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UnitedHealthcare of Pennsylvania, Inc. v. Pennsylvania Department of Human Services

Commonwealth Court of Pennsylvania

May 31, 2018

UnitedHealthcare of Pennsylvania, Inc., Petitioner
v.
Pennsylvania Department of Human Services, Respondent UnitedHealthcare of Pennsylvania, Inc., Petitioner
v.
Department of Human Services, Respondent

          Argued: April 10, 2018

          BEFORE: HONORABLE ANNE E. COVEY, Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge

          OPINION

          MICHAEL H. WOJCIK, JUDGE.

         UnitedHealthcare of Pennsylvania, Inc. (UnitedHealthcare) petitions for review from two final determinations of the Pennsylvania Office of Open Records (OOR), which granted in part, denied in part and/or dismissed as moot in part UnitedHealthcare's appeals from the Commonwealth of Pennsylvania, Department of Human Services' (DHS) partial denial of its requests under the Right- to-Know Law (RTKL).[1] UnitedHealthcare contends that DHS improperly withheld requested documents pursuant to the exemption set forth at Section 708(b)(26) of the RTKL, 65 P.S. §67.708(b)(26) (relating to offerors' proposals), even though the contract was "awarded" by the selection of successful offerors at the time the requests were made. In addition, UnitedHealthcare claims that DHS failed to provide an adequate basis to support its assertion that it properly withheld the requested documents where it did not produce an exemption log identifying the documents withheld and the basis for withholding them. Upon review, we hold that the selection of offerors does not constitute an "award of the contract" for purposes of Section 708(b)(26) of the RTKL and affirm OOR's final determinations.

         I. Background

         This matter stems from a request for proposal (RFP) conducted by DHS, pursuant to Section 513 of the Commonwealth Procurement Code (Procurement Code), [2] known as Original RFP No. 06-15 and Reissued RFP No. 06-15 relating to the Physical HealthChoices Program.[3] UnitedHealthcare was one of eleven offerors that submitted proposals. However, DHS did not select UnitedHealthcare to enter into contract negotiations. UnitedHealthcare protested its nonselection.

         UnitedHealthcare submitted two document requests pursuant to the RTKL. On November 21, 2016, UnitedHealthcare submitted its first request (No. 348 CD. 2017) seeking records related to the submission of proposals in response to the Original and Reissued RFPs, the scoring of proposals, the selection and notification to offerors with regard to the results of the selection process, and protest documents related to the Original RFP before its reissuance. Reproduced Record (R.R.) 21a-23a. Specifically, it requested:

(a) All bids and proposals submitted by offerors in response to the Original RFP #06-15 and Reissued RFP #06-15;
(b) All records and documents, including any and all criteria, bid tabulations, individual scoring sheets and notes of members of the evaluation committee evaluating the Original RFP #06-15 and the Reissued RFP #06-15 proposals, including but not limited to the technical scores and the [small diverse business (SDB)] submittals, records or evaluation sheets, regardless of physical form or description, prepared or produced by or on behalf of DHS, Bureau of Financial Operations, Division of Procurement and Contract Management; DHS Office of Long-Term Living; the Department of Aging; the Bureau of Diversity, Inclusion & Small Business Opportunities ("BDISBO"), and/or any evaluation committee(s);
(c) All correspondence, regardless of physical form, received or produced by or on behalf of DHS and/or any evaluation committee(s) and the BDISBO regarding the Original RFP #06-15 and the Reissued RFP #06-15;
(d) All records related to the results of any evaluation committee's and BDISBO's report to the Issuing office regarding the Original RFP #06-15 and the Reissued RFP #06-15;
(e) All records related to the scores of all bidders, individually or combined, in connection with the final technical scores, the [SDB] scores, the price scores and any other relevant scores including the bidders' overall scores regarding the Original RFP #06-15 and the Reissued RFP #06-15;
(f) All memorandum [sic] including without limitation any selection memoranda, regardless of physical form, received or produced by or on behalf of DHS and/or any evaluation committee(s) and the BDISBO regarding the Original RFP #06-15 and the Reissued RFP #06-15;
(g) All recordings, regardless of physical form, received or produced by or on behalf of DHS or any evaluation committee(s) and the BDISBO regarding the Original RFP #06-15 and the Reissued RFP #06-15;
(h) All records related to the post-selection notification and evaluation processes, including any readiness review conducted by DHS regarding the Original RFP #06-15;
(i) All protest documents, regardless of physical form, received or produced by or on behalf of DHS regarding the Original RFP #06-15; and
(j) All records related to the reissuance of RFP #06-15, including but not limited to all versions and proposed versions, regardless of physical form, of the Reissued RFP #06-15, all correspondence, regardless of physical form, received or produced by or on behalf of DHS related to the reissuance of RFP #06-15, and all reports, memoranda, notes, charts or similar documents related to the reissuance of RFP #06-15.

