What is the role of the private sector in Open Contracting?

A guest blog by Sally Hughes, Chief Operating Officer of IACCM

Social trust is high on the political and corporate agenda. Open contracting is attracting growing attention as one way to increase public confidence in the transparency and integrity of business and government dealings. To date, the private sector has had limited engagement in the debate on open contracts and many legal and contracts professionals show scepticism about its practicality. But with 23 governments having signed up to the principles of Open Contracting, and with active interest from institutions such as the World Bank, OECD and World Economic Forum, it is surely time to engage.

Last week, I represented IACCM in a fascinating keynote panel discussion at the 2017 Open Contracting Conference held in Amsterdam.  The session was moderated by Adrienne Klasa, Editor of This is Africa at the Financial Times Group and my fellow panellists made up a distinguished group, bringing diverse perspectives on the subject of Open Contracting. Dr. Eber Omar Betanzos Torres is the Undersecretary of Public Administration in Mexico, who through 2017 has been the Chairperson of the group of 5 governments, (Colombia, France, Mexico, United Kingdom and Ukraine,) who founded the “Contracting 5”, leading the work to foster openness, innovation, integrity and better business and civic engagement in government contracting and procurement.  Last week it was announced that Argentina would join this group, formally making it the Contracting 6; Zuzana Wienk is a member of the Steering Committee of the Open Government Partnership as well as founder and program director of a leading Slovak political watchdog – Fair-Play Alliance; and finally, George Ofori, Deputy Chair of the CoST (Construction Sector Transparency Initiative).

Open Contracting – The Future

The panel’s remit was to look at the future of Open Contracting, to try and cut through the hype and discuss and debate the strategies needed to maximise its impact; can it be the new “normal” in the next 5 years?  It is a lofty aspiration.  IACCM was particularly requested to comment from a private sector perspective, looking at the role of the private sector in accelerating the Open Contracting agenda and the actions that they can specifically take.  The private sector was notable in its absence at the conference and therein lies one of the first challenges – how to get them in the room?

At IACCM we are in the fortunate and privileged position to be working closely with both private sector and public sector; indeed, having started out 18 years ago as an Association that was founded in conjunction with a small private sector group, the percentage of our membership from public sector has grown exponentially over the last 7 years, the reasons for which are the subject of many other blogs.  There is no doubt that governments around the world are driving commercial reform initiatives, from upskilling staff, streamlining processes and even attempting to simplify contract documentation.  However, when I speak about these initiatives to companies that supply in to government, the response is universally along these lines, “It all sounds very interesting, but the reality is that our experience working with governments hasn’t changed, it’s still the same old unwieldy and unnecessary complex documentation seeking to allocate unreasonably onerous risk to the supplier, still the same old bureaucracy, still ultimately the same old lack of transparency.”  So, no wonder then that the private sector is sceptical.

What are the incentives?

There are certainly incentives for the private sector to get on board with the Open Contracting initiative; those organisations that care about trust and integrity, care about their reputation, should be at the forefront.  However, if they are not observing any change from governments, despite the work that is clearly underway, then the incentives largely disappear, it’s viewed as one way traffic.  There are so many other questions to pose:  What are people going to do with the data if it is publicised; are they really ready for it?  What about the arguments for the need for confidentiality in situations of national security?  How can we make “data” open and useable without significant investment in technology?  Even with the challenges that private sector is navigating in implementation of appropriate technology, this remains an area where public sector is woefully lagging in comparison.

Open Contracting is a complex issue and whilst I sincerely hope that it will have made significant progress in 5 years’ time, for it to be the new “normal” I fear is over ambitious; but we certainly shouldn’t be disheartened or distracted from maintaining that objective.

A need for open dialog

So, what is the role of the Private Sector in Open Contracting?  Firstly, it needs to come to the table and take the opportunity to influence the conversations on this important debate, but importantly the Public Sector needs to listen to the real challenges that are still experienced when working with government institutions; this won’t happen without open dialogue and greater publicising of the case studies demonstrating the successes that can be achieved through greater openness and transparency.  Sanjay Pradhan, CEO of the Open Government Partnership gave a moving opening presentation at the conference; he reminded us all that we need to move from commitments to credible implementations and we need courageous and committed leadership.