Cities run on public contracts. Nearly two-thirds of public procurement spend is handled by cities or other sub-national entities (OECD). The COVID-19 pandemic has also added to this burden – both highlighting the centrality of public procurement, but also making clear the challenges of slow, inefficient, and paper-based systems. Reduced financial controls, soaring funding levels and floods of new or changing actors entering the market have highlighted the importance of robust and efficient procurement processes and systems. Millions, perhaps billions, of dollars may have been wasted, with some cities unknowingly purchasing counterfeit personal protective equipment, others overcharged through vaccine mark-ups of over 50%, and many more seeing contracts delayed or undelivered.
In the midst of these challenges, the pandemic has accelerated the digital transformation of local and city governments around the world. This has included an increased focus on digital service delivery and digital ways of working – a catalyst for procurement processes that have long been composed of analogue and opaque processes and outcomes. It is now more important than ever to strengthen these digital foundations to ensure that offline inefficiencies and challenges are not also digitized. These are the drivers of ‘open contracting’.
How to use this policy
Open contracting is a journey and not a destination in itself. The implementation process may vary depending on the local context, including capacity constraints and technology readiness. The latter can include those cities with no technology at present, as well as cities looking to reconfigure, augment, or refine their existing technology assets.
Implementation of this policy may be led by a whole city administration, or by individual departments. Open contracting enables transformative, major reforms which can start small and scale up over time. It requires collaboration with internal and external stakeholders. There is no one city that has perfectly implemented this policy, and cultures of digitalisation and data use are still developing. Recognising this, open contracting will require agile experimentation, building proofs-of-concept, policies, and processes; focusing on themes, problem areas, issues, or use-cases; and then scaling-up.
This Open Contracting Model Policy aims to provide cities with the ideas, methodologies, and tools needed to explore and embed open contracting in public procurement. Building on best practice from around the world, this Model Policy could be implemented as a policy in its entirety, used by a city to shape a full and comprehensive approach to public procurement, or as a resource to phase-in open contracting over time. Some aspects of this Model Policy may also align with local, regional, or national legislation.
This Model Policy should be considered in conjunction with the G20 Global Smart Cities Alliance Open Data Model Policy.
Open contracting is about city administrations working with businesses and civil society to use the power of open data to transform public procurement – to deliver better goods, services and public works for everyone.
The aims of an open contracting policy are to reduce corruption, improve competition, drive efficiency, ensure value for money, deliver better quality goods, services and public works, increase public or investor integrity and trust, and embed equity, dignity and sustainability into procurement to improve socio-economic and environmental outcomes. In cities, we do this by:
- recognising how procurement can best meet the needs of cities and citizens – including its role in driving broader internal and external change -and how it can identify the most suitable products and service;
- enabling accountability and accessibility through better visibility and transparency mechanisms which are backed by meaningful empowerment and participation; and
- catalysing innovation and data-driven decision making in procurement to drive more effective, expeditious, inclusive and sustainable urban and public service solutions.
Open contracting can be applied to all types of procurement from public to public-private partnerships and covers goods, services and public works. This aligns with the expansive role of cities. Cities are now responsible for a wide-range of initiatives and programmes and are the closest administrative actor to much of the global population. Open contracting is fundamental to delivering these responsibilities effectively – from improving service delivery of healthcare, to ensuring gender and broader inclusion, tackling climate change, and delivering digital and other foundational infrastructure.
1. Fundamentals of Open Contracting
Open contracting should bring together the whole government commercial cycle, – from planning, to tender and awards and onto contract management. This includes shaping a user-friendly digital experience – including developing open government and open data architecture to improve decision-making. Below are the foundations needed to maximise the potential of open contracting. Note that this journey is not necessarily a linear one.
