Case number: 170374

Whether EirGrid was justified in refusing to grant access to records in full or in part relating to a new 110 kV line between proposed electricity substations in Laois and Kilkenny and various interactions between EirGrid and Mouchel, (the consultant on the project) on the basis of sections 30, 35, 36 and 37 of the FOI Act

03/01/2018

Background

On 25 April 1017, the applicant sought a copy of records relating to a new 110 kV line between the proposed electricity substations at Coolnabacky, County Laois and Ballyragget, County Kilkenny. He requested copies of various related documents including the relevant contract and tender documents exchanged between EirGrid and Mouchel. EirGrid identified six relevant records, four of which it released in part and two which it withheld. It relied on sections 35 (confidential information), 36 (commercially sensitive information) and 37 (personal information) of the FOI Act to refuse to grant access to the records in full.

The applicant sought an internal review on 2 June 2017. He indicated that he objected to the decision to withhold access to records in part or in full and said that he believed that additional records should exist relating to his request. EirGrid's internal review decision identified 14 relevant records. It cited sections 35, 36 and 37 in its decision to refuse to grant access to nine records in part (Records 1, 2, 7-10 and 12-14) and four records in full (Records 3-6). The remaining record (Record 11) was released in full.

The applicant applied to this Office for a review of EirGrid's decision on 24 July 2017. In correspondence with this Office, the applicant indicated that he was of the view that records containing a more detailed breakdown of the project costs should exist. EirGrid subsequently indicated that it had located an additional record (Record 15), which contained further cost details. It stated that it was willing to release Record 15 in part and relied on sections 30(1)(c), 35 and 36 of the Act to withhold the remainder of the record. Ms Sandra Murdiff of this Office contacted the applicant and informed him of EirGrid's position on Record 15 and of her view that it was justified in refusing to grant access in full. She invited the applicant to comment but he chose not to do so.

I have decided to bring this review to a close by way of a formal binding decision. In conducting this review, I have had regard to the correspondence between EirGrid and the applicant as set out above. I have also had regard to the communications between this Office and both the applicant and EirGrid, as well as the contents of the records concerned.

Scope of Review

The records at issue in this case concern a new 110kV electricity line connecting two substations in Laois and Kilkenny. Mouchel is acting as a consultant to EirGrid in respect of the project. The applicant sought access to the following records:


1. The contract and/or terms of engagement between EirGrid and Mouchel
2. All tender documents and associated correspondence submitted by Mouchel to EirGrid
3. EirGrid's decision to engage Mouchel, including all records which informed that decision
4. Records describing the total cost of the project, including any breakdown of costs

EirGrid's internal review decision identified 14 records relating to the various parts of his request, as follows:

1. Records 1 & 2 - Framework Agreement and Purchase Order - released in part
2. Records 3-5 - Tender document, appendices and email - withheld
3. Records 6-8 - Tender Evaluation Documents - Record 6 withheld, 7 & 8 released in part
4. Records 9, 10, 12-14 - Various signed Agreements, requests for approval and relevant meeting minutes - released in part

As noted above, Record 15 relates to part 4 of the applicant's request.

Personal Information

Section 2 of the FOI Act provides that in a case where the individual is or was a service provider, the name of the individual or information relating to the service or the terms of the contract or anything written or recorded in any form by the individual in the course of and for the purposes of the provision of the service is not exempt under section 37 of the Act. However, in the circumstances of this case, I am satisfied that details of Mouchel's staff members' CVs do not come under this exception. I note that Ms Murdiff contacted the applicant to clarify whether he sought parts of records relating to Mouchel staff members, including CVs, which had been withheld under section 37 of the Act. He confirmed that he was not seeking this information.  Accordingly, the personal information contained in Records 1 (pages 101-107 and 157-185 of the pdf version), 3 (pages 12-14, 22-28 and 33-34), 4 (Appendix 4G) and 9 will not be considered as part of this review.

I note that EirGrid has stated that it is happy to release the names of EirGrid employees if this is "information that should not have been withheld". It redacted the names and signatures of its own staff (pages 23 and 195) and details including names, signatures, titles and day rates of Mouchel's staff (pages 57, 59, 190) from Record 1. Section 2 of the FOI Act provides that in a case where the individual holds or held a position as a member of the staff of an FOI body, the name of the individual or information relating to the office or position or its functions does not come under the definition of personal information.

These details are not discretely contained in the records and are shown with other information which was withheld on the basis of section 36. Accordingly I will consider these parts of Record 1 under section 36 below.

