Case number: OIC-91959-G9V4V5 & OIC-92038-W9X2B6
13 April 2021
In 2018 Cork County Council released an open competitive tender for the N22 Baile Bhuirne to Macroom Road Development. The project related to the construction and upgrade of approximately 22km of the main N22 Cork to Tralee road to a Type 2 Dual Carriageway standard.
The Council utilised a restricted procedure under the European Union (Award of Public Authority Contracts) Regulations 2016 (S.I. No. 284/2016). The restricted procedure is a two-stage procedure, of which the first stage involves a pre-qualification process which must, by law, be based on an assessment of interested candidates- legal, financial and technical capacity. The second stage involves the submission of tenders by applicants which have passed the first stage and, if applicable, have been successfully shortlisted.
A total of four pre-qualification questionnaire (PQQ) responses were submitted to the Council by the deadline of 15 June 2018, including from the applicant, and following evaluation all were shortlisted to tender. All four tenderers subsequently submitted their tenders in line with the requirements of the competition. As part of these submissions the tenderers submitted detailed technical documentation covering works requirements, scheduling and pricing details.
As part of the process all tenderers were provided with an Instruction to Tenderers (ITT) which set out the awards process, the scoring criteria and the requirements for tenderers. The ITT indicated that the contract would be awarded to the most economically advantageous tender which would be evaluated on the basis of price and technical merit. The criterion of technical merit was scored on the basis of five project-specific criteria.
As part of its evaluation of the tenders submitted, the Council appointed technical advisers to assist the Quality Evaluation Board to undertake a technical merit evaluation of the submissions. These technical advisers carried out completeness checks on the submitted tenders and ensured that responses from tenderers were consistent with their works proposals, works requirements and the requirements of the ITT. In September 2019, the applicant was informed that its tender was ultimately unsuccessful.
On 20 September 2019, the applicant submitted a request for -the PQQ submissions of each Bidder, and how they were evaluated to allow them be shortlisted for this-. In a separate request, also dated 20 September 2019, the applicant sought access to the -technical submissions and associated marking/scoring by your consultants of each bidder-.
On 18 October the Council issued its decision in the applicant-s first request (processed under reference number 19/160) wherein it identified 14 records falling within the scope of the request. It refused access to all 14 records under sections 35 and 36 of the FOI Act which are concerned respectively with the protection of confidential information and commercially sensitive information.
On the same day the Council issued its decision in relation to the applicant-s second request (processed under reference number 19/159) wherein the schedule appeared to indicate that 21 records fell within the scope of this request. However, the numbering of the records listed was not sequential and in fact only 20 records were listed on the associated schedule.
The Council interpreted the applicant-s second request as relating to the part of the tender submissions relating to the technical criteria including the works proposals. In practical terms, the Council interpreted this to mean those documents submitted by tenderers as part of Folder B and Folder C of the tender documentation. Folder B contained two -Packages-; Package 3 related to works proposals which included conceptual design for all elements of the works including proposed execution methods. This Package also included details such as the appointment of a pre-contract Health & Safety Coordinator (HSC). Package 4 in Folder B related to the specialists which the tenderers proposed to use for the design of the scheme. Folder C comprised Package 5 which related to the Technical Merit (Quality) Criteria responses. The Council also refused access to these records under sections 35 and 36.
On 13 November 2019, the applicant sought internal reviews of both decisions. On 3 December 2019, the Council affirmed both decisions. On 19 May 2020, the applicant sought a review by this Office of the Council-s decision in case 19/160 and this was processed under case number OIC-91959. On 21 May 2020, it sought a review of the Council-s decision in case 19/159 and this was processed under case number OIC-92038.
In the course of the investigation by this Office, the three other tenderers were provided with an opportunity to make submissions in relation to the review. The successful tenderer on the project responded to this request with a substantial submission within which it strongly objected to release of the information relating to it in the records on the basis that it contained financial, commercial, technical and legal information. One of the other unsuccessful tenderers also made submissions to this Office wherein it objected to the release of information contained in the records on the basis that the information is commercially sensitive and confidential and, if released, could reasonably be expected to result in material financial loss or could prejudice its competitive position in future tenders. No response was received from the other unsuccessful tenderer.
I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the correspondence between the applicant and the Council as described above, and to the correspondence between this Office and both the applicant and the Council on the matter. I have also had regard to the submissions made by the third parties as outlined above. In addition, I have had regard to the contents of the records concerned. I have decided to conclude my review by way of a formal, binding decision. Given the clear overlap between the two cases I have decided to issue a joint decision covering both cases.
