ORDER MO-3246

Appeal MA14-229

Town of Whitchurch-Stouffville

September 30, 2015

Summary: This appeal arises from a decision by the town to disclose records relating to the appellant’s proposal, made in response to the town’s request for proposal for project management services. The appellant alleged the harms in sections 10(1)(a), (b) and (c) (third party information) of the Act. The adjudicator finds that disclosure of the financial information, specifically the appellant’s pricing breakdown, could reasonably be expected to result in the harms in sections 10(1)(a) and (c) and thus is exempt from disclosure. The adjudicator upholds the town’s decision to disclose the rest of the information at issue.

Statutes Considered: Municipal Freedom of Information and Protection of Privacy Act , R.S.O. 1990, c. M.56 , as amended, section 10(1)(a), (b) and (c).

Orders and Investigation Reports Considered: MO-2151, PO-2853, PO-3062-R.

OVERVIEW:

[1]  The Town of Whitchurch-Stouffville (the town) received eight requests under the Municipal Freedom of Information and Protection of Privacy Act  (the Act ) for access to records relating to two specified Requests for Proposals (RFP). The three requests at issue in this appeal are as follows:

2014-01

• The bids received from [three named companies] for WS-RFP-13-14, specifically, the main proposal (6 pages) and the Schedule of Personnel and Hourly Rates only.
• The post-closing bid repairs allowed by the town for [named company] and related correspondence, specifically for the Schedule of Personnel and Hourly Rates, and for the designated project manager.
• The evaluation scorecards and summary for WS-RFP-13-14, that served to support Report #11 of the meeting of Council on 21 May 2013.

2014-03

• The evaluation scorecards and summaries for the “Project Based Evaluation” for each of the projects assigned to the project management roster consultants by means of the secondary evaluation completed for WS-RFP-13-14.

2014-04

• The executed contract agreements for each of [three named companies] for WS-RFP-13-14.
• Identification of the project manager designated by each of [three named companies] for WS-RFP-13-14.

[2]  After locating the responsive records, the town notified a company that might have an interest in the disclosure of the records (the affected party), pursuant to section 21  of the Act . The affected party submitted representations to the town, advising that it objected to the disclosure of any of the responsive records.

[3]  The town issued a decision to the requester and the affected party, advising them that it decided to grant the requester full access to two of the records and partial access to the third. With regard to the third record, the town advised the requester and affected party that it withheld page 5 under the personal privacy exemption in section 14(1)  of the Act .

[4]  The affected party, now the appellant, appealed the town’s decision to grant the requester full access to the records relating to it. In its appeal letter, the appellant claimed that section 10(1) applied to the records and that their disclosure would significantly prejudice its competitive position and result in undue loss to it.

[5]  During mediation of the appeal, the requester advised that he does not seek access to the information withheld under section 14(1) (personal privacy) of the Act . Accordingly, access to the information withheld under this exemption is no longer within the scope of this appeal.

[6]  During the inquiry in this appeal, the adjudicator sought and received representations from the town, the appellant and the original requester. Representations were shared in accordance with the IPC’s Code of Procedure and Practice Direction 7. The file was then assigned to me to dispose of the issues in the appeal.

[7]  In this order, I allow the appeal, in part. I order the town to disclose portions of Records 1, 2 and 3 and uphold its decision, in part.

RECORDS:

[8]  The records at issue are described as follows in the town’s Index of Records:

• Record 1: Bid Submission for WS-RFP-13-14 from the appellant (page 5 of the record is not at issue)
• Record 2: Post-Bid Repairs by the appellant
• Record 3: WS-RFP-13-14 Evaluation Scorecards and Summary for the appellant

DISCUSSION:

[9]  The sole issue to be determined is whether the records are exempt under section 10(1)  of the Act . Section 10(1) states, in part:

A head shall refuse to disclose a record that reveals a trade secret or scientific, technical, commercial, financial or labour relations information, supplied in confidence implicitly or explicitly, if the disclosure could reasonably be expected to,

(a)  prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization;

