Opinion
Opinion By: Albert B. Chandler III, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Kentucky Department of the Blind violated the Open Records Act in the disposition of John C. Dulske's request for certain records in the Department's possession relating to its contract with the United States Department of Defense, Department of the Army, Fort Knox, Kentucky for the provision of food services at Fort Knox. 1 For the reasons that follow, we affirm the Department's disposition of Mr. Dulske's request.
In his letter of appeal, Mr. Dulske indicated that the Department consented to the release of six (6) of thirty-seven (37) requests; denied twenty-six (26) out of thirty-seven (37) under KRS 61.870(2) on the basis that the Department was not in possession of records responsive to those request; and the remaining requests were withheld pursuant to various exceptions of the Open Records Act. In his appeal, Mr. Dulske challenges the Department's actions relating to his numbered requests 1, 35, and 37. These requests and the Department for the Blind's response to these requests are set out below.
Request No. 1 asked for the production of:
The current prime contract between the United States of America, and any "Governmental Body" (as term is defined by KRS § 45A.030(12)) of the Commonwealth of Kentucky, (including but not limited to the Kentucky Department for the Blind: Division of Client Services, Kentucky Business Enterprise Program, and the State Commerce of Blind Vendors) for the performance of food services at Ft. Knox, Kentucky including Schedule B pricing and all modifications to the contract.
Department's Response to Request No. 1:
The Department for the Blind respectfully denies this request as specifically exempted from inspection under the Kentucky Open Records Act at KRS 61.878(1)(c)1 excluding "records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which if openly disclosed would permit an unfair commercial advantage to competitors of the entity that disclosed the records; . . . ."
Request No. 35 asked for copies of:
All DOCUMENTS and DATA relating to Kentucky's determination of contractor capability or responsibility, including documents showing resume, education, and training of managers and personnel.
Department's Response to Request No. 35:
There are no known records maintained by the Department for the Blind responsive to this request which must be denied for failure to specify with reasonable particularity the records to be produced pursuant to KRS 61.870(2) and KRS 61.872(2)
Request No. 37 requested copies of:
All Documents and DATA (including but not limited to correspondence, notes memoranda, notes of telephone conversations and/or other communicative media) by, between and among procurement representatives at Fort Knox, Kentucky and any Governmental Body of the Commonwealth of Kentucky (including but not limited to the Kentucky Department for the Blind: Division of Client Services, Kentucky Business Enterprise Program, and the State Commerce of Blind Vendors) that relates or refers in any way to Cantu Services, Inc.
Department's Response to Request No. 37:
The two (2) page document of typewritten notes from a telephone conversation on September 5, 2002 that is responsive to this request is exempt from disclosure pursuant to KRS 61.878(1)(j).
As a result of the Department for the Blind's responses to Requests 1, 35, and 37, his request, Mr. Dulske initiated the instant appeal.
After receipt of notification of the appeal and a copy of the letter of appeal, Sue G. Simon, Counsel for the Department of the Blind, provided this office with a response to the issues raised in the appeal. In her supplemental response, Ms. Simon addressed the requests at issue seriatim and, expanding on the Department's original responses, advised in relevant part:
Request No. 1 was properly denied as the Department for the Blind has in its possession a restricted proprietary and confidential bid proposal submitted to the U. S. Department of Defense, Department of the Army, Ft. Knox, Kentucky in response to a 1999 solicitation for contractual food services. The Department for the Blind was subsequently awarded the contract memorialized on a one-page form. The contract has been subsequently amended. The requested current prime contract between the United States of America and the Department for the Blind for the performance of food services at Fort Knox, Kentucky including Schedule B pricing and all modifications to the contract is exempt from disclosure under the Kentucky Open Records Act at KRS 61.878(1)(c)1.
