Standards-based simplification of business access to public procurement (DE0040)

What is the public problem that the commitment will address? Contract notices from public contracting authorities are currently posted on multiple pro-curement platforms run by different operators. As a rule, these are not interoperable. As a result, to participate in public tender procedures, businesses must research through many different public contract and tender platforms to find out what notices might be right for them. In practice, this lack of standardised information provision makes for far less trans-parency than intended. This may mean that tenders receive fewer bids and there is less competition, which may lead to more being paid for contracts than would otherwise be the case. Publication recently began of official procurement statistics that create a valid basis of data on which the importance to the nationwide economy of public contract and concession awards can be measured reliably for the first time. To avoid revealing the awarding authori-ties, bidders or winning submissions, this statistical data is however published anonymised in the form of condensed information and analyses of tendering procedures that have al-ready been completed.

What is the commitment?Data and information on planned and completed public procurement processes will be re-corded and provided centrally, in a standard format. To achieve this, a national notification service for public contract awards, known by its German acronym BKMS, is to be set up using standardised data fields. These fields are based on the requirements of the EU’s Im-plementing Regulation establishing standard forms for the publication of notices in the field of public procurement (“eForms”). The obligation to publish such notices is based on the EU directives on public contract and concession awards. It is planned that the BKMS will accept contract and award notices in the standard XÖV format from as many notification platforms as possible, and check them for completeness and plausibility, as well as for customisable searches by businesses and individual citizens. It will also provide a function that will allow businesses to search easily through the entire data holdings of the BKMS. Furthermore, the service will use eForms to provide prepared data on planned or completed public pro-curements as open data. The aim is to offer this information in the open contracting data standard (OCDS).

How will the commitment contribute to solving the public problem?Business will have easier access to contract award procedures, and competition will be im-proved. The introduction of eForms creates a structured, standardised basis of data that also permits strategic controlling in public procurement. In the future, systematic, uniform data management and provision in open data format may be extended to tendering proce-dures that fall below EU value thresholds.

Why is this commitment relevant to OGP values?The outcomes of the project will create transparency about public contract award and pro-curement processes. This information will be more easily accessible to businesses and in-dividual citizens. The aim is to provide data in OCDS with the help of a uniform design for eForms. All of this works towards the ultimate objective of open contracting. In addition, the project harnesses technology and innovation in the interests of open access and account-ability, in part because it lays the technological and data structure foundation for compre-hensive monitoring.

Additional information The project is part of a collaborative project entitled “Digitisation of Procurement – Cooper-ation Project for Standards-based Digitisation of the Public Purchasing and Procurement Process”, led by the Free Hanseatic City of Bremen. The project was set up at the instigation of the IT Planning Council with the Federal Government, the Länder North Rhine-Westphalia and Rhineland-Palatinate, and the Koordinierungsstelle für IT-Standards standards coordi-nation body of Bremen. It implements the business conditions described in the Online Ac-cess Act (OZG) for invitations to tender and public contracts. The project outcomes will pro-vide a blueprint for other Länder to follow.

Milestones Start Date Implementation by Work to build BKMS data holdings begins Q4 2021 Benchmark solution for the OZG project (go-live) Q4 2022 Data provided as open data Q1 2023 (target)

Action Plan Review

Commitment 7.2: Standards-based simplification of business access to public procurement

Commitment 7.2: Standards-based simplification of business access to public procurement [Federal Ministry of the Interior, Building and Community (BMI) /BMI Procurement Office, Free Hanseatic City of Bremen]

For a complete description of the commitment see Commitment 7.2 in Germany’s 2021-2023 action plan here.

Context and objectives:

Under this commitment, the Federal Ministry of the Interior, Building and Community (BMI) and the Free Hanseatic City of Bremen aim to create a national notification service for public contract awards, known as Bekanntmachungsservice (BKMS), using standardised data fields. BMI proposed this commitment’s inclusion in the action plan as part of the ongoing reform of access for businesses to public contracts in the Online Access Act (OZG). [1] Open contracting was a priority area from civil society during the consultations. [2] Civil society commented on the proposal during the online consultation, but it is not evident if these comments were addressed. [3] Nonetheless, interviewed OGN members said that this commitment is among the most critical of the action plan. The Federal Chancellery echoed this sentiment, noting that this commitment is key to connect Germany’s ongoing procurement reforms to the G7 anti-corruption agenda and to respond to civil society’s desire to include this topic in OGP action plans. The interviewees also said that the German business community is in favor of the project, which was a major justification for including it in the action plan.