- The city should identify an initial entry-point for starting the open contracting journey – including problem identification and goal-setting, building a pilot, or proof-of-concept. This means analysing the challenges that are faced in the context of public procurement, in order to find an initial ‘use-case’. This may be a theme (e.g. improving market opportunities for small and medium enterprises), problem area (e.g. identifying and reducing corruption risks), or more specific tasks (e.g. procuring personal protective equipment or vaccines).
Starting with use-cases will help the city to prioritise which specific items of information and/or data is needed to understand the problem, develop solutions, make the case for change and measure improvements i.e. to test if the city is heading in the right direction. The Open Contracting data use cases and Open Contracting for Infrastructure use cases provide guidance on developing use-cases.
- Open contracting requires the inclusive and meaningful participation of a wide-range of stakeholders. The city will need to identify the full range of internal and external stakeholders. They play a key role in aiding understanding of the problem or use case, identifying the most suitable data to be published, and in ensuring that data will be used to drive improvements and better decision-making. The data capacity (and skills gaps) of stakeholders should also be considered to ensure that they can make meaningful use of open contracting data.
This range can be expansive. For example, it may include relevant industry suppliers, sector experts (e.g. if it’s school meals – a nutritionist or relevant government health authority), community/civic organizations who are users of or directly affected by the procurement (e.g. schools or parent organizations), etc. For example, read how open contracting helped fix Colombia’s biggest school meal program, and how the process supported the Government of Ukraine to fix medical procurement and serve patients better.
This participation will also include building effective mechanisms for engagement and feedback. Stakeholder engagement is not a one-off activity. Instead, it means a constant process of facilitation, discussion, and reflection.
Responding to stakeholders leads to better planning, contracting and contract management processes – and it also results in better data which then creates a virtuous cycle. Many of the challenges in public procurement – such as dealing with opaque or complex processes – are encountered by external stakeholders. This way of working ensures city governments can respond to the realities experienced by stakeholders.
The ‘lived experiences’ of citizens – including micro, small, and medium enterprises (MSMEs) – allow cities to procure products and services from local businesses, who are often best placed to respond to the needs of the city. City governments can also benefit from collective intelligence – leveraging a larger population than their administration which can increase oversight and analytical capacity. ‘Serving the Citizens—Not the Bureaucracy’ explores how public procurement can be a ‘significant catalyst for change’. More broadly, Ukraine has leveraged open contracting to reduce corruption, whilst in Chile these tools have reduced the costs of medicines. The City of New York has also extensively explored open contracting.
- Tracking, measuring, and highlighting the impact of open contracting can ensure that reform is iterative – and driven by a dialogue with external stakeholders. This is the start of a positive feedback loop, shaping further improvements – but also ensuring that decision-making, policymaking, and other city efforts are driven by data.
- Introducing and embedding an open contracting policy requires a wide-range of expertise – including technical, financial, and other human resources. This expertise does not all have to be available in-house. There are a number of roles that should be covered. Many of these can be undertaken by the same person.
- Technical expertise to understand the data structures in open contracting data standards and the source data, and to identify what can be mapped on a technical level. Roles similar to, but not limited to, Business Analyst, Systems Administrator, Systems Architect, Data Analyst, Product Manager, Webmaster, or a Software Engineer or Developer may be able to provide this expertise.
- Policy expertise to understand the definitions referenced in open contracting data standards, identify appropriate mappings to local terminology and identify where policy changes might be needed to fill gaps in the source data. A policy expert could come from a legal background or work as a procurement officer for the government.
- Project management expertise to understand how the results of the mapping affect the implementation and to identify short- and long-term goals. Roles similar to Project Manager, Delivery Manager, Implementation Manager, or Program Coordinator may provide this expertise.
- Similarly, open contracting should be a pan-administration endeavour. Additional team roles may also be required. These roles may include:
- An internal champion who can help navigate bureaucracy and build political buy-in and/or push through the policy decisions for publishing and using open contracting data, and introducing and implementing reforms to use this data to solve problems.
- A procurement expert who will identify where data put forward for publication in an open contracting data standard exists at a semantic level. They should also be familiar with the workings – and challenges – of public procurement in the administration. They need to be familiar with procurement legislation and procedures.
