Between a rock and a hard place: balancing tender debriefs with confidentiality

Tuesday April 5th, 2011

By Ruth McNaught, Solicitor, Harper Macleod LLP

At the end of a procurement exercise, contracting authorities can often feel they are stuck between a rock and a hard place: they need to provide a proper debriefing to unsuccessful bidders at the end of the process but also need to respect the confidentiality of all other bidders’ tender documents.

The procurement rules prohibit a contracting authority from disclosing bid information which a bidder has reasonably designated as confidential, but this is subject to the need for contracting authorities to provide: (a) a summary of the reasons why a bidder was unsuccessful; and (b) the characteristics and relative advantages of the successful tender.

In an action against the Common Services Agency (CSA), Healthcare at Home Ltd (HH) sought to have the decision to award a contract to BUPA Home Healthcare Ltd (BUPA) set aside.

During the course of the action, HH sought disclosure of BUPA’s tender document and argued that the commercial sensitivity of much of the tender document was so low that the right to confidentiality was outweighed by the obligation to disclose necessary information.

On 15 October 2010, having heard submissions on behalf of all three parties, the Court allowed BUPA’s tender document to be remitted to a commissioner to excerpt and report, reserving all matters of confidentiality. The commissioner carried out the excerpting role and, by agreement between the parties, HH’s legal advisers were given access to the whole of BUPA’s tender document on the undertaking that they would not disclose its terms to their client until issues of confidentiality had been agreed or determined by the Court. Agreement on the issues of confidentiality could not be achieved and HH moved for disclosure. BUPA opposed the motion on the basis that the redacted material was confidential.

The Court, on balancing BUPA’s right to confidentiality and HH’s right to obtain the documentation necessary for the presentation of their case, found that the commercial sensitivity of much of the tender document was so insubstantial that the right to confidentiality had to give way to the right to disclosure. Two sections of BUPA’s tender were identified as being sufficiently commercially sensitive to prevent their being disclosed and a further section was to be disclosed subject to proposed redactions by BUPA. The Court granted HH’s motion, subject to the relevant exceptions, but continued the matter to enable discussion to take place as to what safeguards, by way of undertakings and restrictions as to HH’s use of the disclosed material, were appropriate.

The key issues were:

  1. The Court required to balance BUPA’s right to confidentiality against the need for the dispute between HH and CSA to be disposed of fairly. The Court noted the tension between the public interest in maintaining commercial confidentiality and the need for open administration of justice;
  2. Although BUPA’s tender document contained information which BUPA would prefer not to be revealed to its competitors, it did not contain highly sensitive technical or scientific information; and
  3. BUPA had not taken the opportunity to provide written advice to the CSA that disclosure of any part of their tender documentation would be likely to substantially prejudice their commercial interest, although they had been expressly invited to do so in the Invitation To Tender.

The key lesson to be learned from BUPA’s experience is that where a tenderer submits a bid, they must be aware of the possibility that the information could be shared with competitors aggrieved at the outcome of the bidding process, where this takes precedence over the right to confidentiality. Bidders should, at the very least, consider which parts of their bid should be designated confidential and should take every opportunity to advise the contracting authority of which parts of the tender should not be disclosed to others.

Ruth is a solicitor at Harper Macleod LLP and can be contacted on [email protected]

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