Government Contractor’s Internal Financial Information is Not a Public Record

The Commonwealth Court recently held that a private contractor’s internal financial information submitted in response to an RFP to demonstrate the contractor’s economic capability is not a public record. Global Tel*Link Corporation v. Paul Wright and Prison Legal News, ___ A.3d ____, No. 1678 C.D. 2015, (Pa.Cmwlth. 9/22/2016).

The editor of a magazine devoted to prisoners’ rights submitted a Right-to-Know request to the Pennsylvania Department of Corrections (DOC) seeking a copy of DOC’s contracts with a private contractor who provides inmate telephone and kiosk services.   DOC disclosed the underling contracts, but redacted the contractor’s internal financial information.  The contractor had submitted its assets, income, cash, expenses, taxes, and other assets and liabilities to DOC to demonstrate its economic capability to perform the contract.

The Right-to-Know Law (RTKL) empowers a member of the public to obtain bids and other materials submitted in response to government RFPs after the agency awards the contract or rejects all bids.  65 P.S. § 67.708(b)(26).  However, the RTKL prohibits disclosure of financial information submitted to demonstrate the contractor’s economic capability to perform the contract. Id.

The Office of Open Records (OOR) determined that the exemption for a contractor’s internal financial information did not apply to the facts in this case because DOC appended the contractor’s internal financial information to the underlying contract.   The OOR reasoned that the contract itself is a financial record as defined by Section 102 of the RTKL, and therefore, the exemption for a contractor’s internal financial information no longer applies if an agency attaches the information to the contract.  The Commonwealth Court disagreed with this reasoning and reversed the OOR’s final determination.

The Commonwealth Court explained that a government contractor’s internal financial information cannot become a financial record under the RTKL. A financial record deals with the disbursement of funds or acquisition of services by an agency.  A contractor’s internal financial information does not directly relate to the agency’s expenditure of public funds or acquisition of services.

This case is important for individuals and entities that perform government contracts because it confirms that the government will protect a contractor’s internal financial information.