Contracts are fundamental to how governments generate and spend. Investments and agreements that governments enter for their people, as well as services, goods and projects that governments deliver to their people, typically involve contracts. Contracts are at the nexus of revenue generation, budget planning, resource management and delivery of public goods. Contracts are at the core of how countries operate.
Governments around the world spend an estimated US $9.5 trillion every single year through contracts. Yet, contracting information is often unavailable for public scrutiny. Adding to the problems stemming from lack of transparency, the resources spent through these contracts are often poorly managed or misappropriated. This is particularly troubling in the wake of a global financial crisis when pressure to account for use of slim available resources is greater than ever. When companies, governments and citizens continue to get hit by ineffective and unfair contracting practices, theft and waste,everyone is paying the price. School children have to study with missing textbooks, patients in hospitals do not receive sufficient care, vendors are constrained by roads in disrepair, and communities find themselves bordering or even within concessions for mining, land or forestry development with no sense of whom to hold to account for local impacts. Ultimately, contracting that is not open undermines development for all.
What is Open Contracting?
Open contracting refers to norms and practices for increased disclosure and participation in public contracting. It covers the whole contracting chain from planning to finalization of contract obligations, including tendering and performance. It includes the variety of contract types, from more basic contracts for the procurement of goods to complex contracts, joint venture agreements, licenses and production sharing agreements. Open contracting encompasses all public contracting, including contracts funded by combinations of public, private and donor sources.
In order to fully realize the promise of open contracting, the following objectives must be achieved:
- Increased number of contracts that are publicly disclosed.
- Improved quality of publicly available information on contracting.
- Enhanced accessibility to contracting data.
- Increased and more strategic use of contracting data.
- Increased opportunities and mechanisms for participation throughout all phases of contracting.
- Increased number of citizens participating in contracting processes.
- More timely and effective follow-up actions based on citizen monitoring feedback.
- More and better equipped champions promoting open contracting.