FOI Advisory Council opinion AO-07-17

AO-07-17

October 19, 2017

The staff of the Freedom of Information Advisory Council is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your letter (and identical email) of August 11, 2017.

John D. Moss
Virginia Beach City Council
c/o Mark D. Stiles, Esq.
City Attorney
Office of the City Attorney
Virginia Beach, Virginia 

Dear Mr. Moss:

You have asked two questions concerning what action a locality is permitted or required to take in response to a request for records made under the Virginia Freedom of Information Act (FOIA) that seeks records related to an unsolicited proposal made under the Public-Private Education Facilities and Infrastructure Act of 2002 (§ 56-575.1 et seq. of the Code of Virginia) (PPEA). First, you asked how a public body should respond when it receives a FOIA request for a copy of an unsolicited proposal when the request is made prior to the locality's determination to accept or reject the unsolicited proposal. Second, you also asked what action a locality is permitted or required to take in response to a FOIA request for a copy of an unsolicited proposal when the request is made after a decision to reject but prior to the physical return of the proposal and accompanying documentation to the private entity. As background, you indicated that pursuant to subsection A of Virginia Code § 56-575.3, a private entity seeking authorization to develop or operate a qualifying project must first obtain approval of the responsible public entity. That subsection also provides that the private entity may submit an unsolicited proposal or the public entity may request proposals or invite bids. Different procurement procedures apply, depending on whether the proposal is unsolicited or requested by the public body. The questions you presented to this office concern unsolicited proposals submitted by the private entity, so this opinion does not address proposals requested by the public body. As part of the procedure addressing unsolicited proposals, subsection A of § 56-575.4 requires 10 enumerated types of information and material to be submitted in conjunction with the request for approval. In regard to this information and material, subsection C of § 56-575.3 provides as follows:

Upon receipt by the responsible public entity of a proposal submitted by a private entity initiating the approval process pursuant to subsection A of § 56-575.4, the responsible public entity shall determine whether to accept such proposal for consideration in accordance with § 56-575.16. If the responsible public entity determines not to accept for consideration the proposal submitted by the private entity pursuant to subsection A of § 56-575.4, it shall return the proposal, together with all fees and accompanying documentation, to the private entity.

Although you did not mention it, I note that § 56-575.17 also sets out a scheme for posting conceptual proposals, taking public comment, and providing public access to PPEA records.

The relevant policy of FOIA stated in subsection B of § 2.2-3700 is to ensure "the people of the Commonwealth ready access to public records in the custody of a public body or its officers and employees." The policy further states that "[u]nless a public body or its officers or employees specifically elect to exercise an exemption provided by this chapter or any other statute, ... all public records shall be available for inspection and copying upon request. All public records ... shall be presumed open, unless an exemption is properly invoked." This policy is implemented through the procedures for making and responding to a records request set forth in § 2.2-3704. As you noted, subsection A of § 2.2-3704 provides that "[e]xcept as otherwise specifically provided by law, all public records shall be open ... during the regular office hours of the custodian of such records." As an example, as noted above, § 56-575.17 sets out some specific rules addressing posting conceptual proposals, taking public comment, and providing public access to records under the PPEA. Subsection E of that section reads as follows: "Cost estimates relating to a proposed procurement transaction prepared by or for a responsible public entity shall not be open to public inspection." This provision is clearly an exception to the default rule of FOIA mandating disclosure of public records. In contrast, consider subsection F of the same section, which states that "[a]ny inspection of procurement transaction records under this section shall be subject to reasonable restrictions to ensure the security and integrity of the records." While different, this language comports with the provision of FOIA in subsection A of § 2.2-3704, which states that "[t]he custodian of such records shall take all necessary precautions for their preservation and safekeeping." Subsections E and F of § 56-575.17 appear to apply regardless of the status of a PPEA transaction as solicited, unsolicited, accepted, or rejected. The remainder of § 56-575.17 does not appear to address the treatment of unsolicited proposals before a decision to accept or reject has been made, or once a decision to reject has been made, and therefore does not affect the analysis of your questions.

Additionally, before proceeding with further analysis of your questions, note that subdivision 11 of § 2.2-3705.6 sets out a FOIA exemption for certain procurement records under the PPEA as follows:

