Improve Government Procurement Transparency (NZ0029)

Objective

Improving the transparency of government sourcing activity by making changes to the Government Electronic Tender Service (GETS) and by developing a digital data platform (or leverage existing platforms) to capture procurement information, in alignment with the Open Contracting Data Standard (OCDS). Aligning with OCDS will enable government to share better information with the marketplace and improve efficiency and competition. It will also enable better monitoring and data-driven decision making to improve performance. Greater transparency also supports feedback and engagement by business and citizens.

Ambition

To design and develop a digital data platform (or leverage existing platforms) that will capture procurement information from agencies and join up GETS data, All-of-Government panel, and agency procurement data, in alignment with the Open Data Contracting Standard. Fully developing and implementing the digital data platform will take time beyond NAP4 but will significantly increase transparency by making procurement information available to agencies and the public via a suite of dashboards. Also, to make changes to GETS to improve compliance with government contract award publication requirements. The changes will improve collation of data and increase the transparency of government sourcing processes.

Status Quo

Each year, the New Zealand Government spends $51.5 billion on the goods and services to support public services, infrastructure, economic growth, and the wellbeing of New Zealanders. How this money is spent not only determines consumer and national outcomes. It also affects the efficiency, fairness, and inclusivity of the public procurement system for its providers. Currently, transparency of government procurement is limited. Only a subset of government agencies must advertise contracts over $100,000 through GETS. While the quality of that information has improved, with contract award notices being published as open data on a quarterly basis since July 2019, there is room for improvement. Procurement data is currently difficult to combine due to the lack of integrated data systems to aggregate procurement data in real time. Collation of procurement data outside of GETS is largely dependent on manual data collections which is time consuming, places considerable administrative burden on both agencies and suppliers, and is subject to compliance issues.

Te Tiriti o Waitangi

Open contracting makes government procurement fairer and more efficient. Improving transparency of government procurement has benefits to Māori as both citizens and iwi, as it enables data and insights to better inform key policies and initiatives relevant to Māori, such as the progressive procurement policy.

OGP Values: Transparency, Integrity, and Accountability

Milestones

Verifiable and measurable milestones to fulfil the commitment | Start date - End date

Design and make changes to the GETS application for improved information publication compliance | January 2023 - March 2024

Lay the foundations for integrated data system capability and future data management, through: • developing a data governance framework • identifying service design, reference architecture, and Data as a Service model • defining data transparency requirements and developing a structured approach for delivery of new reporting requirements, standards, and formats • developing the blueprint for an integrated data system and prioritised implementation pathway • utilising data.govt to publish data insights and sources. | January 2023 - February 2025

Pilot the digital data platform and system within NZGP | June 2024 - September 2024

Action Plan Review

Commitment 6. Improve Government Procurement Transparency

● Verifiable: Yes

● Does it have an open government lens? Yes

● Potential for results: Modest

Commitment 6: Improve Government Procurement Transparency

For a complete description of the commitment, see Commitment 6 in New Zealand’s 2022–2024 Action Plan: https://www.opengovpartnership.org/documents/new-zealand-action-plan-2022-2024-december/.

Context and objectives:

This commitment intends to strengthen government procurement transparency by improving the Government Electronic Tender Service (GETS) and laying the groundwork for a digital data platform that would bring together government procurement data. GETS serves as the national e-procurement system, used by some government agencies to issue tenders, manage questions, accept bids, and publish award information. However, as of 2021, procurement award notices on GETS represented only about 2.5% of the total annual government expenditure. [42] Annually, New Zealand spends approximately NZ$51.5 billion (US$35.8 billion) on goods and services. [43] According to a 2022 OECD case study, New Zealand’s procurement expenditure, amounting to 15.1% of GDP, is relatively higher than the OECD average. For the most part, government agencies conduct their own procurement, except for limited categories procured centrally. [44] This commitment builds on the previous action plan, which began publishing the GETS notices as open data in .csv format. It is led by MBIE and forms part of the government’s Procurement for the Future Programme, which includes efforts to increase the quality and coverage of public reporting of government procurement information. [45]

Potential for results: Modest

Improvements to online platforms would incrementally open access to public procurement information. Under this commitment, the intended user interface changes to the GETS application would require more structured input from government bodies, involving the use of mandatory fields to submit tender information. According to MBIE, this is expected to increase compliance with contract award information requirements. [46] In addition, the commitment intends to design, develop, and pilot a new digital data platform (or leverage existing platforms) that will bring together GETS data, All-of-Government panel, and agency procurement data in alignment with the Open Contracting Data Standard. This can address difficulties with combining public procurement data in real time, due to lack of integrated data systems.

