Publishing contracts online? Not so fast

Transparency, apparently, has its limits.

The Obama administration announced on Thursday it was withdrawing a proposal that would have required federal agencies to post copies of contracts and task-and-delivery orders on a public website.

Last May, the civilian and defense acquisition councils, which craft changes to the Federal Acquisition Regulation, published an advance notice of proposed rule-making. The councils said at the time they were seeking public comment on how best to amend the FAR "to enable public posting of contract actions, should such posting become a requirement in the future, without compromising contractors' proprietary and confidential commercial or financial information."

The councils heard from 15 respondents, including agencies, industry associations, advocacy groups and private individuals. Most of the responses criticized the plan as difficult to implement, unnecessarily burdensome to industry and a deterrent to competing for government work.

One respondent noted, "With more than 30 million transactions issued by the government annually, the redaction process alone would be overwhelming."

Faced with stiff opposition and scarce resources to implement their proposal, the councils announced they were abandoning the effort. The notice said some of the information that would be disclosed already is available on federal websites and many nonclassified contracts can be obtained through a Freedom of Information Act request.

The councils also acknowledged the government does not have the capability or the resources at this point to guarantee that proprietary information would be protected if the proposal was implemented. The civilian and defense acquisition councils, which represent the Defense Department, General Services Administration and NASA, acknowledged the government runs the risk of lawsuits if they inadvertently release private information.

"The ongoing efforts to identify protections essential for safeguarding unclassified information are not yet sufficiently mature that such efforts can be bypassed to establish a contract-posting requirement prior to guidance on unclassified information," the notice said. "To avoid inadvertent disclosures, the government would be required to review contractor-redacted documents before such items are posted to a public website."

The proposal, which had drawn the ire of many industry groups, was pulled back on the same day House lawmakers debated whether agency regulations were stifling job growth.

The councils cited the costs associated with the plan, including technology, software and the time of contractor and government employees. "DoD, GSA and NASA advocate a judicious approach to establishing contract-posting requirements, one that will appropriately conserve resources and identify information that should be protected from general release to the public," they wrote.

Ironically, the administration's decision runs directly counter to a proposal then-Sen. Barack Obama had supported. While on the presidential campaign trail in 2008, Obama, along with Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., unsuccessfully proposed a bill that would have required agencies to post all contract documents online.

Obama's Office of Management and Budget reaffirmed the administration's commitment to posting contracts online in August 2009.

"I know there was opposition to the transparency proposal, but I thought that the public was in good hands since Obama supported spending transparency while in the Senate and on the campaign trail," said Scott Amey, general counsel for the Project on Government Oversight, a watchdog group that backed the proposal. "I guess it's harder to promote change from inside the White House."

Amey argued federal websites that track contract spending provide only summary data while the FOIA process is often so slow that a long-term contract can be completed before the document is provided to a requestor.

The councils said they could revise the proposal at a later date, but such a plan would have to include a high-dollar threshold for contracts, a requirement for the successful offeror to redact portions of the contract and an incentive for the company to allow the contract to be published.