Request for total amounts paid for parking services

Commercial
Legislation:
Local Government Official Information and Meetings Act 1987
Section 7
Legislation display text:
Local Government Official Information and Meetings Act 1987, s 7(2)(b)(ii), 7(2)(i)
Agency:
City Council
Ombudsman:
David McGee
Case number(s):
297004
Issue date:
Language:
English

Release of total amounts paid would not unreasonably prejudice the commercial position of the incumbent providers in future tender rounds, nor would it disadvantage the Council in carrying on negotiations—ss 7(2)(b)(ii) and 7(2)(i) do not apply

A requester asked Wellington City Council for the total amounts paid per annum to Tenix for parking enforcement services, and to ADT for Parkwise and Walkwise services. The information was withheld under sections 7(2)(b)(ii) (unreasonable commercial prejudice) and 7(2)(i) (negotiations) of the LGOIMA, and the requester complained to the Ombudsman.

Section 7(2)(b)(ii)

The Council argued that release of the amounts would disadvantage Tenix and ADT in future tenders, because tenderers would know the overall cost tendered for the service, and adjust their own tender to reflect a better or lower offer.

The Ombudsman rejected this argument, noting: 

…in respect of requests for total tender or total contract prices or total payments made to a successful tenderer under a contract (as opposed to an explanation of how the tender, contract price or total payment has been calculated or is made up), it has not generally been accepted that release of such information can be said to lead to ‘unreasonable’ commercial prejudice.

Releasing the total amount paid would not reveal the pricing methodology used by Tenix or ADT. They would have built a number of variables into their tendered sums for providing the services concerned, including various cost components and their projected profit margins etc. Competitors would not be privy to a detailed breakdown of the cost components or variables that Tenix and ADT used to calculate their unit rates and overall tender bids. Release of the total amount paid would not be likely unreasonably to prejudice the commercial position of Tenix or ADT.

The Ombudsman acknowledged that, because the total amounts paid had been kept confidential, Tenix and ADT would have a competitive advantage at the next tender round from knowing the details of the previously successful tenders, and if this information was made available to competitors some of that advantage would be lost. He went on to say:

I also accept that this may prejudice the incumbent contractor’s commercial position. But essentially this helps to neutralise an advantage arising from incumbency. Specifically, I do not accept that prejudice is ‘unreasonable’ where it simply allows competitors to redress an advantage created by confidentiality and to enter a new tender round on a more level playing field.

The Ombudsman concluded that section 7(2)(b)(ii) did not apply.

Section 7(2)(i)

The Council also argued that disclosure of the amounts would prejudice its ability to negotiate parking enforcement contracts. It suggested that prospective providers with knowledge of the amounts paid previously would be in a position to set their tender amounts in such a way that it left the Council with little room to negotiate.

The Ombudsman did not accept this argument, noting that two potential parties with which the Council was likely to negotiate (Tenix and ADT) already had the information. Suppression of the information could only create an advantage for them compared to any other prospective providers.

The Ombudsman concluded that section 7(2)(i) also did not apply. After considering the Ombudsman’s opinion, the Council agreed to release the amounts at issue.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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