If a Texas state agency cancels a request for proposal, can it return a bidder's confidential submission to the company that sent it?

TX AG Opinion GA-0266: RFO Records Must Be Retained

Plain-English summary

The Department of Information Resources (DIR) asked whether it could return the original proposal materials submitted by two finalists, American Management Systems, Inc. and Accenture L.L.P., after DIR cancelled its request for offer for a statewide eProcurement application. Both finalists had marked parts of their proposals confidential or proprietary and wanted the originals back so competitors could not see them in a related procurement the Texas Building and Procurement Commission had since opened.

The opinion concluded DIR could not return the materials. Because the submissions were received by a state agency in the conduct of state business and relate to a possible expenditure of state funds, they qualify as "state records" under chapter 441 of the Government Code, and DIR must retain them according to its own record retention schedule rather than give the originals back early, even though no contract was ever awarded. The opinion also addressed a second question: whether the materials were exempt from public disclosure simply because the procurement never resulted in a contract. The answer was no, the information remains subject to the Public Information Act because DIR collected it in the conduct of official business, though specific exceptions like the trade-secret or competitive-disadvantage exceptions might still apply to particular parts of a submission if requested.

Currency note

This opinion was issued in 2004. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Who this opinion affected (as of 2004)

The Department of Information Resources: The opinion held DIR could not return the finalists' original proposal materials to them, because the materials are state records subject to chapter 441's retention schedule requirements, and DIR must keep them for the scheduled retention period regardless of the cancellation.

Businesses that submit confidential or proprietary bid materials to a Texas state agency: The opinion meant that submitted procurement materials do not automatically become returnable, or shielded from public disclosure, merely because the procurement is cancelled or no contract is awarded; the materials stay in state custody under the agency's records schedule and remain subject to the Public Information Act, subject to whatever specific disclosure exceptions may apply.

State agencies handling cancelled procurements generally: The opinion clarified that a cancelled request for offer does not change a submitted document's status as a state record, and that returning documents to their source, even without keeping copies, still counts as impermissible disposal outside the agency's approved retention schedule.

Common questions

Can a Texas agency give back a bidder's proposal after cancelling the procurement?
No, this 2004 opinion found that returning the originals amounts to disposing of a state record outside the agency's approved retention schedule, which chapter 441 of the Government Code does not allow.

Does cancelling a request for offer make the submitted materials confidential or exempt from public records requests?
No. The opinion held the cancellation and lack of an awarded contract do not change the information's status under the Public Information Act; it remains public information collected in the conduct of official business, subject only to whatever specific statutory exceptions may apply to particular content.

If a bidder's proposal contains trade secrets or competitively sensitive pricing, is it automatically protected from release?
Not automatically. The opinion noted that exceptions like the trade-secret exception or the exception for information that would give an advantage to a competitor or bidder may apply, but whether they actually apply to a specific submission is decided through the open records process under chapter 552, not in this opinion.

Background and statutory framework

DIR is a state agency responsible for leading and coordinating information resources management in state government, and under section 2177.051 of the Government Code it is required, along with the Texas Building and Procurement Commission, to establish and manage the electronic infrastructure of a statewide electronic procurement marketplace. In September 2002, DIR issued a request for offer (RFO) for a Statewide eProcurement Application Solutions Provider, and two finalists, American Management Systems, Inc. and Accenture L.L.P., submitted proposals that each designated in part as confidential or proprietary. DIR cancelled the RFO in April 2004, the same day the Texas Building and Procurement Commission issued a related request for proposal covering some of the same services. Both finalists asked DIR to return their original submissions, without DIR keeping copies, so competitors on the new commission procurement, or on the RFO if reissued, could not see their material.

The opinion analyzed the request under chapter 441, subchapter L of the Government Code, which defines a "state record" broadly as recorded information created or received by a state agency that documents state business or the use of public resources. Because DIR received the finalists' materials in the conduct of state business relating to a possible expenditure of state funds, the opinion concluded the materials fit that definition regardless of whether a contract was ultimately awarded. Under chapter 441, each state agency must have a records management officer who prepares a record retention schedule listing the records the agency creates and receives and proposing how long to keep them, subject to approval by the Texas State Library and Archives Commission's director and librarian and, in some cases, the state auditor. An agency may dispose of state records only in accordance with that approved schedule, and the opinion found that returning documents to the entities that submitted them, even without retaining copies, still functions as a disposal that chapter 441 does not permit outside the schedule.

