Transparency in contracting remains opaque

Administration officials are asking how they can make acquisitions more open to the public without compromising proprietary data

Transparency is all the rage in government circles these days, but there might be a limit to its usefulness to the public and its ability to facilitate greater accountability in key government services, such as federal contracting.

The contracting community is wrestling with transparency, especially the proposition of posting contracting documents, such as bid proposals, online for the public to read and comment on. The Civilian Agency Acquisition Council and Defense Acquisition Regulations Council are seeking to amend the Federal Acquisition Regulation and have asked for help in preparing for transparency.

In an advance notice of proposed rule-making, the councils phrased their most pressing question as: How can the government be transparent enough “to enable public posting of contract actions…without compromising contractors’ proprietary and confidential commercial or financial information?”

The councils cited five memos from the Obama administration to prove that transparency is coming to contracting. The primary goal is to promote efficiency, accountability and transparency — three buzzwords in recent years. They also want to simplify public access to contracting information.

At the same time, the councils realize they must also conform to statutory and regulatory prohibitions against disclosing protected information. With that in mind, regulators want to identify methods for protecting information that agencies should not post or release to the public.

Transparency has its advocates. Michael Carleton, chief information officer at the Health and Human Services Department, said the quality of federal data that is made public will improve only when people who use the information demand it.

Others say public data can help agencies compare their prices for products or services to other departments — and perhaps even help end fraud and abuse in the contracting world. It might also diminish the power of big companies. “There needs to be complete transparency, total transparency,” said Lloyd Chapman, president of the American Small Business League.

However, it's not that easy.

Putting all that proprietary data online does greater harm than, say, an inadvertent mistake on a Freedom of Information Act request, said Larry Allen, president of the Coalition for Government Procurement, which has more than 350 member companies. Although FOIA requests are often used to obtain competitive information, that information usually goes to the one person or organization that submitted the request. A searchable database, on the other hand, would be open to the public.

By putting more contracting information online, regulators will need to confront whether they're harming a company’s success and the country’s security, experts say.

The administration wants agencies to be open and justify why a piece of information should stay off the Web. But Allen said that for contracting data, agencies should have to argue why it should go onto the Internet. “You don’t want to make it easier to harm the country with a searchable database,” he said.

After a transparency policy is in place, the federal acquisition workforce would need to make many decisions about what should be public. But already overburdened employees do not need more pressure added to their already stressful work, Allen and others say.

Furthermore, the new regulations should strive to protect contracting officers from the condemnation that comes with a procurement mistake, said Mary Davie, assistant commissioner for assisted acquisition services at the General Services Administration.

On the contractor side, Stephen Charles, co-founder and executive vice president of immixGroup, a consulting firm, said companies should know upfront what information from a transaction could go public. Each solicitation should include it as part of a fair-notice process. That would give contractors the choice of not bidding if, in their opinion, the information strayed too far into proprietary territory, Charles said.

“So it would be a two-step process, and there would be agreement along the way with all contractors being treated equally,” he said.

Overall, agencies need to make sure they have iron-clad firewalls so that nothing sneaks out without them knowing it, Allen said. He suggests waiting until the technology is mature enough.

But is such patience likely in today’s environment? Warns Allen: “Political pressure tends to drive things in an artificially fast time frame.”


About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Fri, Jun 4, 2010 Peter G. Tuttle, CPCM

What would be of more value than posting the actual contracts would be posting the earlier decision support documentation like bundling analyses, acquisition plans, all non-competitive justifications, and similar things which would give the public visibility into how the decision to award a contract is made. That's where the "real" problems start - and that's the part of the process which has been hidden from daylight up to this point. Providing transparency into any poor decision-making processes/documentation will be of more value than posting redacted contracts. Unfortunately, making this stuff public would also be time-consuming and would, most likely, slow the acquisition process down even further. I am not sure where the logical trade-off point is, but then again, I am not sure anybody else is either. The public debate needs to continue.

Fri, Jun 4, 2010 Brandon Washington

Why do we assume that "transparency" can only mean disclosing documents that, in every other setting, are deemed confidential? If you want to protect the tax payers' dollars AND the contractors' proprietary info (and true competitive advantages), then why not do more to make the PROCESS transparent?

Currently, a bidder that was not selected has the right to request a debriefing and, if they're not satisfied, can protest a procurement decision. If you want to be transparent, then don't make anyone ASK for a debriefing; take the info that would normally be in a debriefing and post it online for the world to see. Tax payers could see HOW a contracting decision was made: the steps taken, the evaluation criteria used, the final total price, etc. Contractors could see where they did or didn't do well, and where other companies did or didn't do well.

My experience in Federal procurement is that there is a wide range of quality when it comes to RFP responses. Companies that submit subpar proposals rarely win contracts. Unfortunately, those companies may be well qualified with competitive prices, but simply don't know how to effectively convey that in a proposal. I've heard contractors say that their expertise in writing RFP responses is a "competitive advantage", with which I strongly disagree (unless they're in the business of writing RFP responses). A competitive advantage has to do with the way they perform under a contract, NOT with the way they win a contract.

Build transparency into the procurement PROCESS and you will (1) promote accountability on the Fed side by displaying whether or not everyone is playing by the rules; (2) help level the playing field on the contractor side by showing every company, big and small, how to present what they offer in a way that can be more easily evaluated; and (3) protect the tax payer by discouraging poor procurement practices and improving contractor competition.

Fri, Jun 4, 2010

The issues associated with this initiative could easily be resolved if the FAR were brought into the information age instead remaining in the paper age, where it now resides. The issue is data. Data is fungibel and can be recorded once and then used many times. Coding data as proprietary at the point at which it is first entered and resolving any issues over whether it is proprietary at that time would then allow the cgov't to release to the public contemporaneously with contract award the "contract." The FAR Council has been looking at this issue, but has refused to resolve for it years.

Fri, Jun 4, 2010 Interested Party

It will not be possible to both release this level of information and protect sensitive information. Contracting Officers will NOT be able to spend the time that it takes to remove all competitivly valuable information. Small businesses will be particularly at a disadvantage as they will not have the breadth of product lines to absorb a loss of competitive advantage. Finally, businesses will find a way to price this loss of advantage into the process and the taxpayer will pay more.

Thu, Jun 3, 2010 LC

And will continue to be opaque. They will never allow to have the bosses (Us Taxpayers) see what they spend our hard earned dollars on. The waste fraud and abuse in the government is horrific until the people take thier country back this is and will be the way its done. This has been the norm for over 30 to 40 years both parties why would they let the boss see now what they do and how they do it.

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