This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
When navigating through the public tendering process, public institutions must continuously steer a clear path through the complex and often contradictory currents of confidentiality and transparency. Purchasing professionals must simultaneously protect confidential supplier information while also adhering to the transparency obligations that arise during the debriefing process and through public access requests. As the following recent cases illustrate, finding safe passage through these crosscurrents is becoming an increasingly complex journey.
In its January 2013 decision in Cosepuri Soc. Coop. pA v. European Food Safety Authority, the European Court of Justice determined that their purchasing institutions are under no duty to allow bidders to attend bid evaluations or to disclose the financial submissions of competing bidders during evaluations. The dispute dealt with a tendering process for shuttle services within Italy and throughout Europe, with technical factors weighted at 50 percent and price weighted at 50 percent of the evaluation. A losing bidder brought an application to annul the contract while also claiming monetary damages. That bidder challenged the confidential nature of the bid evaluations and contested the adequacy of the debriefing it was subsequently provided. However, the Court rejected the legal challenge, finding that there was no duty to allow bidders to attend the evaluation of the financial proposals and that the debriefing ultimately disclosed the winning bidder’s financial points so that its price could be readily calculated by the losing bidder. The Court also found that the debriefing provided enough detail to the losing bidder to understand why its bid was not selected and therefore met the applicable disclosure duties. The case was therefore dismissed.
For example, its August 2016 decision in TDC Broadband Inc. v. Nova Scotia, the Nova Scotia Supreme Court awarded a supplier $125,000 in damages due to the government’s inappropriate use of the supplier’s confidential business information. The plaintiff was a small technology company that had developed, with the assistance of a small government subsidy, a system to provide wireless internet access to remote, unserved areas of Nova Scotia. The Court found that the government misused confidential information about that system in the subsequent preparation of a Request for Proposals (RFP) for the provision of similar services, and breached its duty of confidence by providing that information to the supplier’s competitors in the RFP process.
Conversely, in its February 2016 judgment in RPS Consulting Engineers Limited v. Kildare County Council, the High Court of Ireland ordered a municipality to provide detailed evaluation reasons in an engineering consulting tender. The Court rejected the standard form “high-medium-low” scoring statement letters provided by the municipality to all bidders as non-transparent “platitudinous responses”. The Court ruled that a public body is required to explain its scoring, particularly where a contract is not awarded to the low bid. It also found that losing bidders are entitled to comparative information relative to the winning bid to help them assert their bid protest rights and prepare future bids.
In yet another information release decision, the New York Supreme Court ruled against providing a supplier’s trade secret information in response to a public access request in its July 2014 decision in Verizon N.Y. Inc. v. New York State Public Service Commission, pursuant to the state Freedom of Information Law. The Court noted that the burden was with the supplier to establish that the information in the possession of the government institution should not be disclosed. In this case the Court found that the supplier met that burden by establishing that the information in question fell under the statutory exemption for trade secret pricing information. The Court concluded that the government institution’s decision not to disclose the information in question was “rational and neither arbitrary and capricious, nor an abuse of discretion” and ruled in favor of protecting that information from the public access request.
Similarly, in its November 2016 decision in Canadian Bank Note Ltd. v. Saskatchewan Government Insurance, the Saskatchewan Court of Queen’s Bench upheld the government’s decision to withhold the disclosure of a winning bidder’s pricing information. The Court found that the disclosure of the information would be prejudicial to the winning bidder’s future competitive position in the marketplace. The Court also found that the unit pricing contained in the contract had been submitted in confidence by the winning bidder and that the pricing had not been negotiated by the parties. It therefore maintained its protection for the purposes of the public access law non-disclosure protocols.
However, in its March 2016 decision in Accenture Inc. v. Ontario (Information and Privacy Commissioner) and Metrolinx, the Ontario Superior Court of Justice Divisional Court upheld an order of the Information and Privacy Commissioner directing the disclosure of terms contained in a government contract award. The Court found that the terms in question did not meet the “supplied in confidence” test since they had been jointly created in negotiations between the contractor and the government agency. The Court also found that the contractor failed to provide any concrete explanations of how it would be prejudiced by the disclosure of those terms in response to a public access request.
As these cases illustrate, the decision to protect confidential information, to disclose it during a debriefing, or to release it pursuant to a public access request or in the course of litigation, will be based on the nature of the information in question and the specific stage of the procurement cycle at which that decision is made. Irrespective of that decision, public institutions can rest assured that they will remain subject to legal challenge no matter how they navigate the currents of the competitive bidding process and deal with the challenges of confidentiality and transparency.
