to them, the records affecting their interests also remain within the scope of the review, but in deciding on those records, I will have due regard to the fact that the affected third parties raised no objection to release.
Accordingly, the records remaining under review are as follows, using the numbering system and categorisation adopted by the Department:
- Records number 27, 29, 47, 49, 106 (in part) - Records number 25, 26, 28, 45, 46, 48, 104, 105, and 107 (in full)
- Records number 9, 51, 77, 86-89, 100, 101, and 121 (in part) - Records number 30, 50, 53, 66-67, 81-83, 85, 111, and 116 (in full)
- Records number 14, 35, 37, 52, 56, 68-69, 74, 79, 84, 108, and 113 (in part) - Record number 73 (in full)
In making my findings, I consider it useful to address the records in the following order: (1) contracts with successful applicants; (2) successful tender documents; (3) unsuccessful tender documents (4) internal memoranda; (5) correspondence. In addition, it is relevant to note at the outset that the Minister for Finance disclosed in the course of a Dáil debate held on 22 June 2001 that the amount paid to the successful tenderers in this case, ABN Amro Corporate Finance and McCann FitzGerald, Solicitors, for the provision of corporate and legal advice with regard to the sale of ICC Bank was �850,247. It is also important to note that, under section 34(12)(b) of the FOI Act, a decision to refuse to grant a request is presumed not to have been justified unless the head of the public body concerned shows to my satisfaction that the decision was justified.
Record number 122(a) is the contract for services between the Minister and the successful tenderers, ABN Amro and McCann FitzGerald. Record number 122(b) is the confidentiality agreement that was entered into by the parties with respect to the services contracted for. The Department initially refused access to record 122(a) in part under sections 26(1)(a), 27(1)(b), and 28(1) of the FOI Act. Section 28(1) was also claimed by the Department in relation to the signatures on the confidentiality agreement of the Director of ABN Amro and the Partner in McCann Fitzgerald, as well as the signature, work address, and occupation of the witness to the agreements.
The Department now states that, in accordance with my decision in Henry Ford & Sons Limited, Nissan Ireland, Motor Distributors Limited and the Office of Public Works, Case Number 98049, 2 OIC Dec. 144 (1999), it is willing to release more of record 122(a), namely, the information relating to fees and the names of the signatories. In my decision in Case Number 98049, I accepted that, insofar as tender prices are preferential to the Government, their disclosure could disrupt business relationships with other customers and thus prejudice the competitive position of the successful tenderers. I also accepted that the disclosure of such preferential prices could prejudice the conduct and outcome of negotiations. However, I found that the advantages in terms of openness and accountability of disclosing the successful tender prices outweighed the possible harm to the tenderers and the tender process and concluded that the information should be released in the public interest.
The Department continues to seek exemption under sections 27(1)(b) and 28(1) in relation to Appendix 2 of the contract for services, which gives the names and positions of the project team. The Department proposes to release record 122(b) in full.
Section 3 of record 122(a) contains the fee structures of ABN Amro and McCann Fitzgerald, respectively, including the total fees payable to the parties. Section 5 of record 122(a) provides the terms and timetable for payment, and also specifies the fees payable in the event of termination of the project prior to its completion. ABN Amro objects to the release of sections 3 and 5 on the bases of sections 26(1)(a) and 27(1)(b). McCann FitzGerald objects to the release of its fee rates in section 3 and also to the release of the names and positions of its members of the project team in Appendix 2 under section 27(1)(b). No objections were raised to the full release of record 122(b), but the named Director of ABN Amro is now deceased and the witness to the agreements also did not respond to the letter of notification issued to her.
I note that the fee rates in the contract for services remained unchanged from the proposal made in the successful tender document. In Mr. Mark Henry and the Office of Public Works, Case Number 98188, ___ OIC ___ (25 June 2001), I gave a general summary of my views to date regarding records relating to a tender competition. Although Case Number 98188 and its predecessor, Case Number 98049, involved tenders for the supply of goods, I consider my findings to be also generally applicable to tenders for the supply of services.
The Confidentiality of Sections 3 & 5 of Record 122(a)
In this case the Request for Tenders document (RFT) included the following paragraphs:
"1.16 All responses to this RFT will be treated in confidence and no information contained therein will be communicated to any third party without written permission of the tenderer except insofar as is specifically required for the consideration and evaluation of the response or as may be required under law including the Freedom of Information Act, 1997 or under Irish Government Procurement Procedures or in response to questions, debates or other parliamentary procedures in or of the Oireachtas (the Irish Parliament).
1.17 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 which is sensitive and the reasons for its sensitivity. The Department will consult with tenderers concerning sensitive information before making a decision on any request under the Freedom of Information Act, 1997.
. . . . .
The Minister for Finance 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 Department's obligations under law including the Freedom of Information Act, 1997 or under Irish Government Procurement Procedures and accepts no liability whatsoever in respect of any information provided which is subsequently released or in respect of any consequential damage suffered as a result of such obligations."
