States Lead the Way on Contract Disclosure
Citizens have a right to know whether their tax dollars are being spent wisely. Unfortunately, the terms of government contracts are not routinely disclosed. A recent audit of ten federal agencies found that none of the agencies comprehensively posted contract information online. States, on the other hand, have begun innovating on contract disclosure.
Several federal agencies recently backed away from a proposal to make contract information available on the Internet, leaving public access to these contracts within the confines of the Freedom of Information Act (FOIA) process. However, posting government contracts online is not an impossible task. Indeed, several state governments post contracts online as part of their approach to procurement disclosure.
Increasingly, the federal government provides services through contracts with private firms. According to data on USAspending.gov, federal spending on contracts more than doubled from $263.4 billion in 2002 to $537 billion in 2010. Yet information on contract competition, terms, and performance are only partially disclosed through a hodgepodge of systems including FedBizOpps.gov, USAspending.gov, and the Federal Awardee Performance and Integrity Information System (FAPIIS).
Some statistics indicate that many users are unsatisfied with the sporadic information available through related government websites and are turning to FOIA. For instance, in 2010, over 20 percent of FOIA requests to the Office of the Secretary of Defense and Joint Staff included requests for contracts. (Notably, the same office has begun routinely posting all FOIA responses on its website, making those contracts disclosed available to the wider public.) In September 2010, 29 percent of open FOIA requests at the General Services Administration (GSA) included contract requests. Better access to contract information has been a frequent request from the open government community; for instance, OMB Watch called for online contract disclosure in recent congressional testimony.
State Contracts Websites
Currently, at least 41 states offer the full text of at least some contracts online, according to research conducted by OMB Watch with assistance from Good Jobs First. While several state procurement disclosure systems are notably inferior to the federal system in various ways, particularly usability, some states have taken measures beyond those of the federal government.
For instance, Delaware's contracting website allows users to look up contracts by item or service and review the full awarded contract, as well as addendum history and information on the bidding process, including who submitted bids. The site provides a level of detail on specific contract awards that many federal agencies are unwilling to provide because of claims of confidential business information. It should also be noted that Delaware provides this central site as a service the public, as well as to state agencies. State employees needing a product can look up the relevant contract and initiate a purchase order through the system.
In some cases, firms that contract with the federal government also have contracts with state governments, and the full text of those contracts is available online. For example, in the New York contract system, users can view the full contract between Science Applications International Corporation (SAIC) and the State of New York. The same transaction is listed in USAspending.gov, but only basic information about the contract – amount, recipient, location, etc. – is available. That disclosure of full contracts can be so common at the state level undercuts the federal argument that this level of transparency is impractical to pursue.
One state-level innovation of particular interest is the disclosure of all bids, rather than just a successful bid. The Ohio contract website has a "bid tabulation" function that lists all of the bids for some state contracts. The bid history allows the state to prove that it got the best deal available. The public should care about quality as well as price, but absent competitive price information, it is impossible to know when to ask questions about quality.
State Approach and Attitude
Preliminary research indicates that these state contracting websites were often initially developed for the internal purpose of improving procurement and eventually transitioned to providing public accountability for the process. For instance, Servando Patlán, Procurement Reform Policy Manager of the Washington Department of General Administration, reported to OMB Watch that Washington's highly functional procurement website had been developed in such a manner. "When we re-bid the contracts, having the current contract posted helps potential vendors to see how competitive the current contract is and how competitive they need to be to compete against the current contract holder," he said.
Patlán also noted that some of the limitations on posting information are driven more by format issues than by concerns of confidential business information. "The solicitation document, the proposal documents, the standard terms and conditions and special terms and conditions, insurance and bonds information" are not included, he said, because they "are still mostly managed in paper form." These documents are publically available, but to get access, "interested parties may call to make an appointment to have the documents pulled from the file room and put into a viewing room in our office for review," said Patlán.
Like Washington, Oklahoma's site from the Department of Central Services started as a way to streamline internal operations and has evolved over its twelve-year existence into a means for public disclosure. Sara Cowden, Director of Special Projects, explained to OMB Watch the purpose of the website: "We work for the public, they should see what we are doing." Every "state-level" contract is posted online in its entirety for agencies, the business community, and the public to see. On the effect of contract disclosure on businesses, Cowden stated, "State agencies appreciate a central location to go for their purchase needs. Vendors appreciate the visibility afforded by the posting of state awarded contracts, as they may in turn generate their business opportunities with other government entities."
It is not clear why at the state level, disclosure of contracts could be seen as a benefit to businesses, but at the federal level, the same transparency is considered potentially damaging.
Despite the advances in federal government transparency, there are many promising innovations not yet pursued at the federal level. The success states have shown with their contracting websites proves that the federal government could implement such transparency while addressing agencies' and contractors' concerns.