The Senior Investigator found that the Council is not justified in its decision to refuse access to the bulk of the records under section 27(1)(b) of the FOI Act. She varied the decision of the Council by affirming the decision to withhold those parts of the Report on Tenders which identified the unsuccessful tenderers and parts of an appendix to the Report comprising the successful tenderer's financial, banking and insurance positions. She annulled the decision of the Council in relation to the remaining records and directed their release.

Case Summary

Whether the Council is justified in its decision to refuse access to the withheld records in relation to the tender process for a water supply scheme on the basis that the records contain commercially sensitive information and are exempt from release under section 27(1)(b) of the FOI Act.

Date of Decision: 12.08.2010

Review Application under the Freedom of Information Acts 1997 & 2003 (FOI Act) to the Information Commissioner.

Background:

The Applicant wrote to the Council on 1 July 2008 requesting access to the Report on Tenders in respect of Contract CNI 2, Part 2 Production Well Drill Ballinagard, Hughestown and Ballyfarnon (part of Roscommon Regional Water Supply Project) and stating that any ''sensitive material'' may be excluded. On 20 August 2008, the Council issued a decision purporting to grant access to the report despite the fact that significant portions, including all appendices, were withheld. The Applicant requested an internal review of this decision on 26 August 2008. In its internal review decision of 15 September 2008 the Council upheld the original decision.

The Applicant wrote to this Office on 2 December 2008 seeking a review of the Council's decision. I note that Ms Alison McCulloch, Investigator of this Office, wrote to the Council on 5 August 2009 setting out her preliminary views on this case and that the Council responded to these views. I also note that Ms McCulloch wrote to White Young Green Ireland Ltd (consultants to the Council) and to the successful tenderer, for their views on release of the withheld records. White Young Green Ireland Ltd responded in writing and the successful tenderer telephoned this Office to object to the release of the records. The latter was asked to make a written submission outlining why it was not in favour of releasing the records. Despite two reminders having been issued by this Office, a submission has not been received. I consider that the review should now be brought to a close by the issue of a formal, binding decision.

In conducting this review I have had regard to the submissions of the Council as well as those of the applicant (including those made to the Council) and the third parties mentioned above. I have also had regard to additional information and clarification provided by the Council at the request of this Office and to the provisions of the FOI Acts. I have examined the records provided for the purposes of this review.

Conducted in accordance with section 34(2) of the FOI Act by Elizabeth Dolan, Senior Investigator, who is authorised by the Information Commissioner to conduct this review.

Scope of Review

This review is concerned solely with the question of whether the Council is justified in its decision to refuse access to the withheld records on the basis that they contain commercially sensitive information and are exempt from release under section 27(1)(b) of the FOI Act. The records comprise the evaluation of the tenders received and appendices comprising correspondence between the Council, the successful tenderer and unsuccessful tenderers, including the applicant in the course of the evaluation and selection process. The process was completed in 2007.

Submissions

.

Findings

Preliminary matters

Public body's handling of request

Firstly, I would like to comment on the way this FOI request was handled by the Council. There are several unsatisfactory features of the manner in which the Council gave its decisions on this request. The wording of the request that "sensitive information may be excluded'' may have contributed to the confusion. However, it appears that no clarification was sought nor did the Council define what parts of the records it regarded as sensitive information. In the original decision, a large number of records was refused without any reasons being given or any exemptions cited as required by the FOI Act. Further, there was no consideration by the Council of release of records in the public interest either at decision stage or in the course of this review. This is a significant omission and a serious defect in the decision making process. At internal review stage, when the requester was obviously not happy with the original decision, again the Council did not provide reasons or an analysis of reasons for refusing access to large parts of the report. Given that the FOI Act has applied to local authorities since 1998 and having regard to the extent of resources and training materials (including published precedents) available from the Department of Finance Central Policy Unit and elsewhere, one would expect that the Council would by now be fully conversant with these fundamental provisions of the Act. This Office has drawn these matters to the attention of the Council.

I note that a document entitled ''Edited Version for Access to Information Purposes'' was prepared by the Council. While it might be useful to identify or highlight certain sensitive material in records, this practice of preparing a version of a record separate to the original held has, I believe, the potential to prevent decision makers from considering each record on its merits by reference to the exemption provisions of the FOI Act and the necessary public interest balancing test. In my opinion, the preparation of such a version contributed to the poor decision making in this case as indicated above in that it seems to have resulted in little or no consideration by decision makers of the provisions of the FOI Act as they apply to all of these tender type records. Arguably, the edited version has no status in that the request was clearly for the original records created. Any version of a record released in redacted form under FOI should enable a requester to see that parts have been deleted and the decision under the Act should indicate the reasons why such extracts qualified for exemption.

