What information may be protected in a procurement bid as a trade secret?
An offer filed by a bidder in a public procurement procedure may contain information that constitutes a trade secret, which as an exception to the rule of transparency may not be disclosed to other bidders or third parties.
One of the main principles of public procurement is openness of the procedure for awarding public contracts. This rule guarantees the transparency of the procedure and includes a right to review offers filed by other bidders, the contract actually awarded, and the records of the proceeding. Transparency is not absolute, however, because a bidder may specify in its offer that access to certain categories of information related to the procurement be restricted as a trade secret. The bidder must assert such reservation by the deadline for filing offers, at the latest. Assertion of such reservation later is ineffective.
Art. 8 of the Polish Public Procurement Law expressly provides that a contractor may not restrict access to information listed in Art. 86(4) of the act, i.e. information released by the contracting authority when it opens the bids: the name and address of the contractor, the price, the performance deadline, the guarantee period, and the payment terms specified in the offer. With respect to other information which the contractor intends to protect as a trade secret, it is necessary to confirm that the information actually constitutes a trade secret under Art. 11(4) of the Act on Combating Unfair Competition dated 16 April 1993. Under that article, a trade secret is defined as “non-public technical, technological, organisational or other information of an enterprise of economic value, with respect to which the enterprise has taken necessary measures to protect its confidentiality.” For example, based on the established case law, information regarded as a trade secret includes such items as production and sales figures, sources of supply, customers, and marketing information—but first and foremost knowhow.
A bidder’s designation of certain information as a trade secret does not necessarily mean it will be treated as such. For the designation to be effective, the information must meet the statutory definition of a trade secret. This is determined by the contracting authority promptly after opening the bids. This will then determine the range of information in the offer that is actually made available to other bidders. This determination must be based on the specific facts (National Appeal Chamber ruling dated 23 April 2010, Case No. KIO/UZP 528/10). In case of doubt, the contracting authority should seek a clarification from the bidder under Art. 87 of the Public Procurement Law. The burden of proof will then be on the contractor to show that the information deserves to be protected as a trade secret.
If the contracting authority finds that the information designated by the bidder does not constitute a trade secret, then the designation will be treated as ineffective—resulting in disclosure of the information. However, this does not give the contracting authority grounds to reject the offer, because inclusion of information in an offer that complies with the terms of reference for the procurement, but with a reservation of confidentiality that is subsequently denied by the contracting authority, does not automatically disqualify the offer as not complying with the Public Procurement Law (Supreme Court resolution dated 21 October 2005, Case No. III CZP 74/05).
Tomasz Michalczyk, Infrastructure, Transport & Public Procurement (PPP) practice, Wardyński & Partners