VIRGINIA FREEDOM OF INFORMATION ADVISORY COUNCIL COMMONWEALTH OF VIRGINIA

August 26, 2005, Richmond

The PPEA Subcommittee¹ met on August 26, 2005 to continue its deliberations on issues concerning public access to procurement records under the PPEA/PPTA.² Mr. Axselle reminded those present that the subcommittee was working to find the balance between facilitating competition and ensuring the public confidence in the procurement decisions of government. He identified several points of consensus that had been reached based on discussions at previous subcommittee meetings. The points of consensus are that (i) trade secrets, financial statements of privately held companies, balance sheets, etc. should always be confidential; (ii) conceptual proposals received by a public body should be posted on the websites of the respective public bodies once all proposals are received; (iii) FOIA³ should be amended to formalize the process for requesting and getting approval of confidential proprietary records submitted by private entities in order for the records to be protected from public disclosure; (iv) a public comment period on proposals should be established, which may include a public hearing in the discretion of the public body; and (v) recommendations of the subcommittee concerning disclosure of proposals should apply to both interim and comprehensive agreements under the PPEA/PPTA. The subcommittee directed staff to prepare drafts on the points of consensus for review and comment at next meeting of subcommittee.

Mr. Axselle identified the remaining issues to be considered by the subcommittee, including (i) the need to define confidential proprietary information and whether such definition should include the method and manner of construction and/or financing; (ii) whether confidential proprietary information should be accessible to public and if so, when; (iii) whether the VPPA⁴ , PPEA and PPTA should be amended to require more a formalized request process for protection of confidential proprietary information submitted by a private entity coupled with a requirement for the public entity to formally declare what will be considered confidential proprietary information and therefore protected from disclosure; and (iv) whether detail phase proposals should be posted; and (v) whether there should be access to any procurement records before the execution of an interim or comprehensive agreement, and if so, by whom (the participating vendors and/or the public?).

On the issue of defining confidential proprietary records, the Virginia Press Association (VPA) representative urged the subcommittee not to blur two distinct ideas--intellectual property versus proprietary records. "Intellectual property" is a term of art defined in other laws outside of FOIA, and does not necessarily refer to the same type of information as proprietary records. It is agreed that intellectual property should remain confidential, as the release of intellectual property records would always be to the detriment of their owner regardless of when that release occurs. The interest in protecting other proprietary information of a submitted proposal is based on competitive notions that if a proposal is publicly accessible, a competitive advantage may be lost to the proposer. Unlike intellectual property records, proprietary records that are held confidential for these reasons might be released at a point in time when it would no longer cause the loss of any competitive advantage. Representatives of the Department of General Services (DGS) advised the subcommittee that whatever records are submitted to DGS as part of a procurement transaction, DGS assumes to be open unless the proposer can convince them they need to be protected. Generally, DGS protects records that demonstrate a proposer's responsibility and fitness to do the work. The DGS representative opined that the real concern of the public is not the qualification of the proposer but whether the contract is the best deal for the money.

The subcommittee discussed access to procurement records under the VPPA. Access to the public under the VPPA is granted to all procurement records, except confidential proprietary records, at the time a contract is awarded. However proposers participating in the procurement have "preview rights" that allow them to review procurement records within a reasonable time after opening of the bids or completion of negotiations, depending on the type of procurement⁵, and for both, prior to the award of the contract. The PPEA does not make this distinction as PPEA procurement records are open to public inspection once a comprehensive agreement has been entered into. It was suggested that perhaps the preview rights granted under the VPPA could be brought into the PPEA/PPTA.

At this point in its discussions, the subcommittee arrayed options for release of confidential proprietary information under the PPEA/PPTA: (i) preview rights for participating proposers after completion of negotiations, (ii) public access at the end of the 45-60 day notice period, (iii) public access at the time of execution of an interim or comprehensive agreement and after any rights of appeal by unsuccessful proposers, and (iv) no public access. The subcommittee rejected options numbered (ii) and (iv) as unworkable, noting that option number (ii) undercuts a public body's ability to leverage one proposer against another. DGS pointed out to the subcommittee that with option number (iii) the parties are still in negotiations up to the point when the contract is signed. Mr. Axselle responded that at the time of execution could mean the time that you are presenting the contract to approving authority.

The subcommittee directed staff to draft legislation relating to the two remaining options--preview rights for participating proposers after completion of negotiations and public access at the time of executive of an interim or comprehensive agreement and after any rights of appeal by unsuccessful proposers.

The issue of posting of detail phase proposals (minus information concerning intellectual property and confidential proprietary records) remains unresolved at this time.

Mr. Axselle noted that with the resignation of Council and PPEA Subcommittee member David Hallock, the subcommittee had only two remaining members and would request the appointment of additional members to the subcommittee. The next meeting of the subcommittee has been tentatively set for some time in October.

¹ All members (Axselle and Edwards) present.
² The Public-Private Education Facilities and Infrastructure Act of 2002 (§ 56-575.1 et seq.) and the Public-Private Transportation Act of 1995 (§ 56-556 et seq.).
³ Freedom of Information Act (§ 2.2-3700 et seq.).
⁴ The Virginia Public Procurement Act (§ 2.2-4300 et seq.).
⁵ Competitive sealed bidding in the first instance and competitive negotiation in the second.