(b)  result in similar information no longer being supplied to the institution where it is in the public interest that similar information continue to be so supplied;

(c)  result in undue loss or gain to any person, group, committee or financial institution or agency; or

[10]  Section 10(1) is designed to protect the confidential “informational assets” of businesses or other organizations that provide information to government institutions. ^[1] Although one of the central purposes of the Act  is to shed light on the operations of government, section 10(1) serves to limit disclosure of confidential information of third parties that could be exploited by a competitor in the marketplace. ^[2]

[11]  For section 10(1) to apply, the appellant must satisfy each part of the following three-part test:

1. the record must reveal information that is a trade secret or scientific, technical, commercial, financial or labour relations information; and
2. the information must have been supplied to the institution in confidence, either implicitly or explicitly; and
3. the prospect of disclosure of the record must give rise to a reasonable expectation that one of the harms specified in paragraph (a), (b), (c) and/or (d) of section 10(1) will occur.

Part 1: type of information

[12]  The appellant submits that Record 1, its bid proposal, contains commercial, technical and labour information. These types of information have been defined in past orders to mean:

Commercial information is information that relates solely to the buying, selling or exchange of merchandise or services. This term can apply to both profit-making enterprises and non-profit organizations, and has equal application to both large and small enterprises. ^[3] The fact that a record might have monetary value or potential monetary value does not necessarily mean that the record itself contains commercial information. ^[4]

Technical information is information belonging to an organized field of knowledge that would fall under the general categories of applied sciences or mechanical arts. Examples of these fields include architecture, engineering or electronics. While it is difficult to define technical information in a precise fashion, it will usually involve information prepared by a professional in the field and describe the construction, operation or maintenance of a structure, process, equipment or thing. ^[5]

Labour relations means relations and conditions of work, including collective bargaining, and is not restricted to employer/employee relationships. Labour relations information has been found to include:

• discussions regarding an agency’s approach to dealing with the management of their employees during a labour dispute ^[6]

• information compiled in the course of the negotiation of pay equity plans between a hospital and the bargaining agents representing its employees, ^[7]

but not to include:

• names, duties and qualifications of individual employees ^[8]

• an analysis of the performance of two employees on a project ^[9]

• an account of an alleged incident at a child care centre ^[10]

• the names and addresses of employers who were the subject of levies or fines under workers’ compensation legislation ^[11]

[13]  The appellant submits that its proposal contains commercial information as it provides a detailed description of its business and the approach that it takes to compete in a very competitive project management market. Its proposal also contains its price quoted for the service to be provided to the town.

[14]  The appellant submits that section 3.0 of its proposal contains technical information as it is “…concerning our corporate execution plan, tools and technology we will use in performing our obligations, overview of the approach we will use to spearhead and deliver our services.” The appellant notes that their approach is set out with an extremely high level of detail.

[15]  Finally, the appellant submits that because its proposal contains the names, duties and qualifications of its employees, it contains labour relations information.

[16]  I accept the appellant’s submission that its proposal contains commercial information for the purposes of section 10(1). The proposal contains a description of the appellant’s services that it will be providing to the town in response to the RFP. I further find that the proposal contains financial information as it sets out the costs of the services to be provided in the Schedule of Personnel and Hourly Rates, found in both Records 1 and 2.

[17]  I do not accept the appellant’s submission that its proposal contains technical information. I agree that section 3.0 of the appellant’s proposal contains a detailed description of its approach and methodology, but I find that the description of the project management service to be provided does not qualify as information belonging to an organized field of knowledge that would fall under the general categories of applied sciences or mechanical arts. Instead, I find the appellant’s methodology and approach to be commercial information, as it relates to the services being provided by the appellant to the town, for which it will receive payment.

[18]  I assume that the appellant’s submission that the records contain labour relations information relates to page 5 of its proposal. While page 5 is not at issue in the appeal, I considered whether the rest of the records (2 and 3) contain labour relations information. As stated above, “labour relations information” for the purposes of section 10(1) does not include the names, duties and qualifications of employees. Based on my review of all of the records at issue, I find that they do not contain “labour relations” information for the purposes of section 10(1).

