This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
The Savik Enterprises v. Nunavut (Commissioner) decision of the Nunavut Court of Justice serves as an illustrative case study on how the government’s duty to maintain the confidentiality of sensitive supplier information must be balanced against the need to maintain open and transparent procurement practices. The dispute arose out of a Request for Proposals (RFP) for a ten-year contract for the provision of bulk fuel to Nunavut communities. The incumbent fuel provider, Savik Enterprises, lost the competition to a number of locally owned co-operatives operating as Arctic Cooperatives Ltd. Savik sued the government, claiming that there were improprieties in the procurement process.
During pre-trial discoveries, Savik demanded access to the bid documents submitted by the winning vendor. The government claimed privilege over those documents and the Arctic Cooperatives also intervened to contest the disclosure. The Court granted the Arctic Cooperatives standing to contest the disclosure in court:
There is a growing body of jurisprudence in Canada that has recognized the existence of common law “privacy interests”. Given the growing pervasiveness and sophistication of contemporary information technology, particularly that possessed by government, the protection of these privacy interests today is fundamental to the well being of a free and democratic society. Statute has now intervened in four provinces to create a statutory tort of invasion of privacy. In provinces not having this statutory cause of action, lower Courts have determined that common law remedies do exist to protect a growing variety of privacy interests.
In addition to these common law duties, the Court also noted that the Nunavut government was owed a statutory duty to protect bidder information and balance these duties against transparency obligations:
The privacy interest is also recognized in statutory form by Nunavut’s Access to Information and Protection of Privacy Act 1994 C.20. This legislation maintains a precarious balance; a balance between the need to protect and preserve privacy interests on the one hand, with the need to promote accountability of public bodies through enhanced access to certain types of information, on the other.
The Court recognized Nunavut’s interest in protecting business information in order to encourage supplier participation in the bidding process, stating that the government “is concerned that release of the requested proposals may impair the future willingness of others to share the detailed information necessary to make informed and effective decisions in a larger government procurement process.” However, the Court ultimately recognized the need to balance these important confidentiality considerations against the need to promote the transparent and defensible expenditure of public funds, stating that while “the public policy argument advanced by the Defendant in favor of protecting the integrity of the RFP process remains an important consideration, there is an equally compelling, if not greater public policy argument favoring disclosure where the expenditure of public funds is concerned.” In so finding, the Court stressed the importance of transparency in the public procurement process as a means of ensuring public confidence in government spending:
Openness and transparency in public administration promotes accountability and fairness in public government. Secrecy breeds suspicion and mistrust. Claims of partiality or discrimination tend to germinate and flourish in a secretive environment. Given the importance of government contracts to the private sector in Nunavut, it is particularly important that those bidding on contracts have confidence in the fairness of the process adopted by government in making its contract awards.
The Court also stated that accountability “for public funds and fairness in public administration are values essential to the preservation of a democratically elected government” and that “transparency of process is as integral to the building and maintaining of trust in matters of public administration as it is to the justice system itself.”
In striking that balance, the Court distinguished between the need for absolute confidentiality during the tendering process to protect the process from external interference, and the less absolute need for confidentiality after the contract has been awarded:
Absolute confidentiality must be maintained during the submission phase of the government procurement process in order to facilitate a fair and honest competition for government contracts. Secrecy at this stage is clearly essential to the process itself, and is in the public interest. However, the public interest in maintaining this wall of secrecy diminishes rapidly once a decision on the merits has been reached.
The Court ultimately required the government to disclose the bidding documents while ordering the redaction of some of the more sensitive data contained within them. As this case illustrates, like other global jurisdictions, Nunavut’s common law and statutory obligations require it to balance the confidentiality obligations owed to suppliers against its public transparency obligations. Determining the dividing line between information that can be disclosed and information that must be protected will continue to be a delicate balancing act for all public bodies in the years to come.
