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Mr H and Westmeath County Council (FOI Act 2014)

Case Number: 160388

Whether the Council was justified in its decision to refuse access to information relating to a tender process to establish a multi supplier framework for the provision of legal and debt collection services

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

On 26 July 2016, the applicant sought access to records containing information on how the Council "spends public monies on Debt Collection, Financial Recovery and Litigation."

In relation to debt collection, he sought records showing:

- The fixed percentage fee per case on all debt collected - management, administration and collection of monies,
- The value added services the supplier of the debt collections is providing to the Council for which no additional charge is applying,
- The criteria that was applied in assessing these value added services, and
- The monetary or other value that is placed on the value added services.

In relation to Legal Services, he sought records showing:

- The fee being paid under the heading of legal proceedings,
- The fee being paid for court attendance,
- The fee being paid for an adjourned case,
- The hourly rate for a legal partner, and
- The hourly rate for a solicitor.

The Council treated the request as one for access to records relating to a Request for Tenders (RFT) to establish a multi supplier framework for the provision of legal and debt collection services dated 7 July 2015, and in particular to Lot 3, Sub Lot 1 (debt collection) and Sub Lot 2 (financial recovery and litigation). According to the Council, the applicant is an employee of an unsuccessful tenderer. On 15 August 2016, the Council refused the request. The applicant sought an internal review of that decision following which, on 14 September 2016, the Council upheld the original decision. On 17 September 2016, the applicant sought a review by this Office of the Council's decision.

During the course of the investigation, Mr Simon Noone of this Office notified the five successful tender applicants of the review, and invited them to make submissions on the ground that the release of certain records could affect their interests. All five 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 at issue, to the submissions of the parties and the submissions of affected third parties, and to the provisions of the FOI Act. In referring to the records at issue, I have adopted the numbering system used by the Council in the schedule of records it prepared for processing the FOI request.

Scope of the Review

In its response to the request, the Council identified a large amount of documentation relating to the tender process that it considered relevant, including the request for tenders documentation, the tender submissions received, and evaluations and assessments of the tenders. This review is concerned solely with whether the Council was justified in refusing access to the precise information sought by the applicant as described above, insofar as it is to be found in the relevant records. All other information contained in the records falls outside of the scope of this review. Furthermore, based on the precise wording of his request, I am satisfied that only information relating to tenderers that were successful in their bids to be included in the framework is at issue and that similar information relating to unsuccessful tenderers falls outside the scope of the review.

I also note that the applicant has stated in his application for review that he is not seeking supplier specific information. I takes this as a confirmation that the requester is seeking access to the information in a format such that the identities of the various successful tenderers need not be disclosed.

Findings

The Debt Collection records
The details of the fixed percentage fee per case to be charged by the successful tenderers are contained in record 12B, which is described by the Council as a cost evaluation. The value added services supplied to the Council are contained in the various tender response documents. The criteria applied in assessing the value added services are contained in record 3, the RFT document. The monetary or other values placed by the Council on these value added services are contained in record 13B, described by the Council as a report of the evaluation and assessment of the RFTs.

Fixed percentage fees
The Council refused access to details of the fixed percentage fee per case for to be charged by the successful tenderers under sections 36(1)(a) and 36(1)(b) of the FOI Act. It argued that "Tendered rates are proprietary rates...In the event that these proprietary rates are released to competing economic operators, the person to whom the information relates will be at a financial disadvantage...". The successful tenderers have also objected to the release of this information.

Section 36(1)(a) provides for the mandatory refusal of a request where the record sought contains trade secrets of a person other than the requester concerned. Section 36(1)(b) provides for the mandatory refusal of a request where the record sought contains 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.

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

In considering whether certain information constitutes a trade secret, this Office has previously had regard to a number of factors, including (1) the extent to which the information is known outside of the business concerned; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the business to guard the secrecy of the information; (4) the value of the information to the business and to its competitors; (5) the amount of effort or money expended by the business in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. This Office also considers that while a strong case can be made that the price offered by each tenderer may well qualify as a trade secret during the currency of a tender process, it is only in exceptional circumstances that historic price information would qualify as a trade secret. It seems to me that the fixed percentage fee rate quoted by the successful tenderers is equivalent to the prices offered for their services. I am not aware of any exceptional circumstances for accepting that the fee rates at issue should be regarded as trade secrets in circumstances where the tender process has concluded. I find, therefore, that section 35(1)(a) does not apply.

This Office has previously acknowledged that the standard of proof necessary to meet the second part of the test in section 36(1)(b) (could prejudice the competitive position etc.) is relatively low. All that is required is the possibility of prejudice. I accept that the details of the percentage fee per case to be paid by the Council to a successful tenderer would be of interest to companies that may be interested in competing for future tender competitions and that release of those details could prejudice the competitive position of the successful tenderers, albeit in a general way given that there are a number of successful tenderers and where the identities of the successful tenderers are not disclosed alongside their respective percentage fee rates. I am satisfied, therefore, that section 36(1)(b) applies to this information.

I am also satisfied that the exemptions in section 36(2) do not apply in this instance. On the matter of whether the public interest would, on balance, be better served by release of the percentage fee rates, 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.

