Opinion
Opinion By: Jack Conway, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
This matter having been presented to the Attorney General in an open records appeal, and the Attorney General being sufficiently advised, we find that the City of Richmond violated the Open Records Act in denying Richmond Register reporter Ronica R. Shannon's April 7, 2010, request to inspect "all correspondence to the City's request for bid proposals for Gibson Bay Cafe's operation . . .[,] including actual proposals, memoranda, or other submitted documents." Although its intent in issuing a request for proposals for operation of the cafe at the Gibson Bay Golf Course may have been to engage in competitive negotiation, the procurement process the City employed resembled both competitive negotiations and competitive sealed bidding creating a public perception, that extended to the Richmond Board of Ethics, 1 that the city was engaged in a "competitive bidding process" under the terms of which the "bid proposals" would be available for inspection upon opening. Because the City did not strictly adhere to the requirements for competitive negotiation found at KRS 45A.085 and 200 KAR 5:307, we find that it impermissibly relied on KRS 61.878(1)(i) and (j) in characterizing the "bid/ proposals" and related documentation as preliminary records subject to inspection only after a contract was awarded, and improperly denied the Richmond Register's request.
In its April 8, 2010, denial of Ms. Shannon's request, the City contrasted its request for proposals from an invitation for bids:
The nature of the request for proposals is one as to which specifications cannot be made sufficiently specific to permit award on the basis of either the lowest bid price or the lowest evaluated bid rice. As a result, the City has not requested sealed bids, which would as per well-established precedent, be open to public inspection immediately upon their having been opened, but, rather, has entered into competitive negotiation looking towards an agreement with a third party for the operation of the cafe.
Because the competitive negotiation process was "ongoing" at the time of Ms. Shannon's request, the City refused to disclose the records identified in her request on the basis of KRS 61.878(1)(i) and(j).
On appeal, the Richmond Register questions the City's characterization of the procurement process as competitive negotiations, providing the Attorney General with a copy of the advertisement that appeared in the newspaper which stated, in part:
All proposals should be sealed and delivered in person to the City Clerk on the second floor of Richmond City Hall by 4:30 p.m. on March 26, 2010. Sealed proposals will be opened and reviewed by the City Manager on March 29, 2010. (Emphasis added.)
The newspaper also provided this office with an article that identified those present at the "bid openings" as the city manager, the finance director, the city attorney, two commissioners, and chair of the golf committee, reminding us that the Richmond Board of Ethics publicly declared that the City was engaged in competitive sealed bidding.
Given these conflicting facts, on June 14, 2010, the Attorney General asked the City to respond to questions concerning the procurement process and to provide us with copies of the request for proposals issued in March, and in modified RFP, along with the two proposals it received. 2 Specifically, we asked what measures were taken to maintain the confidentiality of the proposals. The City acknowledged that City personnel and officials who the city manager "felt might be helpful to him" were present at the opening, including two commissioners who "function as the Board Commissioners' liaison to the City Parks and Recreation Department." The City further acknowledged that the City sought the imput of the City Golf Board, comprised of "local citizens who are themselves avid golfers," on the proposals prior to awarding a contract. Although the city attorney advised the city manager to open the proposals in a "closed meeting, " the City did not strictly adhere to the requirements of that process found in KRS 45A.370 and 200 KAR 5:307 to insure nondisclosure of the contents of the proposals, and could not thereafter treat the proposals it received as confidential pending award of a contract. Disclosure of the proposals to the broad audience described in newspaper accounts and the City's responses was more consistent with competitive sealed bidding than competitive negotiations, and thus the proposals should have been available for public inspection when they were opened.
It is widely recognized that in the world of procurement perception is critical. Strict compliance with the statutory and regulatory requirements governing the procurement process insures the integrity of, and promotes public confidence in, that process, reducing the likelihood of a successful protest. In the context of competitive negotiations, this translates into a series of measures aimed at protecting the contents of proposals from disclosure both before and after they have been opened. Because the proposals must be held in confidence until a contract is awarded, the proposals are closely guarded. Individuals charged with evaluating the proposals, and individuals from whom imput is sought, are required to execute confidentiality agreements prohibiting discussion of the content of the proposals. At the state level, additional security measures are established in Finance Administration Policy. 200 KAR 5:307 Section 4 thus provides:
Proposal shall not be subject to public inspection until negotiations between the purchasing agency and all offerors have been concluded and a contract awarded to the responsible offeror submitting the proposal determined by the purchasing officer in writing to be the most advantageous to the Commonwealth, based upon the price and the evaluation factors set forth in the solicitation.
The record on appeal suggests that the City failed to observe these precautions.
To begin, the advertisement that appeared in the Richmond Register from March 7, 2010, to March 14, 2010, stated that the proposals would be opened on March 29, 2010, language that is typically associated with competitive sealed bidding and not with competitive negotiations. Although we requested a copy of the RFP, the City did not provide one, presumably through oversight, but instead furnished us with a copy of the advertisement which indicates that "[i]nformation concerning the proposal can be obtained at Richmond City Hall . . . ." Because we have no copy of the RFP, we are unable to ascertain whether it conformed to 200 KAR 5:307 Section 2(2). Moreover, the record on appeal does not reflect that any measures were taken to maintain the confidentiality of the contents of the proposals, other than opening them at a "closed meeting, " or that those with whom the proposals were shared executed a confidentiality agreement. The City's casual approach to competitive negotiations did not insure the confidentiality of the proposals or promote confidence in the integrity of the process. The approach resulted in the perception that the proposals were submitted in response to an invitation for bids under KRS 45A.080, and available for inspection when "opened" on March 29, rather than a request for proposals under KRS 45A.085, and available for inspection only after a contract was awarded, a perception shared by the Richmond Board of Ethics. 3 Under these circumstances, we find that the City improperly relied on KRS 61.878(1)(i) and (j) in denying Ms. Shannon's April 7 request. In our view, she was entitled to the proposals and related correspondence and documentation related to the procurement process and proposals upon submission of her request.
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.
Lorie Love Hailey, EditorGarrett T. Fowles
Footnotes
Footnotes
1 In an opinion issued by the Board of Ethics following an April 22, 2010, meeting at which a conflict of interest complaint concerning operation of the cafe was considered, the Board recognized an "exception for conflicts when a competitive bidding process is employed, such as here. " (Emphasis added.)
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2 Our request was submitted under authority ofKRS 61.880(2)(c) which provides:
On the day that the Attorney General renders his decision, he shall mail a copy to the agency and a copy to the person who requested the record in question. The burden of proof in sustaining the action shall rest with the agency, and the Attorney General may request additional documentation from the agency for substantiation. The Attorney General may also request a copy of the records involved but they shall not be disclosed.
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3 Although the conflict of interest issue presented to the Board was the focus of its inquiry, the procurement process employed was not entirely tangential to that inquiry. At page 2, the Board analyzed the application of Section 33.16 of the City's Code of Ethics to the alleged conflict, dismissing the exception found at Subsection 3 "for conflict when a competitive bidding process is employed, as here" because the officer involved in the alleged conflict was authorized to participate in awarding the contract. The Board considered and ultimately rejected the exception based on the perceived nature of the procurement process employed and an exception to that exception.
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