ORDER MO-3367

Appeal MA15-428

Regional Municipality of Durham

October 24, 2016

Summary: The appeal arises out of a request to the Regional Municipality of Durham for a named company’s winning tender submission including any related evaluation materials. Ultimately, the municipality refused to disclose two reference sheets regarding past work completed relying on the mandatory exemption at section 10(1) (third party information) and the discretionary exemption at 11(c) (economic or other interests) of the Act. The appellant also claimed that the municipality did not conduct a reasonable search. This order finds that the exemptions do not apply and the two reference sheets should be disclosed. Accordingly, the appeal is allowed. In addition, this order finds that the municipality conducted a reasonable search.

Statutes Considered: Municipal Freedom of Information and Protection of Privacy Act , R.S.O. 1990, c. M.56 , as amended: sections 10(1)(b), 11(c), 16 and 17.

Orders and Investigation Reports Considered: P-1190, MO-1888.

BACKGROUND:

[1]  The Regional Municipality of Durham (the municipality) received a request under the Municipal Freedom of Information and Protection of Privacy Act  (the Act ) for a named company’s winning tender submission and any related evaluation materials.

[2]  The municipality located responsive records and granted partial access to the winning “Form of Tender for Contract” and denied access in full to two “Reference Sheets” pursuant to sections 10(1)(b) (third party information) and 11(c) (economic and other interests).

[3]  The requester, now the appellant, appealed the municipality’s decision.

[4]  During mediation, the municipality advised that it had not notified the named company (the affected party) whose information was contained in the winning tender and reference sheets. The municipality also advised that it was withdrawing its claim that section 11(c) applied to portions of the tender. The municipality confirmed that it continued to claim section 10(1)(b) applies to portions of the tender and that sections 10(1)(b) and 11(c) apply to the reference sheets in their entirety.

[5]  During mediation, the appellant stated that he no longer sought access to the withheld portions of the tender but continues to seek the disclosure of the information contained on the reference sheets. Additionally, the appellant took the position that other evaluation materials should be in the custody or control of the municipality and therefore, that additional records responsive to the request should exist. Therefore, reasonable search was added as an issue to the appeal.

[6]  Also, during mediation, the municipality agreed to conduct another search for responsive records however, no other responsive records were located. Accordingly, the issue of reasonable search remained at issue.

[7]  As a mediated resolution could not be reached, the appeal was transferred to the adjudication stage of the appeal for an adjudicator to conduct an inquiry. During the inquiry, I sought representations from the municipality, the appellant and the affected party. I received representations from the municipality and the appellant. The affected party did not provide representations in this appeal. In his representations, the appellant referred to section 16 of the Act and therefore public interest override was added to the appeal.

[8]  In this order, I allow the appeal and find the records are not exempt under section 10(1)(b) or 11(c). I further find the municipalities search was reasonable.

RECORDS

[9]  The two records at issue in this appeal are referred to by the municipality as “reference sheets.” They each consist of 1-page references submitted by the affected party with its tender application. The reference sheets have been completed by third parties and relate to prior work done by the affected party for those parties.

ISSUES:

1. Does the mandatory exemption at section 10(1)(b) apply to the records?
2. Does the discretionary exemption at section 11(c) apply to the records?
3. Is there a compelling public interest in disclosure of the records that clearly outweighs the purpose of the section 10 and 11 exemptions?
4. Did the institution conduct a reasonable search for records?

ISSUE A:  Does the mandatory exemption at section 10(1)(b) apply to the records?

[10]  Section 10(1)(b) states:

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,

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.

[11]  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]

[12]  For a record to qualify for exemption under section 10(1), the institution and/or the third party 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

[13]  The types of information listed in section 10(1) have been discussed in prior orders:

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]

Financial information refers to information relating to money and its use or distribution and must contain or refer to specific data. Examples of this type of information include cost accounting methods, pricing practices, profit and loss data, overhead and operating costs. ^[5]

[14]  In its representations, the municipality states that the information on the reference sheets is commercial and financial information. The sheets reveal specific information about the affected party’s contract with a third party including the cost of the contract and answers to specific questions about the affected party’s practices, quality of work and personnel in completion of the third party’s contract.

[15]  The records completed part of a tender package where the municipality required references regarding past work. There is clearly commercial information in the records, specifically the monetary amount of the previous contract with the third party. Also, the information in the records is the type of information routinely found to qualify as “commercial information” and/or “financial information” for the purposes of part one of the section 10(1) test. I therefore find that part one of the test has been satisfied.