Germany’s public procurement sector is complex, with a number of different platforms and governing regulations across federal, Länder, and municipal levels. While above-threshold procurement is regulated at the EU level, several laws apply for contracts below the thresholds set by the EU. [4] If a contract falls above the EU’s threshold, the law against limitation of competition (Gesetz gegen Wettbewerbsbeschränkung) applies. If a contract falls below the threshold, budget laws of the federal government and states apply. On the federal level, the Unterschwellenvergabeordung (UVgO) requires contracting agencies to publish tenders below thresholds either on their own website or on an online portal. Notices must be searchable on the tender/procurement portal https://www.service.bund.de/. Research suggests that only a limited part of all procurement data below the threshold is made available by the UVgO. This is because only the tenders of procured services are required to be electronically processed below thresholds and only in those Länder where the UVgO is implemented. [5] In the case of the procurement of construction, for example, no electronic announcement or communication are required. On the Länder level, there are currently 14 different laws that apply to contracts below the threshold, which can hinder fairness and transparency in the market. [6] Some Länder have begun to use the UVgO. [7] However, the UVgO has fewer requirements for documenting procurement by contracting agencies at the Länder level, such as excluding the submission of EU-wide tenders or the use of standard forms. Länder may also determine a minimum monetary amount below which contracts can be awarded directly without a bidding process. Some Länder like Baden-Württemberg only recommend, but do not require, communities to adopt the UVgO.

This commitment intends to facilitate procurement processes for public administrations and companies by offering several technical features on the BKMS. These include: 1) a fiscal ID for companies to manage their account and logins, 2) a prequalification service for companies to save application forms for tenders and share them with other procurement platforms, 3) an announcement service for tender notices, 4) bookmarking and alerts, and 5) a “supplier cockpit” (an interface that simplifies communication between suppliers and bidders over their contracts). The BKMS will not handle any procurement processes itself. Instead, the fiscal ID will enable companies to access other procurement systems by facilitating registration and login. The Bund.de tender/procurement portal will be discontinued, and its functions transferred to the BKMS.

Procurement platforms in Germany currently publish data in various formats that are not always machine-readable. For this commitment, the government will develop a uniform data standard as part of the existing “XÖV-Standards” called “XBeschaffung”. This standard is specifically designed for handling procurement processes within German administrations, which can receive contract and award announcements from different platforms. The XÖV standard is a recommendation which could be turned into a requirement if the IT Planning Council decides to do so. [8] XBeschaffung will implement the standardised data fields from the EU’s data structure “eForms” [9] and be made interoperable with the Open Contracting Data Standard (OCDS). eForms defines data fields for the entire procurement process, including planning, competition, pre-registration, results, and contract changes. The Open Contracting Partnership (OCP) has compared eForms for its compatibility with the OCDS, and the project partners will align XBeschaffung with the OCDS. The Free Hanseatic City of Bremen will develop an intermediary service to gather tender information from the existing procurement portals through an API and convert them into the eForms format. As an international communication standard, “Peppol” (a web server-based infrastructure that securely transmits data particularly in the context of electronic procurement) will be tested for its usability. [10] The use of the BKMS will be mandatory for above threshold contracts starting on 25 October 2023. Prior to this date, the project partners will have gathered procurement data and converted it into a format close to the official eForms. By October 2023, the data shall be provided in eForms by the procurement platforms themselves.

Potential for results:Modest

Primarily, this commitment could result in fairer competition in Germany’s procurement processes, as it will be easier for companies to find public tenders and submit applications. As mentioned, Germany uses many different e-procurement platforms for the federal, Länder, and municipal levels, which can create challenges for companies to find out about tenders. For example, companies often need to use service providers to help find tenders and must keep different accounts on different platforms. ^[11] The BKMS will centralise tenders from other platforms in one place, thus simplifying the process of searching for open tenders. This centralisation could be especially useful for SMEs, who may not have the resources to search for open tenders across many platforms.

This commitment could also improve the transparency of Germany’s procurement processes by publishing data on awarded contracts on the BKMS using a standard format. According to OCP, available data on the procurement processes in Germany is fragmented. Data on tenders are available from the buyers and private providers, but the public has no option to analyze data on awarded contracts. Bund.de has a central information point for tenders, but relevant data is published in HTML or PDF formats, with no open data available for further analysis or re-use. Also, certain data such as the price are often not available. OCP also noted that the need for a more transparent and fair allocation process was made clear in the context of the COVID-19 pandemic response, when overpriced contracts and lack of competition resulted in inefficient use of tax money.

An important factor in the success of this commitment will be the uptake of the BKMS by Länder and municipalities. According to the action plan, the project’s outcomes will provide a blueprint for Länder to follow. To expand the scope of data on the BKMS, the project participants plan to involve Länder and municipal actors at an early stage by organising training and information events, testing the features, and organising expert committees. Gaining the support of the Länder to upload their procurement announcements on the BKMS in a standard and machine-readable format would be a major shift in Germany. However, the publication of tenders below threshold from Länder and municipalities will ultimately depend on their willingness to participate in the project. In addition, several Länder and municipalities have not yet implemented binding requirements for publishing tenders or data on other aspects of the procurement process.

