This week, UK Prime Minister David Cameron is hosting a major international anti-corruption summit. To ensure its success, leaders must address the number one corruption risk faced by governments: public contracts.
Gavin Hayman, Executive Director of the Open Contracting Partnership, says:
“Public contracting is too often a lethal combination of money, discretion and secrecy. It accounts for the largest share of government spending. This spending is vital to improve schools and health care, and to help fix roads and infrastructure that will boost the economy. But it is extremely vulnerable to corruption.
The Summit is a rare opportunity to make public contracting ‘open by default’ so that citizens and businesses can follow a clear record of how their money is spent.
Opening up public contracts will save governments billions of dollars, create a fairer playing field for businesses, and result in better goods and services for citizens.“
Open contracting transforms public spending through open data and user-driven engagement to provide better deals for governments, increase business competition, improve public integrity, and deliver quality goods and services to citizen.
Gavin Hayman will be available for interviews throughout the week.
Useful facts and figures:
- An estimated US$9.5 trillion, around 15% of global GDP, is spent annually on public procurement.
- Most foreign bribery cases (57%) prosecuted under the OECD Anti-Bribery Convention involved bribes to win government contracts, according to an OECD report on the cost of foreign bribery.
- Corporate vehicles (including companies located in tax havens, and companies whose beneficial owners were bribed officials) acted as intermediaries in 35% of foreign bribery cases, the same OECD study found.
- Opaque corporate structures are used in more than 70% of cases of grand corruption, equivalent to around US$56.4 billion, according to a study by the Stolen Assets Recovery (StAR) Initiative of the World Bank.
- Corruption and fraud may amount to 20-25% of procurement budgets, according to the UN Office of Drugs and Crime.
- In Ukraine, a fully open contracting portal (Prozorro) saved the government 14% on planned spending in its first year. The number of companies bidding for contracts increased by 50%.
- South Korea’s transparent e-procurement system KONEPS saved the public sector US$1.4 billion in costs. It also saved businesses US$6.6 billion. Time taken to process bids dropped from 30 hours to just two.
- When Slovakia made it mandatory to publish contracts online, competition among bidders almost doubled. Over 8% of citizens checked a public contract in the last year.
The Open Contracting Partnership connects governments, civil society and business to open up and monitor public contracting. We support the global open contracting community and work with partners across sectors and along the whole process of government contracting. We run a global helpdesk at email@example.com to support the implementation of the Open Contracting Data Standard, a global standard to open government contracting. More information at www.open-contracting.org
Gavin Hayman, Executive Director, Open Contracting Partnership
Georg Neumann, Senior Communications Manager, Open Contracting Partnership