Procurement Green Paper Briefings: eProcurement Proposals

The current generation of UK eProcurement solutions inhibit the effectiveness of these systems in developing the digital government agenda.  This somewhat paradoxical development has arisen as a result of the way in which eProcurement solutions have been implemented in the UK.  In contrast to most countries around the world, UK contracting authorities have been encouraged to individually procure and use eProcurement solutions. This has led to the implementation of a range of incompatible eProcurement systems on a contracting authority-by-contracting authority basis, in which the data is inaccessible to the wider public sector, individuals and civil society bodies.[1]  Data held in these eProcurement systems is not easily available for broader digital government purposes, such as data analysis providing insights on such issues as spend analysis, supplier management, fraud prevention and supply chain compliance, as referred to in the Green Paper.

Many countries have implemented centralised public sector eProcurement solutions.  These centralised solutions inherently enable access to procurement data for the purposes of data analysis and improved digital government in a way that is not currently possible in the UK’s fragmented approach. The Green Paper mentions, in particular, South Korea.  South Korea was an early adopter of a centralised eProcurement system – KONEPS - from around 2002.  Use of KONEPS is mandated for South Korea’s central government. Non-central public bodies are encouraged to use KONEPS and its use is very widespread.   KONEPS provides a centralised data repository for the vast bulk of South Korea’s public sector procurement activity that can then be interrogated and analysed to provide insights and intelligence.  As an example, the centralised system architecture of KONEPS has enabled a data analytic solution to be implemented which identifies potential corruption “red flags” on a real-time or near real-time basis through a “Bid-Rigging Indicator Analysis System” (BRIAS)[2].   

Central Data Platform 

To overcome these problems, the Green Paper proposes that a central platform will be designed and developed which will become the single data repository for public sector procurement data for England and Wales.  All contracting authorities will be required – through new legislation – to publish on the central platform “procurement and contracting data throughout the commercial lifecycle”.  The Green Paper envisages that the central platform will initially consist of a limited number of modules and associated data:

• Public access to all published data; 
• Notices from Find a Tender service and Contracts Finder; 
• Links to e-procurement systems for tendering; 
• Access to commercial data analysis tools; 
• Price and commercial performance comparison by supplier and between supplier.

Over time a more extensive range of modules will be developed as follows: 

• Register of suppliers; 
• Register of commercial tools; 
• Contract performance including spend data and KPIs;
• Central debarment list;
• Procurement pipelines; 
• Central register of complaints; 
• Register of legal challenges.

It is clearly envisaged that the central platform will become the primary eProcurement data repository and transparency portal for England and Wales.  The Green Paper envisages that “Scotland, Wales and Northern Ireland will continue to have their own dedicated public sector procurement websites” and that the new central platform “must be flexible enough to be able to integrate with these procurement websites”.   

In order for the central platform to become a usable data repository that will enable the types of data analytic operations referred to in the Green Paper, the data that is provided to the central platform will need to be provided in manner that makes it usable within the central platform.   

The Green Paper proposes that the Open Contract Data Standard (OCDS) will be mandated for the submission of data to the central platform.  All contracting authorities will be required to publish data in an OCDS compliant format so that data for buyers, suppliers, contracts, spend and performance would be held and published on an open, non-proprietary, reusable basis. OCDS enables disclosure of data and documents at all stages of the contracting process by defining a common data model. It was created to support organizations to increase contracting transparency, and allow deeper analysis of contracting data by a wide range of users.

OCDS has been promoted quite extensively by the UK government but its use in the UK remains relatively limited. Outside the UK, the European Bank for Reconstruction and Development (EBRD) has promoted the use of OCDS to enhance the transparency of procurement activity.  A key example is the EBRD funding of a Ukrainian procurement system (“Prozorro” – which means transparent in Ukrainian) which aims to achieve full transparency of public procurement decisions by enabling “everyone see everything” online. There are similarities with the UK Green Paper proposals as Prozorro has established an open source and OCDS-based central database which links the pre-existing commercial electronic platforms and provides online public procurement data exchange and publication of data in OCDS format in real-time. Procurement information is fully open to anyone and the system is thought to significantly reduce corruption risks.

Transparency

The concept of increased transparency flows throughout the Green Paper data recommendations.   As a headline, the Green Paper identifies that “transparency by default” should be embedded on a procurement lifecycle basis, from planning through to procurement, contract award, performance and completion.  As a result, there will be a key and important change to the practice of public procurement processes.  Instead of transparency occurring on a “snapshot” basis at certain points in the procurement lifecycle (contract notice, release of procurement documentation, debriefing information and award notice), the Green Paper recommends that transparency will be continuous on a real-time basis throughout the procurement lifecycle. 