Onus on public body to justify refusal

It should be noted that section 34(12) of the FOI Acts provides that a decision to refuse to grant a request under section 7 shall be presumed not to have been justified unless the head of the public body concerned shows to the satisfaction of the Commissioner that the decision was justified. Further, I draw attention to section 8(4) of the FOI Act which expressly provides that decision makers shall disregard any reasons that the requester has, or is believed to have, for making the request. Therefore, as a general rule, the actual or perceived motive for a request is not a relevant consideration in deciding whether to grant the request.

Neither the Council nor the affected third parties have made arguments in the context of any relevant exemption nor have they identified, other than in a very general way, information in the records which they consider to be of such a nature that its disclosure could reasonably be expected to cause prejudice or harm. Given that the onus is on the Council to justify its refusal in this case, I considered confining my consideration to a brief examination of whether the burden of proof under section 34(12) of the Act had been met. However, in order to ensure fairness for the third parties involved and given that the Applicant is entitled to the basis for and the reasoning behind the decision in the context of the entitlements under the FOI Act, I have decided to include an analysis of the relevant statutory provisions in the context of tender type records.

Analysis and Findings

Section 27

The Council contends that the withheld records are exempt from release on the basis that they contain commercially sensitive information. Section 27(1) of the FOI Act provides:

Subject to subsection (2), a head shall refuse to grant a request under section 7 if the record 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.

I am taking it that it is contended that section 27(1)(b) applies in this case as no case has been made that any trade secrets are included in the records or that negotiations are involved so that section 27(1)(a) or (c) are potentially applicable.

The test in section 27(1)(b) is based, not on the nature of the information, but on the nature of the harm which might be occasioned by its release. The provision protects 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.

I accept that the value of the contract and much of the other detail comes within the terms of the section as "financial or commercial" information. The report includes details of the amounts tendered by the companies seeking the contract. Included in the appendices attached to the report are References, C.V.'s, Training Programme, Method Statements, Financial Statements, Safety Statements and Risk Assessments provided by the applicant and others, including the successful tenderer. It is likely that by now the identity of the company carrying out the project is known to the public. Much of the information contained in the appendices referring to the successful company can be found on its website with the exception of the financial, banking and insurance details as well as details specific to the project. No particular unit prices have been identified and the tender prices revealed in the report are nearly three years old and thus do not disclose detailed information about any company's current pricing strategy.

On 20 October 2009, Ms McCulloch wrote to the successful tenderer seeking its views on the release of the records in question. In a telephone call to this Office a representative of the company objected to the release of the records and was asked to make a submission in writing. Two reminders were issued but no response has been received to date.

The Commissioner has, in previous decisions, dealt with the argument that release of a tender price will impact negatively on the ability of the successful tenderer to compete for similar business in future. I refer, in particular, to Case Nos 98049, 98056 and 98057 - Henry Ford and Sons and the Office of Public works [on www.oic.ie]. The Commissioner concluded that knowledge by future tenderers of the price quoted by an earlier successful tenderer does not automatically give them a significant advantage over the previously successful party. I cannot see how the disclosure of the bulk of the information in these records could reasonably be expected to result in financial loss to the company or how prejudice to its competitive position would result from release of the records at issue. Information regarding the level of expertise that the company has and its experience in similar projects may, if not already available on websites or other publications, be of interest to competitors but for me to make a finding that its release would result in the harms required by section 27(1)(b), the nature of any harm envisaged and a basis for a claim that such harm would be likely to stem from disclosure of particular information would have to be put forward by the Council or by an affected third party.

The general approach taken by this Office for many years has been that, once a contract has been awarded, the tender price for that single transaction is historic and its disclosure under FOI does not, in most cases, cause harm or prejudice to the successful company. Knowledge of the price would not allow competitors to deduce with any certainty the price to be tendered for another project several years later when different circumstances and considerations may prevail. Indeed, price is normally only one of the factors taken into account in awarding public contracts. Although they had adequate opportunity to do so, neither the Council nor the successful tenderer has provided any evidence whatsoever in support of their claims by reference to price or other information. It is appropriate here to refer to the Supreme Court judgment in Sheedy v Information Commissioner [2005] IESC 35, in which Mr. Justice Fennelly stated, in relation to section 21(1), that "the onus to produce evidence of prejudice fell on the Department and in the absence of same the Commissioner was entitled, under s. 34 of the Act of 1997, to hold against the Department. A mere assertion of an expectation [of prejudice] could never constitute sufficient evidence in this regard".

