What would happen if every company published full details of their contracts?

Paul Snell is managing editor at Supply Management
posted by Paul Snell
12 June 2014

13 June 2014 | Paul Snell

Paul SnellOne of the more provocative debates at a roundtable on data and analytics hosted by Optimum Procurement in London this week was what would happen if all organisations, from both the private and public sectors, were to publish all the details about each contract they award?

While it might initially sound crazy, one participant suggested the difference between those who think transparency is ‘good’ and those who believe it is ‘bad’ will be the difference between organisations that are winners or losers in the future.

The main concern about such a move is around the impact it would have on pricing. Would you want your rivals to be able to see the discounts you are getting, or the margin a supplier is making from your deals? And – in the minds of both buyers and suppliers – would contract award decisions end up all being about price, at the expense of quality, innovation and service? But, the counter-argument goes, shouldn’t suppliers be able to defend the margin they are making? And if you are transparent about your award criteria, wouldn't this prevent complaints from suppliers that failed to win the contract even when they were cheaper?

Another point of discussion was around innovation. The argument in favour of transparency says if you are open about your data, suppliers can analyse it and provide innovative solutions to your problems (even the ones you don’t know about yet). But the opposing view was that a move like this could stifle innovation, as which suppliers would be prepared to invest if all the details were to be made public? And while there will always be entrepreneurs, how would they raise money from investors?

It was an interesting discussion, and I would be interested in your views.

The other major question raised, and perhaps the most important, was who would be the first CPO to dare to do it? To paraphrase one attendee: “Transparency brings vulnerability. It can expose backsides, and yours might end up getting kicked.”

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