Part 2: supplied in confidence

Supplied

[16]  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. ^[6]

[17]  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. ^[7]

[18]  In its representations, the municipality states that the records were directly supplied to it by the affected party as part of a required component of a tender. The municipality states that the purpose of the records is to assist it in determining whether or not a tender is compliant and can be chosen. The municipality submits that the information in the record is immutable as the affected party supplied the information and the municipality did not change it. The municipality confirmed that in no way did it negotiate the information, it was simply supplied.

[19]  The appellant did not comment on the issue of “supplied” in his representations.

[20]  The affected party did not make representations despite being invited to do so.

[21]  I find that the record was supplied to the municipality by the affected party who submitted the tender. The record is not a document that can be negotiated with the municipality and instead is a document supplied to the municipality to assist in its exercise of due diligence.

In confidence

[22]  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. ^[8]

[23]  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 municipality on the basis that it was confidential and that it was to be kept confidential
• treated consistently by the affected 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 ^[9]

[24]  In its representations, the municipality refers to Purchasing By-law #68-2000 which it states considers the information that will be released during a tender process. Section 17 of that by-law states as follows:

17.0 PROHIBITIONS

17.1 Confidentiality

No employee, or any appointed or elected official, shall divulge the prices paid by or quoted to the Region for goods, works and/or services unless Counsel may otherwise direct, except that the total price in the case of public tenders or the total bid prices in the case of quotations may be revealed, as well as any prices included in the public reports to Committee and Council. [emphasis in original]

[25]  The municipality states that it released the information that was public pursuant to the by-law, but the records were not considered documents to be made public under the by-law and they were therefore kept confidential. The municipality states that it has no knowledge how the affected party treated the information prior to providing it to the municipality and deferred to the affected party on that issue. The municipality states that it has a duty of good faith in preserving the confidential nature of the information contained in the record.

[26]  As mentioned, the affected party did not make representations in this appeal even after being informed that the municipality took the position that the affected party was in the best position to speak to confidentiality. Therefore, I do not have any submissions on how the affected party treated the information prior to providing the reference sheets to the municipality.

[27]  In his representations, the appellant states that each of the projects referred to in the records would have been published in the Daily Commercial News under the Construction Lien Act after substantial performance.

Analysis and Findings:

[28]  A review of the Construction Lien Act indeed confirms that under 32(1)4, the contractor shall publish the certificate regarding the substantial performance one time in a construction trade newspaper. However, there is nothing in that Act  that would require reference sheets like the ones in dispute to be published in a construction trade newspaper. However, the original tender for the job relating to the references, at one point, would have been published in the Daily Commercial News including the amount of the contract.

[29]  By-law #68-2000 is “a by-law to define the purchasing and tendering policies and procedures covering the acquisition of goods, services and construction projects by the Regional Municipality of Durham.” However, when examining section 17.1, it states that the municipality shall not “divulge the prices paid by or quoted to the Region for goods, works and/or services.” [emphasis added] Since the records in question involve evidence of work done by the affected party for a third party, I find that they do not qualify as evidence of a price paid by the municipality for goods works or services and do not qualify as a price “quoted” to the municipality for goods, works or services. Therefore, section 17.1 of the by-law does not assist in my determination of whether the records were communicated to the municipality on the basis that they were and remain confidential.

[30]  In any event, even if I found that the by-law applied to the records in dispute, it relates to divulging the prices paid by or quoted to the Region and does not refer to other information in the records.

[31]  Also, since the affected party made no representations, I have no information to support an expectation of confidentially. In examining the records, there is no evidence of any assurances on the form stating that the information in the records will remain confidential. Further, the records are essentially a review of prior jobs completed and I am not satisfied that there existed a reasonable expectation of confidentiality in the documents. Therefore, I cannot find that the information in the records were provided to the municipality on the basis that they remain confidential.

[32]  Given my finding that the record was not provided to the municipality with an expectation that the document remains confidential, and given that each part of the three-part test must be met, the exemption under section 10(1) cannot apply.

