In total around $9.5 trillion is estimated to be spent by governments on contracts with various businesses and other organisations worldwide. That’s a lot of money — about 14 per cent of the world’s total output — and much of the process of awarding these contracts is hidden.
That might be changing. The British government and a few others including Canada, Costa Rica, Colombia and Paraguay are working towards opening up the information about public procurement through an ‘open contracting data standard’.
The first version is launched today and sets out a technical standard for the data and documents that ought to be published at each stage of the contracting process, from the invitation to tender through to completion.
The project from the Open Contracting Partnership, is developed by the World Wide Web Foundation and World Bank, among others, and is aimed at making the process more efficient and transparent.
“Corruption adds an estimated $2.3 trillion to the cost of government contracts every year.” said Anne Jellema, CEO of the World Wide Web foundation, “This new standard is a big step forward in the fight to eliminate fraud and waste in public procurement.”
The gross domestic product of Brazil is roughly $2.3tn.
Government outsourcing has been controversial in Britain. The amount spent has doubled under the coalition to £88bn and a number of high profile scandals have tarnished the industry. G4S, the world’s largest security company, was fined after an investigation found that they had overcharged the Ministry of Justice for a contract to electronically tag offenders, including charging the government for tagging prisoners who had died.
And Atos who handled the government’s evaluation of those on disability benefits abandoned the contract after 40 per cent of appeals against its decisions were upheld and staff received death threats.
It hasn’t always been particularly rewarding for the companies involved either. In the last week alone: Mitie who, among other things, cleans Britain’s courts and screens baggage at Heathrow, has announced a first-half loss and the chairman of Serco, another security company, resigned after £1.5bn of write downs in loss making government contracts.
That might be why those working on the project have found both companies and governments pretty supportive of opening up the data. Various reformers and do-gooders in government, they say, have often found it hard to track where the money is being spent. For companies, however, the appeal a better understanding of their competitors and an appeal into an often opaque process.