11. a. Memoranda, staff evaluations, or other information prepared by the responsible public entity, its staff, outside advisors, or consultants exclusively for the evaluation and negotiation of proposals filed under the Public-Private Transportation Act of 1995 (§ 33.2-1800 et seq.) or the Public-Private Education Facilities and Infrastructure Act of 2002 (§ 56-575.1 et seq.) where (i) if such information was made public prior to or after the execution of an interim or a comprehensive agreement, § 33.2-1820 or 56-575.17 notwithstanding, the financial interest or bargaining position of the public entity would be adversely affected and (ii) the basis for the determination required in clause (i) is documented in writing by the responsible public entity; and

b. Information provided by a private entity to a responsible public entity, affected jurisdiction, or affected local jurisdiction pursuant to the provisions of the Public-Private Transportation Act of 1995 (§ 33.2-1800 et seq.) or the Public-Private Education Facilities and Infrastructure Act of 2002 (§ 56-575.1 et seq.) if disclosure of such information would reveal (i) trade secrets of the private entity as defined in the Uniform Trade Secrets Act (§ 59.1-336 et seq.); (ii) financial information of the private entity, including balance sheets and financial statements, that are not generally available to the public through regulatory disclosure or otherwise; or (iii) other information submitted by the private entity where if such information was made public prior to the execution of an interim agreement or a comprehensive agreement, the financial interest or bargaining position of the public or private entity would be adversely affected. In order for the information specified in clauses (i), (ii), and (iii) to be excluded from the provisions of this chapter, the private entity shall make a written request to the responsible public entity:

(1) Invoking such exclusion upon submission of the data or other materials for which protection from disclosure is sought;

(2) Identifying with specificity the data or other materials for which protection is sought; and

(3) Stating the reasons why protection is necessary.

The responsible public entity shall determine whether the requested exclusion from disclosure is necessary to protect the trade secrets or financial information of the private entity. To protect other information submitted by the private entity from disclosure, the responsible public entity shall determine whether public disclosure prior to the execution of an interim agreement or a comprehensive agreement would adversely affect the financial interest or bargaining position of the public or private entity. The responsible public entity shall make a written determination of the nature and scope of the protection to be afforded by the responsible public entity under this subdivision. Once a written determination is made by the responsible public entity, the information afforded protection under this subdivision shall continue to be protected from disclosure when in the possession of any affected jurisdiction or affected local jurisdiction.

Except as specifically provided in subdivision 11 a, nothing in this subdivision shall be construed to authorize the withholding of (a) procurement records as required by § 33.2-1820 or 56-575.17; (b) information concerning the terms and conditions of any interim or comprehensive agreement, service contract, lease, partnership, or any agreement of any kind entered into by the responsible public entity and the private entity; (c) information concerning the terms and conditions of any financing arrangement that involves the use of any public funds; or (d) information concerning the performance of any private entity developing or operating a qualifying transportation facility or a qualifying project.

For the purposes of this subdivision, the terms "affected jurisdiction," "affected local jurisdiction," "comprehensive agreement," "interim agreement," "qualifying project," "qualifying transportation facility," "responsible public entity," and "private entity" shall mean the same as those terms are defined in the Public-Private Transportation Act of 1995 (§ 33.2-1800 et seq.) or in the Public-Private Education Facilities and Infrastructure Act of 2002 (§ 56-575.1 et seq.).

It is my understanding that the provisions of this FOIA exemption were written specifically to coincide with the access and disclosure provisions of the PPEA.

Reading all of these provisions together in the context of your questions, it appears that the short answer is that the requested records must be disclosed unless they are exempt under subdivision 11 of § 2.2-3705.6 as set out above. More specifically, your first question asked how a public body should respond when it receives a FOIA request for a copy of an unsolicited proposal when the request is made prior to the locality's determination to accept or reject the unsolicited proposal. As quoted previously, subsection C of § 56-575.3 provides that if an unsolicited proposal is rejected, then the public body "shall return the proposal, together with all fees and accompanying documentation, to the private entity." If the materials were no longer in the public body's possession, then the proper response under FOIA would be to state that the public body does not have the requested records (i.e., the records cannot be found or do not exist, as set forth in subdivision B 3 of § 2.2-3704). However, it appears that both the PPEA and FOIA are silent regarding what happens if a records request is received before the decision to accept or reject an unsolicited proposal has been made. In the absence of specific statutory guidance, the default rule of FOIA requiring mandatory disclosure of public records would apply. Therefore, such records must be disclosed under FOIA unless they are exempt or prohibited from release (for example, if subdivision 11 of § 2.2-3705.6 or subsection E of § 56-575.17 applied as quoted above). The same analysis would apply to your second question, which asked what action a locality is permitted or required to take in response to a FOIA request for a copy of an unsolicited proposal when the request is made after a decision to reject but prior to the physical return of the proposal and accompanying documentation to the private entity. Again, it appears that both the PPEA and FOIA are silent about this specific factual scenario, and therefore the default rule of FOIA requiring that records must be disclosed unless an exemption or prohibition would apply.

Thank you for contacting this office. I hope that I have been of assistance. 

Sincerely,

Alan Gernhardt 
Executive Director

¹Note that the same exemption also addresses records under the Public-Private Transportation Act of 1995 (§ 33.2-1800 et seq.).