This briefing covers active market intelligence, regulatory guidelines, and tactical capture recommendations for federal and defense contractors pursuing opportunities in this procurement classification.
Keeping contracts hidden is bad for competition, bad for taxpayers. Time to publish the agreements.
Government procurement is a $9.5 trillion industry, and supplying goods and services to the government is a core business function for thousands of companies around the world. In the U.S., contracts signed by both parties are usually not published, and are only released if someone files what is known as a freedom-of-information request with the relevant agency.
We know firms want access to government contracts because they are willing to pay for it. In the U.S., the company DelTek processes freedom-of-information requests for government contracts as part of an effort to help its clients win more government work. It boasts a contracts database of more than 1.7 million entries. There are similar pay-access databases for oil, gas and mining contracts. If firms know what previous contracts look like, it will help them bid for new work or licenses—or avoid bidding if they can’t compete.
This can be a significant benefit, as the bid-preparation process can cost about 1% of total contract value on large agreements, and often much more on smaller contracts. In Slovakia, a world leader in government contract transparency, reforms including contract publication have spurred an increase in competition. In 2013 a government contract received on average 3.6 bids, up from 2.3 in 2009. That’s good news for the new entrants that might win a contract, but it’s also a win for taxpayers, who will get more for their money.
Contract publication is not without costs. Firms would have to be careful about protecting commercial secrets that might be included in contract documents. But this is already a concern, and countries that publish contracts under freedom-of-information laws have a redaction process in place to protect commercial secrets. And experience from countries from Georgia to Colombia, which are already publishing government contracts, confirms that the reform is pro-competition and cost-effective. It’s time for the rest of the world, especially the U.S., to follow suit.
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