[19]  Record 2 is a record entitled “Post-bid repairs” which is a two-page email attaching a schedule of personnel and hourly rates. I find that the schedule contains financial information as it lists the appellant’s price for the service of the project manager. I find that the email does not contain any of the types of information protected under section 10(1) and thus, does not meet the part 1 test for the application of section 10(1). As no other mandatory exemptions apply to this information and no discretionary exemptions were claimed, I will order the email portion of Record 2 to be disclosed to the requester.

[20]  Record 3 is the Evaluation Scorecard and summary with only the appellant’s information withheld. This record contains a listing of the evaluation criteria and a rating and score for each of the proponents to the RFP. In Order PO-2853, Adjudicator Donald Hale considered whether RFP scoring information prepared by the Ontario Lottery and Gaming Commission represented an affected party’s trade secret, commercial and financial information. Adjudicator Hale rejected that argument, finding that the scoring records before him did not contain the actual commercial or financial information that was submitted by the affected party with its proposal, but rather described the scoring process and the proposals in general.

[21]  Adjudicator Hale’s analysis was adopted by Adjudicator Daphne Loukidelis in Reconsideration Order PO-3062-R. In that decision, Adjudicator Loukidelis found that information relating to the scoring of bids at issue did not contain the affected party, or any proponent’s, bid information. In fact, Adjudicator Loukidelis found that the scoring records “represents the application of ‘internally generated criteria’ to the proponent’s bid information to create a record resulting in a score for each proponent.” I adopt this analysis for the purposes of this appeal.

[22]  Record 3 consists of the town’s numerical scoring of the appellant’s proposal to certain listed criteria, as well as general comments made about the appellant. I find that this information does not constitute commercial, financial or technical information for the purposes of section 10(1). As the appellant has not established the application of part 1 of the test for section 10(1) to Record 3, and no other mandatory exemptions apply to it and no discretionary exemptions have been claimed, I will order this information to be disclosed to the requester.

[23]  In summary, I find that the appellant has met part 1 test of the test for section 10(1) for Record 1 and part of Record 2 only.

Part 2: supplied in confidence

Supplied

[24]  The requirement that the information was “supplied” to the institution reflects the purpose in section 10(1) of protecting the informational assets of third parties. ^[12]

[25]  Information may qualify as “supplied” if it was directly supplied to an institution by a third party, or where its disclosure would reveal or permit the drawing of accurate inferences with respect to information supplied by a third party. ^[13]

In confidence

[26]  In order to satisfy the “in confidence” component of part two, the parties resisting disclosure must establish that the supplier of the information had a reasonable expectation of confidentiality, implicit or explicit, at the time the information was provided. This expectation must have an objective basis. ^[14]

[27]  In determining whether an expectation of confidentiality is based on reasonable and objective grounds, all the circumstances are considered, including whether the information was

• communicated to the institution on the basis that it was confidential and that it was to be kept confidential

• treated consistently by the third party in a manner that indicates a concern for confidentiality

• not otherwise disclosed or available from sources to which the public has access

• prepared for a purpose that would not entail disclosure ^[15]

[28]  The town submits that while the information at issue in Records 1 and 2 was supplied by the appellant in response to the call for RFP submission, it was done so with the knowledge that the information would be made available to the public. The town cites section 4.14 entitled “Access to information” of its procurement By-law 2013-136-FI states:

The disclosure of information received relevant to the issue of bid solicitations or the award of contracts emanating from bid solicitations shall only be made by the appropriate officers in accordance with the provisions of the Municipal Freedom of Information and Protection of Privacy Act , R.S.O. 1990, as amended.

[29]  The town, further cites, section 2.11 of the RFP documents which states, “All correspondence, documentation and information provided to the Town by a Proponent in connection with, or arising out of this Proposal will become the property of the Town and as such is subject to, and may be released pursuant to MFIPPA.”

[30]  Finally, the town notes that on the submission form within the proposal, the appellant agreed to the following:

I/WE AGREE that any information provided in this Response, even if it is identified as “Confidential”, may be disclosed where required by law or if required by order of a court or tribunal.

