Develop contract monitoring register (NL0047)

What is the public problem that the Transparency on public procurement results in more efficient public spending, prevents corruption and gives every company a fair chance to win a government contract. The Netherlands publishes about 20.000 23 commitment will address? tenders and contracts on TenderNed.nl every year and several other procurement related datasets can be found on data.overheid.nl and the European Data Portal. However, transparency on procurement is only effective if data is being re-used by the government, companies, journalists and civil society. At this moment, the data is not used to the full potential.

What is the commitment? The development of the contract register and stakeholders’ ability to access and analyse all publicly available information about public procurement in the Netherlands in a one-stop-shop information and engagement platform.

How will the commitment contribute to solving the public problem? The Dutch Ministry of Interior Affairs will improve the accessibility of Dutch procurement data by developing a contract register in cooperation with a variety of stakeholders and promote the re-use of this data with these stakeholders. This will lead to: a. Increased capacities of the Dutch and foreign business to participate in the public procurement in the Netherlands by gaining new intelligence from the existing data and tools b. Increased intelligence capacity of the Dutch government to analyze the performance of public procurement in the Netherlands c. Increased capacity of the Dutch non-governmental actors, including CSOs and academia to monitor public procurement in the Netherlands.

Why is this commitment relevant to OGP values? The policy of the Dutch government resulting from the Open Government Partnership Action Plan is not only to publish the data, but also actively start a dialogue with stakeholders and re-users about the data. By doing so opportunities are created and improved for the public and companies to participate in the way the state buys. And afterwards to hold the state officials accountable to their actions When the Dutch contract register is ready based on the wishes of re-users the register will be launched at an official event where we will also organize a European conference to share experiences with other EU member states. In this way the Dutch government wants to share best practices on building a contract register outside of the national borders, but also wants to learn from other EU members states which have a different or better approach.

Additional information The project is linked to “Inkopen met Impact” (“Procurement with Impact”), the strategy of the Dutch Government to ensure government procurement is social, sustainable and innovative. BZK is working together with the Open State Foundation on this project. The estimated budget of the project Contract Register is € 265,795. The Innovation and Networks Executive Agency (INEA) has awarded a grant of € 199,346 under the Connections Europe Facility (CEF) Telecommunications Sector. Milestone Activity with a verifiable deliverable Start Date: End Date: 24 Analysis of the requirements and preparation of specifications of the Contract Register 01-12-2020 01-05-2021 Development of the contract register and testing 01-05-2021 01-05-2022 Communication and dissemination activities 01-03-2022 01-06-2022

Results Report

Commitment 9: Contract Register in the Netherlands

Commitment #9: Contract Register in the Netherlands (Ministry of the Interior and Kingdom Relations & Open State Foundation)

For a complete description of the commitment, see Commitment 9 on pages 22-24 of the Netherlands 2020 – 2022 action plan here.

Context and objectives:

With an estimated total purchase volume of EUR 73.3 bn annually, government procurement makes up a significant part of the Dutch GDP. [20] The amended Public Procurement Act from 2016 applies to all procedures below and above the threshold, recognizing the general principles of equal treatment, non-discrimination, transparency, and Dutch civil law (including pre-contractual good faith). The central government procures via a so-called system of category management. For each category, a manager is appointed with expertise in that category. Organizations then purchase collectively under the leadership of the category manager. Category management is not only about the actual procurement, but also about realizing government ambitions around sustainability and social responsibility.

Although there is considerable disclosure of procurement information, it is often scattered and incomplete. Since 2015, aggregate numbers of spending per department, per purchasing category, and per supplier are disclosed. Since March 2017, a non-financial overview of State contracts concluded by category managers is made public, containing key data of each government contract. [21] In addition, there is the so-called procurement calendar [22] and the online tendering mechanism tenderned. The need to switch between these different platforms to get an overview of upcoming procurements has been flagged by business groups as cumbersome and undesirable, [23] and stakeholders agree that a new, single portal is needed. [24] To add to the confusion, since May 2018 the category plans are made public on a ministry website. [25] In these plans, the category manager explains the government’s procurement goals, and concrete plans for realizing those goals. Companies can use these plans to prepare for tenders, while citizens or interest groups can use them to understand the intentions towards, for example, sustainable procurement.