- At least one user champion, if not more, who will represent the needs of data users (and the broader beneficiaries and stakeholders) throughout the project. They can be an internal team member, an outside partner, or a representative of external stakeholders.
Broader beneficiaries could include businesses that may want better or more efficient procurement systems so that they can effectively participate in bids. Other stakeholders – such as civil society organisations, and the media – may also use this data to identify whether or not fair market competition is happening in practice.
- A legal expert, who may be involved in approving open data or procurement processes or policies. Depending on the administration, and policy and legal requirements, this may be a legal counsel or a more general data officer.
- This policy will require clear endorsement from the elected council and executive leadership in the first instance to create an enabling environment with the needed policies, processes and mechanisms to ensure progress.
There may also be broader engagement. For example, in the U.S. there is an increasing interest from Departments or Agencies of Economic Development to be a part or leader of this work. Procurement typically does not sit in these organisations, but these agencies typically have business, technical assistance, or other relevant divisions.
- Open contracting needs open data, and building these assets is also a significant undertaking for cities – as a city administration features a number of different divisions, agencies, offices, and teams that may collect and store data differently. A useful starting point is to put together a general map of systems and data across the administration – including which data is already open. The level of engagement, buy-in, and partnership of data holders can also be identified.
This information may be held in a number of different systems, or may not be managed in a structured system at all. Key considerations include identifying how much information is available as structured data (i.e. individual fields, as opposed to free-text) and confirming whether there are restrictions on access to data or accompanying documents. The Open Contracting and Open Contracting for Infrastructure templates support cities in mapping the data that may be available.
- Open data is data that is machine-readable, standardised, and free for use- and reuse. For open contracting, there are established data standards describing each aspect of a contract: the Open Contracting Data Standards. These include data on the organization managing a particular contract – or the length of a tender or project. Embedding these standards within the administration may require starting with a single department, office, or even team and then scaling this effort across the administration.
- The city should also focus on publishing data consistently to ensure continuous learning and progress. Starting the open contracting process can be the hardest step – and continuing to publish data is crucial to maintain this initial commitment and direction. A project management approach to this reform will need to be adopted. Start small, and understand where you have influence and impact. However, don’t avoid going forward because of complexity or lack of support.
2. Relationship to Wider City Policy, Strategy and Initiatives
Open contracting is not just about making procurement more effective and transparent. Building these structures in a city can lead to wide-ranging and positive multiplier effects across an administration – particularly for citizens.
- Open contracting efforts should be focused on achieving key outcomes and impact – including immediate and broader priorities and programmes of the city administration. For example, open contracting can catalyze partnerships and innovation with the private sector, by demonstrating the value of partnering with a transparent and accountable public- sector entity. Businesses are more likely to bid for tenders if they feel that the competition is fair. This improves the likelihood of cities procuring the best products and services for their citizens.
- Open contracting is a crucial tool in the public finance toolkit, and has considerable impact on more traditional processes within a city. This includes financial management, governance, and procurement more generally. With regard to the latter, procurement processes can be professionalised, the catalytic role of procurement can be recognised, and procurement can be better integrated into city activities, policies, and processes.
- Open contracting can be integrated into a city’s open government strategy to help governments, businesses and citizens understand how cities are responding to problems and whether solutions are effective. Procurement data can be used to identify potentially problematic behaviour, or to encourage further investigation and adherence to best practice. Open contracting can also support cities in becoming more comfortable with ‘opening-up’ internal processes.
- Open contracting can be considered as part of wider strategies for economic, social, and environmental outcomes. For example, micro, small and medium-sized enterprises often struggle to navigate complex and out-dated procurement routes and as such, women-owned businesses supply only 1% of national government purchasing. Open contracting can help identify these disparities in order to reduce imbalances or inequalities.