ISSUE B:  ECONOMIC AND OTHER INTERESTS

[33]  The municipality submits that the discretionary exemption at section 11(c) applies in the circumstances of this appeal. That section states:

A head may refuse to disclose a record that contains,

information whose disclosure could reasonably be expected to prejudice the economic interests of an institution or the competitive position of an institution;

[34]  The purpose of section 11 is to protect certain economic interests of institutions. Generally, it is intended to exempt commercially valuable information of institutions to the same extent that similar information of non-governmental organizations is protected under the Act . ^[10]

[35]  For section 11(c) to apply, the institution 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. ^[11]

[36]  The failure to provide detailed and convincing evidence will not necessarily defeat the institution’s claim for exemption where harm can be inferred from the surrounding circumstances. However, parties should not assume that the harms under section 11 are self-evident or can be proven simply by repeating the description of harms in the Act . ^[12]

[37]  The fact that disclosure of contractual arrangements may subject individuals or corporations doing business with an institution to a more competitive bidding process does not prejudice the institution’s economic interests, competitive position or financial interests. ^[13]

[38]  The purpose of section 11(c) is to protect the ability of institutions to earn money in the marketplace. This exemption recognizes that institutions sometimes have economic interests and compete for business with other public or private sector entities, and it provides discretion to refuse disclosure of information on the basis of a reasonable expectation of prejudice to these economic interests or competitive positions. ^[14]

[39]  In its representations, the municipality submits that the type of information in the record has been typically supplied to it on almost all tenders and has been “extremely useful in getting information about how a third party performs its obligations under a contract and ensures that the third party has the ability, staffing and capabilities to perform the functions of the contract.” It suggests that if the information in the record is revealed, “other external parties who do not want their project costs and issues revealed to the public will refuse to provide the third party with the permission to use them as a reference.” The municipality states that if it no longer received these references, it would no longer be able to have candid conversations with others who have used the bidder’s services and would lack the required information to decide whether a company fits the needs for its project. The municipality states that the information received forms part of its evaluation of third party Tenders. With this information, the municipality states that it will know if the third party has completed similar sized and priced projects, if the third party completed same in the usual timelines and how their work has held up over time. The municipality states that the third parties who complete the reference forms, allow the affected party to supply the municipality with the information in good conscience knowing that it will keep this information confidential.

[40]  The municipality submits that if it is obligated to reveal this information then in the future those external parties will no longer allow the third party to submit this information in their tender. It is suggested that the municipality would then lose access to critical information it relies upon to make sound and informed business decisions. The municipality states that this would prejudice their economic interests and may allow a third party that has the lowest bid amount, but no requisite experience, to win a bid at the detriment to the municipality. It is also suggested that releasing the record also may prejudice the municipality’s economic interest by creating a situation where a perfectly acceptable third party cannot bid on a project because it cannot get the requisite releases from external parties and as such a potential lower bid by a good contractor is lost to the municipality’s economic disadvantage.

[41]  The municipality also refers to its “harms” argument under section 10(1) in its representations to support its position concerning section 11(c).

[42]  With respect to section 10(1), it states:

The information is extremely useful in obtaining information about how a third party performs its obligations under a contract and ensures the third party has the ability, staffing and capabilities to perform the functions of the contract. There have been instances where bidders have been eliminated based on the information provided in these Records. The taxpayers of the Region have a right to assume that the Region is, to the best of their abilities, vetting bidding parties to ensure that projects are timely and cost effective. Reviewing documents such as the Records is one of the Region's primary mechanisms for ensuring such. Should this information start to be released, external parties may begin to tell third parties bidding on Regional projects that they do not wish to be used as a reference. This may make it impossible for fully qualified bidders to properly bid on a project and thus be eliminated from consideration. The Region has an interest in both getting the reference information and in ensuring that all qualified bidders who wish to do so, have an opportunity to bid on relevant projects.

[43]  In the appellant’s representations regarding the exemption under section 11(c), he submitted that similar information found in the record is routinely published in the industry newspaper, “Daily Commercial News.” The appellant submits that they are not trying to harm or defame a party but only intend to trace their own flaws in the bidding process to better help them improve in their future bidding for business with the municipality. The appellant submits that it appears that the municipality favoured the awarded contractor and that it was unfair in the evaluation of their bid.

Analysis and Findings

[44]  Having carefully reviewed the contents of the records, I am not persuaded that disclosing this information could reasonably be expected to result in the harm outlined in section 11 (c) of the Act .

[45]  The municipality has denied access to the records on the basis that the exemption in section 11 (c) of the Act  applies to them in their entirety. When an institution refuses access to a record, section 42  of the Act  states that the burden of proving that the record or part of the record falls within one of the specified exemption in the Act  lies upon the institution. Therefore, the onus of proving that the records at issue fall within the exemption in section 11(c) rests on the municipality.

