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Wednesday, November 20, 2013

Transparency is collateral damage when major work is contracted out

I have previously mentioned the debated issue whether procurement transparency laws follow on to the contracts let for government work. See Will FOIA be foiled by outsourced subcontracting? 

The article cited below (click link)arises in Minnesota where its Supreme Court ruled, in the factual context of that case, that private contractors are immune from the State's equivalent FOIA law by a contract clause excluding them from the coverage of the law.

Minnesota high court: Business not subject to open-records laws
The Minnesota Supreme Court ruled Wednesday that a private business that contracted with a northern school district to renovate buildings isn’t subject to state open-records laws. The high court reversed the Appeals Court’s October ruling, which had been viewed as a victory for public access to government contracts.

Under the law, private residents or businesses contracting with the government must comply with the state’s Data Practices Act “as if it were a government entity.” A notice of the requirement must be included in the contract. In this case, the notice was excluded. Without it, the Supreme Court concluded there wasn’t a provision in the Data Practices Act that made the contract between Johnson Controls and the architectural firm public.

In 2011, the state Department of Administration sided with Helmberger, but an administrative law judge threw out the request because the subcontract “did not involve the performance of a government function.” The Appeals Court disagreed, arguing that the planning of five public schools falls under state laws that mandate the duty of a school district to “furnish school facilities” to children, including constructing and renovating buildings.

The state Supreme Court’s ruling didn’t address the question of whether Johnson was performing a government function. In a concurring opinion, Justice Alan Page wrote that he didn’t agree with the court’s “blanket conclusion” that data held by an individual, corporation or association performing a government function are nonpublic. It should depend on whether the contract calls for the contractor to perform a government function.

“If the court had ruled on the question of government function, it may have gotten into Alice-in-Wonderland complexities that would have been extremely difficult to resolve from case to case,” said Anfinson.

Todd Wind, who represented Johnson, said the Supreme Court struck the right balance for the business community and citizens of Minnesota. The ruling recognizes the Data Practices Act doesn’t make all information public just because somebody does business with a government entity, he said. “The ruling makes the requirement of the notice abundantly clear,” he said. “But we believed Johnson wasn’t performing a government function anyway.”
It seems fairly well settled, on Guam, that a procurement contract executed with the government of Guam is a public record that must be disclosed to the extent it is not protected by provisions regarding proprietary information or trade secrets.

But notice that this case did not involve a question of a government contract, rather, a subcontract between the government contractor and a subcontractor. That becomes a more iffy question, but would probably be covered by a governmental function rule -- if there is a governmental function criteria applied to FOIA coverage.

Since government is now engaging in larger and more complex acquisitions than in times past, times need to keep up and legislate to include -- or exclude if that is the preferred policy -- subcontracts of government contracts within the scope of public record transparency requirements, subject, of course, to matters determined by the government to be proprietary information or trade secrets. Issues like the contract definitions and descriptions of the scope of work, as appeared to be at issue in this case, would hardly ever be considered proprietary information or trade secrets.

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