EU procurement: Confidentiality

Trade secrets and other confidential information pose delicate problems in public procurement procedures geared towards undistorted competition, equal treatment, non-discrimination and transparency.

The European Community (European Union) Procurement Directive 2004/18/EC acknowledges the confidentiality of tenders, initially and possibly later.

Confidentiality, trade secrets, transparency, secrecy, disclosure and data security are some of the subjects briefly evoked in this blog post on obligations of contracting authorities.

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Article 6

Under Title II Rules on public contracts, Chapter I General provisions, Article 6 of the Procurement Directive 2004/18/EC places on the contracting authority an obligation to respect the confidentiality of information from economic operators:

Article 6
Confidentiality

Without prejudice to the provisions of this Directive, in particular those concerning the obligations relating to the advertising of awarded contracts and to the information to candidates and tenderers set out in Articles 35(4) and 41, and in accordance with the national law to which the contracting authority is subject, the contracting authority shall not disclose information forwarded to it by economic operators which they have designated as confidential; such information includes, in particular, technical or trade secrets and the confidential aspects of tenders.


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Transparency and secrecy

One of the principal aims of the Procurement Directive 2004/18/EC (or Classic Directive) is to ensure open, transparent and non-discriminatory award procedures, including reporting requirements and remedies. More generally, there is a body of law pertaining to freedom of information concerning public bodies.

On the other hand, tenders before they are opened and trade secrets beyond that oblige contracting authorities to respect the confidentiality of information communicated by tenderers.

Article 6 of the Procurement Directive tenderers have to designate information they regard as confidential. This does not mean a ‘carte blanche’ to withhold any information, since this would infringe upon the transparency of the award and the remedies available to unsuccessful competitors.

After indicating these conflicting interests and the respect for confidentiality, the Procurement Directive refers the detailed solutions to be sought in accordance with the national law to which the contracting authority is subject.

While the relevant national law has to be studied in each case, the problems encountered have many similarities across jurisdictions.

One example of a discussion of transparency versus secrecy is presented in Appendix III of the Irish guide Notifying Tenderers and Disclosure of Information, where the Information Commissioner’s views are summarised:



Appendix III

Summary of the Information Commissioner views regarding disclosure of records
relating to a tender competition given at conclusion of a ruling under Section 34(2)m of
the Freedom of Information Act 1997 in Case 98188.

· First, public bodies are obliged to treat all tenders as confidential at least until the time that the contract is awarded.

· Second, tender prices may be trade secrets during the currency of a tender competition, but only in exceptional circumstances, would historic prices remain trade secrets, As a general proposition, however, I accept that tender documents which “would reveal detailed information about a company's current pricing strategy” or about otherwise unavailable product information could fall within the scope of Section 27(I)(a) of the FOI Act even following the conclusion of a tender competition.

· Third, tender prices generally qualify as commercially sensitive information for the purposes of Sections 27(I)(b) and (c) of the FOI Act, Depending on the circumstances, product information can also be considered commercially sensitive under Section 27(I)(b).

· Fourth, when a contract is awarded, successful tender information loses confidentiality with respect to price and the type and quantity of the goods supplied. The public interest also favours the release of such information, but exceptions may arise (see Telecom Eireann and Mr. Mark Henry, Case Number 98114, to be published (13 Jan 2000).

· Fifth, other successful tender information which is commercially sensitive (for example, details of the internal organisation of a tenderer's business, analysis of the requirements of the public body, or detailed explanations as to how the tenderer proposed to meet these requirements) may remain confidential. Disclosure in the public interest ordinarily would not be required, unless it were necessary to explain the nature of goods or services purchased by the public body.

· Sixth, unsuccessful tender information which is commercially sensitive generally remains confidential after the award of a contract, and the public interest lies in protecting that information from disclosure.

I must stress, however, that no tender-related records are subject to either release or exemption as a class. Therefore each record must be examined on its own merits in light of the relevant circumstances.


