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Tuca Zbarcea & Asociatii

The Power of a Stamp or On the Confidentiality of Documents Submitted in Public Procurement Procedures

11 Iulie 2018   |   Ana Popa, Senior Associate at Țuca Zbârcea & Asociații

This article seeks to answer the questions above in accordance with the author’s own interpretation of the applicable legal provisions.

Ana Popa, Senior Associate at Tuca Zbârcea & Asociatii

 
 
Introduction

Lately, there have been increasing talks about the confidentiality of documents submitted by economic operators in procedures of awarding public procurement contracts, about the need to specifically and efficiently ensure the confidentiality of these documents, but also about the obligation of contracting authorities to ensure the transparency of the public procurement process.

Naturally, two different opinions have emerged with regards to this issue, depending on one’s own interest, and the national case law has been, in its turn, polarised and rather inconsistent.

While during the contract award procedure, in the tender submission and assessment stage, there are no major problems concerning the confidentiality of the documents submitted by the entities participating in the procedure, things change fundamentally when a public procurement procedure is finalised, and the successful tender is selected. After this point, under domestic legislation, the procurement file becomes a public document.


Although the tenders submitted in a public procurement procedure do not become part of the procurement file, when the successful tender is selected, reviewing the successful tenderer’s documentation becomes a purpose per se and, I would even say, the supreme desideratum of the competitors whose tenders either receive inferior scoring or are rejected.

Under these circumstances, the following questions naturally arise: (i) does the public authority have, under the principle of transparency, the right/ obligation to disclose the content of the tender or sensitive information in the clarifications sent to the economic operator while the tenders were assessed? (ii) how does a tenderer efficiently prove that its tender documents include confidential information, the disclosure of which is likely to cause significant damage? (iii) is the stamp “Confidential” per se, affixed to the tender documentation, sufficient to defeat the principle of transparency and to protect the documents that bear this marking? (iv) what are the effective remedies available to an economic operator whose tender documentation was disclosed to third parties so as to minimise the effect of disclosing sensitive/confidential information to third parties?

This article seeks to answer the questions above in accordance with the author’s own interpretation of the applicable legal provisions.

Relevant provisions

At a national level, the matter of confidentiality of the tenders submitted in public procurement procedures is generally regulated by Law No. 98/2016 on Public Procurement and its application norms and by Law No. 101/2016 on the Remedies and Means of Appeal in matters of awarding public procurement contracts, sector-specific contracts and works concession and service concession contracts, as well as on organising and operating the National Council for Solving Complaints. In my opinion, the two above-mentioned regulations include important landmarks for determining/assessing the confidentiality of tender documents, which could and, at the same time, must be applied whenever a conflict arises in connection with the confidentiality of documents submitted in a contract award procedure.

At European level, we may rely on Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 and on the particularly eloquent case law of the Court of Justice of the European Union. A reference decision as regards the need to respect the confidentiality of tenders is the Judgment given in case C-450/06, Varec SA v Belgian State.

Strictly referring to awarding public procurement contracts1, it should be noted that Law No. 98/2018 generally regulates the following aspects:
•    The free access to information of public interest is ensured, however, without being an absolute right. As with any right, the free access to information of public interest has its limitations;
•    The contracting authority has an obligation to not disclose the information submitted by the economic operators and indicated by them as confidential, including technical or business secrets and the confidential terms in the tenders;
•    The contracting authority has a right to impose certain requirements on the economic operators in order to protect the confidentiality of the information that they disclose during the contract award procedure;
•    The contracting authority has an obligation to protect the integrity of the data, the confidentiality of the tenders and of the applications concerning submitting, sending and storing the information;
•    The content of the tenders and of the applications, as well as of the plans/designs in design contests is confidential until the date scheduled for their opening;
•    The access to the public procurement file will comply with the deadlines and procedures provided in the regulations regarding free access to information of public interest and cannot be restricted unless such information is confidential, classified or proprietary, under the law;
•    After the outcome of the contract award procedure is notified, the contracting authority must allow, upon request, within no more than one business day after receiving such a request, the unrestricted access of any bidder to the report of the contract award procedure, as well as to the information in the qualification documents, in the technical and/or financial proposals that were not declared confidential, classified or proprietary by the tenderers.

Moreover, with respect to the need to protect confidential information in the tender documents, Law No. 101/2016 provides the following:
•    The parties to the case have access to the documents in the file created by the Council, similarly to the access to court files, save for the documents declared confidential by economic operators, since they include, without limitation, technical and/or trade secrets, established under the law, and their disclosure would undermine the legitimate interests of the economic operators, particularly as regards trade secrets or intellectual property. The confidentiality must be proven by any means of evidence;
•    The documents may be declared confidential by tenderers by explicitly and visibly marking or indicating them as confidential documents. The confidential documents in the tenders may be reviewed only with the relevant tenderers’ written consent.

Second of all, as regards the matter under consideration, there is extensive national case law that, nevertheless, fails to establish, even at principled level, the correct approach for the confidentiality of the documents submitted in public procurement procedures. Quite the contrary, the national case law is polarised, and the decisions given in this respect are diametrically opposite.

Certain opinions in case law state that the mere fact that the “confidential” stamp is affixed to the tender documents is sufficient for the respective documents to be protected and for third party access to be restricted.

