Decision
Mr X and Department of the Environment, Climate and Communications
From Office of the Information Commissioner (OIC)
Case number: OIC-143309-Y9N8V1
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Cite as: [2024] IEIC 143309
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Whether the Department complied with the requirements of section 10 of the FOI Act in relation to an application for a statement of reasons for acts of the Department in the context of a specified tender
31 May 2024
The applicant is an employee of a company which submitted an unsuccessful tender to the Department. In a request dated 10 February 2023, made on behalf of the company and via its solicitors, the applicant sought a statement of reasons for (a) the Department's decision to accept any documentation relating to financial standing from the successful tenderer, and/or for its decision as to the acceptability of the reasons provided by the successful tenderer for not providing such documentation; and (b) any findings on any material issues of fact which were made for the purposes of the decision to accept documentation relating to the financial standing of the successful tenderer, or for the purposes of the decision to accept reasons from the successful tenderer for not providing such documentation.
In a decision dated 9 March 2023, the Department granted the applicant a statement of reasons for the relevant decisions. The applicant remained dissatisfied and on 5 April 2023 sought an internal review of the Department's decision. In its internal review decision dated 28 April 2023, the Department varied its original decision by providing the applicant with additional information in relation to the decisions specified in his FOI request. The applicant remained dissatisfied and on 27 October 2023 applied to this Office for a review of the Department's decision.
In the course of conducting this review, I formed the view that I was required to invite the applicant to make further submissions on an additional matter that I considered relevant to the review, the details of which I outline below. I subsequently sought and received additional submissions from the applicant, which I have considered in full.
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 exchanged between the applicant and the Department, and to the submissions made by both parties. I have also had regard to the relevant provisions of the FOI Act. I have decided to conclude this review by way of a formal, binding decision.
The scope of this review is confined to whether the Department's response to the applicant's FOI request is in accordance with section 10 of the FOI Act.
I wish to note that this Office has no remit to investigate complaints, to adjudicate on how FOI bodies (or their staff) perform their functions generally, or to act as an alternative dispute resolution mechanism with respect to actions taken by FOI bodies. As such, we cannot examine or take a view on whether acts or decisions taken by a public body for which statements of reasons are sought were appropriate.
Section 10 in general
Section 10 of the FOI Act provides that a person who is affected by an act of an FOI body, and has a material interest in a matter affected by the act or to which it relates, is entitled to a statement of reasons for the act as well as a statement of any findings on any material issues of fact made for the purposes of that act.
Taking section 10 as a whole, this Office considers that the word "act" in the section must be interpreted as the exercise of (or refusal to exercise) a power or function which may result in the conferring or withholding of a benefit. In addition, the reasons for the act must have a bearing on the outcome of whether a person receives or does not receive a benefit or suffers a loss or a penalty or other disadvantage. In other words, if the same outcome would result regardless of the reasons for the act in question then section 10 does not apply to that act.
There are many acts or decisions taken by FOI bodies where section 10 has no relevance. The Oireachtas could not have intended that FOI bodies should be required, on demand, to provide a written statement of reasons and findings on any material issues of fact made for the purposes of every single action of the body. There will be many instances where a number of secondary actions/decision are taken in the course of making a substantive decision which affects a person and where that person has a material interest in a matter affected by that substantive decision or to which it relates. However, section 10 does not entitle a person affected by the substantive decision to a statement of reasons in respect of each and every action which was taken in arriving at that decision. Furthermore, the provision does not require an FOI body to justify the substantive decision concerned.
Section 10(5) provides that a person has a material interest in a matter affected by an act of an FOI body or to which it relates if the consequence or effect of the act may be to confer on or withhold from the person a benefit without also conferring it on or withholding it from persons in general or a class of persons which is of significant size having regard to all the circumstances and of which the person is a member.
The act for which a statement of reasons is sought must affect a person particularly, albeit not necessarily exclusively. Where the act of an FOI body affects a wide class of people (i.e. a class of significant size having regard to all the circumstances) and applies equally to all members of the class, an applicant who is a member of that class does not have a material interest in a matter affected by the act for the purposes of the FOI Act.
The parties' arguments
In submissions made on behalf of the applicant, he contended that a far more detailed statement of reasons than that supplied by the Department was required. He argued that the Department's response was incomplete and did not adequately deal with the queries raised in his FOI request. The applicant outlined his belief that the successful tenderer had not met the minimum requirements of the tender and made a number of allegations in relation to the manner in which the tender competition was decided and the contract awarded to the successful tenderer. It is not necessary to repeat in detail these allegations here.