The opinion separately considered whether chapter 552 of the Government Code, the Public Information Act, resolved the issue by exempting the materials from disclosure since no contract was awarded. It concluded chapter 552 did not change the outcome: the materials are public information because DIR collected them in connection with the transaction of official business, and the lack of an awarded contract does not alter that status. The opinion noted that specific statutory exceptions, including those for confidential information, information that would give an advantage to a competitor or bidder, and trade secrets, might still apply to particular content in a submission, and that if the information were later requested under the Public Information Act, the submitting entities would be notified and given a chance to argue for withholding it, with the actual exception analysis left to the open records process rather than decided in this opinion.

Citations

Statutes:

• TEX. GOV'T CODE ANN. § 441.180(11) (Vernon 1998)
• TEX. GOV'T CODE ANN. § 441.185 (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 552.004 (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 2054.004 (Vernon 2000)
• TEX. GOV'T CODE ANN. § 2054.051(a) (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 2054.003(7)
• TEX. GOV'T CODE ANN. § 2177.051(a)
• TEX. GOV'T CODE ANN. § 2177.051(b)(1)-(2), (6)
• TEX. GOV'T CODE ANN. § 2177.051(g)
• TEX. GOV'T CODE ANN. § 2151.002
• TEX. GOV'T CODE ANN. § 2152.001
• TEX. GOV'T CODE ANN. § 441.184(a) (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 441.180(7)-(9) (Vernon 1998)
• TEX. GOV'T CODE ANN. § 441.185(b) (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 441.185(a), (c)
• TEX. GOV'T CODE ANN. § 441.185(d) (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 441.187(a) (Vernon 1998)
• 13 TEX. ADMIN. CODE ch. 6 (2004)
• TEX. GOV'T CODE ANN. ch. 552 (Vernon 1994 & Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 552.002(a) (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 552.003(1)(A)(i)
• TEX. GOV'T CODE ANN. § 552.021 (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 552.101 (Vernon 1994)
• TEX. GOV'T CODE ANN. § 552.102, .103, .108 (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. § 552.104, .110 (Vernon Supp. 2004-05)
• TEX. GOV'T CODE ANN. §§ 552.201, .301, .305(a)-(b) (Vernon Supp. 2004-05)

Cases: None cited.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0266
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2004/ga0266.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

October 28, 2004

Mr. Larry A. Olson
Executive Director
Department of Information Resources
Post Office Box 13564
Austin, Texas 78711-3564

Opinion No. GA-0266

Re: Whether an agency may return information submitted by a business entity in response to an agency request for offer, which was subsequently cancelled (RQ-0226-GA)

Dear Mr. Olson:

On behalf of the Department of Information Resources ("DIR"), you ask whether an agency may return information submitted by a business entity in response to an agency request for offer, which was subsequently cancelled.[1] To resolve this issue, we must consider whether the business entity's information is a state record that must be retained in accordance with section 441.185 of the Government Code. See TEX. GOV'T CODE ANN. § 441.180(11) (Vernon 1998), § 441.185 (Vernon Supp. 2004-05); see also id. § 552.004 (Vernon Supp. 2004-05) (authorizing a governmental body to determine "a time for which information that is not currently in use will be preserved").

DIR is an agency of the state, see id. § 2054.004 (Vernon 2000), created generally to lead and coordinate information resources management within state government. Id. § 2054.051(a) (Vernon Supp. 2004-05); see also id. § 2054.003(7) (defining the term "information resources"). Among other duties and responsibilities, DIR is required, under section 2177.051 of the Government Code, to "establish and manage the electronic infrastructure of an electronic procurement marketplace." Id. § 2177.051(a); see also id. §§ 2054.051, .052 (setting out DIR's general duties and responsibilities). The marketplace may contain information related to the state's procurement practices, such as information about "the state's standard procurement specifications for goods or services"; "vendors"; and "recycled, remanufactured, or environmentally sensitive commodities or services." Id. § 2177.051(b)(1)-(2), (6); see also id. § 2177.051(g) (listing similar items that the marketplace may contain). The Texas Building and Procurement Commission (the "TBPC"), another state agency, is to manage and administer the electronic procurement marketplace's content, see id. § 2177.051(a); see also id. §§ 2151.002, 2152.001 (defining the term "commission" and declaring the commission to be a state agency), and either DIR or TBPC may contract with private or public entities to "establish or maintain all or part of the databases comprising the marketplace." Id. § 2177.051(a). In addition, DIR or TBPC must "procure all goods and services related to the marketplace through a competitive selection process appropriate for the good or service being acquired." Id.

