BACKGROUND
Approximately 15% of the EU’s Gross Domestic Product is spent every year on procuring goods and services, and some estimates indicate that corruption increases the cost of government contracts by 20 – 25%. It is even more worrying that corruption in public procurement compromises widely supported public goals, such as building safe highways, high quality school buildings, or delivering medicine in time. These are a few of the main reasons why more research needs
to be done on how to make public procurement more efficient and transparent. Addressing this gap is what the EU-funded, large-scale project DIGIWHIST does. This policy paper presents key data challenges in public procurement and proposes recommendations to improve the state of data and data use for better outcomes.
OPEN DATA AND PUBLIC PROCUREMENT
In the 34 European countries examined by DIGIWHIST (DIGIWHIST deliverable D1.1), public procurement is regulated by national and supranational (EU) legislation. This means procurement processes and their publications are governed by monetary values (thresholds). Those thresholds determine the way a tender has to be published at the national level and whether it has to be advertised at the European Union level. The latter is done on the European procurement platform Tenders Electronic Daily (TED). Procurement procedures involve a variety of stakeholders: procurement officers who design and implement tenders, experts who advise on content (e.g. engineers, medical staff) and bidders who bid on the actual tender. In addition, public procurement procedures are interesting for citizens who may want to find out what progress has been made in the construction of a public building or about who won the contract to supply their school canteen, for example. Linking procurement data with other datasets such as budget data creates even richer information on how money is spent. Efficient public spending has increasingly become a focus of transparency advocates, with organisations across the globe launching projects aimed at increasing transparency in public procurement. The Open Contracting Partnership has developed a publication standard, and many NGOs have developed risk indicators across Europe. For its focus countries, DIGIWHIST has developed a set of variables under which procurement data for all 34 countries is analysed and published on one generic portal for easy comparison across borders. Indicators measuring transparency, corruption risks, and administrative quality are also applied to the datasets.
THE PROBLEM
Most countries that have been examined in DIGIWHIST research fail to publish their procurement data to an acceptable minimum standard. Many well-governed countries such as Sweden or Germany publish only those tenders which are regulated by EU Directives in a transparent and data-rich manner. Here, TED is the most reliable resource for open public procurement data. This is in striking contrast with Eastern European countries such as Romania or Croatia, which have introduced low reporting thresholds of only a couple of thousand euros. This has made their procurement spending not only transparent, but also more competitive. With a few exceptions such as Italy and Estonia, no government publishes information on contract implementation, making it impossible to know what happens after the contract is awarded — for example, did the suppliers deliver on time and budget?
In addition to the lack of publicized information on the whole tender cycle, the sources on which procurement data is published can vary greatly and may even require the payment of a fee, making it very difficult for citizens to find the information they are interested in. Even on TED, some of the required fields are either not filled out or not filled in a standardised way, which makes locating a given tender as well as comparing different tenders sometimes impossible. All these obstacles create an opaque environment in which procurement practitioners, bidders, and citizens find themselves.
OPPORTUNITIES AND BENEFITS
Publishing procurement data in an open data format opens a wide range of opportunities. It empowers governments to produce better analytics, which creates vast learning opportunities across authorities. Better and more accessible data can also be used by potential and actual bidders to assess opportunities and evaluate their own performance internally. This would ultimately lead to more competition and ideally better outcomes.
The availability of procurement spending statistics is also a challenge at the EU level, in spite of extensive EU-wide regulations. Such data would enable civil societies to better understand government performance and enable civil society to hold governments more accountable.
RECOMMENDATIONS
1. GOVERNMENTS SHOULD SET UP A COMPREHENSIVE CENTRAL PUBLIC PROCUREMENT PLATFORM
Providing comprehensive public procurement information free of charge in an easy-to-use format to all interested parties is expected to increase market transparency, decrease transaction costs, and facilitate government accountability. Hence, a well-functioning central public procurement platform should contribute to achieving value for money in public procurement as well as increase integrity throughout the public sector. The DIGIWHIST portal opentender. eu, featuring all of the above, is in development and will be launched in 2018.