[46]  It has been determined in prior orders that the purpose of section 11(c) is to protect the ability of institution to earn money in the marketplace. As articulated by Assistant Commissioner Tom Mitchinson in Order P-1190, when considering the same exemption under the Freedom of Information and Protection of Privacy Act, stated:

the purpose of section 18(1)(c) is to protect the ability of institutions such as Hydro to earn money in the market-place. This exemption recognizes that institutions sometimes have economic interests and compete for business with other public or private sector entities, and it provides discretion to refuse disclosure of information on the basis of a reasonable expectation of prejudice to these economic interests or competitive positions.

[47]  In Order MO-1888 Adjudicator Steven Faughnan dealt with a number of records contained in tender documents including a list of similar contracts completed within the last five years submitted to the institution by the affected party. Adjudicator Faughnan referred to a number of IPC orders that addressed the issue of information contained in tender documents and found that there was one unifying theme: “the decision whether to disclose information contained in a tender document must be approached in a careful way, applying the tests as developed over time by this office while appreciating the commercial realities of the tendering process and the nature of the industry in which the tender takes place.” In that order, Adjudicator Faughnan found that details of similar contracts completed by the affected party in the last five years, including contract values, name of owner, contract name, description of the project, the name of the architect/engineer and the date of completion should be released and that the section 10(1) exemption did not apply to this kind of information.

[48]  The municipality asserts that when exercising its discretion, it put its mind to whether or not to release the information and made its decision based on the perceived harms, on the fact that the requester was not asking for his own information and in consideration of the fact that the affected party did not consent to release the information.

[49]  Having carefully considered the representations submitted by the municipality, I find that it has failed to provide the requisite “detailed and convincing” evidence to establish a reasonable expectation of harm, nor does this appeal present circumstances in which harm can be reasonably inferred. On my review of the records at issue, for which the 11(c) claim is made, I note that they reveal the cost of past projects completed by the company making the tender bid. The form also contains the third party comments addressing specific questions concerning issues that arose during the past project. The forms are completed by a third party who the affected party completed work for previously.

[50]  I find that the disclosure of the information in the records could not reasonably be expected to adversely affect the ability of the municipality to continue to receive references from past jobs. I do not accept that there is a reasonable prospect that contractors would be reluctant to bid on future contracts because the information contained in their references may be released. In addition, I do not accept that third parties will be unwilling to complete these reference sheets knowing that the information may be released.

[51]  I find that it is remote to suggest that third parties will, going forward, decline to complete reference forms knowing that they will not remain confidential. Firstly, there is nothing on the present form that indicates that the information will be kept confidential yet the forms are completed. Also, the form does not indicate on it that each of the sections must be completed so if there was something on the form a third party did not want disclosed they are not compelled to complete that section. I note on the 2 reference sheets in issue that neither of the third parties filled in the date; trade; or contact name. Additionally, the form states that completing the identifying information is “optional,” and, in fact, one of the third parties chose not to complete this section.

[52]  Also, it is important to remember that a bidder likely will only provide to an institution, references which put them and their work in a positive light so that their chances of being successful in their bid is increased.

[53]  Essentially, the municipality’s argument is that by disclosing the reference sheets, in future, third parties will not be willing to provide those types of references. The municipality argues that without this information its economic interests will be prejudiced as it may no longer receive this information which it argues is important to their decision making. I agree that past references are an important factor in a municipalities’ decision making. However, I do not have sufficiently convincing evidence before me that the harm elucidated by the municipality is a realistic expectation. Further, given the nature of the document, I find that the harm cannot be reasonably inferred.

[54]  Accordingly, I find that the discretionary exemption in section 11(c) has no application to the information contained in the records at issue in this appeal.

[55]  As I have found that sections 10(1)(b) and 11(c) do not apply to the records at issue, I do not need to consider the possible application of section 16 (public interest override).

ISSUE D:  Did the institution conduct a reasonable search for records?

[56]  Where a requester claims that additional records exist beyond those identified by the institution, the issue to be decided is whether the institution has conducted a reasonable search for records as required by section 17. ^[15] If I am satisfied that the search carried out was reasonable in the circumstances, I will uphold the institution’s decision. If I am not satisfied, I may order further searches.