EirGrid stated in a schedule in relation to its internal review decision that the remainder of record 14 is outside scope as it does not relate to the project concerned. Having examined the record I can confirm that this is the case. Accordingly, the remainder of Record 14 will not be considered in this review.
Scope
This review is solely concerned with whether EirGrid was justified in its decision to refuse to grant access in full or in part to Records 1-8, 10, 12-13 and 15 on the basis of sections 30, 35 and 36 of the FOI Act.

Preliminary Matters

Although I am obliged to give reasons for my decision, section 25(3) of the FOI Act requires me to take all reasonable precautions in the course of a review to prevent disclosure of information contained in an exempt record. This means that the extent to which I can describe the contents of the records is limited.

It is important to note that when a record is released under the FOI Act, it effectively amounts to disclosure to the world at large, as the Act places no restrictions on the type or extent of the subsequent use to which a record may be put.

Analysis and Findings

Section 30(1)(c)
Section 30(1)(c) is one of the exemptions claimed by EirGrid to refuse access to information in Record 15. This is a discretionary exemption which allows an FOI body to refuse a request if access to the record could reasonably be expected to “disclose positions taken, or to be taken, or plans, procedures, criteria or instructions used or followed, or to be used or followed, for the purpose of any negotiations carried on or being, or to be, carried on" by an FOI body.

Section 30(1)(c) does not require any expectation of harm; it applies where the granting of access can reasonably be expected to disclose certain information. An FOI body relying on this exemption must show to the Commissioner that release of the record could reasonably be expected to disclose positions taken (or to be taken), etc., for the purpose of any negotiations.

EirGrid stated that the information in the record was provided to it by ESB Networks, and included details of estimated payments relating to certain aspects of the project (at lines 25 and 36-38). It also stated that release of this information would reveal the amounts it anticipated paying for items which had not yet been the subject of negotiations. Having examined the record concerned I accept that release of this information would disclose positions to be taken by ESB Networks for the purpose of forthcoming negotiations. Accordingly, section 30(1)(c) of the Act applies to this record.

Section 30(1)(c) is subject to a public interest balancing test. If release of the records cannot harm current or future negotiations or cause any other harm, then the public interest in openness in the workings of public bodies and expenditure of public funds means that, in the absence of any other applicable exemption, the records should be released. On the other hand, if access to records which disclose positions to be taken could reasonably be expected to prejudice current or future negotiations or cause some other harm, then this is a matter which must weigh heavily in the application of the public interest balancing test.

The FOI Act itself recognises a public interest in ensuring the openness and accountability of public bodies, regarding how they conduct their business. However, where the release of the record discloses positions taken for the purposes of negotiations which could reasonably be expected to prejudice current or future negotiations or cause some other harm, then this is a public interest factor weighing in favour of refusing the request.

In relation to the information to which section 30(1)(c) has been found to apply, EirGrid has identified a potential impact on future negotiations. I am satisfied that the public interest is served to some extent by the information which has been released already in this case and I find that, on balance, the public interest would not be better served by release of the information to which section 30(1)(c) applies. Therefore, I find that EirGrid was justified in its refusal to grant access to the information at lines 25 and 36-38 in Record 15 on the basis of section 30(1)(c) of the FOI Act.

Section 35(1)(a) - Information Provided in Confidence
Records 6-8 contain an evaluation of Mouchel and the remaining unsuccessful tenderers. EirGrid argued that details of unsuccessful tenderers were confidential and refused to grant access to this information on the basis of section 35 of the FOI Act.

Section 35(1)(a) of the FOI Act provides for the mandatory refusal of a record containing information:

  • given to an FOI body in confidence, and
  • on the understanding that it would be treated by it as confidential, and
  • in the opinion of the head, its disclosure would be likely to prejudice the giving to the body of further similar information from the same person or other persons, and
  • it is of importance to the body that such further similar information as aforesaid should continue to be given to the body.

Each of the four criteria must be satisfied for this exemption to apply. Section 35(2) states that the exemptions at section 35(1) do not apply to records prepared by a member of staff of or contractor to a public body unless the duty of confidentiality is owed to a person other than an employee of, or contractor to, a public body. In this case, while the records were prepared by EirGrid staff, the information relates to third party companies who were not successful in their tender bids.

The Commissioner has found in previous cases that unsuccessful tender information which is commercially sensitive generally remains confidential after the award of a contract. In Case 98188 the Commissioner stated that there are two crucial differences between successful and unsuccessful tenderers; the first difference being in relation to their expectations of confidentiality and the second relating to the benefits that are gained from tendering. He found that where an offer has been rejected, no vendor/purchaser relationship exists, and no public funds are involved. He accepted that there was a mutual understanding of confidence that the FOI body in that case was obliged to observe.