2. GOVERNMENTS SHOULD COMMIT TO PUBLISHING PROCUREMENT DATA BY DEFAULT IN AN OPEN DATA FORMAT
Publishing public procurement data in a timely, simple, and easy-to-understand format and publishing information as machine readable data are essential for lowering the barriers to data use and reuse by all stakeholders. As recommended by international civil society organisations like the Open Knowledge Foundation, the Sunlight Foundation, or the Open Contracting Partnership, governments must adhere with machine-readable file formats such as CSV, JSON and XML to ensure usability. Users should be also able to download data in bulk either as .csv or through an API. The number of data publication forms should be kept to the very minimum in order to minimize complexity facilitating stakeholder engagement with the data.
3. GOVERNMENTS SHOULD PRESCRIBE LOW REPORTING THRESHOLDS WITH THE SAME REGULATORY FRAMEWORK FOR ALL PUBLIC BODIES AND SPENDING AREAS
Governments should implement low monetary publication thresholds and apply public procurement rules to all public bodies and spending areas. Ideally monetary thresholds should be between 0€ and 5,000€ so that most public spending through public procurement systems is transparently published and regulated. In order to carefully balance the demand for transparency and the associated administrative burden, a lighter regime could be applied to the smallest value contracts, with full procedural and transparency rules applied for higher value contracts starting from about 30-40,000€.
4. GOVERNMENTS SHOULD INCREASE THE DEPTH OF PROCUREMENT DATA PUBLISHED
This should include:
- publish public procurement data relating to the whole procurement cycle on existing public procurement platforms including at a minimum call for tenders, contract awards and contract completion/ implementation announcements.
- publish information on amendments, modifications, and failed tenders in a structured and reliable format so that up-to-date information is available on all tenders.
- publish at least a minimum set of variables essential for government accountability and transparency of bidding, such as the description of the purchase, information on bidders and subcontractors, final payments, contract performance, and unique organisational identifiers.
5. GOVERNMENTS SHOULD FACILITATE THE LINK BETWEEN PUBLIC PROCUREMENT DATA AND FURTHER DATASETS
We recommend that governments establish the link between public procurement data and related datasets describing organisational behavior and performance using common organisational and contract IDs throughout different data systems, such as public procurement, payments, company registry, and court rulings.
6. GOVERNMENTS SHOULD LINK PUBLIC PROCUREMENT ANNOUNCEMENTS TO ORIGINAL PROCUREMENT DOCUMENTS BY DEFAULT
Those should include the full tender documentation and maps, plans, etc. Ideally, signed contracts should also be linked and easily available. Here, information on sub-contractors as well as contract amendments, invoices, and completion reports submitted should be linked to the dataset. Submitted bids or at least parts of them may be exempt from these stringent transparency rules for protecting commercially sensitive information or privacy of individuals.
7. GOVERNMENTS SHOULD INTRODUCE CONTROL MECHANISMS TO ENSURE DATA QUALITY IS MAINTAINED
We recommend that existing data reporting requirements are adequately enforced and data quality is increased to the legally mandated minimum throughout Europe. To ensure that all required data fields are filled out with truthful information, governments should consider introducing centralised control mechanisms and penalties for non-compliance.
8. GOVERNMENTS SHOULD LOWER BUREAUCRATIC BURDEN BY LINKING PUBLICATION SYSTEMS TO TENDER, CONTRACT AND PAYMENT MANAGEMENT SYSTEMS
If administrative datasets are linked, the officially verified (and supposedly correct) information should be automatically added to public procurement records to lower public procurement administrators’ administrative burden as well as minimize the risk of erroneous data entry.
9. GOVERNMENTS SHOULD ENCOURAGE THE REGULAR USE OF PUBLIC PROCUREMENT DATA BOTH INSIDE AND OUTSIDE GOVERNMENTS
Governments who are the principal data guardians should promote the use of public procurement data within government and facilitate data reuse by non-governmental stakeholders such as civil society watchdogs and data provider firms. The use of public procurement data should be facilitated first by creating direct feedback mechanisms throughout the entire procurement process cycle (i.e. planning, tendering, awarding, implementation) involving all stakeholders from within and outside government.
The original text was written by Mihály Fazekas and Mara Mendes and published on opentender.eu. Follow this link to access interactive graphics and to download the text in PDF format.
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