[57]  The Act  does not require the institution to prove with absolute certainty that further records do not exist. However, the institution must provide sufficient evidence to show that it has made a reasonable effort to identify and locate responsive records. ^[16] To be responsive, a record must be "reasonably related" to the request. ^[17]

[58]  A reasonable search is one in which an experienced employee knowledgeable in the subject matter of the request expends a reasonable effort to locate records which are reasonably related to the request. ^[18]

[59]  A further search will be ordered if the institution does not provide sufficient evidence to demonstrate that it has made a reasonable effort to identify and locate all of the responsive records within its custody or control. ^[19]

[60]  Although a requester will rarely be in a position to indicate precisely which records the institution has not identified, the requester still must provide a reasonable basis for concluding that such records exist. ^[20]

[61]  I adopt the approach taken in the above orders.

[62]  In his representations, the appellant did not address the reasonable search issue in any detail, despite his indicating that this was an issue during mediation. The only mention in his representations that might address this issue is his statement; “[t]he Region is trying to hide some information which can go against their unfair decision of award.” From the Mediator’s Report, it appears that the appellant took the positon that “other evaluation material should be in the custody and control of the municipality.”

[63]  In its representations, the municipality submits that it conducted a reasonable search. It states that it ensured that the search was conducted by an experienced employee, knowledgeable in the subject matter of the request and who expended a reasonable effort to locate the records reasonable related to the request. The municipality attached an affidavit to their representations detailing what the municipality did to ensure that its search for documents was both thorough and reasonable.

[64]  The affidavit provided by the municipality documents receiving the request and the steps taken to search for the requested records. The evidence shows that all current employees of the municipality known to be associated with the project were contacted to go through their records and that the offices, including the computers of each employee and the main project files, were searched. In addition, all files relating to the procurement file were searched, the results of which were detailed in the decision letter to the appellant dated August 26, 2016. The affidavit confirms that the affiant was advised by staff of the municipality that no records of any kind that relate to the construction project have been destroyed.

ANALYSIS AND FINDINGS:

[65]  As set out above, in appeals involving a claim that further responsive records exist, the issue to be decided is whether the municipality conducted a reasonable search for the records as required by section 17  of the Act . As mentioned, if I am satisfied that the municipality’s search for responsive records was reasonable in the circumstances, the municipality’s search will be upheld. If I am not satisfied, I may order that further searches be conducted.

[66]  In this appeal, I received no representations from the appellant regarding the municipality’s search for records save for the assertion that the municipality is trying to hide information. Taking into consideration the municipality’s representations on reasonable search, I find that the municipality has provided sufficient evidence to establish that a reasonable search was conducted for responsive records. I make this finding for a number of reasons.

[67]  First, as noted above, although an appellant will rarely be in a position to indicate precisely which records have not been identified in an institution’s response, the appellant must, nevertheless, provide a reasonable basis for concluding that such records exist. As noted, the mediator confirmed the appellant’s belief that there were further records as he indicted that the municipality was trying to hide information. In his representations, the appellant neglects to comment on this issue of reasonable search with any further detail. I find that the appellant’s suggestion during mediation that further records exist is not supported by information which would convince me that there is a reasonable basis for concluding that records should exist. Also, I find that the municipality, in their representations, has provided adequate explanations to rebut the appellant’s suggestion that further records exist.

[68]  Further, the municipality maintains that they conduced a reasonable search for requested records. In fact, I note from the Mediator’s Report, that during mediation the municipality conducted another search for records which resulted in not finding anything further.

[69]  Having reviewed the representations and evidence of the parties, I am satisfied that the municipality conducted a reasonable search for responsive records in this appeal. I am satisfied that the search was conducted by an experienced employee who expended a reasonable effort to locate records related to the request. The individual who conducted the search is the clerk and freedom of information co-ordinator for the municipality and part of this role is to search and provide records in response to requests for information under the Act .

[70]  I find that the appellant has not provided a reasonable basis for me to conclude that additional records exist. As stated above, the Act  does not require the municipality to prove with absolute certainty that further records do not exist. Accordingly, I am satisfied that the municipality provided sufficient evidence to demonstrate that they made a reasonable effort to address the appellant’s request and locate all records reasonable related to the request.

[71]  Accordingly, I uphold the municipality’s search for responsive records.

ORDER:

I order the municipality to disclose the records in their entirety to the appellant by November 29, 2016 but not before November 22, 2016.

Original Signed by:		October 24, 2016
Alec Fadel
Adjudicator