I am prepared to accept that knowledge by competitors of the company's financial statements, banking details and insurance policies could possibly prejudice the position of the successful tenderer. The other type of information in the records which I am prepared to accept as potentially prejudicing the position of companies other than the requester, is the identity of the unsuccessful tenderers. This is in line with the Commissioner's previous decisions. Given that I consider that some parts of the records contain information to which the section 27(1)(b) exemption could apply, it is necessary to apply section 27(3) which provides for the release of information which is commercially sensitive where such release is in the public interest.

Section 27(3) - Public Interest

To apply section 27(3), it is necessary to identify the various public interests served by the release of the particular record as well as those served by the withholding of that record. Relative weights must then be applied to these conflicting public interests and a judgement made as to which set of public interests outweighs the other.

I believe the following are among the public interest factors in favour of the release of the records in this case:

• the public interest in individuals being able to understand the reasons for courses of action taken by a public body
• the public interest in members of the public knowing how a public body performs its functions and, as in this case, what a public body does to ensure effective oversight of public expenditure and to ensure the public obtains value for money
• the public interest in increasing the openness and transparency of the process of public expenditure
• the public interest in ensuring effective oversight of public expenditure and the awarding of public contracts as an aid to prevent fraud or corruption or the waste or misuse of public funds
• the public interest in companies who tender for public contracts being satisfied as far as practicable that the process was conducted thoroughly and fairly.

In considering the public interest factors which favour withholding the records, I have taken the following into account:

• the public interest in members of the public / business community being able to communicate in confidence with public bodies, without fear of disclosure, in relation to sensitive matters and
• the public interest in supporting an environment conducive to the conduct of business
• the public interest in companies being able to protect their competitive position and not be unduly disadvantaged through participation in a public tender process.

There is a legitimate public interest in persons being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result; it is this public interest which section 27(1) seeks to protect. However, there is also a very strong public interest in government being open and accountable and the FOI Act, both in its Long Title and in individual provisions, recognises such wider public interests. In attempting to strike a balance between openness, on the one hand, and the need to protect commercially sensitive information, on the other, I have considered both the positive public interest which is served by disclosure and the extent to which disclosure may be contrary to the public interest. I take the view that the public interest in openness and transparency in the matter of public money is a very significant public interest favouring release in this case.There is no evidence, since the release of successful tender information under FOI, that it has damaged the competitive nature of tendering nor that it has acted as a deterrent to companies tendering.

In terms of balancing the competing public interests at issue here, I believe that the advantages in terms of openness and accountability of disclosing the information in the records in question in relation to the successful tenderer outweigh any possible harm to that and that the public interest is better served by the release of these records. The only exceptions I would make in relation to the successful tenderer's information and the evaluation of it by the Council are the banking, financial and insurance details in Appendix 5 of the Report. I see no overriding public interest in the disclosure of those company details to the world at large under FOI.

In relation to the identity of the unsuccessful tenders, I would draw a distinction between this and the information about the company to whom the contract has been awarded. While any possible harm to the successful company would be likely to be outweighed by the benefits of being awarded the contract, the unsuccessful companies are not in this position; they are not being paid public money. My finding is that release of the identities of the unsuccessful tenderers would not enhance the public interest in openness and transparency in public expenditure. Having regard to the content of the records, I am satisfied that the identifying details of the unsuccessful companies can be redacted from the records in accordance with section 13 of the FOI Act so that the Council's evaluation of all tenders, including the prices, can still be disclosed in the public interest without the records being rendered misleading.

Therefore, I find that even if section 27(1)(b) applies to the records, the Council's decision to refuse the request has not been justified and the records should be released in the public interest with the exception of (1) Banking, Financial and Insurance details of the successful tenderer in Appendix 5 and (2) information throughout the records that would allow the unsuccessful tenderers to be identified. My Office will provide guidance to the Council as to the redactions to be made in the copies to be released. 

Section 27(1) is further qualified by section 27(3) which provides that section 27(1) "does not apply in relation to a case in which, in the opinion of the head concerned, the public interest would , on balance, be better served by granting than by refusing to grant the request .... concerned."

Decision

Having carried out a review under section 34(2) of the FOI Act 1997, as amended, I hereby vary the decision of the Council in this case. I direct the release of the withheld records with the exception of the material identified above.

Right of Appeal

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 eight weeks from the date on which notice of the decision was given to the person bringing the appeal.

Elizabeth Dolan

Senior Investigator

12 August 2010