LITTLE ROCK — A private construction firm does not have to release documents on its contract with the University of Arkansas at Fayetteville to build a dorm, the state’s highest court has ruled.
Reversing a lower court’s decision, the Arkansas Supreme Court on Nov. 1 said Nabholz Construction Corp. does not have to turn over receipts and other records detailing the cost of building the Northwest Quad, a residence hall at the university.
The Contractors for Public Protection Association argued that the state Freedom of Information Act requires the company to turn over the documents, and a Pulaski County judge agreed in a March decision. Nabholz, which argued that as a private company it is not subject to the state public-records law, appealed the ruling.
The justices agreed and said the construction firm is not covered under the FOI law.
“While we liberally construe the FOIA in favor of disclosure, we are also aware of the need for a balancing of interests to give effect to what we perceive to be the intent of the General Assembly. In doing so, we must take a common-sense approach,” Justice Paul Danielson wrote in the ruling.
An expert on Arkansas’ public-records laws called the ruling unfortunate and said it could send the wrong message to government agencies contracting with private vendors.
“The way the court reads the law, it just opened up a gaping hole for information in the hands of private entities to evade disclosure,” said University of Arkansas at Little Rock law professor Richard Peltz. “A private contractor is going to refuse to produce documents and the state entity is going to say we don’t have administrative control.”
Lawyers for the association told the court last month that Nabholz essentially agreed to share such information when it signed a building contract with a state agency. Pulaski County Circuit Court Judge Marion Humphrey ruled in March that turning over the records was “the cost of doing business with the state.”
The contractors group wants a state law changed that allows state agencies to hire building contractors without competitive bids. Most of the contracts for the state’s most expensive construction projects have been awarded without competitive bidding since 2001, when the Legislature allowed the practice for state agency projects that cost more than $5 million.
The association is inspecting construction expense records statewide, and wants a detailed account of the $2.5 million the university paid Nabholz for expenses, known as general conditions, as well as other itemized costs.
Nabholz attorneys told the high court that the information is proprietary and not a public record.
Nabholz attorney Jeffrey H. Moore said he was pleased with the court’s ruling and said he didn’t believe the FOIA should apply to private vendors.
“My hope is that this decision will help further development of the Freedom of Information Act,” Moore said.
Danielson’s ruling also said the court will not allow state agencies to circumvent state law by handing off documents to private companies.
Ron Hope, an attorney for the group, said the association has sent another FOI request to the university for the documents on the contract.
“Obviously, we would have been better off if we included the university as a party to begin with,” Hope said.