of AUS$10m.<sup>34</sup> In Victoria, exceptions are made for information in contracts that is genuinely a commercial secret the release of which would unreasonably disadvantage the contractor, or which it is against the public interest to disclose, guided by language in the state’s freedom of information act. The intent is to limit nondisclosure to the narrowest sections of the contract and for as short a time as is possible.<sup>35</sup>

# **Costs and Benefits of Systemic Full Publication of Contracts**

The argument against presumption of publication is usually one of cost. For example, the US government (specifically the former Director of the OMB, Mitchell Daniels) resisted pressure to move towards a presumption of publication because “many federal contracts (or the documents that are associated with a contract) contain trade secrets and other confidential business information that is protected under federal law. As a result, agency staff would have to carry out an individualized review of the contract to identify any such confidential information and redact it before publishing the contract”. Each year, Daniels noted, the US government enters into 9.5 million contracts of which half a million are in excess of $25,000. Even reviewing only those contracts over the $25,000 threshold would require significant resources.<sup>36</sup> In its deliberations, the Victoria (Australia) public accounts committee concluded that the insistence of confidentiality clauses in government contracts frequently came from the government, not the contractor, suggesting that fears regarding the complexity of reviewing contracts for commercial secrets may be exaggerated.<sup>37</sup> Furthermore, it is difficult to see the significant _public_ interest in restricting information regarding company information in contracts beyond those involving patentable (but unpatented) technology. That some countries are managing a process of routine proactive disclosure further suggests that it is administratively possible.

With a suitable dollar cut-off level for automatic publication, it is likely that the review burden could be reduced while still ensuring the publication of contracts involving a considerable percentage of government financing. Using data from the business warehouse on the size of World Bank financed contracts in FY05 gives an indication of the likely magnitudes involved. Figure Four suggests that 7,772 contracts were signed under World Bank projects in FY05 with a total value of USD8.6bn. Out of this universe of contracts, 5,298 contracts accounting for USD8.5bn had a value of above USD100,000. Only 1,218 contracts, or 16 percent of all contracts, had a value of above USD1m –but these contracts accounted for 83 percent of the total value of all contracts signed.

> 34 See http://www.tenders.vic.gov.au/CA256AEA00206A7D/webpages/PublicContractsFrameset?Open

> 35 Government of Victoria, Australia: Ensuring Openness and Probity in Victorian Government Contracts: A Policy Statement 11 October, 2000.

> 36 Source: Letter from Mitchell Daniels to Ralph Nader and James Love, November 26 2001.  Imagine the average $25k-plus contract contains 200 pages in need of review, the reviewer reads 5 pages an hour and charges $25 per hour, for the 500,000 contracts worth more than $25,000, the US government would have to set aside $500 million in reviewing fees.

> 37 Victoria (Australia) (2000).

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