When procuring goods or services, public institutions often rely on Requests for Proposals (RFPs) to ensure a fair procurement process and to thoroughly evaluate all reasonable options before making a purchase decision. Although RFPs are also used by the private sector, they are more frequently employed by government institutions, particularly when procuring high-value goods and services.
RFPs typically require significantly more effort from public institutions compared to single-sourced contracts or merely obtaining multiple quotes informally. Additionally, when an institution issues an RFP, this can sometimes deter vendors from participating in the procurement process due to the extra work and cost involved in preparing a formal response, concerns about engaging in a “lowest price” competition, reluctance to take part in a process where terms and solutions are imposed rather than developed collaboratively, and fears that any information provided in response to the RFP could be deemed “of public interest” and released to competitors or the general public under a Freedom of Information (FOI) request.
However, from the perspective of public institutions, these vendor concerns are often superseded by the desire to ensure the procurement process is perceived as fair, free of favoritism or backroom dealings, open to all qualified vendors, evaluated by skilled assessors, transparent, and reviewable by the public.
Given the desire to ensure the procurement process is suitably transparent, while at the same time not wishing to discourage vendors from participating in the process or from providing comprehensive information in support of their proposals, questions often arise regarding the extent to which answers provided by vendors in response to an RFP should be considered “public information”. Helpfully, the Information and Privacy Commissioner of Ontario (IPCO) recently released a decision which provides guidance on the topic of disclosing information contained in RFP submissions. The decision considers the extent to which information provided by the winning proponent should be disclosed in response to an FOI request.
Order MO-4539 (City of Ottawa) decided June 28, 2024
In IPCO Order MO-4539, a requestor sought access to various documents related to an RFP for healthcare procurement services from the City of Ottawa, including the proposal of the successful RFP proponent, the contract award recommendation, the purchase order, and the letter of award.
The City located 56 pages of responsive records and decided to grant partial access.
When the successful proponent was notified of this decision as an affected third party, they objected to the disclosure of its proposal and contract, claiming these records met the “third-party information” exemption in section 10(1) of the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA).
Despite the objection of the affected third party, the City decided to grant partial access to the requestor. The requestor appealed the City’s decision to grant only partial access. Notably, the affected third party (the successful proponent) did not appeal the City’s decision, nor submit any representations in the appeal, but confirmed that it did not consent to the disclosure of the records.
During mediation, the requestor clarified that they were not pursuing access to any personal information in the records. The application of the mandatory personal privacy exemption in section 14(1) was therefore not an issue in the appeal.
In adjudication, the City revised its decision, granting additional access to the records, but maintaining some information should be withheld under the mandatory third-party information exemption. The remaining information at issue was “the withheld portion of one page of a contract approval request form”. The affected third party did not submit representations in the appeal, but continued to object to disclosure.
Third-party information under section 10(1)
Adjudicator Katherine Ball found certain information provided by the winning proponent under the RFP process was not subject to disclosure. Specifically, commercial information sourced from an email from the supplier which had been incorprated into a contract approval form prepared by the City was exempt from disclosure because it was third-party information supplied in confidence which was exempt under section 10(1).
Adjudicator Ball found the information under consideration satisfied the three-part text for exclusion under section 10(1):
First, it was “commercial and financial information.” The information was related to “the third party’s arrangements with the vendors and distributors in its trading network” and to “the third party’s commercial strategy for the procurement of services at market value and the specifics of pricing arrangements for the purchase and supply of those services”.
Next, the information was “supplied in confidence”. Although the information was incorporated by the City into a “contract approval form”, Adjudicator Ball found the relevant information within such form was provided by the winning proponent in support of its bid to win the contract with the city, and that it was an “informational asset” of the proponent. With regard to whether the information was supplied with a reasonable expectation of confidentiality, Adjudicator Ball noted that both the third party and the City agreed that the information was supplied in confidence, and further, the City believed the information was commercially valuable information which had helped it evaluate the strength of the proposal. Adjudicator Ball accepted this and found that the third party’s supply of commercially sensitive information by email to the City for this specific purpose implied an expectation of confidentiality.