Over the years, cases of poor contract performance by suppliers in relation to state contracts have been reported, as well as bid-rigging at the local level (involving a public transport concession). Government spending on large IT projects resulted in a parliament inquiry, the so-called Commission Elias. Among other things, this commission advised more dialogue between market players and government procurement agencies to enhance efficiency and overall performance. [26] As a result, a specialized team now procures IT projects and monitors contract implementation. In addition, the government has expressed a strong ambition to reflect environmental, social, and corporate governance indicators (ESG) in the public procurement process and launched the ‘procuring with impact agenda’. [27]

Against this backdrop, the Ministry of Interior and Kingdom Relations (via the Chief Procurement Officer), together with the Open State Foundation and others, seeks to streamline scattered flows of information around category-managed government procurement (estimated at EUR 5 bn annually) into a new and consolidated platform. The primary aim of the new platform is to cultivate a structured and fruitful dialogue among citizens, companies, interest groups, and the central government, and to increase the (re)use of publicly available information on procurement. Contrary to the commitment’s title in the action plan, the Ministry of Interior and Kingdom Relations does not currently plan to roll out a new contract register. The commitment has a detailed project plan that identifies shortcomings, sets clear deliverables and milestones, and reflects on possible risks and how to mitigate them. [28] As such, this commitment is well-planned and the outcome, a blueprint for a new platform, well designed.

Potential for results:Modest

Stronger transparency on government procurement can strengthen overall public sector integrity, allowing public oversight to reduce anomalies, improve competition on government contracts, and support efficient government spending. The commitment does not seek to disclose all data needed for such enhanced oversight (in particular individual contracts and their value), and thus its potential for results is modest. However, it could lead to greater scrutiny of contract information by a larger group of experts and stakeholders, generating new insights and data on government spending which will be made publicly available. In addition, and recognizing that effective public procurement is good for business, this commitment could support the Netherlands’ post-COVID-19 economic recovery as small and medium-sized enterprises (SMEs) and their interest groups would be able to use the new platform to better inform themselves on the opportunities and challenges for them to take part in procurement processes. As such, this commitment could help implement recommendations by other global fora such as the Group of Twenty (G20), who urge their members to ensure that procurement processes are open and fair as this encourages a more equitable business landscape by allowing SMEs to compete more effectively. ^[29]

Similarly, other interest groups, such as environmental or human rights organizations, could use the data from the platform to strengthen their advocacy, in particular by this commitment’s attention to disclosing and deliberating on the so-called category plans. The Ministry of Interior and Kingdom Relations will undertake this commitment with leading CSOs, such as the Open Contracting Partnership and the Open State Foundation, who are well aware of challenges and best practices in this area. In addition, according to the commitment’s work plan, the Plain Language Brigade (Direct Duidelijk Brigade) from Commitment 6 in this action plan will ensure that the purchasing plans for each category are easily understandable for external stakeholders and laypersons.

Finally, the work is well planned and supported through a sizable grant from the European Commission so the platform, especially if guided by relevant data standards, can realistically be expected to be launched and generate a lasting impact. This assessment is further inspired by earlier OGP analysis, that found how engaging citizens and users to utilize contracting data and closing citizen feedback loops are key for improving data usage. [30]