I/WE HEREBY CONSENT to the disclosure, on a confidential basis, of this Response by the Town to the Town’s advisor’s retained for the purpose of evaluation or participating in the evaluation of the RFP.

[31]  The appellant submits that it supplied its proposal to the town, in confidence. It submits that it has consistently treated its proposal as confidential and has not disclosed it to anyone outside the town or its own organization. It states:

Furthermore, in the normal courses, we would not expect the Record to be made public because the very nature of the RFP process is that the proposals received are sealed and confidential, lest competitors steal [ideas] from each other for winning the right to tender the services. It will significantly undermine the whole purpose of confidentiality in the request for proposal process if the industry competitors are asked to compete on a confidential basis and then the information they provide is later exposed to competitors and used against them to their detriment in other business competitions.

[32]  I accept that the information at issue in Records 1 and 2 was supplied by the appellant to the town in response to the RFP process.

[33]  I find the town’s representations regarding the terms set out in its procurement By-law, the RFP document and in the submission form, to be compelling regarding its position that any information submitted to it in response to the call for RFP’s would be subject to the Act and the disclosure provisions therein. The appellant’s expectation that its proposal would be kept confidential, in spite of the town’s clearly expressed position about the confidentiality of submissions, is both uninformed and unrealistic. However, for my determination of this aspect of the three-part test under section 10(1), I must consider the supplier’s expectations of confidentiality. In this case, I accept that the appellant had an implicit expectation of confidentiality when it submitted its proposal. I accept the appellant’s submission that it treated its proposal in a confidential manner, not disclosing it to the public or outside parties.

[34]  Accordingly, I find that the appellant has met the part 2 test for the application of section 10(1) for the information at issue.

Part 3: harms

General principles

[35]  The party resisting disclosure must provide detailed and convincing evidence about the potential for harm. It must demonstrate a risk of harm that is well beyond the merely possible or speculative although it need not prove that disclosure will in fact result in such harm. How much and what kind of evidence is needed will depend on the type of issue and seriousness of the consequences. ^[16]

[36]  The failure of a party resisting disclosure to provide detailed and convincing evidence will not necessarily defeat the claim for exemption where harm can be inferred from the surrounding circumstances. However, parties should not assume that the harms under section 10(1) are self-evident or can be proven simply by repeating the description of harms in the Act . ^[17]

[37]  The appellant submits that the harms set out in sections (a), (b) and (c), could reasonably be expected to occur upon disclosure of the records at issue. Specifically the appellant submits that disclosure would result in prejudice to its competitive position for the following reasons:

• If disclosed to a third party, the ideas, process and procedures outlined in the proposal could be copied by competitors in future RFP process, which will significantly prejudice the appellant’s competitive position by eliminating the competitive advantage that the appellant’s proposal structures have given it.
• The project management industry is extremely competitive and it is not merely price that distinguishes the appellant from its competitors but its proposal format and other information related to its services that would be revealed by disclosure of the record.
• Disclosure of the pricing component of the proposal prejudices the appellant’s competitive position by allowing competitors to offer services at a lower rate. The disclosure of the pricing information also interferes with the appellant’s ability to negotiate the cost of the services with other customers.
• The appellant has invested considerable time, money and resources into the development, cultivation and acquisition of the various methods, procedures, forms, corporate structures, employee mix, manpower estimates, risk registers, working relationship, support resources, service delivery methods, project plans, master schedules and cost tracking logs that it uses to provide project management services. To disclose the “technical information” would prejudice the appellant’s competitive position in an unfair manner.

[38]  The appellant submits that disclosure of the information at issue would result in undue loss to it and undue gain to its competitors for the following reasons:

• The appellant has incurred the expense and invested an enormous amount of time required to plan and prepare a winning proposal and develop the project management procedures contained in the record. If the record is disclosed then our competitors would have a gain to which they are not entitled because they could simply copy the format of the proposal and the procedures contained in the record.
• The appellant’s competitors would have the template of a winning proposal with no cost to themselves. Thus, the appellant’s competitors would be able to offer their service at a lower price and they will be assisted by the fact that they would not have to put in the same time, effort or resources into preparing a proposal or planning how best to provide the service.
• Disclosure of the appellant’s methods and procedures would result in undue gain to competitors because they will be able to copy, at no cost to themselves, the appellant’s methods and procedures.

