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August 2, 1993

 

 

Mr. Jeffrey N. Mis
City Attorney
City of North Tonawanda
City Hall
216 Payne Avenue
North Tonawanda, NY 14120-5489

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 Mr. Mis:

I have received your letter of July 23 in which you raised
questions concerning access to certain records.

You wrote that it is your understanding that "where a bid
opening has taken place, the records reflecting the outcome of the
bid are available to the public." However, you asked whether "the
actual bids once received by the Clerk's office [are] considered
public records that are available for inspection, or are they not
public records available for inspection until the bids are
officially opened." You asked further whether "the opening of the
bids alone and compiling of same determine whether they are public
records" or whether they do not become accessible "until the public
body has made a determination on those bids." Finally, you
questioned whether actual bids and their contents or "only the
compilation of same" are accessible.

In this regard, I offer the following comments.

First, the Freedom of Information Law pertains to agency
records, and §86(4) of the Law defines the term "record"
expansively to mean:

"any information kept, held, filed, produced,
reproduced by, with or for an agency or the
state legislature, in any physical form
whatsoever including, but not limited to,
reports, statements, examinations, memoranda,
opinions, folders, files, books, manuals,
pamphlets, forms, papers, designs, drawings,
maps, photos, letters, microfilms, computer
tapes or discs, rules, regulations or codes."

Therefore, as soon as a bid or any other documentation comes into
the possession of an agency, I believe that it would constitute a
"record" that falls within the coverage of the Freedom of
Information Law. This is not to suggest that a bid must be
disclosed immediately when it is received, but rather that it is
subject to rights of access conferred by the Freedom of Information
Law.

Second, 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 section 87(2)(a) through (i) of the Law.

I believe that most relevant with respect to access to bids
and related records is §87(2)(c). That provision permits an agency
to withhold records or portions thereof that:

"if disclosed would impair present or imminent
contract awards or collective bargaining
negotiations..."

In my view, the key word in §87(2)(c) is "impair", and the
potential for harm or impairment as a result of disclosure is the
determining factor regarding the propriety of a denial under that
provision.

In the context of your letter, if, for example, an agency
seeking bids receives a number of bids and related records, but the
deadline for their submission has not been reached, premature
disclosure of the records 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, after the deadline
for submission of bids or other records has been reached, often the
passage of that event results in the elimination of harm. As such,
bids may be available, depending upon the attendant facts, even
prior to an official bid opening or a determination to make an
award. Further, it has been held that bids or proposals are
available after a contract has been awarded, and that, in view of
the requirements of the Freedom of Information Law, "the successful
bidder had no reasonable expectation of not having its bid open to
the public" [Contracting Plumbers Cooperative Restoration Corp. v.
Ameruso, 105 Misc. 2d 951, 430 NYS 2d 196, 198 (1980)]. From my
perspective, the same principles would apply to letters or other
documentation submitted by bidders.

Another provision 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 §87(2)(d) involves the extent, if
any, to which disclosure would "cause substantial injury to the
competitive position" of a commercial enterprise. If, for example,
records 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.

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
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