Open Contracting: What Works for American Cities

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(Photo credit: Jen Gallardo/Flickr)

(Photo credit: Jen Gallardo/Flickr)

Have you ever wondered how much your city spends on school lunches? What about services for the homeless? Cities spend billions of dollars every year on goods and services that residents care about, and yet sometimes they are left in the dark when it comes to important questions about who is being paid, what is being procured, and how much is being spent.

Together with the Sunlight Foundation, we’ve looked at  best practices in making this contract data more open and transparent to help reduce corruption in the procurement process, improve government effectiveness, and allow for more accountability and oversight in the process.

Nowhere is this more important than in municipal procurement. Cities opening and sharing information about their acquisition needs, contract process, and the performance of their vendors will help to improve their communities by building greater trust in government spending. It will also increase opportunities for potential vendors by lowering barriers to identify relevant bids and understanding the government’s decision-making in contract awards. Finally, it makes the internal planning and preparation process more effective as well by having access to timely information across government agencies.

Based on this research and other previous work, we have produced a set of simple, practical guidelines for city procurement officials and a comprehensive research report to consider as they develop their own contracting data release programs. Real world cases highlight best practices from the 22 North American cities included in the research, drawing on interviews conducted with municipal staff, by phone and in person, across the U.S., Mexico City and Montreal.

Here are 5 innovations we have identified:

Planning data in New York City
The earlier a municipality gives vendors a sense of its future needs, the more preliminary planning they can do. In 2011 the New York City Council passed a law that requires the mayor to coordinate all executive departments to share upcoming contracting opportunities for the coming year, at least five months in advance. By 31 July, each agency’s plan for the year ahead must be published online and include detailed information on when the contract opportunity will be released, the contract vehicle, and the number of staff needed and their qualifications. This level of specificity gives vendors time to identify key personnel and research the best method to provide the goods and services.

Solicitation data in Montgomery County, MD
Information about new contract offers should be shared about with potential vendors, including information about the good/service to be purchased, the value of the procurement, and any accompanying documents that justify or explain exemptions from regular procedures and requirements (such as sole source contracts). Montgomery County, MD releases a wide variety of procurement datasets as part of its comprehensive OpenMontgomery initiative. MoCo publishes a variety of solicitations, including potential contracts small enough that they are not subject to its “formal” procurement process, and even calls attention to existing contracts whose terms will be expiring soon. By doing so, it provides other vendors opportunities to compete, and ensures for itself a better deal.

Award data in Miami-Dade, FL
Details about the government’s decisions should be published, stipulating the winner, price, and reasons for contracting with a particular vendor. Before selecting a vendor, Miami-Dade publishes interim recommendations online and provides a period of time for challenges to be filed. This ensures competitors who have been ruled out can examine the proposed decision before it becomes irrevocable. Miami-Dade is also unique in highlighting contracts being issued on a sole-source basis to give other potential vendors a chance to offer equivalent services at competitive rates.

Contract data in Cincinnati, OH
The full text of signed contracts including all amendments should be published including structured data about key details such as awardee, amount, date etc. Cincinnati’s open data portal includes procurement datasets. The primary contracts dataset contains links to a variety of contract-related documents, including the signed contract itself. The records are updated to reflect any amendments to a contract.

Implementation data in Austin, TX
Information on the implementation of contracts should be disclosed, including information such as implementation milestones, actual completion date, and information on funding extensions outside the scope of the original agreement. Austin, like many cities, publishes a list of currently active contracts. What is unusual is that Austin releases details for each contract about the maximum expenditure for the contract, the amount currently ordered, and the amount actually spent up to this point. These details provide some insight into the progress of each contract over time. It also displays a list of current contracts for each vendor. While that information can be assembled from the published data of other cities, doing so automatically makes the data more accessible to less technically savvy stakeholders.

How does open contracting help?

Open contracting transforms public spending by making documents and data ‘open by default’ across the entire chain of public contracting and using this information to engage business and citizens to shape better outcomes. One resource, the Open Contracting Data Standard, describes what to publish and how to make this information useful and practical. This technical schema provides for structured, machine-readable information on all relevant documents in municipal procurement such as budgets, bid proposals, bidder information, contracts, and invoices.

Using the guidelines, research and resources, procurement professionals can work with stakeholders to identify objectives, develop policies, and implement changes. We find that engagement with relevant stakeholders from the policy development stage, all the way through day-to-day disclosure is critical to ensuring results.

In fact, each step in the contracting phase represents a unique opportunity for publishing open data. At a minimum, there should be timely, accessible, affirmative disclosure of open data about procurement plans, solicitation notices and bidding documents, award notices, full contracts, and implementation details.

Final thoughts

Open contracting is one of the few policies available to municipal governments that can simultaneously save cities money and save staff time, increase the public’s trust, and improve public services. While real effort needs to be invested to solidly implement and engage with stakeholders, once done this reform touches on virtually every program a government may undertake.

In cities that open up public contracting, you can take look at that contract for school lunches — worth almost 200 million dollars in New York City last year. You can understand how your city’s homeless services vendor spending adds up (over 30 million dollars in Los Angeles in 2016, up 10 million from the previous year). Imagine this data being accessible for cities far beyond LA or New York, and the possible benefits that could result. That’s what we at Sunlight and the Open Contracting Partnership are working on, and we hope you’ll join us.

Interested in writing a guest blog for Sunlight? Email us at guestblog@sunlightfoundation.com