The applicant noted the Department's reference, in its internal review decision, to the Request for Tender (RFT), which stated that in the case of newly established entities not in existence for three years (a category into which, according to the applicant, the successful tenderer fell), when requested by the Department, tenderers would be required to provide the most recent audited accounts or part-year accounts and other evidence such as a statement from a bank, demonstrating the entity is financially sound. The RFT also stipulated that tenderers were required to declare in their tender submission that they would provide this evidence supporting their financial standing when requested by the Department and that, where a tenderer was unable, for a valid reason, to provide the specified documentation following a request from the Department, it was required to inform the Department of that valid reason and provide such other suitable documentation to prove its economic and financial standing. The applicant went on to note that the Department had concluded that the financial standing of the successful tenderer was satisfactory based on the Department's analysis of (i) the tenderer's ability to pay contractors, (ii) its ability to access liquidity, (iii) its insurance cover, (iv) business risk mitigations and (v) its ability to successfully deliver the contract. The Department had also noted that the successful tenderer had supplied appropriate documentation which proved its economic and financial standing to the Department's satisfaction.
The applicant stated that, given the circumstances and timing of the successful tenderer's incorporation, he found the Department's reasoning difficult to comprehend and failed to understand how the relevant financial and economic criteria could have been satisfied. He argued that the statement of reasons provided by the Department in response to his FOI Request should be sufficiently clear to enable him to understand without undue difficulty why the Department acted as it did and should clearly identify the quantitative criteria that influenced its decision to award the tender to the successful party.
In its submissions, the Department stated, simply, that it had met the requirements of section 10 of the FOI Act by providing the applicant with a statement of reasons for the relevant decisions which met the criteria contained in the section. The Department did not provide any detailed explanation for the basis on which it contended it had met these requirements.
Additional material issue and further submissions received from applicant
As outlined above, in the course of conducting this review, I formed the view that an additional material matter arose, and sought and received submissions from the applicant in relation to same. The details of the matter, and of the applicant's submissions, are as follows.
In its initial decision and its internal review decision on the FOI request, the Department accepted that the acts complained of were "acts" for the purposes of section 10, and that the applicant had a material interest in a matter affected by the relevant acts. However, upon a review of the information at issue I formed the preliminary view, firstly, that the impugned acts/decisions of the Department may not be "acts" for the purposes of section 10 and, secondly, that they may not be acts in respect of which the applicant had a "material interest" for the purposes of section 10(5). My preliminary view was premised on the following considerations:
(a) on the basis of the information before me, my preliminary view was that the impugned acts/decisions of the Department - essentially, the decisions taken by the Department that allowed the application of the successful tenderer to be considered in the tender process - did not constitute the exercise of a power or function by the Department, and furthermore that they were not acts/decisions that might be said to have withheld a benefit from the applicant. Rather, it seemed to me that the impugned acts of the Department might be said to have been secondary acts in the Department's decision-making process that led to the substantive act of awarding the contact to the successful tenderer.
(b) furthermore, my preliminary view was that, even if the impugned acts of the Department could be said to have been acts for the purposes of section 10, and that withheld a benefit from the applicant, such a benefit was withheld from all parties (besides the successful tenderer) that made submissions for the tender. In other words, the applicant was not uniquely or particularly affected by the relevant acts/decisions of the Department, but was a member of a class of persons, all of which were affected equally by the acts/decisions.
In submissions made on the applicant's behalf on the above two points, he argued as follows:
(a) the applicant stated that his company had placed second in the order of merit following the tender assessment, and that his position was that the successful tenderer (ie. the only tenderer that finished above the applicant's company in the tender process) should have been excluded from the tender competition, on the basis that it did not meet the financial requirements specified in the request for tender. The applicant stated that, if the successful tenderer had been excluded for non-compliance, the results of the tender assessment show that his company, as the next ranked candidate, ought to have been awarded the contract. The applicant argued that the decision of the Department not to exclude what he asserted was a non-compliant tender had the direct effect of withholding the benefit which his company would ultimately have received in the award of the contract. The applicant argued that, while he would not necessarily disagree that the further act of the Department to award the contract to the successful tenderer gave effect to this defective decision, ultimately withholding the benefit of the award of the contract from his company, this did not take from the fact that it was the earlier decision to consider the successful tenderer as having submitted a compliant tender that was the material operative action which had the direct result of denying his company the benefit of the contract. Accordingly, he argued that it was the reasons for this decision which were material and relevant to the award of the benefit of the contract to the successful tenderer and not his company.
(b) the applicant argued that it was not disputed that his company, being the second highest ranked tenderer, would have been awarded the contract but for the Department's decision not to exclude the successful tenderer for being non-compliant. As such, he argued that the decision to consider the successful tenderer would only have an impact on the contract award if, as indeed transpired to be the case, the successful tenderer was ranked highest following the detailed tender appraisal. In those circumstances, the applicant argued that the only other tender directly and uniquely impacted was the second ranked tenderer, which was his company. In other words, he argued that no benefit was withheld from any of the other tenderers as a result of the decision not to exclude the successful tenderer. In the circumstances, the applicant argued that he was entitled to be provided with the reasons for this decision and these reasons must be sufficiently clear and precise such that he fully understood the Department's rationale.
