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February 9, 1993

Ms. Irma DeHaro Frier
Frier Associates, Inc.
368 W. 46th Street
New York, N.Y. 10036

The staff of the Committee on Open Government is authorized to
issue advisory opinions. The ensuing staff advisory opinion is
based solely upon the facts presented in your correspondence.

Dear Ms. Frier:

As you are aware your letter of January 22 addressed to
Richard Rifkin of the Department of Law has been forwarded to the
Committee on Open Government. The Committee is authorized to
advise with respect to the Freedom of Information Law. It is noted
that there is no state agency empowered to enforce the Freedom of
Information Law or compel an agency to grant or deny access to
records.

The materials attached to your letter pertain to a request
directed to the Port Authority relating to a request for proposals
("RFP"), as well as correspondence, memoranda and similar records
concerning the RFP process in a particular case, and records of a
RFP evaluation committee.

In this regard, it is emphasized at the outset that the
Freedom of Information Law is applicable to agency records.
Section 86(3) of that statute defines the term "agency" to mean:

"any state or municipal department, board,
bureau, division, commission, committee,
public authority, public corporation, council,
office or other governmental entity performing
a governmental or proprietary function for the
state or any one or more municipalities
thereof, except the judiciary or the state
legislature."

Since the Port Authority is a bi-state entity operating in New York
and New Jersey, I do not believe that it is subject to the New
York, New Jersey or federal freedom of information statutes. In
short, a state cannot impose its laws beyond its borders, and it
has been held that the Freedom of Information Law does not apply to
a bi-state agency (see e.g., Metro-ILA Pension Fund v. Waterfront
Commission of New York Harbor, Sup. Ct., New York County, NYLJ,
December 16, 1986). However, I believe that the Port Authority has
adopted a policy on disclosure that is generally consistent with
the New York Freedom of Information Law.

Assuming that the Port Authority were to give effect to the
New York Freedom of Information Law, several points should be made.

First, as a general matter, the Freedom of Information Law is
based upon a presumption of access. Stated differently, all
records of an agency are available, except to the extent that
records or portions thereof fall within one or more grounds for
denial appearing in §87(2)(a) through (i) of the Law.

Second, potentially relevant is §87(2)(c), which enables
agencies to withhold records to the extent that disclosure "would
impair present or imminent contract awards or collective bargaining
negotiations." From my perspective, the key word in the quoted
provision is "impair", and the question involves how disclosure
would impair the process of awarding contracts.

Section 87(2)(c) often applies in situations in which agencies
seek bids or RFP's. While I am not an expert on the subject, I
believe that bids and the processes relating to bids and RFP's are
different. As I understand the matter, prior to the purchase of
goods or services, an agency might solicit bids. So long as the
bids meet the requisite specifications, an agency must accept the
low bid and enter into a contract with the submitter of the low
bid. When an agency seeks proposals by means of RFP's, there is no
obligation to accept the proposal reflective of the lowest cost;
rather, the agency may engage in negotiations with the submitters
regarding cost as well as the nature or design of goods or
services, or the nature of the project in accordance with the goal
sought to be accomplished. As such, the process of evaluating
RFP's is generally more flexible and discretionary than the process
of awarding a contract following the submission of bids.

When an agency solicits number of bids, but the deadline for
their submission has not been reached, premature disclosure to
another possible submitter might provide that person or firm with
an unfair advantage vis a vis those who already submitted bids.
Further, disclosure of the identities of bidders or the number of
bidders might enable another potential bidder to tailor his bid in
a manner that provides him with an unfair advantage in the bidding
process. In such a situation, harm or "impairment" would likely be
the result, and the records could justifiably be denied. However,
when the deadline for submission of bids has been reached, all of
the submitters are on an equal footing and, as suggested earlier,
an agency is generally obliged to accept the lowest appropriate
bid. In that situation, the bids would, in my opinion, be
available.

In the case of RFP's, even though the deadline for submission
of proposals might have passed, an agency may engage in
negotiations or evaluations with the submitters resulting in
alterations in proposals or costs. Whether disclosure at that
juncture would "impair" the process of awarding a contract is, in
my view, a question of fact. In some instances, disclosure might
impair the process; in others, disclosure may have no harmful
effect or might encourage firms to be more competitive, thereby
resulting in benefit to the agency and the public generally.

Also, of potential significance is §87(2)(d), which enables an
agency to withhold records or portions thereof that:

"are trade secrets or are submitted to an
agency by a commercial enterprise or derived
from information obtained from a commercial
enterprise and which if disclosed would cause
substantial injury to the competitive position
of the subject enterprise."

In my opinion, the question under section 87(2)(d) involves the
extent, if any, to which disclosure would "cause substantial injury
to the competitive position" of forms responding to RFP's. If, for
example, the data could be used to ascertain the value of an
entity's property or involves significant financial information, it
might be contended that certain of the data might, if disclosed,
cause substantial injury to its competitive position.

The concept and parameters of what might constitute a "trade
secret" were discussed in Kewanee Oil Co. v. Bicron Corp., which
was decided by the United States Supreme Court in 1973 (416 (U.S.
470). Central to the issue was a definition of "trade secret" upon
which reliance is often based. Specifically, the Court cited the
Restatement of Torts, section 757, comment b (1939), which states
that:

"[a] trade secret may consist of any formula,
pattern, device or compilation of information
which is used in one's business, and which
gives him an opportunity to obtain an
advantage over competitors who do not know or
use it. It may be a formula for a chemical
compound, a process of manufacturing, treating
or preserving materials, a pattern for a
machine or other device, or a list of
customers" (id. at 474, 475).

In its review of the definition, the court stated that "[T]he
subject of a trade secret must be secret, and must not be of
public knowledge or of a general knowledge in the trade or
business" (id.).

In my view, the nature of the records and the area of commerce
in which a profit-making entity is involved would be the factors
used to determine the extent to which disclosure of the records
would "cause substantial injury to the competitive position" of the
enterprise. Therefore, the proper assertion of §87(2)(d) would be
dependent upon the facts and, again, the effect of disclosure upon
the competitive position of the entity to which the records relate.

Lastly, internal communications between or among an agency's
staff would be subject to §87(2)(g). That provision permits an
agency to withhold records that:

"are inter-agency or intra-agency materials
which are not:

i. statistical or factual tabulations or
data;

ii. instructions to staff that affect the
public;

iii. final agency policy or determinations;
or

iv. external audits, including but not
limited to audits performed by the comptroller
and the federal government..."

It is noted that the language quoted above contains what in effect
is a double negative. While inter-agency or intra-agency materials
may be withheld, portions of such materials consisting of
statistical or factual information, instructions to staff that
affect the public, final agency policy or determinations or
external audits must be made available, unless a different ground
for denial could appropriately be asserted. Concurrently,
those portions of inter-agency or intra-agency materials that are
reflective of opinion, advice, recommendation and the like could in
my view be withheld.

I hope that I have been of some assistance. Should any
further questions arise, please feel free to contact me.

Sincerely,

 

Robert J. Freeman
Executive Director

RJF:pb
cc: Karen Eastman
Dorothea Manning