[39]  Finally, the appellant argues that disclosure of the records at issue could reasonably be expected to result in similar information no longer being supplied to the town where it would be in the public interest that this information continues to be supplied. It submits:

• If the record is made public, it will result in fewer responses to the town’s requests for proposals by quality firms. Firms like the appellant will be reluctant to respond to the town’s future requests for proposals and do business with the town because the disadvantage of disclosure will far outweigh any benefits. It is in the public interest that as many firms as possible respond to the town’s RFP’s processes so that the firm with the best combination of price and quality may be selected for the project.
• If fewer responses are made to the town’s RFP’s then the pool of cost effective, quality service providers willing to respond will shrink and there is an increased likelihood of such contracts being performed by more expensive and less qualified firms.

[40]  The town submits that the appellant has not provided detailed and convincing evidence of the harms in section 10(1) and “…in view of the specific nature of the RFP and the third party’s submission, the Town does not feel that the third party’s competitive position is likely to be harmed in any future bidding process.” The town also disputes the appellant’s position that disclosure of the proposal would affect the number of companies choosing to respond to future RFP processes. The town states:

There is no evidence to suggest that companies could reasonably be expected to withdraw from the bidding process for such contracts as a result of the disclosure of the records at issue, as no evidence has been presented to demonstrate such undue loss or gain.

[41]  The original requester submits that, other than the appellant, there were three other bidders that responded to the RFP that was the subject of his request, and none of these other bidders opposed the town’s decision to disclose records pertaining to their RFP submissions.

[42]  The original requester also submits that the terms of the RFP, cited earlier by the town, informed the appellant that any submission made in response to the town’s RFP could be potentially disclosed unless otherwise identified as confidential. Finally, the original requester submits that the appellant did not provide sufficiently detailed and convincing evidence of harm.

Finding

[43]  I find that the appellant has not provided the necessary detailed and convincing evidence that disclosure of its proposal documents in Records 1 and 2 could reasonably be expected to result in similar information no longer being supplied to the town where it is in the public interest that such information continues to be supplied. I find the town and the original requester’s submissions on the likelihood of this harm occurring to be compelling. The other bidders to the town’s RFP disclosed their information in response to the request and did not raise the same issues about responding to the town’s future RFP’s. I find that the appellant has not provided detailed and convincing evidence that other companies would be reluctant, on the basis of the disclosure in this appeal, to participate in future procurement processes. I find it more likely that companies that wish to do business with the town and to be successful proponents will participate in the town’s RFP process with full knowledge of the town’s procurement policies and responsibilities of transparency under the Act . Accordingly, I find that section 10(1)(b) does not apply to the information at issue.

[44]  The appellant’s arguments supporting its position of the harms in sections 10(1)(a) and (c) are twofold. The appellant argues that disclosure will result in harm to its competitive position and undue gain to its competitors because its competitors will gain insight in to the appellant’s successful proposal structure and drafting. Secondly, disclosure of its proposal would allow the appellant’s competitors to gain insight into the methodology and approach to the project management service it intends to provide to the town.

[45]  Past decisions of this office have considered similar arguments raised by parties that disclosure of their proposal or bid document would disclose the “successful template” to their competitors. Senior Adjudicator Frank DeVries considered this argument in Order MO-2151 and stated:

The affected party also identifies its concern that the disclosure of the form and structure of the proposal will allow others to use their successful proposal as a “template”. I recently reviewed a similar argument in Order PO-2478. In that case the arguments were put forward by an affected party and the Ministry of Energy in respect of a proposal received by the Ministry, and in which the exemption in section 17(1)(a) and (c) of the Freedom of Information and Protection of Privacy Act, (which is similar to section 10(1) (a) and (c) of the Act ) was raised. After reviewing the argument, I stated:

