Opinion
Opinion By: Jack Conway, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
This matter having been presented to the Office of the Attorney General in an open records appeal, and the Attorney General being sufficiently advised, we find that the Transportation Cabinet violated provisions of KRS 61.870 to 61.884 in denying John H. Dwyer, Jr.'s, May 27, 2011, request for copies of "[a]ll final contractor performance reports for [three projects identified by project number]." Because the reports "concern the construction of the projects," and "work on the projects has concluded," they must be "provided to the public." The Cabinet's reliance on KRS 61.878(1)(j) to support nondisclosure of the reports was therefore misplaced.
On June 1, 2011, the Cabinet notified Mr. Dwyer that the requested performance reports qualify for protection as preliminary documents under KRS 61.878(1)(j) because they are "completed by the resident engineer overseeing a project, outlining their thoughts of the contractor's performance, and setting forth their opinions of the contractor's work for review and consideration by the Prequalification Committee when determining a contractor's eligibility. " They are, the Cabinet continued, "[i]n no way . . . intended to give notice of any final agency action, and at the discretion of the Committee, these opinions may be accepted or disregarded."
Shortly after receipt of the Cabinet's denial of Mr. Dwyer's request, Anne E. Trout, an associate in Mr. Dwyer's law firm, initiated this appeal. She maintained that the reports were not preliminary, observing:
Eaton Construction Company, Inc., a contractor on [the referenced projects], received on May 4, 2011, its "Final Contractor's Performance Report" on the . . . projects. Eaton Construction received letters from the Transportation Cabinet's chief district engineer, Thomas Wright, who specifically states that the performance reports are final.
It was Ms. Trout's position that because "the Transportation Cabinet has made its final decisions regarding the contractors' performance on the aforementioned construction projects, and has distributed the reports to the contractors, " the reports have forfeited their preliminary status.
In response to this office's KRS 61.880(2)(c) request for additional information, the Cabinet expanded on its description of the performance reports and the prequalification process. Acknowledging that the projects to which the reports relate have been concluded, the Cabinet explained:
[T]he status of the projects themselves has no bearing on the preliminary status of the performance evaluations in question, as performance evaluations exist for other purposes and play absolutely no part in the finalization of a project.
The Prequalification Committee ("Committee") plays no role in a highway project, beyond that of prequalifying contractors for the purposes of being eligible to bid on a project or perform work on a project as a subcontractor. The purpose of the Committee is to review TC 14-1 forms (Application for Certificate of Eligibility) and to issue a recommendation to the State Highway Engineer concerning a contractor's eligibility. It is the responsibility of the State Highway Engineer to then issue a determination of eligibility.
Performance Reports are reviewed by the Prequalification Committee during the process of renewing or reinstating a contractor's Certificate of Eligibility, and in the event that there is evidence of poor performance on the part of a contractor, the Committee may elect to apply a penalty to the contractor up to and including suspension of the contractor's Certificate of Eligibility.
Because no action has been taken by the Prequalification Committee on the contractor's eligibility for future projects, the Cabinet argued, they "remain preliminary and well within the scope of KRS 61.878(1)(j)."
The Cabinet identified a related use to which the reports are put. Specifically, the reports are used to determine "the percentage factor for multiplying the maximum capacity rating in order to determine an eligibility rating. " The Cabinet hastened to note that the State Highway Engineer makes his final decision "based solely according to the requirements set forth in 603 KAR 2:015 § 3." Neither the report nor corresponding percentage rating, the Cabinet reasserted, is "incorporated into the final decision to prequalify a contractor or to deny prequalification of a contractor. " Each, the Cabinet asserted, retains its preliminary character.
In closing, the Cabinet characterized Ms. Trout's argument that the reports are final because they are denominated "Final Contractor's Performance Reports(s)" as "misguided." The Cabinet observed:
In this instance, the definition of "final" is simply "last," meaning that it is the last contractor performance report to be provided for the calendar year or project . . . . These reports indicate the opinions of the Resident Engineer, and only the resident engineer; and whether the observations and opinions of the resident engineer are final is irrelevant.
The Cabinet stipulated that the reports are signed by the chief district engineer, or his designee, "to reflect that he has seen the report . . . [but not] to reflect any type of final agency action or agreement with the opinion issued," or "any type of final decision or agency action by the . . . Cabinet concerning the contractor's performance." The Cabinet urged this office to affirm its position in the interest of promoting "honest communication between our field engineers and our Prequalification Committee." We find the Cabinet's position legally untenable.
Clearly, the performance reports "are used in a separate process to determine eligibility on future construction projects." Nevertheless, the reports evaluate construction projects that have been concluded, are reviewed and signed by the chief district engineer, and are transmitted to the contractors by cover letter designating them "Final Contractor's Performance Report." Whatever their function in determining eligibility for future projects, the reports forfeit their preliminary status as to completed projects upon approval by the chief district engineer and transmission to the contractor. Because "the Legislature clearly intended to grant any member of the public as much right of access to information as the next," 1 we believe the reports must "be provided to the public" upon submission of an open records request. Accord, OAG 82-233; OAG 90-50; OAG 92-30; 94-ORD-20; 07-ORD-056.
