01 February 2018 #Public Procurement
One of the concerns bidders often have when submitting tenders for public contracts is whether other bidders will be able to obtain access to their confidential pricing information and other commercially sensitive information.
This is an issue which generally crops up in two situations:
1. Freedom of Information requests
All public bodies are subject to the Freedom of Information Act 2000 and this means that they are obliged to disclose information in their possession to members of the public if requested, subject to the various exemptions contained in the Act. FOI requests are often made about contracts tendered by public bodies, because the value of such contracts can be high, and suppliers have a direct interest in obtaining information about their competitors which may help them to improve their own future bids.
Public bodies will often be able to rely on the “commercial interests” or “confidential information” exemptions to withhold disclosure of a bidder’s confidential pricing information and other sensitive data. This is usually in the public interest, because bidders will be put off from bidding if their confidential information is at risk of disclosure, which may result in the public body not getting the best value for money.
Bidders and public bodies do however need to be alive to the potential impact of the FOIA, and in particular:
2. Challenges under the Public Contracts Regulations 2015
An unsuccessful bidder who believes it has a claim against a public body for breach of the Public Contracts Regulations 2015 may issue court proceedings to prevent the award of the contract and seek damages. At the same time as or shortly after starting the proceedings, the claimant bidder must file a detailed Particulars of Claim setting out the grounds for its complaint. Depending on the nature of the complaint, the Particulars may need to include extracts from or annex a copy of the claimant’s bid, including its pricing, designs and business practices.
The Particulars of Claim are, as a general rule, a public document, a copy of which can be obtained online or from the court by anyone. Any court hearings concerning the claim will also, unless otherwise ordered, be open to the public. Not surprisingly, this is a matter of concern for many bidders, who do not want their confidential information in the public domain where it may be accessed by their competitors and used on future bids. For the courts, however, the principle of open justice is paramount and needs to be balanced with the need to protect confidential information.
Confidentiality is also an issue for winning bidders, if another unsuccessful bidder is challenging the award of the contract. The unsuccessful bidder will often seek disclosure of the winning bid from the public body, if it has grounds to believe that its bid has been treated unfavourably compared to the winning bidder. Confidentiality is not a bar to disclosure, and if the unsuccessful claimant can show that the winning bid is relevant to the issues in dispute then the court will order that it be disclosed. Although the winning bidder will not be a party to the court proceedings between the unsuccessful bidder and the public body, it may be necessary to become involve by instructing lawyers and participating in hearings concerning disclosure of the bid.
There are however a number of ways confidential documents can be dealt with in a procurement dispute, subject to the parties’ and the court’s agreement:
Although committed to open justice, the courts do respect the fact that bidders involved in a procurement dispute can have a legitimate interest in keeping parts of their bids confidential, and will work to support this where possible.