In general, I do not accept the position of the Ministry and affected party concerning the harms which could reasonably be expected to follow the disclosure of the record simply on the basis that the disclosure of the “form and structure” of bid would result in the identified harms under sections 17(1) (a) and (c), as it would allow competitors to use the information contained in the successful bid to tailor future bids. In a recent Order, Assistant Commissioner Beamish addressed similar arguments regarding the possibility that disclosure of a proposal would result in the identified harms. In Order PO-2435, Assistant Commissioner Beamish made the following statement:

The fact that a consultant working for the government may be subject to a more competitive bidding process for future contracts does not, in and of itself, significantly prejudice their competitive position or result in undue loss to them.

I accept the position taken by the Assistant Commissioner. In my view the arguments put forward by the Ministry and affected party regarding their concerns that disclosure of the “form and structure” of the bid, or its general format or layout, will allow competitors to modify their approach to preparing proposals in the future would not, in itself, result in the harms identified in either section 17(1)(a) or (c).

I adopt the approach I took in Order PO-2478 and apply it to the circumstances of this appeal. On that basis, I am not satisfied that the disclosure of general information contained in the proposal which discloses the “form and structure” of the proposal could reasonably be expected to prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization.

[46]  I adopt the approach of the Senior Adjudicator in the present appeal. The appellant has not established that disclosure of its proposal could reasonably be expected to result in prejudice to its competitive position or undue gain to its competitors. Besides its general argument that competitors will be able to use its proposal to draft their future proposals, the appellant has not provided me with detailed and convincing evidence that disclosure of its proposal, and in particular its form or structure, would result in the harms set out in sections 10(1)(a) and (c). Furthermore, on my review of the appellant’s proposal, it is not evident to me what about the format of the appellant’s proposal could be used by competitors to the appellant’s detriment in future RFP process.

[47]  Finally, I have reviewed the appellant’s proposal and the financial information in Record 2 in order to determine if the disclosure of any of this commercial information supplied by the appellant to the town could reasonably be expected to result in harm to the appellant’s competitive position or undue gain to its competitors. The appellant’s arguments focus on the fact that the competitors will gain insight into the appellant’s project management methodology that the appellant has developed through time, expense and effort. I find that the appellant has not provided detailed and convincing evidence that the disclosure of its proposal could reasonably be expected to prejudice its competitive position or result in undue gain to its competitors. I assume that the other bidders to the town’s RFP also provide project management services. The appellant has not established how its strategies and approaches are unique or differ from their competitors in such a way that disclosure of this information will result in the harms in section 10(1) (a) or (c).

[48]  On the other hand, I am prepared to withhold the information in the Schedule of Personnel and Hourly rates in Records 1 and 2. A number of decisions have considered the application of section 17(1) (the provincial equivalent to section 10(1)) to unit pricing information, and have concluded that disclosure of such information could reasonably be expected to prejudice the competitive position of an affected party. A reasonable expectation of prejudice to a competitive position has been found in cases where information relating to pricing, material variations and bid breakdowns was contained in the records. [18] I accept the appellant’s submission that disclosure of this information could reasonably be expected to prejudice the appellant’s competitive position or cause undue loss to the appellant because its competitors can use the information in the hourly rates and cost breakdown to underbid the appellant in future RFP processes. I find that the information in the records and the appellant’s representations establish the harms in section 10(1)(a) and (c) to this financial information. Accordingly, as I have found that all three parts of the test have been met for this information, this information is exempt under section 10(1)  of the Act .

ORDER:

1. I allow the appeal in part and find that the Schedule of Personnel and Hourly Rates in both Records 1 and 2 to be exempt from disclosure under section 10(1)  of the Act .
2. I order the town to disclose Records 1, 2 and 3, with the exception of the Schedule of Personnel and Hourly Rates in Records 1 and 2, to the requester by providing him with a copy of these records by November 5, 2015 but not before October 31, 2015.

Original Signed by:		September 30, 2015
Stephanie Haly
Adjudicator