Should the Public Know Who is Reorganizing the Texas Health and Human Services Commission?

By Susan S. Night, LLM candidate

Health and human services in Texas are coordinated and delivered through twelve agencies underneath the umbrella of the Texas Health and Human Services Commission (HHSC).  These agencies employ approximately 50,000 persons operating in over 1,000 offices statewide.  This year, the 78th Texas Legislature enacted sweeping changes to the HHSC through H.B. 2292, including the consolidation of all twelve agencies into five streamlined entities.  As a result, services offered to children, the aging, those suffering from alcohol and drug abuse, the deaf, the blind, the mentally retarded, the disabled and others will be delivered through the following agencies: Health and Human Services Commission; Department of Family & Protective Services; Department of Aging and Disability Services; Department of State Health Services; and Department of Assistive and Rehabilitative Services.

In order to accomplish this monumental task, the HHSC has issued a Request for Proposals (RFP) to obtain consulting services to assist and support HHSC in transforming administrative support services to these agencies in accordance with H.B. 2292.  The amount of money to be spent on consulting services is currently not known, as the project is to be partially funded by federal dollars and partially self-funded through savings realized by the consolidation.  On Monday, November 10, 2003, the Houston Chronicle reported they requested information under the Texas Public Information Act about the 94 companies that have submitted proposals for consulting contracts with HHSC.  To date, only 12 have voluntarily released their information, while others, including the consulting firm tentatively awarded the project management role, are actively seeking protection of this information.  This action prompts the question of how much information should the public have about private firms who play a critical role in the planning and delivery of health care services to the citizens of Texas?

Section 552.0029(a) of the Government Code states that information is public information if, in the transaction of official business, it is collected, assembled, or maintained by a governmental body.  When a request for information is made to a governmental body, that entity shall promptly produce the information. (Section 552.221)  However, if the governmental body considers the request to be within one of the exceptions, they must ask for an attorney general decision as to whether the information is indeed public or if it falls under some exception. (Section 552.301)

Since the property and privacy rights of third parties may be implicated by the release of the information requested by the Houston Chronicle, the HHSC was required to notify the consulting firms whose information was a target of the request.  These third parties may then appeal to the Attorney General, claiming their information should be excepted from release to the public.  Deloitte Consulting, which is under consideration for the lead project management consultant, claims that an organizational map it has created is a trade secret, a list of other government contracts it has performed is proprietary, and the numbers of employees it will use are all confidential information.  Another respondent to the HHSC RFP, Shumaker & Company, argues that resumes of its employees would give advantage to a competitor and should remain confidential.
Section 552.110 of the Government Code protects the property interests of the consulting firms by excepting disclosure of three types of information: 1) information considered to be confidential by law, either constitutional, statutory or by judicial decisions; 2) trade secrets; and 3) commercial or financial information for which it is demonstrated based on specific factual evidence that the disclosure would cause substantial competitive harm to the person from whom the information was obtained.

The Texas Supreme Court has adopted the definition of trade secret from the Restatement of Torts section 757 which holds it to be any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.
The Texas Attorney General’s Office has found the following information to be within the scope of the trade secret doctrine: information in a bid proposal related to computer programs, clerical systems and data processing systems (ORD 175); information in a bid proposal related to scope of consulting work, the study methodology employed, professional fee structures and financial statements and bidding procurement documents (ORD 306); an audit program (ORD 217); customer lists (ORD 306); names of customers and the resultant contract and pricing information (ORD 552).  In addition, the courts have found the “unit price information” which includes specific rates in a bid for labor and equipment which would not customarily be shared with competitors, is a trade secret. (Environmental Technology, Inc. v. United States Environmental Protection Agency, 822 F. Supp. 1226 (E.D. Virginia 1993).

Many of these arguments have already been settled by the Attorney General’s Office though previous Open Records Decisions and Open Records Letters.  However, determinations on the applicability of section 552.110 to any particular item are made on a case-by-case basis. (ORD 661).  Deloitte Consulting has previously claimed similar information was protected from disclosure when they submitted a proposal for services to the General Services Commission in May of 2000.  The Office of the Attorney General, in OR2000-1931, determined five sections of their proposal contained trade secret information or information that, if released, would cause substantial competitive harm.  However, resumes included in the proposal listing the experience and education of consulting firm employees were determined not to fall within an exception and must be released. (OR2000-1931, ORD 175)

These consulting firms are fighting their battle for information privacy amidst a backdrop of a new law passed by the Texas Legislature this session focused on facilitating the disclosure of public information.  Senate Bill 84, authored by Senator Jeff Wentworth, amended section 552.221 of the Government Code to define “promptly” as meaning “without delay.”  Therefore, if public information is requested of a governmental body and the information is known to be public, the body must release the information immediately, without waiting for the end of the statutory time period of ten days.

It is a common practice for consulting firms who lose in the bidding process to request the proposals of competing firms through statutes such as the Texas Public Information Act.  It is understandable, therefore, that these private firms press to keep this information from being released to the public, or rather their competitors.  However, these statutes are designed to provide each person access to complete information about the affairs of government and the official acts of public officials and employees.  It is truly the only way to hold our governmental bodies accountable for our tax dollars.  It is the way citizens retain control over the instruments they have created; not what consulting firms have created.  This is the balance of power that must be contemplated by the Office of the Attorney General in their consideration of this matter.

02/29/04