It appears, given the grounds cited for refusing the requests, that the Council interpreted the applicant-s requests as requests for information relating to the other three tenderers. This was not an unreasonable interpretation, in my view. As such, I have excluded from the scope of this review the small amount of information relating to the applicant itself that is contained in the records at issue, which primarily relates to the scores the applicant received as part of the tender evaluation as well as the notes of the evaluation itself by the assessment board, and some minor references in the relevant records to outstanding information which would be sought from the applicant.
I note, in any event, that much, if not all, of that information, should be already known to the applicant. In its submission to this Office, the Council indicated that since the awarding of the contract it has engaged in significant correspondence with the applicant and as part of that engagement it has provided the applicant with the scores it achieved in the main tender evaluation, as well as the comments of the assessment board. More specifically, the Council provided this Office with a copy of a letter which issued to the applicant on 16 September 2019, wherein the relevant scores were provided to the applicant as well as an explanation as to why these scores were awarded and details of possible improvements which may have resulted in a higher score.
With regard to the report by the external consultant relating to the applicant, contained within record 15 of case OIC-92038, it seems to me that the majority of the report is based on information submitted by the applicant in its tender documentation and as such is already in the possession of the applicant. In addition, in some cases the external consultant raised queries in its report in relation to the applicant-s technical submissions. The Council has confirmed that a clarification request subsequently issued to the applicant on 8 August 2019 outlining the areas for which further information was sought and as such I am satisfied that the applicant is aware of these issues. In light of this, it seems to me that the applicant is in possession of much of the information relating to it in the relevant records. Regardless, I see no reason why the Council would not make that information available to the applicant if it subsequently requires access.
Accordingly, this review is confined to whether or not the Council was justified in refusing access to the relevant tender records relating to the other tenderers under sections 35 and 36 of the FOI Act.
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.
The records
As set out above, 14 records were identified as falling within the scope of the applicant-s request for the PQQ submissions. Nine of the records (records 1-9) relate to the following three submissions from each of the three tenderers other than the applicant:
In addition, three of the records (records 12-14) are comparative analyses, prepared by the Council-s assessors, of information set out in the above questionnaires from the four tenderers, including the applicant. Record 10 is an assessment report, in narrative format, prepared by the Council in July 2018 which examines the PQQ submissions made by each tenderer and determines whether they should be invited to formally tender for the project. Record 11 is a further comparative analysis of the PQQ responses submitted by the various tenderers.
As also set out above, in response to the applicant-s request for -technical submissions- the schedule associated with the original decision listed 20 records as falling with the scope of this request. Nine of the records (records 1-9) relate to the following three submissions from the three tenderers other than the applicant:
Records 10, 12, 20 and part of record 18 are the quality assessment scoresheets for each tenderer. Record 11 and part of record 18 comprise the report of the Council-s Assessment Panel which comparatively examines and scores the various tenderers. Records 13-14 comprise a narrative assessment report comparing the various submissions received from the tenderers and evaluating them under a number of headings. Record 15 is comprised of individualised assessment reports on each tenderer prepared by an external consultant. Records 16 and 19 relate to correspondence from Cork County Council to individual tenderers seeking clarifications on various aspects of their tender submissions. Record 17 relates to correspondence with the external consultant seeking clarification on aspects of the documentation submitted.
The applicant-s arguments
The essence of the applicant-s argument in support of the release of the records sought is that tenderers were notified in advance, through the ITT referred to above, that the Council was entitled to release information relating to the tender and that it was not aware that any of the tenderers entered their tender documentation on the ground that it was confidential and/or commercially sensitive, despite having been given an opportunity to do so. In particular, it has argued that given the rigidity of the documentation which had to be submitted and the fact that it was for a publically funded contract it would have been incredibly unlikely that such a qualification to a tender was made, or would have been accepted if it had been made.
The applicant also argued that much of the information at issue is specific to the tender and has many unique features, such that it cannot prejudice the competitive position of the tenderers in the future or cause financial loss. Having regard to the issues arising and the arguments made, I propose to address section 36 in the first instance.
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.
Council-s submission
The Council submitted that all four tenderers are active competitors operating and competing in the same market. It argued that the information contained in the pre-qualification submissions comprises financial, commercial, technical and other information the disclosure of which could reasonably be expected to result in a material financial loss to the other tenderers and could prejudice their competitive position in the conduct of business and in particular, in applying to be shortlisted for similar contracts in the future. It further argued that the documentation submitted by the companies is pro-forma documentation and as such there is a high probability that such information would be re-used and re-submitted for tender competitions of a similar nature and complexity.
