OPINION: Public procurement is having a reckoning

by Gavin Hayman | Open Contracting Partnership
Thursday, 14 October 2021 13:05 GMT

Britain's Prime Minister Boris Johnson, wearing a face mask to prevent the spread of the coronavirus disease (COVID-19), visits a PPE manufacturing facility, in Seaton Delaval, Britain, February 13, 2021. Scott Heppell/Pool via REUTERS

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Rich nations must make procurement open and fair to avoid obscene waste in recovery spending

By Gavin Hayman, Executive Director of the Open Contracting Partnership and Chair of Open Ownership

How our governments go shopping needs to change. The sleepy, risk-averse world of public procurement was suddenly thrust into the spotlight during the pandemic. Slow, paper-based approaches struggled to source vital PPE and medicines. Emergency procedures were regularly abused, putting lives at risk including through raspberry farms supplying ICU ventilators and passing soda bottles off as test tubes. Emergency funds even rented camels.

Any day now, the UK government is meant to publish the list of emergency contracts awarded through its “VIP” fast track lane, although there is no evidence that politicians were particularly well placed to source stocks of PPE. Indeed, the Department of Health estimates that about 2 billion items of PPE bought (about 6.2% by volume) were substandard. That’s an eye-popping £2.8bn wasted.

The world’s leading economies have now decided to up their game. The G7 countries just committed to strengthen their public procurement systems, guided for the first time by a vision of transparency and digitization across the full procurement process, from planning to payments, to make procurement more agile, responsive and inclusive. The UK has drafted a Green Paper on its own plans to transform procurement. New legislation and regulations must now be crafted to turn these commitments into action.

A new report today from TrustLaw and Open Contracting Partnership can help. We take the best practices across eight countries to design best-in-class rules and guidance to put transparency, competition, and efficiency at the forefront of their reforms.

We found ten clear lessons that any government can follow. Every country needs a single clear rulebook, strong safeguards on anti-corruption and conflict of interest and rules to promote competition and transparency. If governments don’t know how many of their contracts are competitively awarded and how many were sole sourced or only had a single bidder, they aren’t paying adequate attention.

To ensure fair play, procurement rules should support public monitoring of contracts, an accessible and effective complaints mechanism, and specialist oversight. Digital platforms and open data to unlock and share information will ensure money is spent well and save everyone time and money.

These provisions worked well during the pandemic to help some countries buy fast and buy openly and worked with journalists and citizens to reinforce public trust. They had actual, real-time data on what the government was buying which helped manage the huge supply chain disruptions. Compare Ukraine and Colombia, which were able to publish and monitor their emergency contracts during Covid in under 24 hours against the UK, where the turn around for public disclosure was more like 100 days.

More generally, the amounts of public money involved in procurement are staggering: about $13 trillion every year according to our best estimates. But too often government procurement is hamstrung by rules and lazy practices that prioritize commercial confidentiality over sharing information. With key information like the contractor’s name, payments, and specifications missing, it is almost impossible to detect waste, fraud and other abuse.

Open, accountable, data-driven procurement will improve every element of this spending. It will be vital to fostering economic innovation, inclusion and rebuilding our devastated small business sector. We can’t afford to pour trillions into the same leaky systems as we look to rebuild our economies, and tackle climate change, insecurity and inequality.

Our world pretty much runs on public contracts. It’s time to bring public procurement into the 21st century and deliver citizens the fast, open, and smart digital service that they deserve.