In your application for review, you assert that claims for exemption under section 26(1)(a) are not sustainable in light of the reference in paragraph 1.16 of the RFT to the FOI Act. For section 26(1)(a) to apply, it is necessary for the Department to show four things, namely:
In Mr. Michael Grange and the Department of Enterprise, Trade and Employment, Case Number 98179, 2 OIC 203 (1999), I interpreted the first two requirements of section 26(1)(a) by reference to the following definition of the term "confidence", which is derived from the law relating to breach of duty of confidence: "A confidence is formed whenever one party ('the confider') imparts to another ('the confidant') private or secret matters on the express or implied understanding that the communication is for a restricted purpose." ("B" v. Brisbane North Regional Health Authority, (1994) 1 QAR 279, at paragraph 45, quoting from F. Gurry "Breach of Confidence" in P. Finn (Ed.) Essays in Equity; Law Book Company, 1985, p.111.). Based on this definition, I found that, first, information given in confidence is concerned with private or secret matters rather than information which is trite or which is already in the public domain, i.e. that it is necessary to establish that the information has the necessary quality of confidence. Second, the communication must be for a restricted or limited purpose. Third, there must be an understanding that the information is being communicated for a restricted purpose.
To the extent that you are arguing that the reference in paragraph 1.16 of the RFT precludes any mutual understanding of confidence with respect to the tenders, as required for exemption under section 26(1)(a) (Case Number 98049 refers), I disagree. The reference simply acknowledges the risk of disclosure by law of information that the Department and the tenderers may otherwise have intended to keep confidential. As discussed in Case Number 98188, paragraph 5.9 of the Guidelines on Public Procurement (1994 Edition) generally requires public bodies to treat tenders and all information relating to the processing of them as confidential at least until the time that the contract is awarded. In Case Number 98188, I noted that paragraph 5.9 of the Guidelines is subject to the provisions of the FOI Act, but that it nevertheless supports a claim that there is an obligation or mutual understanding of confidence in relation to certain tender information. While the Department has withdrawn its claims for exemption under section 26(1)(a), it has done so without prejudice to its position on whether or not there was a mutual understanding of confidence in relation to the tenders.
Moreover, section 26(1)(b) may apply where disclosure of information would constitute a breach of a duty of confidence provided for by agreement, enactment, or otherwise by law. The correct tests to apply in deciding whether there is a breach of an equitable duty of confidence are set out in the case of Coco v. A. N. Clark (Engineers) Limited F.S. R. 415. The tests require that: (1) the information has the necessary quality of confidence about it; (2) the information was imparted in circumstances imposing an obligation of confidence; (3) there is an unauthorised use of that information to the detriment of the party communicating it.
In this instance, ABN Amro and McCann FitzGerald specified in their tender in accordance with paragraph 1.17 of the RFT that they considered the information supplied to be "strictly private and confidential". Nevertheless, I find that once the proposed fees became the contract rates, the Department could not reasonably be expected to keep that information or any of the other contract terms confidential in the absence of exceptional circumstances. As I stated in my previous decisions, "one would have to question, having regard to the coming into force of the Freedom of Information Act, how any public body could have an understanding that the details of its expenditure of public money would be kept confidential." In accordance with my conclusions in Case Number 98188, I find that, when the contract was awarded, the successful tender information lost confidentiality with respect to the fee rates and other details necessary to understand the nature of the services contracted for. The amount ultimately paid to ABN Amro and McCann FitzGerald does not appear to correspond to the contract price, but it gives an indication of the large amount of public money involved. Moreover, the contract was for services to advise the Minister on the sale of a valuable State asset. In the circumstances, there is a significant need for openness and accountability in relation to the contract. I note that the confidentiality agreement does not relate to the terms of the contract for services. As I am aware of no other countervailing circumstances that would give rise to an obligation or mutual understanding of confidence, I find that section 26(1) does not apply.
With Respect to the Commercial Sensitivity of Sections 3 & 5 of Record 122(a)
Section 27(1)(b) provides that a head shall refuse to grant a request under section 7 if the record concerned contains
"(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".
The fee information at issue is now historic and, in the case of McCann FitzGerald, admittedly out of date. In its submission, McCann FitzGerald argues that, because its fee information is significantly out of date, disclosure would give a misleading indication of the firm's charge-out rates and could reasonably be expected to result in a material financial loss to the firm. However, as I have stated in numerous decisions, including Telecom Eireann and Mr Mark Henry, Case Number 98114, 4 OIC Dec. 9 (2000), I do not accept that the possibility of information being misunderstood is a good reason to refuse access to information under the FOI Act. In any event, I consider that any potential client or competitor is likely to understand that the firm's rates have changed since 1999.
