Partner Article

Freedom of Information and Public Procurement

In the economic downturn and the associated drop in private sector work, companies are keen to gain as many public sector orders as possible. With a plethora of information on private companies being held by contracting public sector agencies as part of formalised procurement processes laid down by the Public Contract Regulations, the Freedom of Information Act 2000 (FOIA) has a significant impact on the accessibility of the information and whether it can be obtained following a request under the Act. As tenders will contain commercial sensitive information, such as price breakdowns and profit shares, some companies will be keen to avoid this getting into the public domain, while others will be keen to gain commercial insight into their competitors.

Under section 1(1) of FOIA, any person making a request for information to a public authority is entitled to be informed in writing by the authority whether it holds the information sought and if does, the authority must communicate the information to them. A number of exemptions are outlined in Part II of the Act, to prevent release of information under the general rule in section 1 (1).

Section 40 gives an exemption for information considered personal and subject to data protection law. It was under this section that much of the information disclosed in MP expenses files was blackened out, causing a furore among many who felt that much of the incriminating evidence had been covered up or greatly diluted.

Section 43 applies where disclosure of information would be likely to prejudice the commercial interests of any person. The Information Tribunal in the John Connor Press Associates case ruled that ‘likely to prejudice’ in the wording of the exemption requires evidence of a ‘real and significant risk of prejudice.’ As section 43 only provides a qualified exemption, information that may be perceived to be of a commercially sensitive nature might still be disclosed if the public interest in disclosing documents outweighs the need to prevent disclosure.

The Office of Government Commerce (OGC) has published guidelines on Freedom of Information Policy in respect of public procurement which can be found at http://www.ogc.gov.uk/documents/OGC_FOI_and_Civil_Procurement_guidance.pdf.

Although these are policy guidelines for contracting authorities themselves, they also serve as a useful guide to FOIA applicants as they set out the types of information a public authority will be inclined to disclose, or decline disclosure of, as well as the stage in the procurement process when information of a specific nature might be released. For each category of information, there is a “working assumption decision” issued as to whether the information should be disclosed.

The impact of the Freedom of Information Act on the procurement process has its ‘pros’ and ‘cons’. Critics will argue that potentially sensitive information can be accessed and pose the question of why a competitor should be entitled to details about their business operation and strategy. On the other hand, those in favour point toward a more transparent tender process which allows for closer scrutiny of procurement decisions. They will also say that opening up access to information improves competition, allowing companies to improve their own tendering procedures - This also means tenders will be more closely fought, creating more value for the taxpayer. The debate on merits against pitfalls may long continue, but Freedom of Information is here to stay and companies should be aware of the rules and their implications when bidding for public sector work.

Further information is provided in the Construction section of www.watsonburton.com. If you have any queries relating to this article, or any other Construction Law matter, please contact Mark Lennon at Watson Burton LLP on 0191 244 4369 or email mark.lennon@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .