This post is written by Bernadine Fernz, Head of Infrastructure at the Open Contracting Partnership.

  • **The problem: **Nearly two-thirds of public procurement is handled at a sub-national level, but it is not always leveraged to its fullest potential.
  • Why it matters: Sub-par procurement can lead to failures in service delivery or missed opportunities in meeting the needs of citizens.
  • **The solution: **Open contracting can transform public procurement so that it is more transparent, more accountable and more effective, leading to better outcomes for cities and citizens.

Cities run on public contracts. Nearly two-thirds of public procurement spending is handled by cities or other sub-national entities. Cities are also responsible for a wide range of initiatives and programmes and are the closest administrative actor to citizens. Open contracting is fundamental to delivering these responsibilities effectively – from improving service delivery of healthcare to ensuring gender and broader inclusion, tackling climate change, and delivering digital and other foundational infrastructure.

The Covid-19 pandemic has also highlighted the centrality of public procurement, but also made clear the challenges of slow, inefficient, and paper-based systems. Recognising this, the aims of an open contracting policy are to reduce corruption, improve competition, drive efficiency, ensure value for money, deliver better quality goods, services and public works, increase public or investor integrity and trust, and embed equity, dignity and sustainability into procurement to improve socio-economic and environmental outcomes.

Putting open contracting into practice

Although these are ambitious aims, many cities have embarked on the open contracting journey. Their experiences and successes have informed the Open Contracting Model Policy for cities, developed in collaboration with the World Economic Forum’s G20 Smart City Alliance. Across this shared experience, cities have recognised the importance of:

Finding a starting point

Including problem identification and goal-setting, building a pilot, or proof-of-concept. Cities will need to explore the realities of existing public procurement, in order to find an initial ‘use-case’. This may be a theme (e.g. improving market opportunities for small and medium enterprises), problem area (e.g. identifying and reducing corruption risks), or more specific tasks or priorities (e.g. procuring personal protective equipment or vaccines).

Open contracting being a collaborative effort

Internal stakeholders are essential, but external stakeholders are also key. Many of the challenges in public procurement – such as dealing with opaque or complex processes – are encountered by external stakeholders. In addition, the broader benefits of open contracting are premised on the local ecosystem being empowered to use open data. The city may need to shape broader efforts to achieve this. For example, job aids, technical support desks, and other resources. Similarly, ensuring the digital and data literacy of the public is also important. This could include using clear language, infographics, and visualisations.

Being driven by data

For open contracting, there are established data standards describing each aspect of a contract: the Open Contracting Data Standard (OCDS), and projects: the Open Contracting for Infrastructure Data Standard (OC4IDS). More broadly, as a starting point to fully benefiting from open contracting, the city should look to publish regular and timely data releases – with an aspiration to achieve real-time publishing using the OCDS and/or OC4IDS. This can also create a virtuous cycle, with open contracting often a tangible and accessible starting point for broader open data efforts. Open contracting data can also better inform city policies and planning.

Not letting perfect be the enemy of the good

Open contracting is a marathon and not a sprint, and few cities produce ‘perfect’ data from the outset. It can also take time to engage and convince internal and external stakeholders – and for this data-driven approach to improve processes and outcomes. But finding the above entry-point, and starting this journey, is essential for improving city and citizen outcomes. Open contracting also requires a commitment to an open and inclusive way of working with, and including, key stakeholders. This can have significant and positive multiplier effects.

The importance of getting started

Cities are increasingly focusing on digital service delivery and digital ways of working – a catalyst for procurement processes that have long been composed of analogue and opaque processes and outcomes. It is now more important than ever to strengthen these digital foundations to ensure that offline inefficiencies and challenges are not also digitised. These are the drivers of ‘open contracting’.

Putting open contracting into practice does not have to be complex. It’s about finding an entry-point and setting out a direction and commitment for change. As part of this, the Model Policy can be used in its entirety, or to inspire or guide particular priorities and initiatives. Open contracting is a journey and not a destination in itself. But this journey is enormously important for improving the effectiveness of cities, and the lives and livelihoods of their residents.

The important role that cities play is only going to increase. The pandemic has accelerated the digital transformation of local and city governments, and localisation efforts continue around the world. Improving the physical and digital urban environment is founded on successful and transparent collaboration with the private sector and other stakeholders – and we need to find ways to identify, shape, and implement the technology and innovation needed by cities and citizens. This is why truly smart cities need open contracting.

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(Image Credit: Unsplash)