Neither ABN Amro nor McCann FitzGerald has claimed that the fee rates were preferential to the Government, which was the basis for my finding that section 27(1) applied to the tender prices in Case Number 98049. I also do not see how the total prices or the information in section 5 of record 122(a) could be indicative of pricing strategy. However, I accept that the details of the fee structures, including details about what the fees did or did not include, and the terms of payment could be of interest to competitors and, if released, could be harmful to the competitive position of the affected parties. Nevertheless, I find that, on balance, the public interest is better served by the release of sections 3 and 5 in light of the significant need for openness and accountability in relation to the contract. As noted above, the information is historic. I also note in relation to the fee structures in section 3 that the information shows how the Department was willing to calculate the contract price if the total fees did not apply for a reason other than the termination of the project. These and other details included in sections 3 and 5 may also provide some explanation for the apparent discrepancy between the total contract price and the amount of $850,247 that was ultimately paid to ABN Amro and McCann FitzGerald.
The Remainder of Records 122(a) & (b)
I find that the remainder of records 122(a) and (b) should also be released. In relation to the Department's claim for exemption under section 28 of the FOI Act, I note that "personal information" is defined at section 2 as information about an identifiable individual that would ordinarily be known only to the individual or his/her family or friends, or information about the individual that is held by a public body on the understanding that it would be treated as confidential. The FOI Act details twelve specific categories of information which is personal without prejudice to the generality of the forgoing definition. It also specifically excludes certain information from the definition of personal information, such that the definition does not include, in a case where an individual provides a service for a public body under a contract for services, the name of the individual or information relating to the service or the terms of the contract. I find that this exclusion applies to the names and positions of the project team, as well as the name of the Director of ABN Amro and the Partner in McCann FitzGerald who signed the contract.
In any event, I note that the fact that a person is referred to by name in a record does not necessarily constitute personal information about that person within the meaning of section 2 even where an exclusion to the definition does not apply. Here, none of the information in the contracts can be considered to be information that would, in the ordinary course of events, be known only to the individuals concerned or members of their family or friends. Moreover, as indicated above, I generally do not accept that there could be a mutual understanding of confidence in relation to the contract terms. I also do not accept that there could be a mutual understanding of confidence in relation to signatories to a government contract, including the identifying information given by a witness. I therefore am not satisfied that section 28(1) applies to any of the information in records 122(a) or (b). As this was the only basis for the partial refusal of record 122(b), it follows that this record should be released in full.
Both the Department and McCann FitzGerald claim that section 27(1)(b) applies to the names and positions of the project team in Appendix 2 of the record 122(a). McCann FitzGerald asserts generally that, among other information in its tender, its proposed team provides the firm with a "competitive advantage which would be negated by the release of this information." A more specific argument in support of the claim for exemption of this information under section 27(1)(b) is provided by the Department: "[T]he competitive position of consultancy firms is essentially dependent on the skills and experience of their personnel. Such information is not publicly available - if it were to be made public, it would expose such firms to predation by competitors, thereby prejudicing their competitive positions." As a general proposition, I accept that, if confidential, information about a tenderer's proposed team could be commercially sensitive for the reason stated by the Department. This is supported by the Western Australian case of Sideris v. City of Joondalup, Re [2001] WAICmr 37 (10 October 2001), at paragraph 19. However, McCann FitzGerald publishes biographical information about its partners and consultants on its website, including a note on their areas of work. Moreover, it is public knowledge that McCann FitzGerald advised the Minister on the sale of ICC Bank, and it seems unlikely that the firm's competitors would be unaware of the identity of those involved in that transaction. In any event, the proposed teams of the tenderers were among the key determinants in the selection process, as confirmed by the very inclusion of the project team as an appendix to the contract for services. Therefore, even assuming that section 27(1)(b) applies to the names and positions of the project team, I again find that, on balance, the public interest is better served by the release of this information. I conclude that record 122(a) should also be released in full.
The successful tender document in this case is record number 27, as modified by record number 106. Record 27 is the tender dated 28 September 1998 that was submitted by the consortium of ABN Amro and Arthur Cox. As you know, the ABN Amro/Arthur Cox consortium was initially successful in the tender competition, but had to withdraw from the appointment when it emerged that Arthur Cox had a conflict of interest. After exploring various options, the Department ultimately elected to follow the "negotiated procedure" provided for under Article 11 of the applicable European Union (EU) Directive, 92/50/EEC. Accordingly, the Department invited most of the original tenderers to confirm their tenders. On 14 January 1999, ABN Amro responded by submitting record 106, which, in turn, incorporates record 27. This is acknowledged by the contract for services, which refers to the document dated 28 September 1998 as the "tender document", the document dated 14 January 1999 as a "supplementary document", and both documents together as the "consultancy tender". I also note that record 106 refers to record number 47, which is the written presentation made to the selection board on 19 October 1998 by the ABN Amro/Arthur Cox consortium.
The Department now proposes the partial release of all of the tender documents at issue, including records 27, 47, and 106. It seeks to withhold the remainder under sections 27(1)(b) and 28(1). The Department also previously claimed exemptions under sections 31(1)(a) and (c), but it stated in its submission that it would have no objection to the release of information under these provisions once the sale of ICC Bank was concluded. I therefore consider the Department's claims under section 31(1)(a) and (c) withdrawn.
