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Public sector contract secrecy based on ‘myths’


Michael Cross Correspondent

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Government contracts with the private sector are being kept secret because of erroneous fears about the consequences of publication, a lobby group has claimed.

In its Mythbusting confidentiality in public contracting report, the Open Contracting Partnership says it aims to “unpack and, where possible unpick” what it calls 10 widespread myths. These include fears about commercial confidentiality, national security, data protection and concern that transparency will promote collusion between suppliers or harm public perceptions of government.

The Open Contracting Partnership describes itself as “a silo busting collaboration across government, business, civil society and technologists to promote open contracting.” It was set up in 2012 under the umbrella of the World Bank but is now funded by foundations and public bodies, including the UK Department for International Development. 

The ‘Mythbusting’ report is based on comparative legal research and studying public tenders in eight countries: Australia Canada, Chile, Colombia, Georgia, New Zealand, Ukraine and the UK.

Differences in disclosure

It highlights large differences in the level of disclosure of contracting information: in general Eastern Europe and Latin America are the most open, whereas disclosure levels in Western Europe and in large Commonwealth countries “are much lower and attitudes regarding disclosure are much more conservative”.

The report suggests the reasons lie in history - the legacy of the Soviet era and very large corruption scandals in Latin America. “In Western and Northern Europe, on the other hand, it appears that the conservative approach to disclosure of contracting information is partly driven by the fear of enabling collusion as a result of public cases that came to light over a decade ago,” it says. 

The team identified 10 separate arguments for keeping contracting information secret, which it describes as myths. “As we looked into each of these assertions, we found surprisingly little evidence that backed up the harm proposed by the arguments and quite a lot of evidence that does not support them,” the report says. 

Among the assertions are: 

- That confidentiality clauses prevent the disclosure of contracting documents. The report says out that such clauses do not prevent the disclosure of non-sensitive information, that governments must disclose contracting information if required by law and that confidentiality clauses can be overridden where both parties to the contract agree. 

- Commercial sensitivity prevents publication. Even where information is legitimately redacted at certain stages “most commercially sensitive information is not legitimately sensitive forever”. In particular, authorities should consider whether commercial information is already known to the contractor’s competitors. 

- National security. This is often exaggerated and applied to information that cannot legitimately be expected to undermine security, the report says. It notes numerous inconsistencies: Nigeria has a blanket exemption on disclosure of all defence spending, whereas Ukraine, "where armed conflict is ongoing", conducts open tenders. Everywhere, the report says, sensitivities will reduce with the passage of time. "No information may remain classified indefinitely."

- Disclosing information encourages collusion. On the contrary, the report says, evidence suggests that disclosing information discourages the creation of cartels. Research found a clear correlation between publishing more information about tenders and a reduced likelihood of single bid contracts.

Bias and exemptions

While the authors admit to a bias on the side of disclosure, they admit that there are some valid exemptions, albeit mainly temporary ones. These include information that is legitimately found likely to harm a company’s competitiveness, a person’s privacy or a country’s national security.

“They are not as common as is proposed though and should not be lazily invoked to avoid routine public scrutiny”, it concludes - and in any case the burden of proof should lie with the party proposing redaction. 

"There is a better way for the government to do business," Gavin Hayman, executive director, writes in a blog. "Open contracting can save money and time for everyone, increase public trust and probity and improve competition and sustainability of contracts."

Image from GOV.UK, Open Government Licence v3.0

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