Transparency in contracting remains opaque

Transparency is all the rage in government circles these days, but there might be a limit to its usefulness to the public and its ability to facilitate greater accountability in key government services, such as federal contracting.

The contracting community is wrestling with transparency, especially the proposition of posting contracting documents, such as bid proposals, online for the public to read and comment on. The Civilian Agency Acquisition Council and Defense Acquisition Regulations Council are seeking to amend the Federal Acquisition Regulation and have asked for help in preparing for transparency.

In an advance notice of proposed rule-making, the councils phrased their most pressing question as: How can the government be transparent enough “to enable public posting of contract actions…without compromising contractors’ proprietary and confidential commercial or financial information?”

The councils cited five memos from the Obama administration to prove that transparency is coming to contracting. The primary goal is to promote efficiency, accountability and transparency — three buzzwords in recent years. They also want to simplify public access to contracting information.

At the same time, the councils realize they must also conform to statutory and regulatory prohibitions against disclosing protected information. With that in mind, regulators want to identify methods for protecting information that agencies should not post or release to the public.

Transparency has its advocates. Michael Carleton, chief information officer at the Health and Human Services Department, said the quality of federal data that is made public will improve only when people who use the information demand it.

Others say public data can help agencies compare their prices for products or services to other departments — and perhaps even help end fraud and abuse in the contracting world. It might also diminish the power of big companies. “There needs to be complete transparency, total transparency,” said Lloyd Chapman, president of the American Small Business League.

However, it's not that easy.

Putting all that proprietary data online does greater harm than, say, an inadvertent mistake on a Freedom of Information Act request, said Larry Allen, president of the Coalition for Government Procurement, which has more than 350 member companies. Although FOIA requests are often used to obtain competitive information, that information usually goes to the one person or organization that submitted the request. A searchable database, on the other hand, would be open to the public.

By putting more contracting information online, regulators will need to confront whether they're harming a company’s success and the country’s security, experts say.

The administration wants agencies to be open and justify why a piece of information should stay off the Web. But Allen said that for contracting data, agencies should have to argue why it should go onto the Internet. “You don’t want to make it easier to harm the country with a searchable database,” he said.

After a transparency policy is in place, the federal acquisition workforce would need to make many decisions about what should be public. But already overburdened employees do not need more pressure added to their already stressful work, Allen and others say.

Furthermore, the new regulations should strive to protect contracting officers from the condemnation that comes with a procurement mistake, said Mary Davie, assistant commissioner for assisted acquisition services at the General Services Administration.

On the contractor side, Stephen Charles, co-founder and executive vice president of immixGroup, a consulting firm, said companies should know upfront what information from a transaction could go public. Each solicitation should include it as part of a fair-notice process. That would give contractors the choice of not bidding if, in their opinion, the information strayed too far into proprietary territory, Charles said.

“So it would be a two-step process, and there would be agreement along the way with all contractors being treated equally,” he said.

Overall, agencies need to make sure they have iron-clad firewalls so that nothing sneaks out without them knowing it, Allen said. He suggests waiting until the technology is mature enough.

But is such patience likely in today’s environment? Warns Allen: “Political pressure tends to drive things in an artificially fast time frame.”