California Supreme Court provides definitive guidance as to when public entities must disclose competitive proposals pursuant to Public Records Act request
The dispute in the case arose more than two years ago, after the Los Angeles Department of Airports, also known as Los Angeles World Airports (“LAWA”), refused to disclose competitive proposals requested pursuant to the PRA. The request was made by Michaelis, Montanari & Johnson (“Firm”), a law firm engaged in aviation-related business. The requested records were proposals to lease LAWA property at the Van Nuys Airport, submitted in response to a RFP. The Firm made its request after proposals were submitted but before negotiations with the proposers had concluded.
In a letter to the Firm, LAWA refused to disclose the requested information, citing the “long established practice” of making RFP proposals available for public review only after the negotiation process had concluded and the successful proposal had been submitted to the Board of Airport Commissioners and the Los Angeles City Council for approval. Unsatisfied with LAWA’s explanation, the Firm filed a mandate petition in Superior Court to compel LAWA to produce the records. The trial court denied the petition pursuant to the PRA exemption in section 6255 of the Government Code, holding that the “public interest in nondisclosure clearly outweighs the public interest in disclosure” of the proposals before the conclusion of the negotiation process. The trial court reasoned that disclosing the contents of the proposals prior to the selection of the successful proposer would negatively impact LAWA’s negotiating position. After the Court of Appeal reversed the trial court’s decision, the California Supreme Court granted review.
Both the Firm and LAWA had well-defined positions before the Supreme Court. The Firm’s position was that the records should be made public before the completion of the negotiations, because the public had a significant interest in knowing that the agency was not improperly favoring certain proposers over others. LAWA’s position was that disclosing the records prior to the completion of negotiations would likely undermine the negotiation process and could result in the proposers gaining a competitive advantage in negotiations with the agency.
In a unanimous decision, the Supreme Court agreed with LAWA and reversed the Court of Appeal’s judgment, holding that proposals submitted to LAWA were exempt from disclosure under the PRA until after the negotiation process was completed. The Supreme Court reasoned that disclosure prior to the conclusion of negotiations could impair and thus harm LAWA’s ability to effectively negotiate with the proposers. Moreover, delaying disclosure until after the negotiation process but prior to the LAWA Board’s final approval of the contract award would still give the public ample opportunity to scrutinize and protest the proposed award (a five-day public comment period in this case).
The Michaelis decision provides definitive guidance as to when public agencies must disclose competitive proposals submitted through an RFP process, with a negotiation stage, requested pursuant to the PRA. In accordance with the public interest balancing test found in section 6255 of the Government Code, competitive proposals, submitted pursuant to an RFP process, are exempt from disclosure until the negotiation process is complete. After negotiations have concluded, the proposals must be disclosed to the requesting party with enough time prior to the public entity’s final decision on a contract award to allow for public comment and protest. This decision applies to all manner of competitive proposals submitted to public entities that utilize a negotiation process, including proposals for construction related-services such as architectural, engineering, surveying and construction management services.