The applicant further argued, without prejudice to the foregoing, that the clear intent of the proviso in section 10(5) in relation to the conferring or withholding of a benefit ("without also conferring it on or withholding it from persons in general or a class of persons which is of significant size having regard to all the circumstances and of which the person is a member") was to exclude decisions or acts which are directed uniformly at the public generally or at a class of persons. In the present case, he argued, the decision was not uniformly applied, as the successful tenderer was conferred a benefit while the other tenderers were denied a benefit. In addition, the applicant argued that, while it may be said that his company was a member of a defined class of affected persons, being the service providers capable of delivering the relevant service for which the RFT was issued, the decision only affected those members of that class that submitted a compliant tender and not that class of persons generally. Furthermore, the applicant argued that it could not be said the tenderers who submitted tenders were of a class of persons of a "significant size". Finally, the applicant argued that it was relevant and significant that the Department itself concluded his company had a material interest in a matter affected by the impugned act/decision.
Analysis and findings
I consider it appropriate to address first of all the issue of whether the decisions in respect of which the applicant has sought a statement of reasons are "acts" for the purposes of section 10 of the FOI Act. This is the case in circumstances where, if those decisions are not "acts" to which section 10 applies, the remainder of the issues are essentially rendered moot.
As noted above, the requirement to provide a statement of reasons does not apply to every action of an FOI body, and in order for a right to a statement of reasons to arise under section 10 this Office must first be satisfied that the action complained of is an "act" (that is, the exercise of, or refusal to exercise, a power or function) for the purposes of that section.
It should be noted that, in correspondence with this Office, the Department accepted that the applicant had sought a statement of reasons for an act within the meaning of section 10 of the FOI Act. However, having reviewed the actions of the Department outlined above in respect of which the applicant has requested a statement of reasons, after careful consideration I am forced to disagree. I am not satisfied that any of the actions complained of in the applicant's FOI request constitute an "act" of the Department for the purposes of section 10. That is to say, the impugned actions of the Department seem to me not to relate to the exercise (or refusal to exercise) a power or function, but rather to steps taken and/or procedures followed as part of the Department's deliberations or decision-making processes, which ultimately fed into its decision to exercise a relevant function of power (the awarding of the relevant contract to the successful tenderer).
To illustrate the point, I do not accept that either a "decision to accept any documentation relating to financial standing" from the successful tenderer," or a "decision as to the acceptability of the reasons provided by the successful tenderer for not providing such documentation" can be said to be an "act" of the Department in respect of which the applicant is entitled to a statement of reasons under section 10, because decisions on whether to accept (or not accept) supporting documents in the course of a tender application are (it seems to me) steps in the process undertaken by the Department in the course of ultimately making a decision to exercise (or refuse to exercise) a power or function (ie. the decision to award the relevant contract to the successful tenderer). Any decision to accept documentation from a tenderer, in furtherance of the Department's decision-making process on the tender submissions, is not, in and of itself, an act that can be said to constitute an exercise of a relevant function or power. For the same reasons, I do not accept that a finding "on any material issues of fact" which was made either for the purposes of the decision to accept the relevant documentation relating to the financial standing of the successful tenderer, or the decision to accept reasons from the successful tenderer for not providing such documentation, constitutes an "act" of the Department for the purposes of section 10. Again, in my view, these are steps taken by the Department in the course of its deliberation or decision-making processes that it followed in order to come to the ultimate determination to exercise the relevant power or function (ie. to award the relevant contact to the successful tenderer).
Furthermore, in order for a decision or act of an FOI body to constitute an "act" for the purposes of section 10, the position of this Office is that the reasons for the impugned act must have a bearing on the outcome of whether a person receives or does not receive a benefit or suffers a loss or a penalty or other disadvantage. I am not satisfied that this is the case here. In this case, my view is that the reasons that the Department decided to accept that the successful tenderer was financially compliant with the relevant criteria in the RFT did not have a bearing on the outcome of whether a person received or did not receive a benefit, suffer a loss, etc. I consider that, having made the decision to accept the financial standing of the successful tenderer, the act that might be said to have had a bearing on such an outcome was the decision of the Department to ultimately award it the contract.
