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Open Contracting Open Data Draft is a Good Start


September 4, 2014

Doug Hadden, VP Products

The Open Contracting initiative is an important stage in the government transparency movement. A draft open data standard has been produced by the organization. This is an excellent start because government procurement represents such a significant factor in government expenditures and country GDP. And, government procurement is highly available for corruption.

The purpose of the initiative is:

Open contracting refers to norms and practices for increased disclosure and participation in public contracting including tendering, performance and completion. It includes the variety of contract types, from more basic contracts for the procurement of goods, to complex contracts, joint venture agreements, licenses and production sharing agreements. Open contracting encompasses all public contracting, including contracts funded by combinations of public, private and donor sources.

The draft data standard provides:

  • Link between procurement planning and the tendering process – critical to understand the linkage to policy
  • Contract award information – critical for corruption and best value analysis with contract data
  • Performance milestones and documents

Comprehensiveness Not Achieved – But Should it?

There are some problems associated with the proposed standard. Many of these problems come from the nature of government procurement that is difficult to decompose. Some issues are:

  • The planning data standard is limited. And, there doesn't appear to be any linkage across the procurement cycle related to budget classifications or multiple year commitments.
  • Rationalization of simple purchasing of commodity goods with complex procurement. The notion of "units of measurement", "quantity per unit", and "value per unit" is more difficult to define in complex procurement.
  • Notion of "performance" is usually associated with outcomes rather than outputs. The standard focuses on milestones – typically related to outputs. This makes sense because outputs are easier to track. But a milestone usually includes many outputs. The standard links to documents that provide performance narrative, but there is no standard for this data. Guidance for performance reporting is needed.
  • Standard contract data is very sparse. Government contracts can be very complex. This includes hold-backs, bonus payments, and penalties. Some contracts provide criteria for extended phases. 
  • The selection criteria for procurement provides string information but does not have categorization. Categorization would enable analysis across contracts.
  • The standard doesn't seem to follow multiple stage tendering such as RFI followed by 2 stage RFPs

This is one of the problems associated with open data standards: information comprehensiveness is valuable but not at the risk of making compliance too expensive or complex. 

Supporting the Standard in Software

The standard is easily supported in Commercial Off-the-Shelf software like the FreeBalance Accountability Suite. That's because our suite is fully unified across the budget cycle. Many governments acquire "e-procurement" software separate from core financial management. This standard exposes the problem associated with this approach:

  • Standalone e-procurement software tends to have no idea about the original budgets, planning processes or budget transfers.
  • Commitment management is outside the e-procurement system.
  • Contracts and payments are usually managed outside of the e-procurement system.
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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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