As TINZ points out, with around 97.5% of government procurement not reported on GETS, opaque procurement practices allow concerns about bribery, corruption, and fraud to thrive and undermine public trust in government. [47] An OECD report acknowledges a number of reasons for this low rate, which include a low rate of compliance with existing procurement rules, as well as many legitimate exemptions under the rules for significant categories of government procurement. [48] Without easy access to procurement information, currently the public must rely on external monitoring, for instance by the Office of the Auditor General. [49] MBIE has also found that the system is underperforming, [50] an observation echoed by public and private sector organisations concerned by the procurement process. [51]

However, how much new public procurement information this commitment will make available during the implementation period is uncertain. Although the commitment plans to pilot a digital data platform, full implementation of the platform would take place after the action plan period. MBIE expects the platform to be a starting point for iteration and improvement, with 2030 as a potentially realistic timeframe for change. [52] For GETS, specification of new mandatory fields for disclosure have yet to be determined. In terms of compliance, MBIE is not mandated to enforce the Government Procurement Rules. Changes to these rules are out of scope for this commitment. [53] This means that certain procurements would continue to be exempted, such as those through a panel of suppliers (Government Rules of Procurement 57), all-of-government contracts (Rule 58), syndicated contracts (Rule 59), and common capability contracts (Rule 60). [54]

This commitment has modest potential to improve public access to procurement information and is considered part of MBIE’s wider effort to improve the transparency and efficacy of public procurement. All EAP members support continuing to leverage the open government platform to further open procurement efforts. [55] TINZ expects this commitment to produce more open and complete information about government procurement in the long run. [56] Because government views this commitment as a component of its strategic work programme, [57] implementation is likely to receive the resources and priority needed to achieve planned milestones. [58] In the long term, according to the OECD, efforts to improve the transparency of New Zealand’s procurement transparency through e-procurement systems could provide new visibility on government agencies’ spending and allow for monitoring of public procurement’s contributions to national policy objectives. [59] Across OGP countries, open procurement has helped governments save money, fight corruption, and expand the number of participating businesses. [60]

Opportunities, challenges, and recommendations during implementation

In the view of Trust Democracy NZ and TINZ, involvement of civil society in oversight of this commitment’s implementation is key to achieving results. [61] Civil society’s ongoing support could be vital to building cross-party support following the October 2023 election. Publication of the procurement data gathered by the improved system as open data, rather than simply providing access to dashboards, should be made explicit to enable ease of analysis and reuse by CSOs. MBIE anticipates that, as well as building the new data collection system, work is needed to ensure compliance by public sector agencies. [62] To help improve effective implementation of this commitment, IRM recommends the following:

● Systematically include participation by CSOs in oversight of commitment implementation in areas such as identification of mandatory data fields to be collected by agencies using GETS and the application of open data standards. Identify and consult stakeholders before developing the new contracting platform to understand user demands. Take measures to encourage utilisation of the procurement data collected by CSOs and the public. [63] Establish feedback mechanisms for citizens to act on procurement data, such as through audits, flagging systems, or hotlines. For example, Ukraine launched DoZorro, a public procurement monitoring platform that enables citizens to submit feedback, including alerts of possible irregularities and violations. [64]

● Publish procurement data gathered in an open data format that enables easy analysis and use by third parties. Make data interoperable with other systems, such as beneficial ownership registries and government spending data. Finland’s e-procurement portal offers an example of a user-friendly design. [65]

● Consider measures to widen public sector agencies’ compliance on publishing procurement information such as training and technical support and amendment to government procurement rules and related legislation to require the proactive publication of contract related information, in consistency with the Open Contracting Global Principles. [66] New Zealand can draw on Germany’s example, which responded to a low publication rate for public tenders by instituting a new ordinance to mandate the collection of procurement information. [67]