The Department for the Blind is the state licensing agency for the federal Randolph Sheppard vending facility program. 20 U.S.C. § 107 et seq. It is afforded a priority for contractual food services on military installations if its bid falls within the competitive range. 34 CFR 395.33 (2001). The food services contract at Fort Knox was a hard fought victory when the Request for Proposals (RFP) was issued to permit participation by the Department for the Blind. And included the Randolph Sheppard priority. As such, this is a highly competitive field. The Department for the Blind retains an office copy restrictively labeled confidential and propriety of the initial bid proposal submitted in response to the 1999 Request for Proposal (RFP) issued by the United States Department of the Army. This proposal was prepared by Mitchco International, Inc., a privately owned corporation, in partnership with and on behalf of the Department for the Blind. Ultimately, a one page contract form was signed between the Commissioner, Department for the Blind and Contracting Officer for the United States Department of Defense, United States Army, Fort Knox, Kentucky 2 Subsequently, there have been contract amendments.
The Department for the Blind posits that its bid composed of the restricted proprietary and confidential technical and cost proposals and solicitation documents are exempted from disclosure pursuant to KRS 61.878(1)(c)1. . . .
?
The Department for the Blind meets this same test for exemption as disclosure of contractual documents in its possession would provide competitors in military solicitations an unjust advantage to know unit pricing and quantities. Clearly, the release of any portion of the bid proposal falls within this statutory exemption from release because such information contains commercial, confidential, proprietary, or competitive information the release of which would place the Department for the Blind at an unfair disadvantage in future competitive military procurements. Further, as a state licensing agency under the Randolph-Sheppard Act, the Department for the Blind's ability to compete effectively in a military procurement conducted pursuant to that federal law would be harmed if the requested documents were released and placed in the public domain available to its competitors.
?
The technical and management plans containing Mitchco International's key personnel and management structure are exempt from disclosure as it could cause competitive harm to the Department for the Blind's partner in the provision of contractual food services at Fort Knox. Access to a contractor's key personnel is not envisioned under open records laws as it would give a competitive edge to know qualifications, training, employment history and constitutes a clearly unwarranted invasion of personal privacy if disclosed. Further, if individual managers were contacted, proprietary information could be disclosed about day to day operations.
Courts have held commercial or financial matter to be confidential if disclosure could impair the ability of the government to obtain requisite information in the future or to cause substantial harm to the competitive position of the entity from which the information was obtained. National Parks and Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974); Landfair v. United States Department of the Army, 645 F. Supp. 325, 327 (D.D.C. 1986). The Department for the Blind, Mitchco International, and River City Management Services continue to take every opportunity in any forum to protest public dissemination of the information of this confidential commercial information because its commercial value to competitors will cause substantial harm to the business that submitted it. It was the expectation that the entire bid proposal in the possession of the Department for the Blind would remain proprietary and confidential and it so clearly marked restrictively. If disclosed, competitors could simply copy and refine the work to their competitive advantage in federal military procurements. The Court in McCoy v. Weinberger, 386 F. Supp 504 (D.C. Ky. 1974) held that disclosure of proprietary work product would cause substantial competitive harm.
For all these reasons, the confidential bid proposal for contractual food services at Fort Knox is exempt in its totality from disclosure under the Kentucky Open Records Act at KRS 61.878(1)(c)1.
Request No. 35 was properly denied as no documents specifically responsive to this request are in the possession of the Department for the Blind and must be denied pursuant to KRS 61.870(2). The requester on appeal clarifies that the documents sought pertain to the River City Management Services. September 3, 2003 letter to OAG, page 3. The only documents in the possession of the Department for the Blind related to contactor capability or responsibility, including documents showing resume, education, and training of manager and personnel, are contained within the bid proposal provided to the Department for the Blind by Mitchco International. These documents are entitled to the statutory exemption at KRS 61.878(1)(c)1. which is more fully set out in the Department for the Blind's response to Request No. 1 above.
?
Request No. 37 was properly denied as the notes from a telephone conversation between staff of the Department for the Blind and representatives of Fort Knox, Kentucky are exempt from disclosure. KRS 61.878[1](i) and (j). These requested notes fall clearly within the specific and mandatory exemptions from disclosure. It is incumbent on the public entity, Department for the Blind, to abide by the law to ensure that preliminary notes are protected from public disclosure.
