ROK FCC JV pre-construction service agreement for "our hospital" project (FOI)

Original Request

A

I would like to receive a copy of the contract between the Government of Jersey and ROK FCC JV in connection with construction of a new hospital in Jersey.

B

I would like to know how much the Government of Jersey has already paid ROK FCC JV since 1 January 2017 up until now.

Original Response

A

The contract is at Pre-Construction Services Agreement (PCSA) stage and is based on a standard New Engineering Contract 3, Option E (NEC3) with optional Z clauses.

The standard terms and conditions of the NEC3, Option E, PSC Contract is available for you to purchase on-line at:

NEC3: Professional Services Contract  

Therefore, this information is exempt under Article 23 of the Freedom of Information (Jersey) Law 2011.

The contract is subject to a number of Z clauses. These clauses are exempt under the Articles 26, 33(a), 33(b) and 34 of the Freedom of Information (Jersey) Law 2011.

The value of the contract is £30m, which is published in the following link:

Design and delivery partner for Our Hospital project to be appointed

B

Since 1 January 2017 £3.9 million has been paid to the supplier, ROK FCC JV.

Articles applied

Article 23: Information accessible to applicant by other means

(1) Information is absolutely exempt information if it is reasonably available to the applicant, otherwise than under this law, whether or not free of charge.

(2) A scheduled public authority that refuses an application for the information on this ground must make reasonable efforts to inform the applicant where the applicant may obtain the information.

Article 26 Information supplied in confidence

Information is absolutely exempt information if –

(a) it was obtained by the scheduled public authority from another person (including another public authority); and

(b) the disclosure of the information to the public by the scheduled public authority holding it would constitute a breach of confidence actionable by that or any other person.

The information shared with potential suppliers on the States of Jersey tender portal stated that the information received would be kept confidential. Should the States of Jersey release the commercial terms and conditions of contract in this instance, it would likely have a negative impact on the reputation of the States of Jersey.

It considered that the likely negative impact to Jersey’s reputation outweighs the argument in favour of release of the contract in the public interest.

Article 33 Commercial interests

Information is qualified exempt information if –

(a) it constitutes a trade secret; or

(b) its disclosure would, or would be likely to, prejudice the commercial interests of a person (including the scheduled public authority holding the information).

Prejudice / public interest test:

Article 33a – Trade Secret

Disclosure of clauses though the process of a Freedom of Information response would likely confer a competitive advantage to rivals and would therefore be prejudicial to their professional services business. It is considered that the likely consequences of disclosure far outweigh the interests of the public in this case.

Article 33b – Commercial Interests

The release of the commercially sensitive terms and conditions of the contract would significantly disadvantage all parties’ ability to compete in any future tender process whether in Jersey or overseas should the contract be made public.

Article 34 The Economy

Information is qualified exempt information if its disclosure would, or would be likely to, prejudice –

(a) the economic interests of Jersey; or

(b) the financial interests of the States of Jersey.

Public Interest Test:

The release of the sensitive commercial terms and conditions of the contract, at this point, will disadvantage the Government of Jersey’s ability to retain commercial advantage in any future tender process leading to the inability to secure best value for the tax payer and this will likely prejudice the States of Jersey finances as its bargaining power decreases. It is considered that the likely prejudices to the contractor and to the Jersey Economy outweigh the argument in favour of release of the contract in the public interest.

Internal review request

I have received your response to my Freedom of Information (FOI) Request dated 7 December 2020 in which I asked for a copy of the contract / statement of work (SOW) between the Government of Jersey and ROK FCC JV in connection with construction of a new hospital in Jersey.

Your response includes an anonymous contract template and a press release which do not constitute a contract that is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement.

I now request an Internal Review into the handling of my Request, in accordance with the “Freedom of Information Internal Review Procedure”.

Internal review response

This review has been completed by two senior staff members of the Government of Jersey, independent of the original decision making process.

The original response has been reviewed and assessed to identify whether the application of the exemption had been applied correctly.