On the other hand, some opinions state that the confidentiality of a tender/information declared confidential cannot be ensured by simply affixing the “confidential” stamp on the tender documents. According to this opinion, such an approach does not meet the requirements expressly provided by the law in order for the respective document to be deemed confidential. This is because, in accordance with Article 217 of Law No. 98/2016, the rule is the free access to the documents in the procurement file, with the exception (which must be interpreted restrictively) that access is restricted, inter alia, when the information is confidential under the law.

Analysis or attempt to provide answers to the multitude of questions with regards to the topic under consideration

In the introductory part of this article I proposed a series of questions, or rather personal doubts, that I have thoroughly reflected upon in an attempt to identify answers and solutions, faced ever more often with the issue of the confidentiality of the documents submitted in public procurement procedures.
As regards the first such doubt/question, namely whether the contracting authority has an obligation to disclose the content of the tender or the confidential information in the clarifications addressed to the economic operator based on the principle of transparency, the answer that I have eventually found is that it depends from one case to another.

Why do I believe that the answer should depend, on specific circumstances and not be a one-size fits all type? This is because the reality of projects of such magnitude as those subject to public procurement procedures is in its turn complex and unpredictable and the real-life situations are not simple and require specific consideration depending on their specifics.

Nevertheless, in an attempt to answer this question, which I find quite thought-provoking, I will first rely on the fact that the overall regulatory approach to tender confidentiality seems to rather establish as a matter of principle the fact that access to information of public interest is free. Such approach is to be expected considering that one of the fundamental principles of public procurement is the transparency that should be shown by the contracting authority. Therefore, transparency is a genuine control instrument, a guarantee of the efficient use of public funds, and applying the principle of transparency in concreto is likely to increase public trust in the public procurement process.

Without denying or minimizing the importance of this principle, I nevertheless consider that transparency in a public procurement process cannot be applied de plano, without a substantiated a priori consideration. Having this in mind, we are heading towards the answer to the second proposed question, namely: how does a tenderer efficiently demonstrate that its tender includes confidential information, the disclosure of which is likely to cause significant damage?

For instance, if an economic operator declares its tender confidential, and the confidentiality statement indicates that the answers to the clarifications required during the assessment stage are also confidential, and one of its competitors, relying on its free access to information of public interest, wishes to examine part of this tender or even the answers to clarifications, the contracting authority is not entitled, de plano, to give such latter tenderer access to examine the documents.

In my opinion, in such a case, the contracting authority should check whether: (i) there is a confidentiality statement with respect to the documents that a tenderer requests to examine; and (ii) whether the confidentiality statement is drafted according to the law, namely whether it mentions that the relevant documents include classified or proprietary information etc. If it finds that the confidentiality statement sets forth this information, in my opinion, the contracting authority is not entitled to disclose such information to competitors, since any such disclosure is likely to make the competitors aware of sensitive and relevant information that they can use to create similar or identical technical solutions and thus causing the entity whose tender became public to lose its economic advantage on the market. This is ever so relevant since “[...] contract award procedures are founded on a relationship of trust between the contracting authorities and participating economic operators. Those operators must be able to communicate any relevant information to the contracting authorities in the procurement process, without fear that the authorities will communicate to third parties items of information whose disclosure could be damaging to them.” (please see Judgment of the Court of Justice of the European Union of 14 February 2008, Varec SA v Belgian State, C-450/06, para. 36.)

However, if the tenderer simply affixes a stamp with the marking “confidential” on the tender documentation, without being able to prove the confidentiality of its documents and declaring its tender confidential “en bloc”, in my opinion the contracting authority and, later, the courts of law/the National Council for Solving Complaints cannot be bound by this stamp and the principle of transparency and free access to information of public interest should prevail.

I have recently heard opinions (that I cannot agree with, in the absence of legal arguments and details regarding the specific circumstances to which they apply) that merely affixing the “confidential” stamp is sufficient and, moreover, as provided by Article 19 of Law No. 101/2016, the confidentiality statement would suffice in order to demonstrate the confidentiality of the tender. I cannot share this view, as long as the public nature of the documents is the rule, while confidentiality is the exception, which means that it should be specifically proven, not merely stated.

In particular, my interpretation of the legal provisions regarding confidentiality in public procurement procedures is that:
•    The documents may be declared confidential insofar as they include technical/trade secrets etc., the disclosure of which could damage the concerned economic operators
and
•    The confidentiality of the documents is never presumed but must be proven by any means of admissible evidence by the economic operator that deemed that document “confidential”.

Nevertheless, if the tender of an economic operator that demonstrated the confidentiality thereof is disclosed to third parties, the remedy available to minimise the effect of such wrongful disclosures is filing legal action against the responsible person(s) and asking that they be ordered to repair the damage caused by disclosing and/or using such information. With respect to the efficiency of such a remedy, I am somewhat reserved given that, under the general rules of law, in order to be repaired, the damage must be proven and, in this case, although not disputed, in practice the damage is difficult to assess/prove.

Conclusions

To end on a positive note, in my opinion, the current regulatory approach to the confidentiality of documents submitted in public procurement procedures efficiently ensures the confidentiality of the sensitive/secret information insofar as such sensitivity/secrecy is demonstrated. Based on current practice, I can confirm that, in order to ensure confidentiality of the tender documentation, neither the contracting authorities, nor the courts of law request the concerned economic operators to do what the doctrine qualifies as “probatio diabolica”, namely to bring impossible evidence or to submit complex evidence to prove the confidentiality.

The article first appeared in the Just in Case magazine issue 19/2018 published by Țuca Zbârcea & Asociații which can be downloaded at http://www.tuca.ro/just_in_case/


 
 

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