TOR164 – The Power and Promise of Open Contracting with Gavin Hayman

Gavin Hayman

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How much money will your government spend this year? In 2016, the Government of the United States spent over $3.5 trillion dollars. China threw down $2.8 trillion and the UK just over $1 trillion. Worldwide, governments spent a combined total of $22.7 trillion. My point here is that there is a ton of money being spent by governments around the globe to procure products and services. It would be great to know where exactly all of that money goes, right? I mean, in most of the major economies out there, there is an expectation that the public should know what their hard earned taxes are funding. And, there are some big figures out there, usually represented in pie charts, that are relatively easy to access. But what about specifics? Governments spend a great deal of money internally, for things like defense, but – especially in a place like the United States – governments rely on contractors for products and services. Everything from vaccines to uniforms. In order to find out what any individual contractor received for their work takes a massive amount of effort… and then the available information often is less than satisfying. As you can imagine, this is unfortunately the beginning of the corruption game. But equally as important, it is also the beginning of the inefficiency game. Honestly, just thinking about the numbers involved gives me the willies, and how to crack this problem? Forget about it. Luckily for us that’s exactly what my guest for the 164th Terms of Reference Podcast thinks about and works on all day. Gavin Hayman is the Executive Director of the Open Contracting Partnership – an organization that seeks to open up public contracting through disclosure, data and engagement so that the huge sums of money involved are spent honestly, fairly, and effectively. And, as the former Executive Director of Global Witness, Gavin knows a thing or two about how to uncover unsavory practices of government contractors. You’re going to love this episode where Gavin and I talk about the origins of the Open Contracting Partnership, the size of the issues they are trying to tackle, information asymmetries and how we all benefit when governments (and contractors) get it right. And, personally, I was surprised by some of Gavin’s examples – their just not from where you’d expect to find massive transparency… and I think you will be as well. You can connect with Gavin here:
Team

IN TOR 164 YOU’LL LEARN ABOUT

  • What Open Data is, and how it’s bringing light into government spending one country at a time
  • How large government contracts have rippling effects politically and in the economic climate, and how government data can promote citizen engagement
  • The origins of Open Contracting Partnership in 2012 involving the World Bank and the City of New York later on
  • How there is a right and a wrong way to be transparent, why “transparency for transparency’s sake” does not work, and why engaging user interface are critical to build citizen trust and ownership. Plus, the 4 key “Value Drivers” of open data
  • Open data experiences involving Ukraine (and Eurovision), Uganda and Nigeria’s young startup scene
  • The panorama of government contracting across the world, where power and talent almost always give big private companies a leg up in negotiations, often at the expense of economic ecosystem opportunity

OUR CONVERSATION FEATURES THE FOLLOWING

Names:

  • Open Contracting Partnership
  • World Bank
  • Africa Center
  • Odebrecht
  • Global Witness
  • Eurovision
  • Nigeria’s Public-Private Development Centre
  • European Regional Development Fund
  • Fund for the City of New York
  • Ford Foundation
  • Laura and John Arnold Foundation
  • UK’s Government Digital Services’ Warren Smith
  • European Bank for Reconstruction and Development
  • The New York State Museum
  • Global Integrity’s Alan Hudson
  • Transparency International
  • Trade Justice Movement
  • Hernando de Soto

Topics:

  • Brexit
  • Public spending, government budgets, efficiency, Value for Money
  • Public procurement,
  • Open data, Big Data,
  • Transparency, accountability, traceability, public trust
  • Citizen engagement, fiscal education, Public Integrity
  • Technology, startups
  • Freedom of information
  • Open Data, Schema, Analytics, dashboards
  • 2013 Ukraine’s Euromaidan
  • Data-driven decision-making
  • Ethnography and ethnology of data
  • Blockchain, smart contracts

Places:

  • London, UK
  • Ukraine
  • Uganda
  • Nigeria
  • Minas Gerais, Brazil
  • Mexico City, Mexico
  • New York City
  • Libya