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Notifying Tenderers and Disclosure of Information is available at the Irish Government’s eTenders Public Procurement web site:


http://www.etenders.gov.ie/guides/Guides_show.aspx?id=1122


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OECD: Integrity in public procurement

The OECD Council has adopted a Recommendation on enhancing integrity in public procurement
[C(2008)105], which evokes some of the challenges related to public procurement. It serves as a reminder of why openness is the norm and secrecy has to be interpreted restrictively.

The October 2008 OECD Recommendation is available at:

http://www.oecd.org/dataoecd/62/24/41549036.pdf


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Competitive dialogue

The third subparagraph of Article 29(3) of the Procurement Directive 2004/18/EC on the competitive dialogue reminds contracting authorities of the obligation to confidentiality in the context of a procedure where particularly complex contracts are discussed:

Article 29(3) third subparagraph

Contracting authorities may not reveal to the other participants solutions proposed or other confidential information communicated by a candidate participating in the dialogue without his/her agreement.


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UK OGC/HMT guidance

The competitive dialogue is more prone to confidentiality problems than other award procedures. Again we look at an example of national guidance on problems common in nature.

Competitive Dialogue in 2008 – OGC/HMT joint guidance on using the procedure contains a section Equal Treatment and Commercially Confidential Information with advice to bidders and contracting authorities to agree on which parts of the solutions should be treated as confidential (page 19):

http://www.ogc.gov.uk/documents/OGC_HMT_2008_Guidance_on_Competitive_Dialogue.pdf


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Information security



One obligation of contracting authorities is secure handling of confidential information (as seen in various provisions of the Procurement Directive). For a discussion of these topics in public (ICT) procurement, you can read the UK OGC Procurement Policy Note: Data Handling Review (Information Note 13/08 – 26 November 2008), especially Annex 2 Information Assurance in Procurement. The Information Note is available here:

http://www.ogc.gov.uk/documents/PPN13_08_Data_Handling.pdf


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As always, I would appreciate your comments with views or experiences.


Ralf Grahn

EU Treaty of Lisbon: Fundamental Rights

Slowly but surely the people, the citizens of the European Union, emerge with legal rights and obligations.

The Charter of Fundamental Rights of the European Union was prepared by the first broadly based Convention, encompassing members of the European Parliament and national parliaments. At the summit in Nice, in December 2000, the member states were not yet unanimously ready to incorporate the Charter into the Treaty of Nice.

The Charter was jointly proclaimed by the European Parliament, the Council and the European Commission on 7 December 2000, and it became politically but not legally binding (OJ 18.12.2000, C 364/1).

The second Convention incorporated the Charter into the Treaty establishing a Constitution for Europe signed in Rome on 29 October 2004 (OJ 16.12.2004, C 310/1), where it became Part II.

Since the Constitutional Treaty was not ratified by all member states, the Charter has continued to live on as a solemn political proclamation.

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The intergovernmental conference (IGC 2007) decided, in line with its June mandate, to make the Charter legally binding without incorporating the text into the Reform Treaty, now called the Treaty of Lisbon.

One day before the signing of the Treaty of Lisbon, the Charter was solemnly proclaimed in Strasbourg by the European Parliament, the Council and the European Commission. The Charter of Fundamental Rights of the European Union has been published in the Official Journal of the European Union (OJ 14.12.2007, C 303/1) with the Explanations relating to the Charter of Fundamental Rights (C 303/17).

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Since the solemn proclamation ceremony in Strasbourg was marred by unseemly protests in the European Parliament, it is appropriate to mention that the 27 member states’ governments and the European Commission have acted unanimously, and that the groupings against citizens’ rights had suffered a resounding defeat, 534 MEPs voting in favour of the Charter, 85 against and 21 abstentions.

This disgraceful tumult against the rights of EU citizens has been justly reprimanded, although friends of loutish behaviour have done their utmost to turn their soul buddies into champions of free speech for trying to disrupt a solemn and, for most Europeans, joyful occasion.

