Contractors Resist Push to Post Contracts Online

In a move intended to make it easier for the public to see what exactly federal contractors do for the taxpayer money they receive, two Senate Democrats have introduced legislation that would require agencies to post the text of major contracts online. But contractors and contracting specialists are pushing back.

On March 15, Sens. Claire McCaskill, D-Mo., and Jon Tester, D-Mont., introduced the Contractor Accountability and Transparency Act of 2017 (S. 651), which would require agencies to post a “machine-readable, searchable copy of each covered contract” within 30 days of its signing.

The bill would cover awards worth $150,000 or more and would require that contracts be posted not later than 30 days after the agency enters into the agreement.

Contractors would be permitted to request redactions of sensitive national security information, trade secrets and other proprietary information—subject to approval by the contracting officer in consultation with the director of the Office of Management and Budget. No information required to be made public under the Freedom of Information Act would be redacted, the bill says.

“Taxpayers deserve to know where their money is being spent,” said McCaskill, the top-ranking Democrat on the Homeland Security and Governmental Affairs Committee. “The more transparency we have, the more all of us can do to identify and cut down on wasteful spending and unethical practices.”

Tester added, “Making these documents publicly available will hold government contractors accountable to the American public . . . ensure taxpayer dollars are spent responsibly, increase government transparency, and shine more light on big corporations.”

The senators cited the Pentagon’s rejection of a FOIA request last year that the Defense Department justified by saying it would have to scour every contract—at a cost of $660 million.

But the plan presents a workload problem and would bring “zero benefit to the government,” said Alan Chvotkin, executive vice president and counsel of the 400-company Professional Services Council. “The tension here is between the value to the public versus the [resources required to post the] numbers of contracts covered,” he told Government Executive.

“A quick look at a database shows that almost 200,000 transactions would be covered by the bill. That’s an awful lot of work for both government and industry to review.” The process would require the contractor to make redactions, then the government would review them, and “they’d have a conversation back and forth.”

Chvotkin conceded there is public value in posting the contracts, but he noted that much contract data is already available on USAspending.gov, such as who won each award and its place of performance. And for more long-term detail such as terms and conditions, advocacy groups can use the FOIA process, which “admittedly is clunky,” Chvotkin said. In fact, the FOIA process can take many months, even years, to produce relevant documents.

“Most people are not interested in this this volume of information,” Chvotkin argued. “We’d like to make sure they’re not posting millions of documents for the sake of getting visibility into a relative handful.”

Similar drawbacks were cited by Michael Fischetti, executive director of the National Contract Management Association. “The existing Federal Procurement Data System is already designed to address the expectation for transparency in contracting,” though that system could be modernized and made more responsive, he said.

“Government contracts can be very complex, diverse and non-standard in the manner in which they are written, even with the more prevalent use of automated contract writing systems,” Fischetti said. “The quantity and description of any given ‘widget’ may vary from one contract vehicle to another, making a data search far more difficult and manually driven than reliance on FPDS,” which also makes fair comparisons difficult, in his view.

“The effect of posting contracts in their entirety would naturally result in an apples to oranges comparison of contracts of similar products and services,” he added, citing industry’s objections to the General Services Administration’s efforts to increase price transparency for contracting officers.

“If part of the intent of the legislation is to better understand where a government contracted product or service is developed or made or where its component parts, supply chain, integration derives,” Fischetti said, that “will not necessarily become clear even after reading through individual contracts.”

One nonprofit transparency group that welcomed the bill during Sunshine Week this month is the Project on Government Oversight, which found that 33 states already post major contracts online.

“In order to rein in spending and regain public faith in the contracting system, the government must provide public access to information on the contracting process,” wrote general counsel Scott Amey in a blog post. “Posting copies of contracts—rather than summary data that offers little, if any, insights into the goods and services being purchased—is essential to learning about government activities and eliminating waste, fraud, abuse, and substandard performance. When contract information is publicly accessible, genuine competition will increase, and the government will be better situated to get better deals, especially as budget constraints take hold.”