Case Number: 160302

Whether UCC was justified in its decision to refuse access to records relating to successful tenderers in a specified tender process under section 36 of the FOI Act on the ground of commercial sensitivity

Conducted in accordance with section 22(2) of the FOI Act by Stephen Rafferty, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

The applicant was an unsuccessful tenderer in respect of a UCC tender competition for the appointment of a panel of agents to provide patent services. On 4 November 2015, the applicant made a request to UCC for access to records relating to the tender. It sought:

"1. Copies of the tender documents submitted by the six successful applicants.
2. Copies of any documents relating to the assessment and marking of our, and the successful applicants' tender applications, including score sheets, assessment comment forms, internal memos or any other similar or related documentation or correspondence."

On 22 December 2015, UCC decided to partially grant the request. It refused access to the tender submissions made by five successful applicants and to details of their scoring and assessment on the ground of commercial sensitivity. On 15 January 2016, the applicant sought an internal review of UCC's decision. On 18 February 2016, UCC upheld the original decision. The applicant sought a review by this Office of UCC's decision on 19 July 2016.

While UCC's decision referred to five successful tenderers, it transpired during the course of the review that UCC had inadvertently omitted details relating to a sixth successful tenderer. UCC subsequently provided this Office with copies of the relevant records in respect of all six successful tenderers. Mr Simon Noone of this Office notified the six successful tenderers of the review and invited them to make submissions on the matter. All six made submissions and objected to the release of what they considered to be commercially sensitive information.

I have decided to conclude this review by way of a formal binding decision. In conducting this review, I have had regard to the contents of the records, to the submissions of the parties and the affected third parties, and to the provisions of the FOI Act.

Scope of the Review

UCC ultimately identified nine records as coming within the scope of the applicant's request. Records 1 to 5 (each of which comprise a number of documents) are the first five successful tender submissions, and access to these records was refused in full under section 36(1)(b) of the FOI Act. Records 6 to 8 comprise UCC's assessment and comparison of the tender submissions, both successful and unsuccessful. As the applicant has only sought information relating to successful tenderers, that information concerning the unsuccessful tenderers does not fall to be considered in this review. In its decision, UCC granted access to information relating to the applicant but refused access to all other information contained in these records. The final record, which I will refer to as record 9 for the purposes of this review, is the sixth successful tender submission. While it appears that no specific decision was made by UCC in respect of this record, as it was not identified by UCC in the schedule of records prepared in response to the request, similar considerations apply to it as to the other five tender submissions and therefore I believe it is appropriate to consider the record as part of this review.

In submissions to this Office, the applicant stated that it was also seeking details of the panel who reviewed the tenders. However, this information was not sought in the original request, and therefore falls outside the scope of this review. Accordingly, this review is concerned solely with whether UCC was justified in refusing access to records 1 to 5 and record 9 in their entirety, and in granting only partial access to records 6 to 8.

Findings

Preliminary Matters
It should be noted that the courts have taken the view that, under FOI, records are released without any restriction as to how they may be used and, thus, FOI release is regarded, in effect, as release to the world at large.

Additionally, section 18(1) of the Act provides that if it is practicable to do so, access to an otherwise exempt record shall be granted by preparing a copy, in such form as the body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). I take the view that neither the definition of a record under section 2 of the Act nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, I am not in favour of the cutting or "dissecting" of records to such an extent. Being "practicable" necessarily means taking a reasonable and proportionate approach in determining whether to grant access to parts of records.

In its submission to this Office, UCC stated that it had refused to grant full access to the records sought by the applicant on the ground that they contained commercially sensitive information. Specifically, it stated that the tender submissions contained particularly sensitive information about costs, the approach to the provision of services, added value services, insurance information and IT management and security. Additionally, five of the successful tenderers submitted that the records contained commercially sensitive information. Two of the tenderers also contended that they had provided the information to UCC in confidence, and one of the tenderers stated that its submission contained personal information. I will address the claims of commercial sensitivity in the first instance as it is of most relevance.

Section 36
Section 36 is a mandatory exemption that protects commercially sensitive information. Section 36(1) provides that

"Subject to subsection (2), a head shall refuse to grant an FOI request if the record concerned contains --
(a) trade secrets of a person other than the requester concerned,
(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation, or
(c) information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates."

Subsection (2) contains a number of exceptions to the exemption. Subsection (3) contains a public interest balancing test.

Tender Submissions
UCC has submitted that the records should be withheld under section 36(1)(b), and has argued that "Disclosure of the submissions made by the winning tenderers and records relating to the scoring/assessment would be seriously damaging to the commercial interests of the companies involved. This in turn could prevent such companies from participating in future tender processes with the University." Three of the tenderers have submitted that, in addition to subsection (1)(b), subsections (1)(a) (trade secrets) and (1)(c) (negotiations) are also applicable to the tender submissions.

The standard of proof necessary to meet the second part of section 36(1)(b) (information whose disclosure could prejudice the competitive position of the person concerned) is relatively low. Records 1 to 5 and record 9 contain detailed information about the successful tenderers, including pricing structures, staff experience, proposed service details, financial information and organisational structures. I am satisfied that the vast majority of the information contained in those records comprises information of a type that may be of use to competitors and as such, that release of the records could prejudice the competitive position of the parties concerned. I accept that some information in the records, of itself, is not commercially sensitive. However, arguably even the disclosure of the precise format of the tender submissions could be of use to competitors.