While I note that the applicant is aware of the identities of the successful tenderers, it seems to me that the disclosure of a range of percentage fee rates would not allow for the identification of what rates are attributable to each tenderer. I also note that the range of percentage fee rates is broad. Furthermore, I note that the marks available for award in the tender evaluation process relating to the percentage fee rate per case amounted to only 25% of the total marks available. In such circumstances, it seems to me that the potential harm to each individual tenderer that could arise by the release of the percentage fee rates is low. I find, therefore, that the public interest would, on balance, be better served by the release of the fixed percentage fee rates for the various successful tenderers.

Value added services
Tenderers were required to describe in their submissions the added value services they would provide to the Council for no additional charge. In its decision on the applicant's FOI request, the Council stated that the value added services tendered were assessed by a tender assessment panel, compared and scored relative to each other. The RFT is a publicly available document. Part 3 of the RFT is entitled Qualification and Award Criteria. It clearly indicates that 15 marks are available for award in the tender evaluation process relating to qualitative criteria of value added services, from a total of 200 marks available. The RFT further states that the evaluation group will assess the information provided and each response element will be awarded marks using a scoring range, details of which are set out in the RFT. It seems to me that this is the criteria that was applied in assessing the value added services and as such, it is already available to the applicant.

The Council refused access to the details of the value added services supplied by the successful tenderers, and the scores awarded by the Council for these services, under section 36(1)(b). The Council argued that "The release of the information will remove the competitive edge of the person in its profession or business operation, and place the competing economic operator in an unfairly attained competitive position." The successful tenderers have also objected to the release of this information.

The value added services proposed by the tenderers are specific to each tenderer and I am satisfied that section 36(1)(b) applies to such information. On the other hand, I fail to see how the release of the scores awarded for those services or the general comments the Council made about those services, without disclosing details of either the services themselves or the tenderer, could possibly give rise to any of the harms identified in section 36(1)(b).

On the matter of whether sections 36(2) or 36(3) might serve to disapply section 36(1)(b) in the case of the details of the value added services, I am satisfied that section 36(2) is not applicable. On the matter of where the balance of the public interest lies, I consider that the same public interest considerations apply to this information as to the fixed percentage fees. On the one hand, there is the public interest in favour of openness and transparency of public bodies. On the other hand, there is a public interest in protecting private companies from suffering undue commercial prejudice when applying for public tenders. I consider that the release of the details of the value added services themselves would provide potential competitors with an unduly detailed insight into the business practices and strategies of the successful tenderers. I do not believe that the public interest would be served by releasing such information, which by necessity is specific to each individual tenderer. I find, therefore, the public interest would, on balance, be better served by refusing access to this information.

The Financial Recovery and Litigation records
The applicant has sought a detailed breakdown of the fees to be paid by the Council to the successful tenderers for this sub lot. This detailed breakdown is to be found in the individual tender submissions. The request for tenders (RFT) required tenderers to stipulate a unit price and a total price under a number of headings, including legal proceedings, court attendances, processing adjournment pre-court, and hourly rates for partners and solicitors. The RFT also required tenderers to calculate the overall total cost of their tender. This total cost was considered by the Council when assigning a score to each of the tenderers based on cost of the proposal.

The Council refused access to the information sought under section 36(1)(b). I accept that the pricing information sought by the applicant is commercially sensitive, and I am satisfied that section 36(1)(b) is applicable. I am also satisfied that none of the exceptions set out in subsection (2) are applicable.

In considering whether the public interest favours protecting or releasing the requested information, I have outlined above my view that the need for FOI bodies 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 carries even greater weight where the use of public funds is involved.

In this case, is seems to me that the release of the overall cost of the successful tender submissions would act as a significant step in the promotion of openness and accountability. However, the information sought in this case is significantly more detailed than the overall cost. The applicant seeks details of the detailed pricing schedule which underpins that overall cost. In my view, the release of such detailed particular information could reasonably be expected to provide a significant advantage to competitors in future similar competitions, while providing little additional insight into the overall cost to the taxpayer. I find, therefore, that the public interest would, on balance, be better served by refusing the information sought relating to legal services.

Section 35

While not relied upon by the Council, one of the successful tenderers argued that section 35 of the FOI Act serves to protect as confidential all information provided by it in its tender submission. Section 35 provides for the protection of information given to an FOI body in confidence. The tenderer argued that both clause 2.9 of the RFT and condition 8 of the Services Contract Agreement provide for the treatment of all information provided by the tenderers as confidential. Of all of the information sought, I have found that only the fixed percentage fee per case for Lot 3 Sub-Lot 1 and the Council's scores and comments concerning the value added services for Lot 3 Sub-Lot 1 fall to be released.

Clause 2.9 of the RFT provides that tenderers shall treat as confidential any information provided to them by the contracting authority for the purposes of the tender process. I am satisfied that it does not serve to require the Council to treat the information at issue here as confidential. Condition 8 of the Services Contract Agreement provides that each of the parties to the agreement agrees to hold as confidential all information received, provided, or obtained, arising from their participation in the agreement and shall not disclose same to any third party except for, among other things, "as may be required by law".It seems to me that this clause relates to information received, provided, or obtained during the course of the agreement and that it does not cover information provided by tenderers for the purposes of the tender process. Even if it did, I do not accept that condition 8 is such that it operates so as to prohibit the release of information in accordance with the provisions of the FOI Act. I find that section 35 does not apply.

Decision

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

- The fixed percentage fees per case for Lot 3 Sub-Lot 1, as contained in the column entitled "Cost of Proposal" in record 12B
- The Council's scores and comments concerning the value added services for Lot 3 Sub-Lot 1 as contained in record 13B

I affirm the Council'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