Opportunities, challenges, and recommendations during implementation

Drawing on the previous action plan, the IRM recommends integrating the lessons learned from work on the Open Contracting Data Standard (OCDS) and elaborate how such standardization can complement the new platform. It could also support the thinking around topics that the commitment does not currently address, such as if all government contracts will eventually be included and in what format that could best take place. In that context, another opportunity is to use open contracting during the implementation of this commitment for the area of beneficial ownership transparency. In a number of jurisdictions, contract registers require bidders on government contracts to also disclose their ultimate beneficial owner. This combination of information has proved helpful in preventing collusive bidding and enhancing overall contract performance, including in the procurement of COVID-19 related purchases. [31] Furthermore, the Ministry of the Interior and Kingdom Relations could pool this commitment’s resources with those of Commitment 10 on open data communities, as procurement data is also partly provided via the Netherlands’ open data portal (data.overheid.nl). Finally, the IRM recommends that future activities involve training people on how to use the data on the new register, specifically for groups who are perhaps less adapted to using such databases in their daily work.

In terms of challenges, Dutch law does not currently require the government to maintain a contract register. However, as this work is progressing, and open contracting standards are becoming the norm, it is possible that a contract register will be necessary. A number of EU member states have already established contract registers (such as the Czech Republic, Estonia, and Slovakia, among others) that legally require certain formats to be used (machine readable), and have provisions for the completeness of such data, etc. The IRM recommends using this commitment to prepare the groundwork for such efforts in the Netherlands to inform a legal basis for certain standards and sources of procurement information to consider. The IRM also recommends that stakeholders build broad partnerships, including with business interest groups who have been asking for more consolidated data. In case discussions to phase out or replace tenderned become more prevalent, the lessons learned from this work could be vital to prevent possible duplication of efforts.

Results Report

Commitment 9. Contract Register in the Netherlands

● Verifiable: Yes

● Does it have an open government lens? Yes

● Potential for results: Modest

● Completion: Complete

● Did it open government? Marginal

Commitment 9: Contract Register in the Netherlands (Ministry of the Interior and Kingdom Relations)

Context and Objectives:

This commitment aimed to streamline the use and re-use of central government public procurement data on a new, single platform. Up to now, users needed to switch between many platforms to get an overview of upcoming opportunities with the central government. This situation is cumbersome and has not set a good open data practice. In addition, the government sought to ensure that objectives around sustainability and social responsibility are achieved through strategic procurement, especially since the 2019 cabinet strategy ‘Procuring with Impact’ to which the project was linked, ^[7] and the overlapping National Plan on Sustainable Public Procurement for 2021-2025 ‘Commissioning with ambition, procuring with impact’. ^[8] This further necessitated the availability of central government procurement data, including contract award criteria and contract performance against environmental, social, and governance (ESG) dimensions. In addition, the platform would facilitate dialogue with interested parties around how procurement is organized on the government’s online tendering system “tenderned”.

The platform referred to as a contract register in this commitment focused on procurement information related to so-called category management (goods and services that several ministries regularly use such as office supplies, company clothes, catering, etc.). The annual purchasing volume of the central government was about € 16 billion in 2021, and roughly 25 percent of that amount concerns category management procurement of goods and services that are, at present, divided over 22 categories. ^[9]

Did It Open Government? Marginal

This commitment led to several positive outcomes. In May 2021, the Open State Foundation carried out a study into the needs of the (re)users of central government procurement data. [10] Among other things, respondents mentioned that certain critical contract information such as price and deliverables are currently unavailable, existing systems are not user-friendly, the quality of available data is not always satisfactory, and feedback mechanisms (i.e., to provide input to category procurement plans) are largely absent. The study made seven recommendations to address the identified shortcomings. The Ministry of Interior and Kingdom Relations -in coordination with the Interdepartmental Committee on Purchasing and Procurement (ICIA)- wrote an official policy paper in which it outlined its ambition to follow the recommendations, to the extent possible within the legal framework. ^[11]