The Council specifically highlighted the fact that the PQQ submissions contain tax details, financial information including annual turnover, insurance details, staff experience and education, quality assurance measures, technical equipment available and annual numbers of employees. With regard to the associated evaluation documentation, the Council argued that information contained in these records is extrinsically linked to the submissions and contains details of the information which has been set out in the submissions.
With regard to the applicant-s request for the -technical submissions- of the tenderers, the Council argued that the relevant records contain conceptual design for all elements of the works including the proposed execution methods which would be deemed to be commercially sensitive information and may contain trade secrets. The Council further argued that the records contain confidential information regarding the specialists the tenderers intended to utilise for the design of the scheme. In addition, the Council indicated that the records contain the tenderers- responses to the five technical project-specific criteria which was scored and this information is deemed to be confidential and contains trade secrets.
Submissions of successful tenderer
In its submission to this Office, the successful tenderer argued that the relevant records contained information relating to personnel, specialists, sub-contractors and organisational structure and experience, the release of which would cause financial loss and significantly damage its competitive position. Focusing particularly on the fact that the company is one of a relatively small number of companies which compete against each other for contracts in the same market, it argued that release of the information in its PQQ would be highly prejudicial to its competitiveness in the market and would provide a significant and unfair financial and commercial advantage to its competitors.
With regard to what the applicant referred to as the -technical submissions- and the associated marking, the successful tenderer also objected to the release of this information on the basis that the technical submissions contain specific and detailed methodologies which are unique to the company and to the particular project. It argued that the technical submissions specifically identify methodologies, innovations, sequencing and timing, temporary works plans and designs, traffic management design, specialist relationships, quality, environmental and health and safety plans and procedures, all of which combined represents the cumulative knowledge, intellectual property and trade secrets of the company. With regard to the specific project which was being tendered for, the successful tenderer provided examples of innovative proposals which it set out in its technical submissions for addressing specific elements of the project.
As I consider subsection (1)(b) of section 36 to be of most relevance to the records at issue I propose to consider the applicability of that subsection first. The essence of the test in subsection (1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release. The harm test in the first limb of subsection is whether disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.
The only requirement which has to be met in the second part of subsection (1)(b) is that disclosure "could prejudice the competitive position" of the person concerned. The standard of proof necessary to meet this test is considerably lower than the standard required to meet the test of "could reasonably be expected to" in the first part of the subsection.
The general approach of this Office to tender records is well settled. In Case 98188, a decision which this Office issued in 2001, the then Commissioner, while noting that no tender-related records are subject to either release or exemption as a class and that each record must be examined on its own merits in light of the relevant circumstances, provided a general summary of his views regarding records relating to a tender competition. Those views are as follows:
I note that the general approach outlined above is also referenced in the -Public Procurement Guidelines for Goods and Services- published by the Office of Government Procurement that is available to all tenderers.
The PPQ submissions and related analysis and assessment records contain quite detailed information relating to the various tenderers and associated sub-contractors. As I have highlighted above, they contain, amongst other things, a range of information relating to their financial and corporate structure and inner workings, details of their experience and technical abilities and their approach in previous projects. The technical submissions and associated documents contain details of the specific, detailed methodologies of the various tenderers. I accept that the records reflect the cumulative knowledge and expertise of the various tenders that would be of benefit to competitors. I also accept that the release of the technical submissions would disclose details of the methodologies employed by the various tenderers in presenting their submissions, which could also be of benefit to competitors.
I further accept that the tenderers are of a small pool of companies that compete against each other for contracts within the same market. I am satisfied that the release of the records could prejudice the competitive position of the various companies in future tender processes. I do not accept that access to the records would be of no benefit to competitors due to the unique features of the particular tender. I am satisfied that much of the information at issue would be of use in future competitions. Furthermore, as I have stated above, access to the records would provide details of the methodologies employed in presenting such tender submissions.
I note that some of the records at issue comprise templates that were completed by the various tenderers. As those same template forms would already be in the possession of the applicant, and having regard to this Office-s approach to section 18 as described above, I see no value in directing the release of the standard parts of the various records that do not contain the responses of the tenderers. Accordingly, I find that section 36(1)(b) applies to all of the records at issue.
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).
With regard to section 36(2), the applicant made specific arguments in relation to the applicability of subsection (2)(d) to the records at issue. That subsection provides for the grant of access to a record to which section 36(1) relates if information contained in the record was given to the FOI body concerned by the person to whom it relates and the person was informed, before giving the information, that it belongs to a class of information that would or might be made available to the general public.