Finally, in terms of the “harm” of disclosing such information, the winning proponent asserted that “knowledge of its pricing strategy would give its competitors insight into its private business practices and minimize its competitive advantage because it would allow competitors to undercut its pricing”. Further, the winning proponent explained that “by knowing the financial information at issue, competitors could induce the City to accept alternative more favourable financial terms.” The City itself submitted that that “disclosing details of the third party’s strategy in delivering services including achieving cost savings could reasonably be expected to result in competitors gaining insight into their otherwise confidential practices that they have developed over time.” Adjudicator Ball determined that although a third party cannot rely solely on the fact that disclosure of the information at issue might lead to a more competitive bidding process in the future, she was satisfied that disclosure of the information at issue might reasonably be expected to cause significant prejudice to the third party. In this case, competitors could use the information to structure future bid proposals in a way that mimics the third party’s strategy and thereby prejudices its competitive advantage built up through the operation of its trading network. This was sufficient to establish the third part of the test: that disclosure would “harm” the affected third party.
The Public Interest Override Did Not Apply
Section 16 of MFIPPA provides a “public interest override”, which means that an exemption from disclosure does not apply if a compelling public interest in the disclosure of the record clearly outweighs the purpose of the exemption.
For Section 16 to apply, there must be a significant public interest in the disclosure of the information, and this public interest must clearly outweigh the purpose of the relevant exemption. In this case, the interest of the public was to be weighed against the benefit of protecting third-party confidential information under section 10(1) of MFIPPA.
The appellant suggested that there was a public interest in disclosure of the names of the vendors and distributors engaged by the successful proponent in light of the City’s commitment to sustainable and ethical purchasing, and that public knowledge of these names was necessary for enforcing the City’s ethical and environmental guidelines.
The City, on the other hand, argued that disclosure of the third party’s business strategies would not shed any light on the operations of the City nor serve the purpose of informing the public about its activities. Rather, the appellant’s interest in obtaining access to the exempted information appeared to be for its own private interests, as opposed to public in nature.
Adjudicator Ball found in favour of the City’s interpretation, finding no connection between the information at issue and the purpose of the Public Interest Override to shed light on the operations of government:
I find that there is no relationship between the information at issue and the transparency of the city’s procurement process concerning its commitment to ethical and environmental guidelines. The information at issue is commercial and financial information pertaining to the third party’s pricing strategy provided in support of its bid. There is no reasonable basis for me to find that there is a public interest in disclosure of this pricing information. Accordingly, I find that the first requirement of the test for the application of the public interest override is not met and it is not necessary for me to consider whether the public interest outweighs the purpose of the exemption.
Given the Public Interest Override did not apply, Adjudicator Ball determined the information at issue was in fact exempt from disclosure under section 10(1)(a).
Thoughts & Takeaways
Despite some of the information being found exempt from disclosure, it should be noted that most of the information submitted under the RFP process by the winning proponent was in fact disclosed. Therefore, this decision shouldn’t be understood as exempting RFP submissions from disclosure by default. Rather, it is significant that some information submitted under the RFP process was deemed exempt from disclosure, either as personal information, or as confidential third-party information under section 10(1). It is also of interest that the relevant information was exempted even after it was incorporated into a contract award recommendation document prepared by the City.
The exempt information included pricing details, though it remains unclear whether this referred to actual amounts to be charged to the City or simply pricing methodology.
The public interest override did not apply in this case. The requestor’s motives for obtaining the information were described as “private rather than public in nature”, i.e., driven by private interests rather than a broader public concern.
The adjudicator’s decision underscores the importance of protecting sensitive business information in the public procurement process. While transparency is essential, there is a need to balance it against the protection of proprietary information. This ensures that businesses can compete fairly and can provide relevant information to government institutions without their confidential strategies and competitive advantages being exposed to competitors.
On a final note, to the extent that information supplied by a winning proponent is exempt from disclosure (as in the decision above), similar arguments against disclosure would also presumably apply to information supplied by an unsuccessful proponent, as such information would be of even less interest to the public.
This decision reinforces the principle that while public access to information is important, safeguarding commercial confidentiality is also vital for a fair and competitive procurement environment.
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