Although there is a lack of representative data, available evidence suggests that below-threshold contracts represent a significant portion of all public procurement in Germany. Recent studies found that the number of public contracts below threshold amount to between 80 and 90 percent of all public contracts in Germany. [12] Based on the contracting volume, public contracts below the threshold are estimated to amount to roughly 64 percent of the entire amount spent by public procurement. [13] Interviewed project planners, OGN representatives, and the Federal Chancellery confirmed that legal reforms are not planned for this commitment, as Germany recently underwent a major procurement law reform (the Public Procurement Statistics Ordinance - Vergabestatistikverordnung) which came into effect in October 2020. [14] Therefore, restrictions on below threshold reporting will still apply to the BKMS in accordance with the existing legal framework. For example, non-public tenders will not have to be filed and there may be below-threshold tenders that will be exempt from reporting.

Opportunities, challenges and recommendations during implementation

If successfully implemented, the BKMS can provide a basis for greater transparency if it makes data increasingly available in open format for the entire procurement process, from all public offices on Federal, Länder and municipal levels, above and below thresholds. A possible risk is that the participation of the awarding bodies at the Länder and municipal levels in below-threshold contracts is not legally binding, but dependent on their willingness to participate. Because Länder and municipalities have some discretion about what data to publish for below-threshold contracts, the project explicitly wants to involve Länder and communities. The project partners plan to foster cooperation between the federal and Länder levels to increase the acceptance of this project in other Länder. Submitting procurement information for below-threshold contracts is crucial to achieve the desired simplification and centralisation of information related to tenders.

As Germany recently underwent a major procurement reform, the government did not add new legislative changes to this commitment that could define transparency requirements for below-threshold awards. Interviewed project partners note that legal changes will eventually be needed to transpose eForms into Germany's various procurement laws. In order not to wait for a legal update they want to develop a technical solution ahead of the implementation of eForms which shall be finished by 2023. Nevertheless, the successful implementation of this commitment could showcase the usefulness of OCDS and familiarise government actors with the principles of transparency and open government. OCP thus sees this commitment as an important step towards wider reforms in how procurement processes are organised in Germany.

To maximise the impact of this commitment, the IRM recommends the following to the project leads:

· Encourage wide uptake of the BKMS by Länder. Absent legally binding requirements for publishing tenders or data on procurement in the Länder, the IRM recommends that the federal government collaborate with Länder governments to use the BKMS. During the implementation period, the BMI could evaluate which Länder are the least transparent in terms of contracts that are below the threshold and make extra effort to encourage these Länder to use the BKMS when it is adopted in 2023. Publishing these evaluations on the BKMS or on a separate dashboard could help to motivate Länder that are less transparent to publish below the threshold contracts. As an example, Estonia’s fourth action plan (2018-2020) contained a commitment that involved launching a website that measures the transparency of all municipalities in the country, including if they have transparent procedures for conducting public procurement. [15]

· Consult a wide range of stakeholder groups when determining relevant data fields and when collecting the data. Civil society could benefit from better access to procurement data in open format. However, the project partners have not mentioned whether they will collaborate with civil society directly during implementation. Organisations such as OCP can provide technical advice to optimise the data publication on the BKMS. The legal framework for the national implementation of eForms in Germany is still under development and other implementation framework conditions have not yet been finalised. When selecting the specific data fields from eForms to be covered in the BKMS, the project partners can hold discussions with various stakeholder groups (ministries, private sector, civil society, etc.) to ensure that their priorities are taken into account. OCP recommends consulting organisations such as Open Knowledge Foundation Germany and their FragdenStaat team and Transparency International Germany to record relevant data for the BKMS and ensure its uptake. Journalists are also an important target group, as most German media outlets now have their own data teams who could use the BKMS data for their investigations and research.

· Widen the scope of procurement data beyond announcements for tenders and make data gradually accessible during the implementation period to ensure more collaboration: Currently, this commitment focuses on increasing transparency around one part of the procurement process, namely announcements. To further increase transparency, the BKMS should also include data covering the entire procurement cycle. For civil society and journalists, data on contract volume, payments and companies are important. The project leads could consider using Ukraine’s Prozorro platform for peer learning, as Prozorro also links up procurement data with public databases of ultimate beneficial owners and the State Treasury. [16] Regarding the provision of open data, members of OGN recommend gradually publishing already existing data over the course of the implementation period, instead of publishing the full, standardised datasets only at the end of the period. [17] This could be in the form of a pilot project of a project partner (i.e. a Länd or a federal ministry). This could enable a network to be built up so that the data can be used and incorporated into innovative services. A gradual opening of public purchasing data and contracts based on open contracting standards can lead to greater involvement of stakeholders, minimise risks and achieve successes during implementation.