The ministry commissioned an external expert to analyze the risks and benefits of applying open contracting principles to central government procurement and make recommendations for disclosing data about tenders and contracts within the limits of existing laws and regulations. In April 2022, the advisory report by a professor from the Utrecht University Centre for Public Procurement was released. ^[12] The report asserts that overestimating the need for confidentiality -and underestimating the impact of open public procurement- can be detrimental to government procurement efficiency and might explain why important data is missing or of low quality. Aside from data on unit-price, where the report recommends to not disclose such data, the report echoes broader calls for transparency and proactive disclosure of data on overall contract value and names of award criteria. The study also underscores that greater transparency in procurement will be accompanied by additional administrative needs for the government. On legal exclusion grounds, the report refers to guidance from the PIANOo (Dutch Public Procurement Expertise Centre). This guidance stipulates that, in principle, all information must be provided, including price(s) paid and the final value of the contract (or the value of the lowest and highest bid). Deviations are only possible by exception, when publication would prevent application of the law, is contrary to the public interest, or harms the commercial interests of entrepreneurs. In its guidance, PIANOo notes that improper use of exception grounds is common, and that in principle the contract price must be included in the publication of the contract award notice. [13] The Ministry of the Interior and Kingdom Relations wrote an official policy paper responding to this report, which at the time of writing is not yet public.

In May 2022, stakeholders organized a large conference in Amsterdam with international partners to explore how procurement can be improved using open data, technology, and stakeholder engagement. All interviewees mentioned that the conference was valuable for attendees, including the government. On 2 December 2022, the new platform was presented during a launch event with a panel discussion on the value of increased openness. [14]

Implementation was delayed several months because of the COVID-19 pandemic, as well as Russia’s war against Ukraine in 2022. Both led to changing priorities and additional work for the responsible ministry. In addition, interviewed stakeholders frequently opined that the introduction of the Woo meant open government work under OGP was somewhat deprioritized.

Although it is a positive step, the current platform does not represent an actual contract register and it does not currently disclose any new data on central government procurement. It also does not disclose any new contract data fields, using for example the Open Contracting Data Standard (OCDS). Instead, it has made it easier to find and access existing procurement data by linking to different portals in one place. There are unresolved questions about who is responsible for the quality and accuracy of the data submitted to the portal. It also remains unclear what kind of engagement the platform seeks to facilitate and whether it is the right place for such dialogue. Given that the procurement process is typically divided into phases, and each phase often brings different kinds of questions, a clearly stated objective about what dialogue it seeks to have (and not have) could have been helpful. The IRM considers that, in its current form, the platform is a positive, but marginal change to existing practice. Existing parallel to several other portals and platforms, it is difficult to assume that this platform will facilitate proactive engagement of stakeholders. [15]

Work under this commitment was not connected to the knowledge gained through other relevant processes and institutions. It remains unclear, for example, how knowledge gained from feedback and/or questions from bidders on tenderned or how jurisprudence (that is, actively shared and summarized on the PIANOo website) would feed into the portal, thereby potentially missing another important use-case for the platform.

Looking Ahead:

Based on the current progress, longer-term outcomes could be strong, provided the platform transforms into a contract register with good user engagement. As mentioned in the IRM Action Plan Review, if tenderned will be phased out, it will be important that the next online tendering system adequately supports open contracting standards and needs. Moreover, linking central government procurement information to relevant court and complaints proceedings could help ensure (future) category plans are legally and strategically sound and consider existing jurisprudence and user feedback. Such information could also ensure that the government’s objectives around sustainability and social responsibility are being met. In that effort, monitoring and controlling public procurement contracts will be critical, and can be greatly supported by up-to-date data on complaints and disputes. A future iteration of the platform could offer that functionality.

In addition, the Netherlands has an extra-judicial review body for public procurement procedures since 2013. ^[16] This body frequently issues reports and non-binding opinions, such as how innovative approaches to ensure a green economy could conflict with the procurement law. ^[17] Business associations argue that this procedure did not work because its opinions have no legal power over contracting authorities. ^[18] Under an ongoing reform of the procurement act, the role of this commission will focus on complaints that arise earlier in the procurement process, particularly tender design, so that in theory, necessary adjustments could be made. [19] Using this reform to strengthen the feedback loop would also provide an opportunity to assure that the commission solicits civil society input.