R.R. at 22a-23a.

         On December 27, 2016, UnitedHealthcare submitted a second request (No. 543 C.D. 2017) seeking two categories of documents relating to the rescoring of proposals and the reissuance of awards pursuant to the Reissued RFP. R.R. at 433a-36a. Specifically, it requested:

(a) All records related to the re-scoring of proposals conducted by [Department of General Services (DGS)] pursuant to DHS's announcement of the same on December 14, 2016, including but not limited to all bids, SDB submittals, scoring sheets, charts, handwritten notes, evaluation memos and similar documents; and
(b) All records related to the reissuance of awards under the Reissued RFP #06-15 pursuant to the re-scoring, including but not limited to all correspondence (including emails); announcements, selection memos, news releases and similar documents.

R.R. at 434a (emphasis in original).

         DHS partially granted and partially denied the requests. With regard to the first request, DHS denied Items (a), (b), (d), and (e) in their entirety as exempt under Section 708(b)(26) of the RTKL. R.R. at 28a-30a. DHS explained that the proposal documents are exempt until the award of an agreement and that the evaluation committee documents are permanently exempt pursuant to the procurement exemption under Section 708(b)(26) of the RTKL. R.R. at 28a-34a. DHS granted in part Items (c), (f), (h), (i), and (j) and provided UnitedHealthcare over 300 documents, having redacted personal identification information, as permitted under 708(b)(6) of the RTKL, 65 P.S. §67.708(b)(6). R.R. at 29a-32a. DHS redacted certain information from records responsive to Item (h) under Section 708(b)(10) of the RTKL, 65 P.S. §67.708(b)(10) (predecisional deliberations). Finally, DHS responded that it did not have any documents responsive to Items (g) or part of (h). R.R. at 31a-32a.

         With regard to the second request, DHS denied Item (a) and part of Item (b) as exempt under Section 708(b)(10) (predecisional deliberations), (12) (notes and working papers), and (26) of the RTKL, 65 P.S. §67.708(b)(10), (12), (26). R.R. at 441a-43a. DHS again explained that the proposal documents are exempt until the award of an agreement and the evaluation committee documents are permanently exempt pursuant to the procurement exemption of the RTKL under Section 708(b)(26) of the RTKL. DHS partially granted the request for Item (b) in response to the first request, with redactions. R.R. at 442a.

         UnitedHealthcare appealed to OOR, challenging the partial denials and arguing that DHS failed to meet its burden of proving that the requested records are exempt under Section 708(b)(10), (12), and (26) of the RTKL. UnitedHealthcare also argued that, without the requested records, it will suffer prejudice in connection with its bid protests filed under the Procurement Code.[4]

         OOR invited the parties to supplement the record and directed DHS to notify any third parties of their ability to participate in this appeal. DHS submitted position statements reiterating its grounds for denial. In support, DHS offered the affidavits of Erin Slabonik, DHS Division Director of Managed Care (Slabonik Affidavits); Barry Bowman, DHS Managed Care Operations Chief (Bowman Affidavit); and Andrea Bankes, DHS Open Records Officer (Bankes Affidavit). UnitedHealthcare also submitted position statements and affidavits.

         OOR permitted offerors that had submitted proposals to participate and submit position papers. Those that participated argued that the RTKL protected the requested documents related to their proposals from disclosure under multiple exemptions, including the procurement and confidential, proprietary information exemptions under Section 708(b)(26) and (11) of the RTKL and offered affidavits in support.

         On February 23, 2017, OOR granted in part, denied in part, and dismissed as moot in part UnitedHealthcare's appeal pertaining to the first request. OOR Final Determination, 2/23/17, at 23 (OOR Dkt. No. AP 2017-0146). Specifically, OOR denied the appeal holding that DHS properly withheld proposal documents and evaluation committee documents under Section 708(b)(26) of the RTKL. OOR explained the proposal documents were exempt because no contract had been awarded under the Reissued RFP. Based on the selected offerors' submissions, OOR also concluded that the proposals were exempt under Section 708(b)(26) because they contain "financial information of a bidder or offeror requested in an invitation for bid or request for proposals to demonstrate the bidder's or offeror's economic capability." OOR Final Determination, 2/23/17, at 8. However, OOR granted the appeal insofar as it found that DHS failed to prove application of the predecisional deliberation ...


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