You indicate that, in accordance with section 2177.051, DIR issued a "Request for Offer [('RFO')] for a Statewide eProcurement Application Solutions Provider and Associated Implementation Services" on September 4, 2002. Request Letter, supra note 1, at 1. At least two entities responded to the RFO, and you state that the two finalists, American Management Systems, Inc. and Accenture L.L.P., "each proposed a statewide Strategic Sourcing component of the Cost Offer as part of the funding methodology for the . . . project." Id. at 2. Each of the finalists designated all or part of the entity's proposal as "confidential or proprietary." Id. On April 15, 2004, DIR cancelled the RFO, and "[i]t is not certain at this time if or when the RFO will be reissued." Id. But on the same day, April 15, 2004, TBPC "issued a Request for Proposal for Spending Analysis, Strategic Sourcing, and Spend Management Services." Id. According to the entities that responded to DIR's RFO, TBPC's outstanding request for proposal "include[s] some of the same services" as the RFO. Id.

Both of the finalists in DIR's cancelled procurement process now request the return of the materials they submitted to DIR "to protect their confidential and proprietary information that may be used by other bidders on the TBPC" request for proposal or that may be used by other bidders should DIR reissue the cancelled RFO. Id. You therefore wish to know whether the DIR may comply with this request. We understand that the finalists are requesting the original documents, not copies, and that DIR would not retain copies of the documents.

Chapter 441, subchapter L of the Government Code regulates the preservation and management of state records, which include all "written, photographic, machine-readable, or other recorded information created or received by or on behalf of a state agency . . . that documents activities in the conduct of state business or use of public resources." TEX. GOV'T CODE ANN. § 441.180(11) (Vernon 1998) (defining the term "state record"). Under chapter 441, each state agency must designate a records management officer, who may be the agency head, to administer the agency's records management program. See id. § 441.184(a) (Vernon Supp. 2004-05); see also id. § 441.180(7)-(9) (Vernon 1998) (defining the terms "records management," "records management officer," and "state agency"). A records management officer must prepare a record retention schedule that lists the types of records the agency creates and receives and that proposes a period of time the agency will maintain the record. See id. § 441.185(b) (Vernon Supp. 2004-05). The schedule must be submitted to the Texas State Library and Archives Commission for approval. See id. § 441.185(a), (c); see also id. §§ 441.180(3), (10), (12), .181(b) (Vernon 1998), § 441.182(b) (Vernon Supp. 2004-05) (defining the terms "commission," "state archivist" and "state records administrator" and setting out the archivist's and administrator's duties). If the Library and Archives Commission's director and librarian, and possibly also the state auditor,[2] approve the schedule, the state agency that is the subject of the schedule may "destroy" state records only in accordance with the schedule. Id. §§ 441.185(d) (Vernon Supp. 2004-05), 441.187(a) (Vernon 1998). See generally 13 TEX. ADMIN. CODE ch. 6 (2004) (Tex. State Library & Archives Comm'n, State Records).

The materials the finalists have requested returned to them are state records for purposes of chapter 441: the materials were "received by" DIR, a state agency, "in the conduct of state business" and relate to a possible expenditure of state funds. TEX. GOV'T CODE ANN. § 441.180(11) (Vernon 1998) (defining the term "state record"). Moreover, the fact that no contract was executed in this case does not remove the records from the scope of the state records that are subject to the chapter 441 record retention schedule. They are thus subject to DIR's retention schedule, and DIR must retain them consistently with the schedule. See id. § 441.187(a). The fact that returning the records to the entities that created them does not, strictly speaking, "destroy" the records is immaterial, as chapter 441 requires that the state agency retain the records. See id. § 441.187(a) (referring to the "destruction" of state records).