These notes are a subjective perspective of one party to a telephone conversation from which no final agency action has emanated. It may or may not be an accurate representation of the exact telephone conversation or opinion of the other party to the conversation. These notes are a staff member's personal recollection of a telephone conversation. There is an imperative governmental need for confidentiality in the conduct of its preliminary business that has been recognized and codified as this exemption to the Kentucky Open Records Act. Courts have recognized this concept and statutory proscriptions to disclosure. The Office of the Attorney General consistently has upheld the statutory prohibition to disclosure of work papers, intra office memoranda, and preliminary discussions. 03-ORD-245 and 01-ORD-222; KRS 61.878(1)(j).
?
In the instant appeal, the Department for the Blind does not have a document even rising to the level of an electronic mail transmission from a state employee. Rather, what is at issue in our case consists of a couple of pages of notes taken by a state employee of a telephone conversation in which a non-state employee expresses an opinion. Such notations jotted down to chronicle a telephone conversation fall squarely within the statutory exemptions from disclosure of notes and/or preliminary opinions. To latter attribute for public disclosure a verbally expressed opinion which may or may not have been accurately understood, perceived, or noted by another party to the conversation would unreasonably curb any hope for future frankness between citizens and public servants.
It is not in the public interest to curtail the state's ability to cull opinion from appropriate sources for fear that notes -- accurate or inaccurate - from conversations would later be placed in the public domain. Diminishing the free exchange of information between individuals and state agency representatives cannot be in the public interest. State action formulated without forthright input is too insular to benefit the public interest. Restriction of free expression does not further the purposes of the Kentucky Open Records Act to ensure that state agency final action is available for public scrutiny. The requested notes from a telephone conversation are specifically exempted from disclosure under the Kentucky Open Records Act at KRS 61.878(1)(i) and (j).
To facilitate this office's review of this appeal, we requested that the Department provide us with a copy of the records in question for an in camera review. The documents were not disclosed to other parties. KRS 61.880(2)(c); 40 KAR 1:030, Section 3.
We are asked to determine whether the Department for the Blind's actions relative to the Mr. Dulske's requests 1, 35, and 37 were consistent with the Open Records Act. 3 For the reasons that follow, we affirm the Department's disposition of Mr. Dulske's request.
Request No. 1
We conclude that the Department's denial of the request for the "current prime contract" between the United States of America and the Department for the Blind for the performance of food services at Fort Knox, Kentucky, "including Schedule B pricing and all modifications to the contract," was proper under KRS 61.878(1)(c)1 and did not constitute a violation the Act.
KRS 61.878(1)(c)1. provides:
Upon and after July 15, 1992, records confidentially disclosed to an agency or required to be disclosed to it, generally recognized as confidential or proprietary, which if openly disclosed would permit an unfair commercial advantage to competitors of the entity that disclosed the records.
In 99-ORD-201, we discussed the application of KRS 61.878(1)(c)1., as it applied to RFP bid proposals and the type of records and information that may qualify for exclusion from disclosure under that exception. It is instructive to quote at length:
In 96-ORD-135, this office, in discussing the application of KRS 61.878(1)(c)1., noted that although the exemption had not generally been construed to exclude bid proposals, once those bids are opened and the vendor selected, the Attorney General had recognized RFP bid proposals which contained secret commercial plans and formulas may qualify for exclusion under KRS 61.878(1)(c)1. Citing OAG 83-256, OAG 88-1, and 92-O RD-1134, at pages 3 and 4 of 96-ORD-135, we explained:
See also, OAG 83-302 (adopting the reasoning of OAG 83-256).
Similarly, in OAG 88-1 we held that a bid proposal submitted in response to an RFP issued by the Finance and Administration Cabinet, Division of Purchases, contained secret commercially valuable plans and formulas which if openly disclosed would permit an unfair advantage to competitors of the entity submitting the proposal, including consolidated financial statements, project narratives, summary experience charts, work plans, and pricing schedules.
