Winchester Vacancies

A model approach

The extent to which key clauses and schedules in a contract – including the operator’s financial model – should be disclosed was considered by the First-Tier Tribunal recently. Ibrahim Hasan reports.

In a recent Tribunal case – Department for Works and Pensions v Information Commissioner (EA/2010/0073 20) – the complainant requested, amongst other things, the full text of any and all contracts or agreements between the Cabinet Office and Atos Origin regarding the provision of the Government Gateway service. Following Directions and a Pre-hearing Review the DWP disclosed much of the information apart from some clauses and schedules in the contract, in particular:

  • Liability caps
  • Performance requirements – KPIs, service levels, service credits and hosting service levels
  • Benchmarking model
  • Charges
  • Atos’ financial model (“Financial Model”)
  • Change control notifications
  • Information relating to Atos’ data centre

This was on the basis of Section 43 which provides for exemptions for trade secrets (section 43(1) and where the commercial interests of the public authority or others would or would be likely to be prejudiced (Section 43(2)).

The Tribunal noted that there is no definition of what is a trade secret in FOI. It considered the case of Lansing Linde v Kerr [1991] 1 WLR 251 where the court referred to “information, which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret” provided it was used in a trade or business and the owner had either limited the dissemination of the information or at least not encouraged or permitted widespread publication.

The Tribunal found that the Financial Model is equivalent to a trade secret of Atos. “Even if we were wrong we found that it ‘would prejudice’ the commercial interests of Atos if it was disclosed because it contained the confidential financial information of Atos and its unique model for calculating prices, rates of return etc and which would put competitors at an unfair advantage if disclosed in relation to any future procurement exercise.”

In relation to the rest of the disputed information it found that there “would be likely to be prejudice” to the commercial interests of the DWP. It found that there was a causal relationship between the disputed information and future government procuring of IT services and that there is a real risk to the competitive environment particularly in relation to the future of the Gateway.

Turning to the public interest ,the Tribunal found that the public interest balance favours disclosure of the information apart from the Financial Model and data centre information. With regard to the former it noted that the OGC FOI (Civil Procurement) Policy and Guidance version 2.0 (“OGC Guidelines”) recognises financial models and that up to the contract date its working assumption is that it should not be disclosed. It is not mentioned again in later stages of contract delivery but it seemed to the Tribunal that there is a strong public interest in such models being protected though the life of a contract particularly where the model continues to be used. The Financial Model in this case contains confidential information which if disclosed may very well reduce the competitiveness of Atos. Although the company would not walk away from public procurement if the model was disclosed, it was clearly very concerned and indicated that Atos would be less inclined to offer such models as part of future contracts.

If this was the case then the tribunal found that it would not be in the public interest that suppliers would in any way be reluctant to provide financial models in large IT outsourcing contracts.

With regard to the data centre the DWP argued that the location of the centre would make it easier for terrorists or other criminals to locate Gateway data. Also if security specification and other information on the layout of the centre is disclosed it will make it easier for the premises/data to be penetrated or attacked. Therefore there is a public interest in keeping the information secret.

Having considered all the circumstances in this particular case, including the fact there was ultimately only one bidder for the 2006 Contract, the Tribunal found that the public interest in maintaining the exemption did not outweigh the public interest in disclosure and that liability caps, performance requirements – KPIs, service levels, service credits and hosting service levels, the benchmarking model, charges and change control notifications should be disclosed.

Ibrahim Hasan is a solicitor and director of Act Now Training (www.actnow.org.uk).