Dark Patterns in Public Contracts
Contract administration is frequently a source of concerning behavior in the public sector. For example:
In the aftermath of Hurricane Maria, a company with only two employees (Whitefish Energy) was hired hired by PREPA, Puerto Rico’s public utility company, to restore power to the island at a cost of $300M. The contract had audit-proofing clauses and left little recourse for PREPA due to nonperformance. After 8 months, Puerto Rico did not have power fully restored and now Congressional and FBI investigations are pending.
During an internal audit of the City of San Diego’s contracting practices, the contract with office products supplier Staples was found to exceed the City Council’s approved $2M annual threshold by a full $1M. Auditors found found insufficient financial controls and produced a further 60 pages of recommendations.
The US Defense Contract Audit Agency (DCAA) found sustained exceptions for incurred costs audits 28.6% of the time in its 2017 Report to Congress.
From 2010 to 2013, a Maryland Transit Authority employee allegedly used poor contracting oversight to siphon $6.3M from the state coffers.
The City of Vallejo, CA was recently the victim of an alleged contracting kickback scheme run by the city’s landscape maintenance manager, only uncovered in an FBI investigation. The kickback scheme occurred only a few years after the city was in Chapter 9 bankruptcy, largely because of ballooning contractual obligations.
In recent years, officials in the southern California cities of Bell, Irwindale, La Puente, Monterey Park, Pico Rivera, Temple City, and Vernon have been brought up on various public corruption charges, including some contracting schemes.
We started this project in California by requesting contracts from all counties, as well as a sample of cities. Next, we plan to work our way through the many CA state agencies and other entities like public colleges and universities. We hope to eventually obtain a comprehensive record of every public contract in California, then repeat the model in other states.
This project is already producing a staggering number of documents. To make these documents even more valuable to reporters and to the public, we plan to enrich and cross-link the information we receive from multiple jurisdictions, and provide an exploratory interface for the public on the internet, for free. We expect the truly interesting work will be secondary analysis and composition of the materials we obtain.
Our development work to automate as much of the public records process as possible is generously funded through the AI and the News Open Challenge, a joint project of the MIT Media Lab and the Harvard’s Berkman Klein Center for Internet & Society. However, we also welcome donations to offset the significant document production fees from governments.