In 92-ORD-1134, we identified the distinguishing feature which led to the results in these decisions:
92-ORD-1134, p. 5-6. In the latter decision, we held that the City of Paducah properly relied on KRS 61.878(1)(c)1. in withholding a proposal for an 800 MHZ Trunked Radio Communication System which contained specific detail relative to items of equipment to be used in implementing the system, as well as site selection, charts, maps, and diagrams designed by the entity submitting the proposal for the purpose of carrying out the city's objectives. The city amply demonstrated that the system might serve as a prototype for similar systems elsewhere, and that the entity submitting the proposal therefore had a proprietary interest in that proposal such that disclosure would provide its competitors with an unfair commercial advantage.
In 99-ORD-201, we held the Workers Compensation Funding Commission, under authority of KRS 61.878(1)(c)1., properly withheld information that included the precise formulae or processes which the companies would employ to provide the services the Commission was seeking in RFP, including proprietary ranking systems, policies and software; individual personnel data and bios; company customers and references; fee mechanisms; company research profiles and proprietary scorecard ratings on two of the Commission's current money managers. In 99-ORD-201, page 8, we discussed examples of information contained in RFP proposals that we had held to be properly withheld from disclosure under KRS 61.878(1)(c)1. In that decision, we stated:
In the prior opinions of this office, cited above, we have recognized that RFP proposals, which contain confidential or proprietary information, may qualify for exclusion under KRS 61.878(1)(c)1. Examples of the types of information that was found to have been properly excluded are: "the personnel which will be relied upon and includes biographic information of individuals in the employ of the company, contains charts, maps, diagrams, all of which has been especially designed and organized," (OAG 83-256); "consolidated financial statements, project narratives, summary experience charts, work plans, and pricing schedules," (OAG 88-1); "the method and equipment to be used, and that the bidders demonstrate that they have the personnel and capability to accomplish the objective," (92-ORD-1134).
The Kentucky Supreme Court has analyzed KRS 61.878(1)(c)1., concluding that the public agencies which had invoked it met their statutory burden of proof.
In
Marina Management Services, Inc. v. Cabinet for Tourism, Ky., 906 S.W.2d 318 (1995), the Court held that records containing financial information of privately owned marina operators were exempt from disclosure. The Court reasoned that disclosure would provide an unfair advantage to competitors by allowing them to ascertain the economic status of the marina operators. At page 319 of that opinion, the Court observed:
The records submitted to the Parks Department include information on asset values, notes payable, rental amounts on houseboats, related party transactions, profit margins, net earnings, and capital income. These are records of privately owned marina operators, disclosure of which would unfairly advantage competing operators. The most obvious disadvantage may be the ability to ascertain the economic status of the entities without the hurdles systematically associated with acquisition of such information about privately owned organizations. Further, the facts on the record indicate that the audit statements were disclosed confidentially to Tourism and the Auditors Office. On these facts alone, the exemption clearly applies.
Thus, in Marina, the Court found that the Parks Department adduced sufficient proof to support invocation of the exemption.
Similarly, in
Hoy v. Kentucky Industrial Revitalization Authority, Ky., 906 S.W.2d 766 (1995), the Court found:
The financial information required to be submitted by GE in its application to KIRA detailed the company's business and revitalization project. Under administrative regulations adopted by KIRA, such information included a financial history of the corporation, projected cost of the project, the specific amount and timing of capital investment, copies of financial statements and a detailed description of the company's productivity, efficiency and financial stability. . . . It does not take a degree in finance to recognize that such information concerning the inner workings of a corporation is "generally recognized as confidential or proprietary" and falls within the wording of KRS 61.878(1)(c)(2).
Again, the public agency from which access to confidentially disclosed records of a private corporation was sought established that those records were generally recognized as confidential or proprietary.
