Making public procurement truly public Riga, Mathias Huter

Entrance hallway of the Georgian State Procurement Agency, 2010

Transparency in PP matters Public procurement in the EU represents 20% of GDP – More than € 2.4 trillion/year PwC report on EU procurement: maximum transparency is a good practice against fraud and corruption Transparency in procurement allows – Civil society & media to identify systematic problems (policy solutions) and individual cases – Encourages businesses to participate in PP, if they trust the process and can see why they lost Source: studies/identifying_reducing_corruption_in_public_procurement_en.pdf

Open EU procurement data Tenders Electronic Daily (TED) data is quite difficult to search, process and analyze (PDF-files) Activists have used algorithms to make TED data better searchable and more accessible: – – They have started to link TED data with other information (lobbying spending, EU contracts, EU experts)… – … and have started looking for trends in the data –

Case study: Slovakia Pro-actively publishes all contracts since 2009 – Meta data and scanned contracts available on one central website – Including data on small purchases and receipts – A few exceptions: labor contracts, tombs,… – Sensitive personal or commercial data in contracts is redacted, but this is only the case in less than 5% of contracts – Contracts only come into force once they are published Ensures high compliance – Increased competition: from average 2.3 bids in 2009 to 3.6 bids in 2013 per tender – People care: some 9 per cent of the population said they had looked at contracts (TI Slovakia survey)

Introduced full e-procurement in 2011, conducted through a central platform, used by more than 3,500 state bodies All tender documentation accessible online for everybody – All bids, all documents, contracts & amendments, payments, all procurement budgets of public bodies – Transparent, anonymous Q&A between suppliers and procurers Publication of all awarded contracts, including small purchases Blacklist of banned companies, Whitelist of privileged companies public Tenders can be appealed and frozen online – Review within 10 days, appeals and complaints published Case study: Georgia

Georgia: Single-source contracting Analyzed data for 430,000+ single-sourced contracts & receipts Cross referencing data – Contracting data, – Scraped company registry, – Scraped asset declarations of public officials, – Scraped donations to political parties, finance/declaration/contributions finance/declaration/contributions

The power of open contracting Found more than EUR 100 million in single-sourced contracts going to companies officially owned by Members of Parliament, high-level public officials and their spouses ( ) Found that in 2012: the ruling United National Movement party had received about 58% of its reported donations – EUR 3 million – from individuals who were linked to businesses that received single-sourced contracts with a total value of more than EUR 72 million that year (4.125% of contract value) Report available at: procurementhttp://transparency.ge/en/simplified- procurement

The case for open contracting Stronger trust in the procurement process – Increased participation from bidders, fosters competition – Lower prices, better value for money Public scrutiny deters wasteful spending and corruption Allows government to better understand the companies it is dealing with – Detect cartels, collusion, conflicts of interest Small reduction in fraud & corruption can result in massive savings for the public – Investment in procurement pays off Cutting of red tape and savings on administration  Good for citizens  Good for governments,  Good for companies with integrity More information at

Thank you for your attention! Mathias Huter Consultant on good governance