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This is not the place for detailed analysis of the Charter, but a brief look at the headlines of the Articles gives an overview of the freedoms, rights and principles it contains:


TITLE I DIGNITY

Human dignity
Right to life
Right to the integrity of the person
Prohibition of torture and inhuman or degrading treatment or punishment
Prohibition of slavery and forced labour


TITLE II FREEDOMS

Right to liberty and security
Respect for private and family life
Protection of personal data
Right to marry and right to found a family
Freedom of thought, conscience and religion
Freedom of expression and information
Freedom of assembly and of association
Freedom of the arts and sciences
Right to education
Freedom to choose an occupation and right to engage in work
Freedom to conduct a business
Right to property
Right to asylum
Protection in the event of removal, expulsion or extradition


TITLE III EQUALITY

Equality before the law
Non-discrimination
Cultural, religious and linguistic diversity
Equality between women and men
The rights of the child
The rights of the elderly
Integration of persons with disabilities


TITLE IV SOLIDARITY

Workers’ right to information and consultation within the undertaking
Right of collective bargaining and action
Right of access to placement services
Protection in the event of unjustified dismissal
Fair and just working conditions
Prohibition of child labour and protection of young people at work
Family and professional life
Social security and social assistance
Health care
Access to services of general economic interest
Environmental protection
Consumer protection


TITLE V CITIZENS’ RIGHTS

Right to vote and to stand as a candidate at the elections to the European Parliament
Right to vote and to stand as a candidate at municipal elections
Right to good administration
Right of access to documents
European Ombudsman
Right to petition
Freedom of movement and of residence
Diplomatic and consular protection


TITLE VI JUSTICE

Right to an effective remedy and to a fair trial
Presumption of innocence and right of defence
Principles of legality and proportionality of criminal offences and penalties
Right not to be tried or punished twice in criminal proceedings for the same criminal offence


TITLE VII GENERAL PROVISIONS GOVERNING THE INTERPRETATION AND APPLICATION OF THE CHARTER

Field of application
Scope and interpretation of rights and principles
Level of protection
Prohibition of abuse of rights

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Why is the Charter important?

Indeed, the Charter contains no new rights. They all exist in the EU Treaties, in the the European Convention for the Protection of Human Rights and Fundamental Freedoms (Council of Europe) and various other human rights documents.

But bringing these various rights together, and making them visible for the citizens of the Union, is a manifestation of shared European values. The result is the most up to date legally binding human rights document on earth, and it offers the citizens a basis for scrutiny of EU institutions and member states when they implement European Union law.

The political rights of the Union’s citizens are still underdeveloped, but otherwise the Charter is a step towards recognition of the interests of the citizens as the foundation for the European project.
The Charter is a source of pride for the EU citizens, and it is going to be a source of reference for human rights in the world.

Naturally, the Charter would have been more visible if it had become a part of the Lisbon Treaty (and of future consolidated versions of the Treaty).

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The European Union is given leave to accede to the European Convention for the Protection of Humans Rights and Fundamental Freedoms.

The constitutional traditions common to the Member States form part of the general principles of European Union law.

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The Treaty of Lisbon (Official Journal of the European Union 17.12.2007, C 306/1) repeals Articles 4 and 5 of the Treaty on European Union (latest consolidated version OJ 29.12.2006, C 321 E/1). Consequently, the following Article is numbered 6, the present one being replaced by the following

Article 6

1. The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties.

The provisions of the Charter shall not extend in any way the competences of the Union as defined in the Treaties.

The rights, freedoms and principles in the Charter shall be interpreted in accordance with the general provisions in Title VII of the Charter governing its interpretation and application and with due regard to the explanations referred to in the Charter, that set out the sources of those provisions.

2. The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union’s competences as defined in the Treaties.

3. Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union’s law.

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Unanimity among the member states’ governments has come at a price. The unity of EU law is diminished by the opt-outs of the governments of the United Kingdom and Poland.

See Protocol Number 7 on the application of the Charter of Fundamental Rights to Poland and the United Kingdom, as well as the Polish declarations 51 and 53 annexed to the Treaty of Lisbon.

The new Polish government has not been able to relinquish the opt-out, since it needs the support of the morally conservative opposition to ratify the Treaty of Lisbon. But the new government wants Poland to become a constructive force in EU politics, so a future renouncement of the opt-out seems to be hanging in the air.

That would leave Great Britain as the only member state fundamentally out of tune with mainstream European values on human rights.


Ralf Grahn