To facilitate our review of Mr. Dulske's appeal, this office requested copies of the disputed records, under authority of KRS 61.880(2)(c). Those records were transmitted to this office and consist of three notebooks of records. From our in camera review, we identify and summarize generally the contents as follows: Part I - Solicitation Documents, which includes Schedule B pricing and set out a description of supplies and services and prices/costs for the joint venture; Part II - Technical Proposal, which contains the joint venture's understanding of specification requirements, including key personnel and management structure, staffing methodology, proposed personnel worksheets, and information indicating qualifications, records of achievement and recognition of past performance of the company and employees; and Part III - Cost Proposal, which contains the proposed costs worksheets for personnel, equipment, facility costs/profits for joint venture provision of food services.
Based on the above decisions of the courts and this office and our in camera review of the records, we find that the information which the Department for the Blind identified in its responses to Request No. 1 and which it withheld under authority of KRS 61.878(1)(c)1., is information generally recognized as confidential or proprietary.
In its supplemental response, the Department for the Blind argued that disclosure of these contractual documents would provide competitors in military solicitations an unjust advantage by allowing them to know, among other things, unit pricing and quantities. The Department further argued that release of any portion of the bid proposal falls within KRS 61.878(1)(c)1. because it contains commercial, confidential, proprietary, or competitive information the release of which would place the Department for the Blind at an unfair disadvantage in future competitive military procurements and, as a state licensing agency under the Randolph-Sheppard Act, the Department's ability to compete effectively in a military procurement conducted, pursuant to that federal law, would likewise be harmed if the requested documents were released and placed in the public domain available to its competitors. Based upon our review of the records at issue, we agree with the Department's arguments. Accordingly, we conclude that the Department for the Blind could properly withhold access to these documents under KRS 61.878(1)(c)1.
Moreover, we believe the Department for the Blind, Mitchco International, Inc., and River City Management Services are in the best position to assess the confidential and proprietary nature of the information submitted and whether its release would permit an unfair commercial advantage to their competitors, and that they have demonstrated that the records withheld qualify for exclusion under KRS 61.878(1)(c)1. See 99-ORD-201. The Department further argued in its supplemental response that the Department for the Blind, Mitchco International, and River City Management Services "continue to take every opportunity in any forum to protest public dissemination of the information of this confidential commercial information because its commercial value to competitors will cause substantial harm to the business that submitted it. It was the expectation that the entire bid proposal in the possession of the Department for the Blind would remain proprietary and confidential and it so clearly marked restrictively. As the Department stated in its supplemental response: "[i]f disclosed, competitors could simply copy and refine the work to their competitive advantage in federal military procurements. "
Accordingly, under these facts, we conclude the Department for the Blind, working in tandem with the two companies, have established that the information in the RFP Proposal was of such a character that disclosure would permit an unfair commercial advantage to competitors of the Department for the Blind, Mitchco International Inc., and River City Management Services and could be properly be withheld from disclosure under KRS 61.878(1)(c)1.
Request No. 35
In response to Mr. Dulske's clarified request that the records "relating to Kentucky's determination of contractor capability or responsibility, including documents showing resume, education, and training of managers and personnel, " pertained to River City Management Services, the Department for the Blind advised that it had no documents specifically responsive to request no. 35 and further advised that the only documents in its possession related to contractor capability and responsibility are contained within the bid proposal provided to the Department for the Blind by Mitchco, and these documents are exempt from disclosure under KRS 61.878(1)(c)1. We conclude that the Department of the Blind's response to request no. 35 did not constitute a violation of the Open Records Act.
This office has consistently recognized that a public agency cannot afford a requester access to records that it does not have or which do not exist. 93-ORD-134. The agency discharges its duty under the Open Records Act by affirmatively so stating. 99-ORD-150. Thus, the Department's action in affirmatively advising Mr. Dulske that it did not have any documents specifically responsive to his request was consistent with the Open Records Act and prior decisions of this office and did not constitute a violation of the Act.
Moreover, for the reasons set forth in our holding on request no. 1, the Department could properly withhold access to documents in its possession related to contractor capability and responsibility contained within the bid proposal under KRS 61.878(1)(c)1.