ABN Amro has no objection to the release of some portions of its tender documents, but generally objects to all references to fees, further information regarding Arthur Cox's conflict of interest, specific valuation ranges, and potential purchasers of ICC Bank. ABN Amro specifically seeks to withhold the following:
Arthur Cox supports the objections of ABN Amro, but does not concur in the proposed disclosure of many portions of record 27. The firm generally objects to the release of any fee information and, in essence, any further information regarding its conflict of interest. Unlike ABN Amro, Arthur Cox only agrees to the release of the cover letter to the tender document at record 27 subject to the deletions suggested by the Department. Arthur Cox argues in relation to the tender document at record 27 that the following is confidential and commercially sensitive and should not be released: the layout, format, substantive content, and pricing information, particularly the fee proposal on page 5 and in paragraph 5.1 on page 38, and also the conflict of interest statement on page 13. Arthur Cox also invokes section 28 on the basis of its argument that the firm is a "partnership of individuals" and therefore information relating to its financial affairs and property qualifies as personal information.
In addition, both ABN Amro and Arthur Cox make claims for exemptions which are discretionary to the Department and do not relate to their interests as third parties. These claims will not be addressed unless they are also raised by the Department.
McCann FitzGerald generally objects to the release of information regarding its pricing strategy and approach to tendering. It argues that such information is exempt under section 27(1)(b), as disclosure could reasonably be expected to result in a material financial loss and could prejudice its competitive position. McCann FitzGerald also argues that it owes a duty of confidence to its clients and, thus, any details of its clients are exempt under section 26(1)(b). Specifically, in relation to record 106, McCann FitzGerald objects to the following:
In Case Number 98188, I observed that certain 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 even after the contract is awarded. I also observed that disclosure of such information 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. However, I emphasised that each record relating to a tender competition must be examined on its own merits in light of the relevant circumstances.
In this case, the original successful tender document is now over four years old. The lead partner in the consortium, ABN Amro, does not seek to withhold the tender document as a whole and has agreed to the release of the cover letter in its entirety. I note at the outset in relation to Arthur Cox's claim under section 28(1) that I do not accept that information relating to the firm may qualify as personal information within the meaning of the FOI Act, as it concerns only the business affairs of the firm's partners rather than information of a private nature. I further note that the tender document appears to have been proprietary to ABN Amro. Even Arthur Cox states in its submission that the proposal was prepared by ABN Amro. Moreover, it was submitted by the Director of ABN Amro under ABN Amro letterhead and was subsequently incorporated into the tender document (record 106) submitted by ABN Amro without Arthur Cox on 14 January 1999. In the circumstances, I do not accept that Arthur Cox, on its own, is in a position to object to the release of the tender document on the basis of section 26 unless it is shown that either the Department or ABN Amro owes Arthur Cox a duty of confidence within the meaning of section 26(1)(b). While it is unclear, Arthur Cox appears to suggest that an oral or written confidentiality agreement may exist, but no evidence of this has been presented. I am not aware of any relevant statute which might apply in this case. The correct tests for determining whether disclosure would constitute a breach of an equitable duty of confidence are set out above.
The deletions from the cover letter suggested by the Department pertain to the experience and resources available to the consortium in meeting the needs of the Minister in relation to the sale of ICC Bank. The information in the first two deletions is general in nature. Two well-known clients are named, but they are also mentioned as clients of Arthur Cox on the law firm's website. I do not accept that the information has the necessary quality of confidence for the purposes of section 26(1)(b). I also do not see how the release of the information provided could result in any identifiable harm for the purposes of section 26(1)(b) or 27(1)(b). The information in the third deletion appears to relate entirely to ABN Amro. I conclude that the cover letter should be released in full.
No claim has been made that Arthur Cox advised ABN Amro on the layout or format of the tender document. In any event, Arthur Cox has not identified any special characteristics of the tender that would set it apart in form from other tenders of that nature; on the contrary, the tender appears to follow the format suggested by the Department in the RFT. Moreover, I do not see how the interests of Arthur Cox are affected by the substantive content of a tender relating exclusively to ABN Amro and its financial services. I therefore reject any suggestion that the tender as a whole qualifies for exemption.
In addressing the contents of the proposal, I will start with the fee information, found here in the third paragraph of page 5 and paragraph 5.1 of page 38. The fee structure provided is similar to one of the fee structures in section 3 of the contract for services, but it is more general in nature and does not give even the breakdown between the corporate finance and legal fees. No "vendor/purchaser" relationship exists with respect to this information, as in Case Number 98049, since it did not ultimately become the contract price. Nevertheless, I find that sections 26(1)(a) and (b) do not apply.