Having examined the records, I am satisfied that the information concerned, including prices, was provided to EirGrid by prospective tenderers in confidence on the understanding that it would be treated as confidential. I am also of the view that disclosure of this type of information in these circumstances would be likely to prejudice the provision of similar information in the future, insofar as companies intending to place a bid could be likely to provide less information with their tender. I also consider it to be important that EirGrid receive as much information as possible so that tenders can be properly evaluated and the best value for money achieved.

Accordingly, I find that section 35(1)(a) applies to the information in Records 6-8 relating to the unsuccessful tenderers.

Public Interest
I must also consider section 35(3) which provides that section 35(1)(a) does not apply if the public interest would, on balance, be better served by granting rather than by refusing to grant the request.
On the one hand, section 35(1)(a) itself reflects the public interest in the proper preservation of confidence. On the other hand, section 11(3) of the FOI Act requires public bodies to have regard to the need to achieve greater openness in their activities and inform scrutiny, discussion, comment and review by the public of their activities. I consider this to be relevant here, in that it is a public interest which equates with "a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law " as referred to by Macken J. in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v The Information Commissioner 1 I.R. 729, [2011] IESC 26.

After careful consideration, I believe that the public interest would not be better served by granting this FOI request. I recognise that there is a public interest in openness and transparency around EirGrid's activities, but I consider that this has been served to some extent by the records released to the applicant in part. While the FOI Act was designed to increase openness and accountability in the way in which public bodies conduct their operations; generally speaking, it was not designed as a means to open up the operations of private enterprises to scrutiny. On balance, I believe that in the circumstances of this case, the public interest in such companies being able to carry on their work without such confidential information being released outweighs any remaining public interest in openness and transparency around EirGrid's activities.

Accordingly, I find that the Department is justified in refusing to grant access to information contained in Records 6-8 relating to unsuccessful tenderers under section 35(1)(a) of the FOI Act.

Section 36 - Commercial Sensitivity
EirGrid relied on section 36 to refuse to grant access to the remainder of information in the records at issue, most of which relates to Mouchel, who was the successful tenderer.
Record 1 comprises details of EirGrid's request for tender, as well as Mouchel's tender documents, which include proposed project details and procedures and cost information. Record 2 is a purchase order from EirGrid to Mouchel. Record 3 is Mouchel's submission to a mini tender competition , containing details of Mouchel's proposed approach and methodology. Record 4 is a range of appendices to the tender, including staff details, prices, details of internal processes and audits. Record 5 is a cover email asking tender-specific questions. Records 6-8 are evaluation documents, comparing details of the tenders of all companies who applied. Records 10, 12 and 13 are internal EirGrid documents recommending/setting out approval of the project, which contain pricing details. Record 15 is a spreadsheet setting out a cost estimate for all aspects of the project.
While EirGrid failed to indicate what subsection of section 36 it was relying on in its decisions, in its submission to this Office, it concentrated on section 36(1)(b). Section 36(1)(b) provides, insofar as is relevant:

"Subject to subsection (2), a head shall refuse to grant an FOI request if the record concerned contains –
... (b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation,".

However, section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than refusing the request (section 36(3) refers).

The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The harm test in the first part of subsection (1)(b) is that disclosure of the information could reasonably be expected to result in material financial loss or gain. I take the view that the test to be applied in this regard is whether the decision maker's expectation is reasonable. The harm test in the second part of subsection (1)(b) is whether disclosure of the information "could prejudice the competitive position" of the person concerned. The standard of proof necessary to meet this test is considerably lower than the standard to meet the test of "could reasonably be expected to" in the first part of subsection 36(1)(b).

The applicant is of the view that the records should be released, as they relate to a public tender process. He stated that Eirgrid holds a monopoly position for the provision of services such as the ones provided in the Consultancy Framework Agreement. In essence, he argued that as EirGrid had no competitors, no-one could benefit from the release of the information to EirGrid's detriment.

During the course of this review, EirGrid indicated that it was willing to release the gross figure of the winning tender, i.e. the monetary amount which had been redacted from Record 2.

In essence, EirGrid argued that release of the remaining records at issue would result in a material financial loss for EirGrid, ESB Networks and Mouchel. It indicated that it had agreed to favourable terms for Mouchel following protracted negotiations and that release of this information could encourage future tenderers to seek better terms, which would result in a material loss to EirGrid. It stated that release of details from Record 15 would reveal standard cost allocations by ESB Networks, which would essentially reveal to prospective contractors the minimum price ESB Networks was willing to pay for the individual aspects of the project, enabling them to use that as a starting point for negotiations, thereby driving prices up. It also contended that release of details of Mouchel's particular processes, team composition, individualised pricing information and the technical content of their tender documents would allow their competitors to use this information to bolster their own proposals.