We accordingly conclude that DIR may not dispose of the requested materials except in compliance with the time periods set forth in its record retention schedule. It may not return the materials to the entities that created and submitted the documents unless and until the appropriate schedule authorizes DIR to divest itself of them. We do not consider here whether a state agency such as DIR may provide in its record retention schedule for the return of information received in response to a cancelled RFO, nor do we consider whether the State Library and Archives Commission may approve such a record retention schedule.

An email exchange attached to the request letter suggests that chapter 552 of the Government Code, the "Public Information Act," may resolve the issue. See Request Letter, supra note 1;[3] TEX. GOV'T CODE ANN. ch. 552 (Vernon 1994 & Supp. 2004-05). Under chapter 552, all information that a state agency collects, assembles, or maintains "under a law . . . or in connection with the transaction of official business" is public information that must be made available to the public consistently with that chapter. See TEX. GOV'T CODE ANN. §§ 552.002(a), .003(1)(A)(i), .021 (Vernon Supp. 2004-05). Confidential information is absolutely excepted from disclosure, and other information may be excepted from disclosure in certain circumstances. See id. § 552.101 (Vernon 1994) (excepting confidential information); see also, e.g., id. §§ 552.102, .103, .108 (Vernon Supp. 2004-05) (excepting certain personnel information, information relating to litigation, and certain law enforcement information). The Public Information Act does not authorize a state agency to relinquish the original copy of public information, and it is consequently not dispositive.

You also ask, if we conclude (as we have) that DIR may not return the materials, whether the materials should be "considered not subject to release as public information because a final contract was not awarded." Request Letter, supra note 1, at 1. We thus consider whether the Public Information Act applies to the information, such that the information would be available to the public in accordance with the Act. See TEX. GOV'T CODE ANN. ch. 552 (Vernon 1994 & Supp. 2004-05).

The information is subject to the Public Information Act because DIR collected it in connection with the transaction of official business. See id. § 552.002(a) (Vernon Supp. 2004-05) (defining the phrase "public information"). The fact that DIR cancelled the RFO and did not award a contract does not alter the information's status under the Public Information Act. Depending on the circumstances, however, one or more of the Public Information Act's exceptions to disclosure may apply to information in a submitted bid. See, e.g., id. § 552.101 (Vernon 1994), §§ 552.104, .110 (Vernon Supp. 2004-05) (excepting confidential information, information that would give advantage to a competitor or bidder, and trade secret information). See generally id. ch. 552, subch. C (Vernon 1994 & Supp. 2004-05) (listing all of the Public Information Act's exceptions to disclosure). Should the information be requested under the Public Information Act and DIR seek an attorney general's open records ruling, the entities that created and submitted the information would be notified of the request and would have the opportunity to submit to the attorney general their reasons that the information should be withheld, wholly or in part. See id. §§ 552.201, .301, .305(a)-(b) (Vernon Supp. 2004-05). Whether this particular information would be excepted from disclosure is a question to be decided in the open records process under chapter 552 and not here.

SUMMARY

A state agency must retain information submitted by a business entity in response to a request for offer, which the agency subsequently cancelled, for the period specified in the agency's record retention schedule created under chapter 441 of the Government Code. The information may not be returned to the business entity that submitted it within the time period that the information is to be retained. The information also is subject to the Public Information Act, chapter 552 of the Government Code, and is available to the public unless chapter 552 excepts the information from disclosure.

Very truly yours,

BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee

Footnotes

[1] Letter from Larry A. Olson, Executive Director, Department of Information Resources, to Honorable Greg Abbott, Texas Attorney General (May 4, 2004) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[2] The state records administrator and the state archivist review the record retention schedule that the local records management officer has submitted "and recommend the schedule's approval or disapproval" to the Commission director, the Commission librarian, and the state auditor. TEX. GOV'T CODE ANN. § 441.185(c) (Vernon Supp. 2004-05). "The state auditor, based on a risk assessment and subject to the legislative audit committee's approval of including the review in the audit plan under [Government Code] Section 321.013, may review the schedule." Id. If the state auditor reviews the schedule, the auditor's approval is necessary for the schedule to become effective. See id. § 441.185(d).

[3] Email colloquy between Renee Mauzy, Douglas Doerr, and Bill Miller (Apr. 15-16, 2004) (attached to Request Letter).