In this instance, I am cognisant that the services tendered for were specialised and required a high level of expertise and experience on the part of the successful tenderers. UCC's "Letter of Invitation" stated that the procurement was for "patenting and professional intellectual property related services in support of the technology transfer activity at Republic of Ireland third level institutions...The patent firms will be expected to possess the necessary breath (sic) of intellectual property law experience and technical understanding particularly in the Energy & Environmental Sciences, Life Sciences, Biomedical Sciences, Engineering/Natural Science, Physical Sciences, IT Technology & Software and Computer Sciences." The tender submissions reflect this expertise acquired by the tenderers, and I accept the contention of one of the successful tenderers that it had spent "a great deal of time and effort" in preparing the tender submissions. Consequently, given the detail of the information contained in the tender submissions, I find that section 36(1)(b) applies to records 1 to 5 and record 9.

However, that is not the end of the matter as section 36(1) is subject to subsection (2) and is also subject to a public interest balancing test as set out in section 36(3). I am satisfied that none of the provisions of section 36(2) apply. On the matter of 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.

On the other hand, there is also 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. In my view, this need to enhance openness, transparency and accountability carries even greater weight where the use of public funds is involved. It is worth noting, however, that the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations and it was not generally designed as a means by which the operations of private enterprises were to be opened up to scrutiny.

In this case, the tender submissions contain detailed information about the companies concerned, their 'know-how', their tender proposals, their pricing strategies, and the expertise and qualifications of their teams. This information primarily concerns the companies themselves, rather than the operations of UCC, and in my opinion, the public interest on balance favours the protection of such information.

In relation to the public interest in enhancing openness, transparency and accountability in relation to the use of public funds, this Office generally takes the view that the advantages, in terms of openness and accountability, of disclosing successful tender prices outweigh the possible harm to the tenderers and to the tender process. Such disclosure serves as a significant aid to ensuring effective oversight of public expenditure, to ensuring the public obtains value for money, to preventing fraud and corruption and to preventing the waste or misuse of public funds.

In this case, however, I note that the tenderers were not required to provide an overall cost for the service to be provided, nor would it have been practicable to do so given the uncertainty around the level of the services that might ultimately be provided. Indeed, the Request for Tender (RFT) published by UCC provides that "the appointment of a firm to a Framework does not constitute a commitment or guarantee by any of the participating institutions to purchase or procure any patent services from the successful tenderer". As such, when appraising each tender submission on cost grounds, the RFT provides that each submission would be considered on the basis of the quoted costs of providing fifteen specified service tasks and quoted daily/hourly fee rates.

In my view, the disclosure of the quoted hourly rates and costs of the specified tasks would not serve to allow for such a level of oversight of public expenditure that the public interest would be better served by release, to the detriment of the commercial position of the successful tenderers. I note, for example, that it is simply not possible to determine how much the services provided by each successful tenderer, if any, will ultimately cost. Indeed it is possible that one or more of the successful tenderers could receive little or no benefit from having been appointed to a framework from which services may be procured. On the other hand, release of such a detailed pricing structure would, in my view, be of benefit to competitors, given the level of detail involved, such that release could unduly prejudice the commercial position of the successful tenderers. As I have stated above, the services tendered for were specialised and required a high level of expertise and experience on the part of the successful tenderers. I find, therefore, that the public interest would, on balance, be better served by refusing access to the tender submissions of the successful tenderers in their entirety. Having found that records 1 to 5 and record 9 are exempt under section 36(1)(b), I do not need to consider the applicability of any other exemption to these records.

Records 6 to 8
Records 6 to 8 contain comparisons of the pricing structures and other details of the tender applicants. Record 6 ("Tender Scoresheet") comprises a number of spreadsheet pages for the various tender lots and contains details of the scores awarded to each tenderer under the various award criteria. Record 7 ("Reasoning for Scores") contains more detailed comments on the scores awarded and on the added value services offered. Record 8 ("Cost Ranking") contains a ranking of the various tenderers based on total scores awarded for price and added value services. As I have outlined above, this review is concerned only with the information contained in these records relating to the six successful tenderers. I am satisfied that section 36(1)(b) applies to the relevant parts of these records.

On the matter of where the balance of the public interest lies, I consider that there is a strong public interest in enhancing the transparency and accountability of UCC in relation to the manner in which it assessed and scored the tender applications. In my view, this public interest would, on balance, be served by the release of the relevant parts of records 6 and 8 relating to the successful tenderers. While the scoring provides for comparisons to be made as to the relating costs quoted by the various tenderers, I am of the view that such information is not so precise as to disclose the actual costs quoted. The remaining scores are of a more qualitative nature and disclose no precise information that, in my view, would be of such benefit to competitors as to cause a real commercial harm to the relevant tenderers.

I also find that the public interest would, on balance, be better served by the release of the information contained in record 7 relating to the successful tenderers apart from the opening commentary in the "Quality" field for each tenderer and the commentary in the "Added Value Services" fields.

In summary therefore, I find that the following parts of the records at issue are not exempt under section 36:

Record 6: All information relating to the successful tenderers,
Record 7: All information relating to the successful tenderers, apart from the opening commentary in the "Quality" field for each successful tenderer and the commentary in the "Added Value Services" fields,
Record 8: All information relating to the successful tenderers.

Decision

Having carried out a review under section 22(2) of the Act, I hereby vary the decision of UCC. I direct the release of the following additional information:

Record 6: All information relating to the successful tenderers,
Record 7: All information relating to the successful tenderers, apart from the opening commentary in the "Quality" field for each successful tenderer and the commentary in the "Added Value Services" fields,
Record 8: All information relating to the successful tenderers.

I affirm UCC's decision to refuse access to the remaining information.

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 by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

Stephen Rafferty
Senior Investigator