The Green Paper sets out that contracting authorities will be required to disclose procurement and contract data as soon as practically possible during the procurement process. The Green Paper comments that “contracting authorities would be required to declare in their tender documents when information would be disclosed and justify what, if any, information is to be treated as commercially sensitive”.  This suggests that contracting authorities will have an element of discretion in deciding what types of information will be subject to transparency.  Given the reluctance of many public authorities to provide information on an open basis, the extent of this discretion is likely to be a “hot topic” for practitioners.  

On the issue of the publication of award and debriefing information (which is a key element in ensuring adequate  transparency), the Green Paper states that contracting authorities would need to publish “basic disclosure information, covering the information currently required by regulation 84” before they will be allowed to initiate contract award and commence standstill.  However, Regulation 84 relates to the reports that contracting authorities are required to draw up following the conclusion of a procurement process - it does not relate the debriefing information provided to bidders (which is referred to in Regulation 86).  

The Green Paper suggestions, however, go beyond Regulation 84. It refers to transparency requirements at this stage as including “Bidder Identities; Basis of award decision; Basic disclosure of tenders submitted; Evaluation reports; Basic evaluation disclosure information”.  This is outside of and additional to the Regulation 84 requirements.  Clearly, an obligation on contracting authorities to publicly disclose information about successful and unsuccessful tenders, evaluation reports and evaluation information before the award of contract would be a significant change to UK procurement practice.  Bidders could regard these additional transparency requirements as a considerable risk issue as the additional disclosure elements could relate to commercially significant information.   

The Green Paper devotes considerable focus on the scope of the transparency obligation through an analysis of data protection and freedom of information principles.  In essence, the Green Paper recognises that information should not be disclosed which is protected as personal data or is not disclosable under the Freedom of Information Act 2000 (FOIA).  For non-personal data the Green Paper proposes that the “default should be to disclose all information” but that the FOIA categories of “Commercial Interests” (FOIA, s. 43) and ”Information Provided in Confidence” (FOIA, s. 41) will continue to apply.   

The disclosure by default principle indicates that all bidder submissions (including tender submissions) will be disclosable. This is indicated but not stated expressly in the Green Paper in the comments that guidance will be published on what would not be disclosable, including the following:

• profit margin and overheads; 
• financial models; 
• elements of the bid (and evaluation documents) which reveal intellectual property;
• elements of the bid (and evaluation documents) which reveal innovative or unique technical solutions and methodologies;
  
• elements of the bid (and evaluation documents) which reveal trade secrets; 
• names, personal telephone numbers, addresses, email addresses or other data capable of identifying a living person

Full tender disclosures are already made in the Ukraine Prozorro system.  Under Prozorro, after a tender procedure is complete, absolutely all data is disclosed, including the list of all participants, their bids, decisions of the tender committee and all qualification documents, etc. This information is publicly accessible through Prozorro’s online analytics module.  However, this approach would be a novel development in the UK context.  Bidders will inevitably be concerned about likely leakage of significant commercial information.

Points to Consider

Broadly speaking, the Green Paper proposals on eProcurement and transparency are to be welcomed.  The UK was an early adopter of eProcurement but further developments have not moved forward in line with global developments, particularly in the extent to which eProcurement data can be used to support and enhance broader digital government initiatives. 

The scope of the transparency requirements outlined in the Green Paper needs further development. Whilst the Green Paper gives considerable focus to FOIA principles and their application it does not address the real tension between the benefits of transparency and bidder concerns to ensure that significant commercial information is not disclosed in public sector procurement processes.  If this tension is not resolved the risk of disclosure could inhibit participation in public sector procurement processes, with the consequent reduction in competition and value for money of the public sector.  

In the Ukraine, there was a significant need to move to full disclosure due to considerable corruption in the public sector procurement process.  There are not the same pressures in the UK and so the need and purpose of full disclosure at all stages of the procurement lifecycle ought to be discussed and clarified.

[1] Discussed in Albert Sanchez-Graells, “EU Public Procurement Policy and the Fourth Industrial Revolution: Pushing and Pulling as One?” see https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3440554

[2] See Dae-in Kim, “Legal Issues in Facilitation & Fair-Use of E-Procurement System - Lessons from Korean Experience“ - https://www.researchgate.net/publication/338392472