As stated by the Queensland Information Commissioner in "B" v. Brisbane North Regional Health Authority, at para. 139: "There will be cases where the seeking and giving of an express assurance as to confidentiality will not be sufficient to constitute a binding obligation, for example if the stipulation for confidentiality is unreasonable in the circumstances, or, having regard to all the circumstances equity would not bind the recipient's conscience with an enforceable obligation of confidence." In this case, the ABN Amro/Arthur Cox consortium was initially successful and only failed to conclude the contract due to Arthur Cox's conflict of interest rather than any lack of interest on the Department's part. Like the fee structures in the contract for services, the tender price in record 27 shows what the tenderers were prepared to charge, and what the Department was willing to accept, following the initial tender competition. Given that the consortium was responsible for its failure to conclude the contract, it is also reasonable to expect that its initial tender price would be released to allow taxpayers to assess whether "value for money" may have been lost or gained by reason of the delay in the appointment of advisors. In the circumstances, I do not accept that there is an obligation of confidence in relation to this information. I also do not accept disclosure of the tender price would be likely to prejudice the supply of further similar information in the future. In light of the passage of time and the generality of the information, I also do not accept that the tender price is commercially sensitive within the meaning of section 27(1)(b). In any event, I find that the information should be released in the public interest.
The conflict of interest statement in dispute is found at paragraph 1.6 on page 13 of the proposal in record 27. Only the first two sentences pertain to Arthur Cox. The information is again very general in nature and says nothing more than what would be expected in light of the requirements of the RFT. In my view, the information does not have the quality of confidence necessary for protection under section 26(1). Moreover, given the delay caused by the fact that Arthur Cox did have a conflict of interest, disclosure of the conflict of interest statement in the tender is required to determine whether the Department was remiss in not detecting the potential conflict before awarding the contract to the consortium. In the circumstances, it is unreasonable to expect that the conflict of interest statement in the tender document would be treated as confidential. I am also not persuaded that the information is commercially sensitive for the purposes of section 27(1)(b).
Before addressing the remainder of the tender documents, I should explain my approach to the granting of access to parts of records. Section 2 of the FOI Act defines "record" as including "anything that is a part or a copy" of a record. Section 13 of the FOI Act provides for the deletion of exempt information and the granting of access to a copy of a record with such exempt information removed. This should be done where it is practicable to do so and where the copy of the record thus created would not be misleading. However, I take the view that neither the definition of a record nor the provisions of section 13 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, I am not in favour of the cutting or "dissecting" of records to such an extent.
In accordance with Case Number 98188, I accept that, generally speaking, undisclosed, detailed information about a successful tenderer's business, understanding of and approach to a particular project, and approach to tendering in general remains confidential and commercially sensitive following a tender competition. Where relevant objections are made, such information may qualify for exemption under sections 26(1) and 27(1). This does not include general, promotional information that is in the nature of a "sales pitch" or the type of information that can be found on a tenderer's website or in other publications. As I stated in Case Number 98188, disclosure of confidential, commercially sensitive information in the public interest ordinarily would not be required, unless it were necessary to explain the nature of the goods or services paid for by the public body. In this case, I find that the assessments of the successful tenderers, which are discussed below, are adequate to satisfy the public interest in openness and accountability in relation to the selection process.
In light of the foregoing, I find that the following parts of record 27 are exempt:
I also find that the following parts of record 47 are exempt:
In addition, I generally accept that the names and positions of, and other identifying information about, individuals put forward as members of the proposed project team, but who are not named as such in the contract for services, qualify as personal information within the meaning of the Act. The information is held by the Department on the understanding that it would be treated as confidential. The information relates to the employment or employment history of the individuals and thus falls within the third specific category listed as personal information under the Act. While biographical information about the individuals may be available on the websites and in other publications of their employers, it is not published that the individuals were put forward as proposed team members in their firm's bid to advise the Minister on this particular transaction. I do not find that the public interest in releasing this information outweighs the right to privacy of the individuals concerned. I conclude in relation to record 27 that the Department was justified in refusing to grant access under section 28(1) to the identifying information on pages 20, 34-35, and in appendix 2 about the proposed team members from Arthur Cox. The same information on pages 2 and 6 of the written presentation is also exempt, as is the name of the individual listed first under the heading "ABN AMRO" on page 2 of record 47, since this individual also was not a proposed team member and is not named as such in the contract for services.
For the sake of clarification, however, I should add that I do not accept that a reference to a Director or Executive of a company or a Partner of a law firm acting solely in his or her representative capacity for and on behalf of the company or firm in a tender for a public contract is personal information. I consider such a reference to be about the company or firm, not the individual.
It follows from my discussion of the contract for services between the Minister and the successful tenderers and record 27 that I do not accept that the fee information and team details in record 106 are exempt. However, applying the principles stated above, I find that access has been correctly refused under sections 26(1) and 27(1)(b) to the following parts of record 106, to which relevant objections have been made:
I note that the identity of all of the other unsuccessful tenderers has been disclosed in records which have already been released by the Department. I will address their tender documents in turn.