- Open contracting should be considered in planning for specific use-cases and verticals, including infrastructure. Infrastructure – from roads to hospitals to digital infrastructure – is a major source of investment for a city. However, challenges include inefficiencies and mismanagement of infrastructure projects and investments, which open contracting can address.
- Open contracting should be used for the management of public-private partnerships (PPPs) for service delivery. PPPs can be complex – and success requires transparency and accountability. Through the open contracting process, the city can make key documents and information accessible to ensure that PPPs lead to positive outcomes for local government, companies, and citizens.
- Open contracting can be a tangible and accessible starting point for broader open data efforts. Similarly, open contracting can better inform city policies and planning. Data can be used to conduct value for money studies, benchmarking, and prediction.
3. Governance and Process for Accountability and Compliance
At the heart of open contracting is driving better results from procurement and public contracts. Ensuring these outcomes requires a similarly expansive and rigorous governance process. However, this should recognise that change can be hard, and progress may not be linear. Few organizations produce ‘perfect’ data from the outset – and it can take time for this data-driven approach to improve processes and outcomes. Similarly, new policies and processes need to be integrated into practices – and embedded in relevant legislation.
- Where possible, cities should work with national governments to codify clear principles and protections for open contracting in legislation. This can include drawing on established best practice at the city level. Ideally, these principles should be contained within a single piece of overarching legislation.
Cities may not always be able to directly inform legislation. Where this is the case, publicly publishing clearly-defined and time-bound commitments for example, in the form of regulations, directives or other policy pieces can be extremely valuable. These commitments are also important even when legislation cannot be shaped by cities.
- As a starting point to fully benefiting from open contracting, the city should commit to regular and timely data releases – with an aspiration to achieve real-time publishing. A ‘publication policy’ can be useful – and shaping processes to make data publication as simple as possible. Regular and systematic data publishing is especially important in enabling course-correction during the delivery or implementation of products or services.
This results in proactive, end user-focused publication, with end users more likely to use and reuse the data. If a city already publishes other open data or open content there may be a pre-existing standard or policy. Guidance for producing a ‘Publication Policy’ can be found here.
- Open contracting efforts can also complement, refine, and amplify existing local procurement laws, procedures, and practices. The city should look to identify opportunities to update legal frameworks – and the above laws, norms, and administrative regulations – whenever possible, to enshrine open contracting principles and processes. These changes could be made when digital contracting systems are renewed or updated, or by capitalising on the momentum or opportunity provided by new regulations or other regulatory changes. However, speed should not be a replacement for rigour.
- High level political leadership that sends a clear signal for open contracting is key to sustaining ongoing implementation and reforms that can stand the test of time.
Open contracting does not exist in a vacuum. It will respond to – and shape – wider norms, including in the context of open government and open data initiatives. In implementing open contracting and advocating for public procurement that is ‘open-by-design’, inclusive and innovative, cities can lead by example and help to entrench new local norms and influence change at the national and regional levels from the ‘bottom-up’.
Open contracting also requires a commitment to an open and inclusive way of working with and including key stakeholders. This collaboration with users, and other stakeholders, should be used to frame the open contracting approach – and to identify and measure success. It will also identify what other publication features are important, such as where data might come from, how it can be combined with other sources to add insight, and how it should be shared. The ‘users’ of this data can be broad – from private sector companies submitting responses to tenders, through to individual citizens.
- Feedback loops are crucial to ensure that published open data is meeting internal and external user needs, and to identify areas of improvement. The city should develop processes that can help drive improvements to public procurement – these can include consultation channels, complaints mechanisms, monitoring processes, and mechanisms for oversight. Where possible, these feedback mechanisms should enable direct interaction between the city and the group providing feedback. The city can leverage key citizen reporting channels – including councillors and local politicians, residents’ groups, civil society organisations, and others – to ensure that citizens are aware of and engaged with open contracting efforts.
