Making public procurement
truly public
Riga, 25.2.2015
Mathias Huter
Email: mathias.huter@gmail.com
Twitter: @mathiashuter
Entrance hallway of
the Georgian State
Procurement Agency,
2010
Transparency in PP matters
• Public procurement in the EU represents 20% of
GDP
– More than € 2.4 trillion/year
• PwC report on EU procurement: maximum
transparency is a good practice against fraud and
corruption
• Transparency in procurement allows
– Civil society & media to identify systematic problems
(policy solutions) and individual cases
– Encourages businesses to participate in PP, if they
trust the process and can see why they lost
Source: http://ec.europa.eu/anti_fraud/documents/anti-fraud-policy/research-andstudies/identifying_reducing_corruption_in_public_procurement_en.pdf
Open EU procurement data
• Tenders Electronic Daily (TED) data is quite difficult to
search, process and analyze (PDF-files)
• Activists have used algorithms to make TED data better
searchable and more accessible:
– http://ted.openspending.org/
– https://spendnetwork.com/
• They have started to link TED data with other
information (lobbying spending, EU contracts, EU
experts)…
– http://openinterests.eu/
• … and have started looking for trends in the data
– http://tt.spendnetwork.com/index.html
Case study: Slovakia
• Pro-actively publishes all contracts since 2009
– Meta data and scanned contracts available on one central
website
– Including data on small purchases and receipts
– A few exceptions: labor contracts, tombs,…
– Sensitive personal or commercial data in contracts is redacted,
but this is only the case in less than 5% of contracts
– Contracts only come into force once they are published
• Ensures high compliance
– Increased competition: from average 2.3 bids in 2009 to 3.6 bids
in 2013 per tender
– People care: some 9 per cent of the population said they had
looked at contracts (TI Slovakia survey)
Case study: Georgia
• Introduced full e-procurement in 2011, conducted through a
central platform, used by more than 3,500 state bodies
• All tender documentation accessible online for everybody
– All bids, all documents, contracts & amendments, payments,
all procurement budgets of 3500+ public bodies
– Transparent, anonymous Q&A between suppliers and
procurers
• Publication of all awarded contracts, including small purchases
• Blacklist of banned companies, Whitelist of privileged companies
public
• Tenders can be appealed and frozen online
– Review within 10 days, appeals and complaints published
Georgia: Single-source contracting
• Analyzed data for 430,000+ single-sourced
contracts & receipts
• Cross referencing data
– Contracting data, https://tenders.procurement.gov.ge
– Scraped company registry,
http://corpsearch.tigeorgia.webfactional.com/en/
– Scraped asset declarations of public officials,
http://declarations.gov.ge
– Scraped donations to political parties,
http://sao.ge/monitoring-service-offinance/declaration/contributions
The power of open contracting
• Found more than EUR 100 million in single-sourced contracts
going to companies officially owned by Members of
Parliament, high-level public officials and their spouses (20112013)
• Found that in 2012: the ruling United National Movement
party had received about 58% of its reported donations – EUR
3 million – from individuals who were linked to businesses
that received single-sourced contracts with a total value of
more than EUR 72 million that year (4.125% of contract value)
• Report available at: http://transparency.ge/en/simplifiedprocurement
The case for open contracting
• Stronger trust in the procurement process
– Increased participation from bidders, fosters competition
– Lower prices, better value for money
• Public scrutiny deters wasteful spending and corruption
• Allows government to better understand the companies it is dealing with
– Detect cartels, collusion, conflicts of interest
• Small reduction in fraud & corruption can result in massive savings for the
public
– Investment in procurement pays off
•
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Cutting of red tape and savings on administration
Good for citizens
Good for governments,
Good for companies with integrity
More information at http://www.open-contracting.org/
Thank you for your attention!
Mathias Huter
Consultant on good governance
Email: mathias.huter@gmail.com
Twitter: @mathiashuter