Records number 25 and 45 are the tender document and written presentation, respectively, initially submitted by Chase Manhattan Bank. Record 104 is the tender document submitted by the consortium of Chase Manhattan and the law firm of Mason Hayes and Curran under the negotiated procedure following the withdrawal of the ABN Amro/Arthur Cox consortium.
The letters of notification issued to the third parties stated that if they failed to contact my Office within a certain period, it would be assumed that there was no objection to the release of the records in question. Nevertheless, no response has been received to date from Chase Manhattan. In the circumstances, and having regard to the provisions of section 34(12)(b), I find that sections 26(1) and 27(1)(b) do not apply to any part of records 25 and 45. However, for the reasons stated above, I find that the Department was justified in refusing access under section 28(1) to the team details on pages 34-41 of record 25 and pages 4-5 of record 45.
In its response, Mason Hayes and Curran concurred with the partial release of record 104 as edited by the Department, but the firm indicated that it objects to the release of any further information affecting its interests. The information in dispute includes deletions from the cover letter giving the total fee proposed by Mason Hayes and Curran. No claim has been made that the proposed fee was preferential to the Government, nor is it otherwise apparent how disclosure could result in a material loss or gain to the firm or prejudice the firm's competitive position. As no harm or detriment arising from disclosure has been identified, I do not accept that section 26(1) or section 27(1)(b) applies to the cover letter (Case Number 98188, paragraph 61, refers). For the same reason, I am also not satisfied that the top paragraph of page 10 of the note headed "Profile of Mason Hayes, & Curran" included in record 104 is exempt.
In addition, a visit to the law firm's website reveals that two of the deletions on page 1 of this note do not contain information of a confidential nature. I find that the line deleted in the second paragraph under "Personnel" and the line under "Departments" are not exempt. However, the remaining information deleted from the edited version of record 104 includes details of Mason Hayes and Curran's fee structure, details regarding the firm's business and its understanding of and approach to the project, as well as team details. I am satisfied that the Department's refusal to grant access to this information is justified.
AIB Corporate Finance and its partner in the tender competition, L.K. Shields, strongly object to the release of any part of their tender documents, records number 26, 46, and 105. They maintain that all of the information provided is confidential and commercially sensitive. Three specific areas of sensitivity are identified as follows:
I find that some of the disputed information is too general in nature to be considered confidential or commercially sensitive. Also, some of the information is publicly available, and I see nothing about its presentation that would reveal damaging information about AIBCF or L.K. Shields or their approach to tendering. Accordingly, I find that the edited versions of records 26, 46, and 105 should be released. Moreover, with respect to the deletions that have been made from the edited records, I am not satisfied that the Department was justified in refusing access to:
However, applying the principles stated above, I am satisfied that access to the remainder of records 26, 46, and 105 has correctly been refused under sections 26(1), 27(1)(b), and 28(1). I also find that the Department has properly deleted the personal information from records 26, 46, and 105 under section 28(1).
Records number 29 and 49 are the tender documents submitted by the consortium of N M Rothschild & Son and William Fry. In relation to these records, Rothschild and William Fry object only to the release of their fee details on pages 36-37 of record 29 and page 25 of appendix F of record 29, and of the details of Rothschild's professional indemnity cover on page 12 of record 29. In light of the details provided, I accept that the disputed information is exempt under sections 26(1) and 27(1)(b). I also find that the Department was justified in applying section 28(1) to the personal details of the individuals mentioned in record 29.
Bear Stearns and Co., Inc., did not respond to the letter of notification issued to it. I therefore assume that it has no objection to the release of its tender documents, records number 28, 48, and 107. Record 107 was submitted jointly with the law firm of Dillon Eustace, but the firm responded to its letter of notification by confirming that it has no objection to the release of record 107 in full or as edited by the Department. Accordingly, I find that the Department was justified in deleting only the personal information from records 28, 48, and 107 under section 28(1).
