On the importance of designing public contracts well

Very interesting piece on Wired about how Barcelona is dealing with smart city surveillance, even if I do not buy the whole political worldview.* On the procurement side, this bit at the start caught my eye:

“Now we have a big contract with Vodafone, and every month Vodafone has to give machine readable data to city hall. Before, that didn’t happen. They just took all the data and used it for their own benefit”

I will take this at face value, but even so it shows the importance of understanding where value (and risk) lies. By giving Vodafone free reign on using the data generated in that contract the City Council was effectively paying them twice for the same service: first, in cash. Then, in data Vodafone could use as well for its own purposes. That the current City Council understands that the value generated by its contract is valuable (and also a key reason why incumbents usually have a built in advantage IMHO) is a welcome development.

In general I am in favour of more, not less transparency even though it is not exactly risk free in some markets due to the collusion opportunity it offers. But my experience in public procurement tells me that more detailed data provided to tenderers helps them reduce uncertainty and provide more detailed bids based on that data (it just so happens it might as well help collusion).

There is another important point to think about here as well and that is the potential State aid implications. If usage data has value for the incumbent and it is already being paid to deliver the contract then it is arguable the intrinsic data value goes beyond the market rate and that might constitute a case of implicit (?) State Aid. 

The fact the data is controlled by the City Council and (hopefully) made available to tenderers in the following tender allows to level the ground between the incumbents and challengers, negates part of their inbuilt advantage and the value the data has for the first.

*The idea behind Barcelona as a smart city predates 2015 and the current preoccupation with data ownership as well.