- The city should document and actively communicate progress. Particularly in the early stages of the reform, demonstrating wins can placate sceptics and build support for the programme among key actors, stakeholders, and the public. It can also identify what is and is not working. More broadly, active communication can foster goodwill across an administration – and strengthen efforts. It is crucial to communicate internally outside of a small project team. External communication is also important.
- The city should develop a robust monitoring and evaluation approach, including identifying key indicators – informed by internal and external stakeholders. This will include identifying relevant use cases and developing suitable indicators. More broadly, the city may also want to conduct an analysis of the performance of the procurement market.
Measurement, and continuous learning should be a priority from the outset. Open contracting combines major reform with a need to start small to build policies and processes. This includes governance aspects such as experimentation; building proofs-of-concept; focusing on themes, problem areas, issues, or use-cases; and then scaling-up.
4. Ecosystem Engagement for Trust and Value Creation
The whole open contracting process should be simple, accessible and inclusive, designed with users across government, businesses, and civil society to maximise participation, integrity and efficiency. Internal and external sharing of lessons learned is also an important component in creating a space for others to learn from this example. It can also be an opportunity to give credit to all of the individuals and organizations that played a role in creating fairer, more demand-driven procurement for all.
- Early engagement with external stakeholders, to understand what questions they want to answer through open contracting, is important. It is not feasible for most cities to start publishing hundreds of data fields. Instead, asking end users about their needs can prioritise the complete and consistent publication of relevant data fields.
- Similarly, this process should be iterative and comprise a continuous dialogue with the private sector, civil society, and other important partners. The city should define clear use cases for the published data, in partnership with these actors, to help drive development, implementation, and success of open contracting. An advocacy strategy may guide this work – in particular, building buy-in amongst stakeholders.
- The broader benefits of open contracting are premised on the local ecosystem being empowered to use open data. The city may need to collaborate with the above sectors to achieve this. Efforts could include job aids, technical support desks, and other resources. Similarly, ensuring the digital and data literacy of the public is also important. This could include using clear language, infographics, visualisations, etc.
- From here, the city can develop comprehensive reform plans that deliver transformational change. Often this means unifying many areas of public procurement reform under one overarching strategy, as described above in ‘2. Relationship to Wider City Policy, Strategy and Initiatives’.
5. Technical Measures to underpin Open Contracting
Open contracting requires a number of underlying processes. A commitment to publishing using open data standards is essential. The city should also confirm its in-house capacity to build software tools and services. If this exists, the team should also be experienced in working with open-source software systems. The technical capacity of external stakeholders should also inform technical considerations and decisions.
- The Open Contracting Data Standard (OCDS) and Open Contracting for Infrastructure Data Standard (OC4IDS) are the foundation to sustainable open contracting. They can be implemented in a number of different ways: from including OCDS output in the specification given to a contractor, to using existing data outputs to build a ‘data broker’ layer which will publish to the required standards. Regardless of method, open data standards must be used
- Once the city has identified all the relevant data sources and related data elements, the next step is to map each element to a standardized data field in either OCDS (for detailed contracting process-level data) or OC4IDS (for infrastructure project-level data and summaries of related contracting processes). This information may be held in multiple systems, or may not be managed in a structured system at all.
- The city should also map existing systems, tools, and processes involved in the contracting process. This will be important in shaping an open contracting architecture – which must meet the needs identified in the initial design activities of open contracting. Key considerations will include:
- Whether existing systems can be updated, or new systems need to be created,
- The number and nature of the data sources,
- The technical resources available to the city, like storage and processing capabilities. This includes the availability of technical personnel to maintain new and updated systems,
- How frequently data will be updated (this could also include the availability and accessibility of data), and
- How users locate the collections of releases and records they want.
There are a number of different approaches to deploying an open contracting process. These range from a single system – with all stages of the contracting process managed within a single software platform – to using multiple systems, and a data broker layer to extract and combine data from different sources and systems. There is no single ‘best’ solution, and dependent on the context and capacity of the city.