The Cabinet maintains that the performance reports exist exclusively for the purpose of enabling a committee to prequalify contractors to bid on projects, or perform work on a project as a subcontractor, and make recommendations to the State Highway Engineer in accordance therewith, including recommendations as to the "percentage factor for multiplying the maximum capacity rating in order to determine an eligibility rating. " The Cabinet emphasizes that "[t]he Committee makes its recommendations, and the State Highway Engineer makes his final decision, based solely on the requirements set forth in 603 KAR 2:015 § 3." Significantly, neither that regulation nor any other applicable regulation makes reference to the performance reports. Nor do the statutes authorizing the Cabinet to promulgate regulations for determining the eligibility of bidders for construction contracts. 603 KAR 2:015 § 3 establishes requirements for contractors seeking to procure a certificate of eligibility, directing them to submit form TC-14-1 consisting of an application and financial statement and establishing their:
(1) Ability to perform the types of work for which eligibility is requested[;]
(2) Construction experience . . .[;]
(3) [P]lant and equipment[; and]
(4) [F]inancial status . . . .
603 KAR 2:015 § 4 prohibits the Cabinet from disclosing financial information required by Sections 3(3) and (4), but makes no reference whatsoever to performance reports generated by the resident engineer and approved by the chief district engineer. In a similar vein, KRS 176.130, et seq., cited in the administrative regulation as the statutory authority for 603 KAR 2:015, focuses on the bidder's financial status. It references the contractor's "previous record" in only one place, KRS 176.140(1), and makes no reference to performance reports. While the omission of any reference to the performance reports in the statutes or regulations suggests that the State Highway Engineer's eligibility determination is not "based solely" on the criteria set forth in 603 KAR 2:015 § 3, we do not question the Cabinet's arguments concerning the function and purpose of the reports in the prequalification process.
We do, however, question the Cabinet's argument that this is the only function and purpose the performance reports serve and that disclosure of the reports would be detrimental to the prequalification process. Performance reports, or "evaluations" as the Cabinet describes them in its July 5, 2011, supplemental response, enable the Cabinet as evaluator, as well as the contractors undergoing evaluation, to measure the contractors' success or failure in the performance of their contractual obligations relative to a completed project. Thus, they serve a dual function relative to past performance and future eligibility. The reports serve an equally important function by facilitating public oversight of the state's highway program. Vast sums of taxpayer dollars are expended in consideration of the contractor's performance. Disclosure of the reports promotes the goal of agency accountability insofar as they relate to the expenditure of these public funds and records relating to "[a]mounts paid from public coffers are uniquely of public concern." OAG 9-30, p. 3. Finally, the reports implicate highway safety. Disclosure of the reports advances the public's right to know that the Cabinet is promoting this goal through its evaluation of completed projects as well as prequalification of eligible candidates for future projects. The reports thus have a purpose and function far beyond that articulated by the Cabinet.
As to the purported need for confidentiality in the prequalification process, it is stipulated that the Cabinet voluntarily discloses the reports to the contractors. Assuming, without conceding, that KRS 61.878(1)(j) shields the reports from disclosure before the contractor's eligibility is determined, the Cabinet regularly waives the exception by transmitting them to the contractors. In so doing, the Cabinet undermines the argument that disclosure inhibits "honest communication" between field engineers and prequalification committees. 03-ORD-042. Moreover, nothing prevents these contractors, or indeed the Cabinet, from making the reports public. It is only "financial information required by [603 KAR 2:015 Section 3(3) and (4)]" that is deemed confidential. We therefore question whether the need for secrecy articulated by the Cabinet is not overstated.
Additionally, we question the Cabinet's argument that "final" does not mean "final" in the context of a "Final Contractor's Performance Report," but instead means "last" as in "the last contractor performance report to be provided for the calendar year or project." Assuming, again without conceding, that the Cabinet can meaningfully distinguish these terms, we find that although the decision whether to grant a certificate of eligibility to the contractor has not been made, the reports have been reviewed by the chief district engineer who affixed his name without objection, have been transmitted to the contractor, and no longer enjoy protection as preliminary memoranda in which opinions are expressed. See, e.g., 01-ORD-83. We concur with Ms. Trout in the view that "[t]he final performance reports . . . mailed to the contractors stems from the completion of their work on the construction projects . . . [and reflect] final decisions of the contractors' performance on the contracts." Disclosure of the nonexempt reports serves a number of purposes not the least of which is enabling the public to know what a Cabinet evaluator thought of the job performance of a contractor entrusted with construction projects that implicate highway safety and compensated with taxpayer funds.
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:
Anne E. TroutAnn StanselTodd Shipp
Footnotes
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