Records number 35, 52, and 108 contain the assessments made of the tenderers by the Department's Selection Committee. The Department argues that the disclosure of information about the tenderers that were rated poorly could be expected to prejudice the competitive position of the firms concerned and is thus exempt under section 27(1)(b). The Department acknowledges that disclosure of the assessments made of the "higher-placed tenderers" would only be prejudicial insofar as it could, by implication, reveal information about the "lower-placed firms". I agree that the assessments of all but the highest-placed tenderers, i.e. the ABN Amro/Arthur Cox and ABN Amro/McCann FitzGerald consortia, are exempt under section 27(1)(b). Given the low number of tenderers and the focus in record 52 on the first- and second-placed tenderers, I accept that the even the mere identification of the second-placed tenderers could suggest that the other unsuccessful tenderers were rated poorly. However, the ranking of the highest-placed tenderers has already been disclosed, and I do not see that the release of their assessments could reveal any further information about the unsuccessful tenderers. Not surprisingly, the assessments are entirely positive. ABN Amro objects to the release of the price differential noted in record 52 between its initial tender and the second-placed quote, but it does not explain the basis for its objection. I note that overall cost was only one of the selection criteria and was allocated only 15% of the marks in the scoring system; therefore, the second-placed tenderers did not necessarily propose the second-lowest price. Moreover, while disclosure of the price differential together with the tender price of the ABN Amro/Arthur Cox consortium gives some information regarding the tender price of the second-placed tenderers, the information is very general in nature. Accordingly, I am not satisfied that the price differential alone reveals enough information to render it commercially sensitive for the purposes of section 27(1)(b). I conclude that the information relating solely to the ABN Amro/Arthur Cox and ABN Amro/McCann FitzGerald consortia is not exempt, but that the Department was correct in withholding the remaining information at issue in records 35, 52, and 108, including the identity of the second-placed tenderers. Relating to Arthur Cox's Conflict of InterestThe records at issue here are numbered 68, 73, 74, 79, and 84. Parts of records 68, 74, 79, and 84 have been released, and the Department proposes to release more of records 68, 74, and 84, but not any further information about the conflict of interest.
I accept that the undisclosed details relating to Arthur Cox's conflict of interest, such as the nature of the conflict, how it came to light, and how Arthur Cox and ABN Amro proposed to deal with it, are commercially sensitive for the purposes of section 27(1)(b) in that they could reveal damaging information about the business practices of Arthur Cox and ABN Amro which could, in turn, harm their competitive positions. This is not to say that the details are necessarily damaging, but as noted in previous decisions which I have made, the standard of proof necessary to establish the requisite prejudice under section 27(1)(b) is low. The test is not whether the harm is certain to materialise, but whether it might do so. The public interest in relation to the conflict of interest lies in ensuring the proper conduct of the tender process by the Department rather than the conduct of the tenderers. In my view, sufficient information to satisfy the public interest is available from the records already released and the conflict of interest statement in record 27 discussed above. I conclude that the Department's refusal to release any further information about the conflict of interest is justified. Records 74 and 79 also contain legal advice which has correctly been withheld under section 22(1)(a) of the FOI Act. In addition, for the reasons stated above, I agree with the deletion of the name of the second-placed tenderers from records 79 and 84. The additional information that the Department proposes to release is not exempt.
Records 14 & 37 The Department claims that the parts of the records number 14 and 37 relating to the Employee Share Ownership Plan (ESOP) for ICC staff do not relate to the FOI request underlying this review. Alternatively, the Department invokes section 21(1)(c) in relation to this information. Section 21(1)(c) provides that a public body may refuse to grant a request if access to the record concerned could reasonably be expected to disclose positions taken, or to be taken, or plans, procedures, criteria, or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being or to be carried on by or on behalf of the Government or a public body. The information on the scoring system included as an attachment to record 14 and the assessments of the tenderers show that experience with ESOPs was one of the bases upon which the tenderers were evaluated. I therefore do not agree that the parts of records 14 and 37 relating to the ESOP for ICC staff are beyond the scope of this review. I accept that the full release of records 14 and 37 could reasonably be expected to disclose information relating to past negotiations carried on by or on behalf of the Government with the ICC trade union. A record is capable of qualifying for exemption under section 21(1)(c) despite the fact that any negotiating positions, plans etc. which it might disclose relate to past negotiations and even if such positions, plans etc. are of no conceivable relevance to any current or future negotiations. However, where the release of a record relating to past negotiations cannot harm current or future negotiations, the public interest in openness in the workings of Government means that, in the absence of any other applicable exemption, the record should be released (section 21(2) refers). In this case, the Department has not shown that the full release of records 14 and 37 could reasonably be expected to prejudice any current or future negotiations or cause some other harm. Therefore, I find that the public interest would be better served by the release of these records in their entirety. Records 56 & 113 Records number 56 and 113 have been refused in part by the Department under section 27(1)(b). They contain recommendations to the Minister, but do not provide any new information about Arthur Cox's conflict of interest. The recommendation contained in record 56 restates the Selection Committee's assessment of the ABN Amro/Arthur Cox consortium, but also includes their tender price, the name of the second-placed tenderers, and the price differential mentioned in record 52. The only undisclosed information in record 113 relates to the second-placed tenderers. For the reasons stated above, I find that records 56 and 113 should be released with the deletion of the name of the second-placed tenderers. I have already explained why I do not consider the tender price or the price differential to be exempt under section 27(1)(b). I also find no support for the Department's claim for exemption under section 27(1)(b) of the remaining information in record 113 relating to the second-placed tenderers. Record 69 The Department invokes sections 27(1)(b) and 28(1) in relation to record number 69, which is a cover note that includes information about the partner at Arthur Cox who participated in the presentation made by the ABN Amro/Arthur Cox consortium to the Department. However, the named partner, who made the submission on behalf of the firm, has no objection to the release of this record. It follows that record 69 should be released in full. Correspondence
Records number 30, 66-67, 77, 81-83, 85, and 88 consist of the records of communication between Arthur Cox and ABN Amro and between these parties, respectively, and the Department concerning Arthur Cox's conflict of interest. For the reasons stated above in relation to the internal memoranda, I am satisfied that section 27(1)(b) applies to the undisclosed details in these records relating to the conflict of interest. Accordingly, the Department's refusal to grant access to records 66-67 and 81-83 in full and to records 77, 85, and 88 in part is justified. However, I do not accept that the fee proposal in record 30 is exempt given its generality and historic nature. Therefore, record 30 should also be released in part.