- If the city does not currently have the capacity to introduce an entire open contracting solution, existing data collection tools can be adapted and used to meet local needs – and to start to shape a data collection and publishing workflow.
If you need to collect structured data, but you don’t have the capacity to create an IT system, you can consider reusing an existing data collection tool. These tools offer fewer opportunities for customization than a bespoke IT system, but can provide a quick and initial route to collecting and publishing data in OCDS format.
Regardless of system architecture, or complexity of the process, the city should regularly review whether the data it is collecting continues to meet open contracting data standards.
The Open Contracting Partnership’s Data Review Tool allows governments to check that your OCDS data complies with the schema, inspect key contents of your data to review data quality, and to access your data in different formats (spreadsheet and JSON) to support further review: https://standard.open-contracting.org/review/
- The city should also look to future-proof technical processes wherever possible. This includes in the context of any future artificial intelligence (AI)-based analysis of budget documents that can inform open contracting implementation. Leveraging such tools will require adherence to open contracting data standards.
Putting this into Practice
Open contracting is a journey for a city. From developing open data skills and infrastructure, to shaping collaborations within and beyond the city administration. Don’t let ‘perfect is the enemy of good’ hold you back. Work with stakeholders to build trust and overcome barriers to sharing what might initially seem sensitive financial and operational information. Opening up and sharing leads to better outcomes for cities and citizens. The Open Contracting Global Helpdesk is available to support you in publishing or using OCDS and/or OC4IDS data, and to assist in the ongoing development of the standards. If you are planning to publish or use OCDS or OC4IDS data, then the Global Helpdesk is on-hand to offer input, by:
- Helping you identify approaches for converting data from your existing systems to OCDS or OC4IDS
- Suggesting existing tools and services that can help you publish or use OCDS or OC4IDS data
- Providing guidance on mapping your data structures to OCDS or OC4IDS
- Giving you feedback on draft data files, and checking the structure of your data
Helpdesk support is available in English and Spanish. Through funding from the Open Contracting Partnership, this support is provided free of charge.
Data standards define the structure and meaning of data in order to resolve ambiguity and help systems and people interpret it.
Open contracting is about publishing and using open, accessible and timely information on public contracting to engage citizens and businesses to fix problems and deliver results. These results include improving the efficiency, effectiveness and integrity of a public contracting system.
Open data is data that can be freely used, modified, and shared by anyone for any purpose. This requires data to be accessible and machine-readable, and for permission to be granted for reuse.
Bernadine Fernz, Head of Infrastructure at Open Contracting Partnership
Task Force Members:
Shreya Basu, Deputy Director at Open Government Partnership
Tim Chapman, Director of Infrastructure at Arup
Dan Dowling, Director of Cities and Sustainability at PWC
Jennifer Geiling, Deputy Director at City of New York Mayor’s Office of Contract Services
Rory Moody, Cities Advisor at Foreign, Commonwealth & Development Office
George Ofori, Vice Chair (Advisory Board) at CoST – Infrastructure Transparency Initiative
Calum Handforth, Adviser (Digital Health and Smart Cities) at the UNDP Global Centre for Technology
Contributors and reviewers:
Rafa García Aceves, Public Contracting Lead at Transparency International
Kailey Burger, Managing Director (Government Performance Lab) at the Harvard Kennedy School
Michael Canares, Monitoring and Evaluation expert
Elena Hoffnagle, Assistant Director, (Government Performance Lab) at the Harvard Kennedy School
Javier Irigaray, Head of Open Government at City of Buenos Aires
Thomas Michel, Economic Development Facilitator at the City of Newcastle, Australia
Florencia Romano, Head of Institutional Quality at City of Buenos Aires
Anil Sawnhey, Director of Infrastructure at the Royal Institute of Chartered Surveyors
Jimena Zaga, Chief of Staff at City of Buenos Aires
The Open Contracting Partnership and World Economic Forum G20 Global Smart Cities Alliance Working Group