Commercial Interests: where does the balance lie under FOIA?

Although August is a traditionally quiet month in courts and tribunals it can still produce a noteworthy decision which can sometimes be over-looked in the general holiday atmosphere. Such a case is the decision of the First-Tier Tribunal on an appeal against the Information Commissioner's decision not to allow disclosure of a successful bid in a procurement process for the delivery of a 'Leisure Management System'.

The surprising factor in this decision is that the tender process had concluded in 2012 and it was generally thought to be the case (confirmed by other decisions from the Information Commissioner) that the more time that had passed since the procurement the more difficult it was to resist disclosure.

The Appellant had originally requested sight of the winning bid 'without prices' in order to get a better idea, she said, of what a winning bid would look like so that she could improve her own bid in the future. The Council had refused to disclose the information relying on the exemption at section 43(2) of FOIA that disclosure would prejudice their own and the bidder's commercial interests. The Information Commissioner agreed and that led to the appeal.

The Appeal Tribunal unanimously agreed with the Information Commissioner's decision to uphold the Council's refusal to disclose the bid. It concluded that:

  • Disclosing the requested information would prejudice the Council's commercial interests as showing how a winning bidder presented its material and answered questions would demonstrate how the Council distinguished between bids and therefore undermined the competitiveness of future tender exercises.
  • Disclosing the requested information would prejudice the bidder's interests because information on how a bid was presented and the added value that may have been offered would place that bidder at a commercial disadvantage in the future.

In addition the Tribunal specifically made the point that the commercial sensitivity of bids was unaffected by the remaining duration of the current contract nor how far in the past the bid had been prepared. It concluded:

  • If a prospective tenderer were to be able to review its competitor's previous bid documents including trade secrets, this could inhibit competitive tendering and reduce the number of bidders willing to participate which would not be in the Council's interest.
  • It then went on to consider whether it was in the public interest to allow the exemption. Whilst it accepted that there should be transparency and accountability in decision making these principles were not significantly advanced by the information requested especially as Appellant had received detailed debrief information at the time.

Indeed the Tribunal considered that there were strong public interests in not disclosing the requested information including:

  • That potential private sector tenderers should not be discouraged from submitting tenders for fear that their commercially confidential information will be released as this may affect the quality of tenders.
  • There was a public interest in maintaining an efficient competitive market for these services.

Unanimously, therefore the disclosure of the information sought under FOIA was refused.

This case is useful for both bidders and Contracting Authorities to be aware of when dealing with a request for disclosure of information under FOIA. Whilst there are some contradictory decisions from the Information Commissioner and the First-Tier Tribunal it is clear that in appropriate cases there is scope to refuse disclosure of bids even some time after the event and that the facts of each case should be considered carefully where a commercial exemption may apply. It is also important as it highlights that prejudice can arise not just to the bidder but also the Contracting Authority. For those interested in reading more the full citation is Sally Ballan v Information Commissioner EA/2015/0021.

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