With Bear Stearns - Records 9 & 53
Record number 9 is a letter from Bear Stearns that has been refused in part by the Department under section 27(1)(b). Record number 53 is another letter from Bear Stearns that the Department initially refused in full, but now proposes to release in its entirety. As noted above, Bear Stearns did not respond to the letter of notification that was issued by this Office. In the absence of its views on the matter, I find no basis for concluding that section 27(1)(b) or any other exemption applies to any part of either record.
With ABN Amro/McCann FitzGerald - Records 87, 111, 116
Records number 87, 111, and 116 are letters from ABN Amro to the Department. Included in record 111 is an attached letter from McCann FitzGerald. ABN Amro objects to the release of records 87 and 116. McCann FitzGerald argues that parts of records 111 and 116 should be withheld.
Most of record 87 was released by the Department in its original decision. The only part withheld was the name and signature of the Director of ABN Amro. I have already explained that I do not consider the Director's name and signature in the context of this tender competition to be personal information within the meaning of the Act. I also note that ABN Amro has not objected to the release of the Director's name and signature in relation to other records under review. Record 87 should therefore be released in full.
The parts of record 111 that McCann FitzGerald seeks to withhold contain client details. I accept that sections 26(1) and 27(1)(b) apply to this information. Record 111 should therefore be released subject to the deletions suggested by McCann FitzGerald. The edited version of this letter that McCann FitzGerald included with its submission will be forwarded to the Department to assist it in the implementation of this decision.
The Department now proposes to release record 116 in full. This record sets out proposals regarding the payment of fees to the successful tenderers and includes an estimate of the monthly legal fees that ABN Amro expected to discharge. I have already found that similar information in record 122(a), the contract for services between the Minister and the successful tenderers, is commercially sensitive for the purposes of section 27(1)(b), but that it should be released in the public interest because of the significant need for openness and accountability in relation to the contract. The proposals in record 116 differ from the contract terms and are indicative of ABN Amro's negotiating strategy. I find no positive public interest in the release of these proposals that would outweigh the public interest in the proper preservation of confidences and the protection of commercially sensitive information. Accordingly, the release of record 116 should also be made subject to the deletions suggested by McCann FitzGerald, and an edited copy of this records will also be forwarded to the Department.
With Rothschild/William Fry - Records 50, 51, 86, 89, 101
Records number 50, 51, 86, 89, and 101 are records of communication between the Department on the one hand and Rothschild and/or William Fry on the other. As the affected parties do not object to the release of records 51 and 101, these records should released in full.
Rothschild also does not object to the release of record 89, which is a fax it sent to the Department that makes reference to William Fry. The letter of notification issued to William Fry did not include a copy of this record, but the reference to William Fry affects its interests in the same manner as record 101. This record therefore should also be released in full.
Likewise, the contents of record 86, in which telephone conversations with Rothschild are recorded, only affect the interests of Rothschild and William Fry in a manner not objected to in relation to records 89 and 101. Again, this record should be released in full.
Record 50 sets out the detailed fee structure proposed by William Fry. William Fry states in its submission that its current rates could be inferred from this record and also that the structured fee arrangement therein could potentially have competitive impact. It follows from my discussion of the tender documents that I accept that this record is exempt under sections 26(1) and 27(1)(b).
These are records of telephone conversations between the Department and representatives of the companies that participated unsuccessfully in the negotiated procedure following the withdrawal of the ABN Amro/Arthur Cox consortium. The Department initially refused access to the names of the representatives and their companies under section 28(1). It also refused access to a part of record 121 under section 27(1)(b). The Department is now willing to release record 100 in full and more of record 121.
Three of the named individuals did not respond to the letter of notification issued to them. In any event, I have already explained that I do not consider such references to be personal information within the meaning of the Act. The company whose information has been withheld from record 121 suggests in its submission that the names of its Directors is confidential and commercially sensitive information, but I disagree, as this information is publicly available. However, record 121 does include a brief summary of the assessment made of the company by the Department. Like the more detailed assessment in record 108 on which it is based, I find the summary exempt under section 27(1)(b). Accordingly, record 121 should be released with the following deletion: "He asked . . . important one."
Having carried out a review under section 34(2) of the FOI Act, I hereby vary the decision of the Department as described above.
A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than four weeks from the date of this letter.
Yours sincerely
Information Commissioner