Having reviewed the records at issue, I am of the view that the records contain a level of detail about Mouchel's procedures and processes which is over and above the material which one could find publicly. I am prepared to accept that it would be possible for potential competitors to use this information to their advantage, thereby prejudicing Mouchel's competitive position. I also accept that disclosure of ESB Network's standard costing information and EirGrid's negotiated pricing with Mouchel could result in a material financial loss. I am therefore willing to proceed on the basis that section 36(1)(b) applies to the information withheld from release in Records 1, 3-8, 10, 12-13 and 15. This finding is subject to sections 36(2) and (3), which I shall consider below.

Section 36(2)
Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arises in this case.

Section 36(3)
Section 36(3) of the FOI Act requires me to consider whether, on balance, the public interest would be better served by granting than by refusing the request.

Section 36(1) itself reflects the public interest in protecting commercially sensitive information. I recognise that there is a legitimate public interest in entities being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result.

On the other hand, the FOI Act recognises, both in its long title and in its individual provisions that there is a significant public interest in government being open and accountable. Section 11(3) of the FOI Act provides that public bodies shall, in performing any function under the FOI Act, have regard to a number of matters, including the need to achieve greater openness in their activities and to promote adherence by them to the principles of transparency in government and public affairs.

EirGrid's decisions gave no indication as to what public interest factors were weighed in its consideration of section 36(3). In its submission to this Office, EirGrid argued that the public interest favours efficient and cost-effective procurement by EirGrid. It contended that release of tender submissions and contract terms would weaken EirGrid's negotiating position. It did not identify any public interest factors in favour of release.

The applicant is of the view that it is in the public interest to understand how tenders for public projects such as this one are awarded, to know the terms of public contracts and to be aware of the costs of such projects. He also argued that transparency in the public tender process was in the public interest and that information regarding contracts awarded should be made available to the public. Similarly, he was of the view that it was in the public interest to understand the cost of the project and how that cost has been reached.

I take the approach that in attempting to strike the balance between openness on the one hand and the need to protect commercially sensitive information on the other, it is legitimate to consider two things: the positive public interest which is served by disclosure and the harm that might be caused by disclosure.

In considering the public interest under section 36(3), I note once again that there is a strong public interest in openness and accountability with respect to the expenditure of public funds. However, this public interest is served to some degree by the records already released by EirGrid. On the other hand, the provisions of section 36 itself reflect the public interest in protecting commercially sensitive information.

The purpose of the public interest test is to strike a balance between competing interests insofar as they are relevant. As noted in previous decisions, the Commissioner takes the view that the FOI Act was designed to increase openness and accountability in the way in which public bodies conduct their operations; generally speaking, it was not designed as a means to open up the operations of private enterprises to scrutiny. In this case, the withheld parts of the records relating to Mouchel include detailed information about its "know how", its daily rate charges, and other charging structures, as well as its strategy for managing the project and the expertise of individuals in its team.

Taking the above into account, I am of the view that, on balance, the public interest would be better served by refusing access to the records sought. Furthermore, I consider that it is in the public interest that public bodies be able to negotiate and to achieve value for money when expending public funds. Accordingly, I find that EirGrid was justified in refusing access to the relevant information in Records 1, 3-8, 10, 12-13 and 15 in full or in part on the basis of section 36 of the FOI Act.

However, as acknowledged by EirGrid, the final price of the winning tender is generally not considered to be commercially sensitive once the contract has been awarded. I see no reason why that should not be the case here. Therefore, I find that section 36 does not apply to this information. Accordingly, I direct the release of Record 2 to the applicant.

I also direct EirGrid to release Record 15 in part to the applicant if this has not already been done, as it indicated it was willing to do so.

Decision

Having carried out a review under section 22(2) of the Freedom of Information Act 2014, I hereby vary EirGrid's decision as follows: I affirm its decision to refuse to grant access to Records 1, 3-8, 10, 12-13 and 15 in full or in part on the basis of sections 30(1)(c), 35(1)(a) and 36(1)(b). I annul its decision to refuse access to Records 2 in full and direct its release in full to the applicant. I also direct the release of lines 32, 33 and 34 of Record 15, if this has not already been done.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

 

Elizabeth Dolan
Senior Investigator