Corporate Restructuring, Mergers and Buy-outs

4.8
Costs of Large-Scale or Complex FOIP Requests

Public bodies normally include a condition in the contract stating that, if the public body receives an access request under the FOIP Act for any records maintained by the contractor, but under the control of the public body, the contractor must provide responsive records within a given time to the public body at the contractor’s expense. The contractor is obliged to comply regardless of the size or complexity of the access request.

Where a contract contains such a clause, the contractor is presumed to have included the potential costs of FOIP requests in the cost of the contract. However, it is difficult to predict the number, the regularity, or the scope of FOIP requests that may be made in the course of any given project. If the contractor projects an excessive amount for potential FOIP requests, the cost of the contract to the public body may be inflated unnecessarily. If the contractor does not allocate sufficient resources, the contractor may be unwilling or unable to retrieve and to provide the responsive records. This could affect the processing of the FOIP request, and hence the public body’s compliance with the FOIP Act. Alternatively, the contractor may attempt to recoup the cost of its part in processing the FOIP request from funds intended to provide the core services of the contract.

This issue has become more critical with respect to more recent IT contracts, many of which involve large-scale and complex IT systems and databases. For example, under the Service Coordinator Initiative and the Alberta Secure Access Service Project, it may be extremely costly, time-consuming, and technically demanding to retrieve the personal information of any particular individual. The question arises whether the usual contractual condition that requires the contractor to bear all of the risk is fair and appropriate. How should the public body address this issue? Some of options that may be considered are as follows.

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  Establish a base amount that the contractor will be responsible for if asked to produce records relating to FOIP requests in a given year. Beyond that level, the contractor will be reimbursed for the costs by the public body either as extra work, or through contingency fees included in the budget under the contract. The rate of reimbursement should be predetermined, perhaps in accordance with the fee schedule under the FOIP Regulation. (This option is based on the notion that, prior to the outsourcing arrangement, the public body was obliged to handle any large or complex FOIP requests, in some instances by redeploying financial or human resources to handle these requests.)
  
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  Consider including a specific amount in the contract for privacy-related activities. This could include the costs of any FOIP requests as well as the costs of privacy training for the contractor’s staff. Any money not used in a given year could be carried over to the next contract period.
  

The number and nature of options that are available to address this issue is constrained by the current FOIP Regulation and the Financial Administration Act. The fees that a public body is allowed to charge under the FOIP Regulation will cover only a small portion of the costs associated with any large-scale or complex request. Also, under section 14 of the Financial Administration Act, FOIP fees are paid to the General Revenue Fund rather than to the public body.

Related Topics	Chapter
IT outsourcing contracts	4.3
Business case Tendering process	5.2 5.7
Drafting the contract: FOIP access to information requests	6.4

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