In short, it is my view that the acts of the Department complained of by the applicant do not involve the exercise of (or refusal to exercise) a power or function which might result in the conferring or withholding of a benefit. I take the view that the relevant "act" (that is to say, the exercise of the relevant power or function) in respect of which an eligible party may be entitled to a statement of reasons under section 10 in this context (in other words the substantive act that might have resulted in the conferring or withholding of a benefit) would likely be the decision to award the contact to the successful tenderer. Section 10 does not, in my view, require the Department to provide an explanation, upon request, for the reasons it took various steps in its deliberations or decision-making processes, or for the reasons it decided to accept applications from tenderers, or to assess those applications, in the course of making a determination on whether or how to exercise that power or function.
It seems clear that the applicant believes that his company has been treated differently from the successful tenderer, and indeed that maladministration has occurred. However, analysis of why or whether maladministration may have occurred does not lie within the province of this Office. In respect of the relevant tendering process, I find that the applicant has not identified in the first instance an "act" by the Department for the purposes of section 10 (the exercise of, or refusal to exercise, a function or power) such as would entitle him to a statement of reasons under that provision of the FOI Act.
In circumstances where I have found that none of the actions specified in the applicant's FOI request constitute an "act" for the purposes of section 10, I am not required to examine either the question of whether the applicant had a material interest for the purposes of section 10(5), or the specific arguments made by the applicant regarding the adequacy of the Department's responses to his FOI request. However, for the sake of completeness, I would note as follows.
First of all, in relation to the requirements of section 10(5) of the FOI Act, I am not entirely satisfied that the applicant can be said to have had a material interest in the relevant act of the Department. In order to have a material interest, the applicant must have been uniquely or particularly affected by the act, as opposed to being a member of a class of persons, all of which were affected equally by the act - in other words, that the effect of the act was to withhold from the applicant a benefit without also withholding it from persons in general or a class of persons which is of significant size having regard to all the circumstances and of which the applicant was a member. I have considered the applicant's submissions on this point, but take the view that the applicant was essentially a member of a class of persons, that class being essentially parties who met the criteria to submit tenders, that were equally affected by the decision of the Department to award the contract to the successful tenderer.
Secondly, even if I am wrong both in my finding above that the impugned acts of the Department were not "acts" for the purposes of section 10, and in my view above that the applicant may not in any case have a material interest in the matter, I would also note that I consider that the statement of reasons that was actually provided by the Department to the applicant seems to me likely to be adequate for the purposes of section 10. The statement provided by the Department in its initial decision sets out in four points the reasons that it considered that the successful tenderer met the financial criteria for the tender. In particular, it notes that the services were not such as might have required specialist equipment or a large financial outlay; that the winning tenderer will be using sub-contractors to carry out some work, and that these contractors are subject to monthly milestones; that payments to contractors can be stopped if these milestones are unmet; and that the financial standing of the successful tenderer was reviewed to the satisfaction of the Department's financial advisor. In its internal review decision, the Department provided additional details, outlining that the successful tenderer had supplied suitable documentation which proved, to the satisfaction of the Department, its economic and financial standing, and noting a number of factors were taken into consideration when reaching this conclusion, including: the capital outlay required by the successful tenderer; its ability to pay contractors; the willingness of contractors to support the winning tenderer; and the risks associated with non-completion of the contract. Furthermore, the Department advised that its decision to accept that the successful tenderer satisfied the financial criteria of the Department was taken following analysis of the information provided by the successful tenderer, and that the successful tenderer provided a number of documents in
relation to its liquidity and corporate experience, together with documentation that
satisfied both the insurance risk and business risk requirements of the Department. The Department noted that its conclusion that the financial standing of the successful tenderer was satisfactory was based on the analysis of its ability to pay contractors; its ability to access liquidity; its insurance cover; business risk mitigations; and its ability to successfully deliver the contract. It seems to me that this sets out in considerable detail the reasons why the Department took the decisions complained of in the applicant's FOI request. While it seems clear that the applicant is unhappy with the reasons for these decisions, and indeed plainly disagrees with the validity of those reasons, it does not seem to me to be the case that the explanations given by the Department can be said to be inadequate or unintelligible having regard to the particular circumstances of the case. I note that the Department's statement identifies a number of criteria relevant to its decision to accept the financial standing of the successful tenderer, and explains how each criterion was relevant to the decision. In my view the statement provided by the Department seems sufficiently clear to enable the applicant to understand without undue difficulty why the Department acted as it did.
In summary, on the basis of the above analysis, I find that the acts/decisions of the Department in respect of which the applicant requested a statement of reasons are not acts in respect of which the applicant was entitled to such a statement under section 10 of the FOI Act, and I annul the decision of the Department to issue him with such a statement.
Having carried out a review under section 22(2) of the FOI Act, I annul the Department's decision on the applicant's FOI request, on the basis that the acts/decisions in respect of which the applicant sought a statement of reasons do not constitute acts for the purposes of section 10, such that the applicant is not entitled to the statement sought.
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.
Neill Dougan
Investigator