The reviewers noted that the route to contract for Our Hospital included a Pre-Qualification process, an outline of services required were published on the Channel Islands portal at that time, supported by a draft version of the contract. This was available to all interested parties, with the finer and more commercial detail finessed with the shortlisted bidders during the following stages of the process. The final outcome of these are not in the public domain as they include proprietary information alongside z clauses.

The reviewers sought to respond to the application of each exemption as follows:

Application of Article 23: Information accessible to applicant by other means

The NEC is an industry recognised suite of contracts, suitable for procuring a diverse range of works, services and supply projects, spanning major framework deals through to minor works and the purchasing of goods and services. The NEC3 contract is available by other means and therefore Article 23 of the Freedom of Information (Jersey) Law 2011 was applied and a link to the contract was provided for ease of reference.

The parties to the contract in this instance are public knowledge as is the value of the contract. However, as this information is generally of the most public interest, a link to a press release for ease of reference was provided.

The body of the contract used did not have any significant modifications to the NEC3 contract. The contract contains some ‘z’ clauses which contain specific details of the relationship the contract formalises. In considering these clauses Articles 26, 33 and 34 were applied. A view was taken that this was justified because:

• a precedent was set during the Future Hospital Project that no z clauses were published

• publishing the z clauses would reveal the results of negotiation of the contract which could negatively influence the Design and Delivery Partner’s negotiating position with other employers

• publishing the z clauses could negatively influence the Government of Jersey’s negotiating position with other contractors.

Application of Article 26 Information supplied in confidence

The review panel discussed whether disclosure of the contract would breach the confidentiality clauses of the documentation. After due consideration is was decided that the public interest in maintaining the confidentiality clause in totality, exceeded the public interest in publishing the contract.

The panel further discussed the potential implications for a) a breach in confidentiality and b) a perceived breach in confidentiality, and agreed that either would be detrimental to the financial interests of the Government of Jersey. They considered that the potential withdrawal of parties from the contract due to a breach in the confidentiality clauses by the Government of Jersey was a legitimate and concerning risk, such outcome being exceedingly prejudicial to the economic interests of Jersey.

The panel agreed that the terms of the Confidentiality Agreements were significant and binding and that Article 26 had been correctly applied. They also noted that Article 34 (The Economy) was engaged in relation to the request for information.

Application of Article 33 Commercial interests

The following considerations were taken into account by the panel:

Public interest considerations favouring disclosure:

• disclosure of the information would support transparency and promote accountability to the general public

Public interest considerations favouring withholding the information:

• the release of the sensitive commercial information in the Contract could significantly disadvantage the Government of Jersey’s ability to retain commercial advantage in any such future process leading to the inability to secure best value for the tax payer; this will likely prejudice the Government of Jersey’s finances as its bargaining power decreases;

• fees paid are the result of negotiations and therefore commercially sensitive to release;

• impact of a breach of confidentiality, leading to a negative commercial outcome for the facility.

Application of Article 34 - The Economy

Article 34 is a qualified exemption which requires there to be a likelihood of prejudice against the economic interests of Jersey or the financial interests of the Government of Jersey. Whilst this could include reputational concerns, the larger concern is whether the economic interests of the Government of Jersey could be prejudiced by the release of information – in this instance confidential information, that could undermine Jersey’s reputation.

The following extract from the guidance of the UK Information Commissioner should also be noted:

The exemption concerns the effect on the economy rather than the government’s ability to manage the economy. However, since it is an aim of governments to improve economic prosperity, weakening the government’s control over the economy may also damage the economy itself.

Public interest would not be served by disclosing information which may have a detrimental impact on the economy

The reviewers having considered the application of the Articles 23, 26, 33 and 34 concluded that the exemptions were appropriate and should be upheld.

In respect to the response to question B, the reviewers felt that it should be noted the contract was signed in July 2020 and that payments have been made since that date under the contract and total the £3.9m provided in the original response. No previous payments have been made to ROK FCC JV.