EPISODE CRIB NOTES

Download an automated transcript. London, 2017 General Elections   03:2204:15 Open Contracting “It’s a remarkably uninspired election” Instead of issues, Brexit Of course, it will have implications on spending and efficiency in government Every government provides goods and services for its citizens Some embrace innovation in the process World governments spend USD 9 Trillion in citizens 15% of GDP 30% of government expenditures “Unfathomably large” OC tries to interpret data Through open data And citizen engagement Creative ways to solve government problems About what and how to buy Contract traceability   08:06 Who’s idea was this? 2012 the World Bank started it Public procurement and contracting as a global challenge OC is a collaboration with governments, citizen organizations, companies WB wants it to scale, work outside the “monolithic bureaucracy” Announcements about large investments, as in infrastructure, raise questions OC can bring clarity, transparency, understanding   10:26 Engage with a government in 3 simple steps 2013 Euromaidan Ukraine, promising open contracting landscape How do we build trust? The new government was for procurement reform The existing “soviet system was sclerotic” Autocratic Parallel conflict on the East part of the country Humanitarian supplies needed Then a civic movement arose Made with citizens and businesses The movement facilitated the humanitarian delivery It allowed the emergency system to be accessible to OCP Completely transparent open code You can follow the money It is now the default procurement mechanism for the country whole   14:01 That time I changed Ukraine The impact of OCP in Ukraine’s public procurement was measured 30-40% reduction in the public’s perception of government USD~660 in savings in procurement Measured in real time People get better at it, % to be increasing Hundreds of businesses applying to become government suppliers About 50-fold increase More competitive field Ministry of economic development championed transparency “Tech geeks” handle the platform Open contracting is possible at scale, can disrupt, can be supported politically Transparency led to resignations   16:50 Next, to decentralize Uganda “We want to build a field of open data practice in Africa, not be the field” Not looking to be the implementor Not bidding for contracts Collaboration with agencies and local organizations, entrepreneurs African Center for Information Working on “Right to know issues” Freedom of information Let citizens find information about government contracts Proactively, not reactively Be more about the partners than ourselves Focus on user needs: Value for money Integrity The USD 100 hospital wrench (in Ukraine, mop) and other horror stories To which anyone in the globe can relate The bigger the contract, the higher the chance corporation interests flex their muscles   20:06 Before Chicago “I used to work in the almighty gas industry” Vast asymmetries Private sector can hire the absolute best talent, for negotiation, legal advice Tendency across industry Imbalance where government is always at risk Private keeps pushing for larger contracts Public-Private Partnerships on the limelight Truth is, most governments need funding And most funding is private Which makes OCP all the more relevant Odebrecht! Minas Gerais, Brazil Government officials: “Why do we have to publish data” “Why do you think there’s anything you shouldn’t publish” Philosophy of public function Meanwhile corporation acts IP should not be an issue in government contracting Which does not mean there are no other rules, such as privacy Personal data about kids treated on a public hospital Global Witness Anti-corruption watchdog How to address the issues in the future How to stop money from being stolen in the first place And more interesting challenges   25:37 Recapping the 4 Value drivers #1. Value for Money #2. Public Integrity #3. Citizenry #4. People monitoring the completion of contract Also, businesses pushing for openness in government contract Economies want more small business getting contracts with the government, for employment and work Government efficiency in contracting Putting public information on the hands of entrepreneurs Making public contracting more navigable   27:46 What is the end of the observable universe of public contract deliverables? Government could do more to encourage smaller players to get in on the action But too much “chunking” could stave off competition Mexico UK is adopting contract finders standard So every contract follows the same guidelines and is available in one place So everyone has a chance, and a challenge Better dialogue with the marketplace Talk with companies Some are skeptic Stephen: Too often proposals seem built for exactly one competitor’s characteristics “Brute” enforcement of guidelines could make all contracts look like duplicates Hindering innovation   31:09 On the Open Data Scheme, Technologies A structured model with not too many relational links Latest update recently published Knowledge about open contracting is being created How to structure, “chunk” contracts, management Making it “accessible, shareable” Friendly analytics, dashboards Make people pay more attention “Public procurement is opaque and dull” People react when something goes wrong But there are rewards in innovation and applied creativity Open contracting innovation creativity stimulus Stephen: Governments are rewarded for stability Governments “innovating too much” raise eyebrows There’s a right way to be transparent, risks in “opening stuff up” Smart people going into making government contracting better make professional sacrifices In every country Thanklessly   37:09 On the liabilities of Open Open can save money Improve the ecosystem But there are differences in approach Nigeria’s Public-Private Development Centre Take advantage of Freedom of Information Organize and share information “They are not doing that to shame the government” “They are doing that to improve the delivery of public services” Information helps the balance of power and democracy Eurovision Ukraine The government opened a bid for media services related to the contest It was one of the most reviewed government contracts by the public ever “How to prevent things going wrong”   39:52 Open Contracting Olympics Mexico’s City’s Airport Set to be 5th largest infrastructure project in the world USD 10 Billion Open Data is available at the moment Itemized to follow budget and schedule Civic engagement promotion Civil engineering responsibility Also, EU Regional Development Fund Being tracked by citizens Uses an OC approach Open contracting as an “emerging best practice” “It can be done. It’s not rocket science.” Plus it’s good for democracy   42:26 Keeping OCP under budget and ahead of schedule Fund for the City of New York Built by the Ford Foundation in the 1960s Promote good governance in the Big Apple and beyond It has allowed OCP to scale and grow OCP is transparent itself about its own spending Visit it now Arnold Foundation “Data-driven government” promoters   44:28 Open, quantified mistakes “Our mistakes make us stronger, and it’s liberating” Mistakes come when focusing on “transparency for transparency’s sake” Data dumps By itself does not help make the job better or “smarter” “Transparency done to people” The British government understood the value When deep links in the ownership of large companies were identified, it led to a change in regulation It was critical information was laid out in an understandable format Along with Ukraine, Nigeria has been at the OD forefront A team of young entrepreneurs have led these movements It’s important, in the long run, even if it doesn’t uncover “hot” political scandals In Libya after Gaddafi, lots of questions about a better way to handle oil funds Optimism completely gone now “But you have to seize the moment” Opportunity shifts at any moment   49:22 Whose data do you openly consume? GDS UK’s Warren Smith Nigeria’s open procurement European Bank for Reconstruction and Development NY State Museum Booth – Ethnography Ethnology of Data Global Integrity’s Alan Hudson: Adaptive Learning for Governance Transparency International Clean Contracting Approach, Citizen Monitoring Open Ownership (who owns corporations?) Trade Justice Movement Blockchain-style smart contracts Hernando de Soto
   

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