Contracting Industry Verklempt Over Possibility of Contracts Going Public

The Federal Times had an interesting piece last week on the contracting industry's reaction to a recent notice in the Federal Register seeking input on "how best to amend the Federal Acquisition Regulation (FAR) to enable public posting of contract actions." Despite the FAR Councils' stated efforts to post contracts "without compromising contractors' proprietary and confidential commercial or financial information," industry executives are beside themselves over such a monumental change. Not surprisingly, their arguments against the idea don't hold much water.

It seems the FAR Councils are reading the proverbial handwriting on the walls when it comes to the Obama administration's transparency efforts, and have issued an advanced notice of proposed rulemaking "should [public] posting become a requirement in the future." Scott Amey over at the Project on Government Oversight (POGO) posted a good overview of the issue back when the notice came out.

A Stack of Contracts

Following up on the issue, the Times decided to check in with contracting experts, including leading industry executives, to gauge their reaction to the effort. What was the executives' biggest concern? Naturally, it was the potential for releasing confidential information.

Larry Allen, president of the Coalition for Government Procurement, argued, "[I]f the government makes a mistake about releasing confidential information under a Freedom of Information Act (FOIA) request" – currently the only way for the public to obtain contract records – "the damage...is fairly limited." Allen contrasted this with the government unintentionally posting proprietary information to "a database for everyone to see," which, according to Allen, would really put "a company at a significant risk of harm."

First, I'm not sure if Mr. Allen realizes that we live in an advanced technological age where almost anyone can instantly spread information around the world through the internet. If the government makes a mistake by releasing confidential information through a FOIA request, the damage isn't necessarily limited because it was only released to an individual or organization. That individual or organization could easily post the information to the web "for everyone to see."

Second, once the government releases information through a FOIA request, the information is in the public domain and there's no getting it back. If the government were to set up a public database where it posted contracts, it could remove improperly posted confidential information. Of course, if the government didn't catch the mistake in time and the public obtained the information then the damage would already be done. But, again, that risk is already present with FOIA.

To his credit, Tom Spoth, the author of the Times article, also interviewed Tom Lee of the Sunlight Foundation and Hugo Teufel of Pricewaterhouse Coopers, who both support the effort. Lee argued that online access to contract information "would encourage competition and result in better deals for the government," while Teufel claimed, "The public has a right to know how its tax dollars are being spent." I couldn't agree more on both points.

This effort is long overdue. As Lee points out, "current databases on government spending are inadequate" when it comes to contract information, and just because the contracting industry is scared of the government accidentally leaking proprietary information to the public isn't reason enough to scrub the exercise. One of the costs of doing business with the government, a process financed by taxpayer dollars, should be a lower threshold for releasing business information. With that comes the small risk that the government might accidentally release confidential or proprietary information.

Image by Flickr user luxomedia used under a Creative Commons license.

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