The applicant argued that paragraph 5 of the ITT essentially notified the tenderers, in advance of the submission of proposals, that the information submitted might be made available. The relevant paragraph provides as follows:
-The Employer is entitled to disclose information about this competition, including the identity of the Candidates, to any person. If a Candidate considers that any information in its Tender is commercially sensitive or confidential, this should be clearly stated and clear and substantive reasons should be given. The Employer will have regard to such a statement in considering a request for access to the information under the Freedom of Information Act 2014, but is not bound by the Candidate-s views.-
I do not consider it appropriate to interpret this provision as the applicant has done. The excerpt seems to me to have the aim of ensuring that Council would have as many relevant considerations before it as possible when deciding on an FOI request for relevant records. It could not possibly mean that all information provided by a private sector company to the Council, in the hope of winning a tender, would fall to be released to the world at large unless properly identified as commercially sensitive or confidential. This is all the more unreasonable a proposition in the case of tenderers who were not successful and/or did not ultimately receive public monies.
I note that the Public Procurement Guidelines issued by the OGP state that;
-Tenderers are normally requested to indicate, with supporting reasons, any information included within their tenders which they wish to be regarded as confidential. A contracting authority-s FOI Decision Maker will normally consult with a tenderer before deciding on whether to disclose such information on foot of an FOI request. However, no category of tender related records is subject to either release or exemption as a class. Therefore, each record must be examined on its own merits.-
It is also worthy of note that section 36 is mandatory. It is not the case, as the applicant also argued, that an FOI body is only permitted to classify information as commercially sensitive when the party to which the information relates requests that the information be treated as such. Indeed, if the applicant's view were to be accepted, and in the event that it had not adequately identified any confidential or commercially sensitive information in its own tender, that document would be releasable to the world at large on foot of any FOI request that might be made for it by a third party.
Accordingly, I do not consider section 36(2)(d) to apply. Neither do I consider any of the other exceptions in section 36(2) to apply in these cases.
Section 36(3) provides that section 36(1) does not apply where the body considers that the public interest would, on balance, be better served by granting than by refusing to grant the request. In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. Section 11(3) provides that an FOI body must have regard to the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principles of transparency in government and public affairs and the need to strengthen the accountability and improve the quality of decision making of FOI bodies. However, it is important to note that inThe Minister for Communications, Energy and Natural Resources v The Information Commissioner & Ors[2020] IESC 57, the Supreme Court held that general principles of openness and transparency do not provide a sufficient basis for directing the release of otherwise exempt information in the public interest and -there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure-.
The Court also found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request. It stated that -the scheme of the Act is to make the refusal of certain records mandatory, unless the public interest could, following an analysis of the contents, rationally be said to lead to the conclusion that disclosure of the records is in the public interest by reason of their contents.-
In these cases, the Council argued that, on balance, the public interest was against release, in view of its contention that disclosure of the information could prejudice the commercial position of other tenderers. In addition, the Council also argued that it was essential that it received similarly commercially sensitive information in future public procurement competitions and the release of the relevant records in this case could hamper this and could negatively impact on public finances.
In its submission to this Office, the successful tenderer argued that it was in the public interest that companies tendering for public contracts are innovative in their approach and design so as to ensure that contracting authorities can obtain the best value for money but also the best quality. As such, it argued that it is imperative that detailed commercially sensitive information, such as that set out in the relevant records, is not released to competitors in a manner which would result in financial loss to the company. It further argued that if such information were to be disclosed to competitors it would dissuade companies from utilising such innovative approaches in tendering for public contracts which would be detrimental to the public interest.
From a review of the correspondence between the applicant and the Council in this case it would appear that the applicant was unhappy with the Council-s interpretation of the turnover requirement for joint ventures tendering for the contract. However, the applicant has made no specific arguments as to why the public interest might warrant release of the records. This Office takes the view that while the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations, it was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny.
Having carefully considered the matter and the contents of the records at issue, I am not aware of any sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure of the records. Accordingly, I consider that the public interest would not be better served by their release.
In conclusion, therefore, I find that the council was justified in refusing access to the records sought under section 36(1) of the FOIA ct. Having so found, I do not need to consider the applicability of any other exemption to the records.
Having carried out a review under section 22(2) of the Act, I hereby affirm the decisions of Cork County Council to refuse access, under section 36 of the Act, to the relevant tender records relating to the other tenderers.
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Stephen Rafferty
Senior Investigator