This article is an excerpt from the 2020 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its January 2019 decision in Report A-2019-001 Regarding the Department of Health & Community Services, the Newfoundland and Labrador Information and Privacy Commissioner determined that the proposal of a selected proponent was subject to a public access request even though the Request for Proposals (RFP) process was cancelled during contract award negotiations and never resulted in a contract award to the selected proponent. The proponent, who was referred to as the “Third Party” in the decision, argued that its proposal was not subject to an access request because the process never concluded with an award, and that, even if its proposal was subject to a request, it should not be disclosed since the disclosure of its commercial information would harm its competitiveness in future bidding competitions. The Commissioner disagreed.
With respect to whether the proposal was subject to an access request, the Commissioner decided that the proposal was not provided in confidence since it was the expectation of the parties that the proposal would become part of the terms of the final contract:
In the present case, the Third Party correctly points out that there is no contract between it and DHCS owing to cancellation of the RFP. The RFP Response and Draft Service Agreement were supplied to the Public Body. As to the confidential nature of the information, this Office is of the opinion that it should be considered confidential (“supplied in confidence”) during the bidding and evaluation process, however, once bidding and evaluation has been completed, the expectation of confidence attached to any bids, successful or unsuccessful, normally ends. The bidding and evaluation process had concluded. As such, no expectation of confidentiality remains, as the records were submitted with the expectation that if successful, the terms would become part of a contract.
Furthermore, and in the alternative, the Third Party continued to communicate with the Public Body after the initial bid process on the understanding that an award had been made and therefore, it could not reasonably have expected the confidentiality to continue. The Third Party operated under the assumption it was the successful bidder working with DHCS towards a draft agreement (that was never concluded), and its communications and submissions during this time were therefore made in the belief it would eventually be captured in a contract with DHCS. The Third Party itself acknowledged in its submissions to this Office that such a contract would mean the information in question would not be considered supplied, but rather negotiated and therefore open to public disclosure.
Furthermore, the Commissioner found that the proponent failed to establish that the disclosure of the information would result in probable harm to its competitive position, noting that meeting this test “requires evidence that the assertion of harm is more than speculative, but rather should establish a reasonable expectation of probable harm.” The Commissioner ruled that the proponent failed to meet that test since probable significant harm must be shown to shield bidding information from disclosure:
The Third Party argued primarily that should the information in question be disclosed, its competitive position would be harmed as competitors could use the contents of its proposal and supporting documents and information subsequently provided to the Public Body to “better compete…in a re-issued RFP, as well as more generally to close the gap of standards.” It went on to note that “its reasonable expectation of harm is further based on its reasonable expectation of a future reissuance of a substantially similar RFP.”
Competitive advantage is addressed in previous reports, including Report A-2013-008, to the effect that heightened competition should not generally be interpreted as unduly harming the competitive position of third parties. Fair competition helps ensure that public bodies are making the best possible use of public resources. The basis on which the Third Party was prepared to contract is relevant to the principle of public accountability. As this Office has previously noted, while the Third Party does not have to prove that competitors will obtain an undue financial gain, speculative statements, unaccompanied by evidence as to how the information could reasonably be expected to result in undue gain (or loss), are insufficient to discharge the burden of proof.
The Third Party has not provided sufficient evidence to demonstrate unfairness to the degree that the disclosure of the records could reasonably be expected to significantly harm its competitive position.
The Commissioner ordered the government to disclose the information in question.
As this case illustrates, some jurisdiction’s public access laws, and resulting case law interpretations, are heavily calibrated towards the disclosure of bidding information. Purchasing institutions often find themselves caught in the crosscurrents between their disclosure duties under those access laws and attempts by suppliers to protect their information from being disclosed pursuant to public access requests.
