The Open Market

Sharing information with vendors is the best way to ensure an open market.


s the federal government fosters openness and communication with its contractors, the concept of transparent procurement systems is taking hold around the globe. Procurement professionals and policy officials from more than 100 nations have met in various countries to exchange lessons and ideas.

In January, the World Trade Organization and World Bank gathered representatives from more than two dozen nations for a workshop in Tanzania on public procurement. Scores of nations, led by the World Trade Organization, are working toward a multilateral agreement to promote transparency in government procurement.

Transparent procurement systems broadcast the rules of the game. The United States, for example, makes procurement laws and regulations available in public libraries and on the Internet. The government widely advertises its needs and selection criteria through its official procurement Web site, FedBizOpps ( Agencies announce award decisions, explain selection decisions through debriefings, and publish the outcomes of challenges by disgruntled bidders. Citizens can learn which firms received the government's business through the General Services Administration's Federal Procurement Data System.


Transparency describes the ability to see through all phases of the procurement process. It implies that everyone can play and anyone can win. Transparent systems still can favor certain players, such as domestic firms or small businesses-as our government often does-but those preferences are disclosed.

Transparency fosters competition by giving contractors insight into the selection process. Competition means better deals for governments.Transparency breeds efficiency by allowing government buyers and private sellers to share successes or failures. And it promotes public trust in government.

By helping producers of goods and services, exporters and importers conduct their business, the World Trade Organization hopes to show policy-makers and legislators the value of transparent governing. The benefits of transparency in procurement are a function of economics, not politics. Robert Hunja, senior procurement specialist at the World Bank, encourages developing countries to embrace effective advertising of procurement opportunities, a public bid process, disclosure of information on contractor evaluation and award procedures, and enforcement rights.

Technology can accelerate that process. "From Chile and Brazil to South Korea and India, the spread of e-government involves increasing use of the Internet to disseminate public information and to open up the bidding process," says Transparency International, a global watchdog organization that is active in more than 90 countries. Brazil's successful electronic procurement portal, ComprasNet, frequently is held up as a model of both transparency and efficiency.


The United States has been a path-breaker and model for transparent procurement. But that's becoming less true. Our procurement system, and possibly our government, is drifting toward the shadows.

Each year, the public loses more insight into federal spending. The increased use of government purchase cards is one example. Without the steady stream of GAO reports highlighting trends in purchase card use and abuses, the public would know little about how the government spends its money. The proliferation of task order and delivery contracts, which require no advertising for potential bidders, and the use of acquisition flexibilities have resulted in a dearth of information about government purchases. These procurement tools are designed to cut red tape and increase efficiency, but in many ways they limit opportunities to share lessons and compete for business.

The U.S. Agency for International Development's reconstruction contracts in Iraq offer a textbook example. Early this year, AID quietly invited a few highly competent contractors to compete for eight multimillion-dollar contracts covering a wide range of activities including stevedoring operations, logistics, public school revitalization, public health and construction of roads, public buildings, hospitals and schools. Watchdog groups, foreign contractors, and the news media promptly trumpeted various conspiracy theories involving elected officials, campaign contributions and oil concerns.

People need proof that their government is fair to vendors and gets the best value. Critics say too much transparency limits the pursuit of efficiency and best value. It's true that buyers need flexibility to spend tax dollars wisely. But it's incumbent on them to show the public how wisely they used that flexibility. Without information, public trust is tenuous.

Good government depends on transparency. Marginal, if not ephemeral, savings fail to justify backsliding on this fundamental principle. A procurement system that undervalues public trust is no bargain.

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