Request No. 37
We also find that the Department for the Blind properly withheld from disclosure the two (2) page document of typewritten notes of a telephone conversation between staff of the Department and representatives of Fort Knox, Kentucky under authority of KRS 61.878(1)(i) and (j). These exemptions authorize the nondisclosure of:
(i) Preliminary drafts, notes, correspondence with private individuals other than correspondence which is intended to give notice of final action of a public agency.
(j) Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended.
This office has consistently held that preliminary interoffice and intraoffice memoranda or notes setting forth opinions, observations and recommendations, as well as investigative reports that do not represent the agency's final action, may be withheld from public inspection pursuant to KRS 61.878(1)(i) and (j). These exemptions are intended to protect the integrity of the agency's internal decision-making process by encouraging the free exchange of opinions and recommendations. See, e.g., OAG 88-85; OAG 90-97; 93-ORD-26; 02-ORD-099. They are premised on the notion that:
Not every paper in the office of a public agency is a public record subject to public inspection. Many papers are simply work papers which are exempted because they are preliminary drafts and notes. KRS 61.878(1)(g) [now (i)]. Yellow pads can be filled with outlines, notes, drafts and doodlings which are unceremoniously thrown in the wastebasket or which may in certain cases be kept in a desk drawer for future reference. Such preliminary drafts and notes and preliminary memoranda are part of the tools which a public employee or officer uses in hammering out official action within the function of his office. They are expressly exempted by the Open Records Law and may be destroyed or kept at will and are not subject to public inspection.
Only if these predecisional documents are adopted as part of any final action of the public agency do they forfeit their preliminary characterization. The Department in its response advised that these notes were a staff member's personal recollection of a telephone conversation from which no final agency action was emanated. This document retains its preliminary character until such time as it is adopted and made a part of final agency action. Accordingly, the Department properly denied access to this document under KRS 61.878(1)(i) and (j).
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.
Distributed to:
John C. DulskeDulske & FiorinoThe Spectrum Building613 NW Loop 410, Suite 550San Antonio, TX 78216
Denise Placido, CommissionerDepartment for the Blind 209 St. Clair StreetP.O. Box 757Frankfort, KY 40602-0757
Bobby McDowellRecords CustodianDepartment for the Blind 209 St. Clair StreetP.O. Box 757Frankfort, KY 40602-0757
Sue G. SimonDepartment for the Blind 209 St. Clair StreetP.O. Box 757Frankfort, KY 40602-0757
Footnotes
Footnotes
1 From documents supplied by the parties, we note the following brief summary of facts related to the contract: the Department for the Blind submitted a bid proposal in response to the 1999 Request for Proposal (RFP) issued by the United States Department of the Army for the provision of food services at Fort Knox, Kentucky. Pursuant to a Management Services Agreement, Mitchco International, Inc. (Mitchco), a privately owned corporation, agreed to assist the Department for the Blind by preparing the response to the RFP for submission by the Department and would serve as the management service contractor and provide the technical and management assistance to the Kentucky Department for the Blind and the licensed blind vendor appointed by the Department to manage the awarded Fort Knox contract. The contract was awarded to the Department for the Blind. Mitchco also entered into a Joint Venture Agreement with Charles Allen, the appointed licensed blind vendor, to assist in the preparation of a proposal to be submitted by the Department for the Blind in direct negotiations with the United States Department of the Army for the contract for provision of food services at Fort Knox, Kentucky. The name of the joint venture was River City Management Services and Mitchco was to be the manager of the joint venture.
2 The Department for the Blind appointed a licensed Randolph Sheppard vendor to manage the awarded contract. The Randolph Sheppard vendor entered a joint venture agreement with Mitchco International, Inc. The name of the Joint Venture is River City Management Services, a Joint Venture.
3 Both parties have submitted responses and replies to the issues on appeal, including references to the Federal Freedom of Information Act and Federal case law. Because the burden rests with the public agency to establish that records are exempt from disclosure under the Kentucky Open Records Act under KRS 61.880(2)(c), we analyze the Department for the Blind's responses and arguments in support of its action under Kentucky case law and prior open records decisions of this office.