Executive Office of the President
               Office Of Budget and Management
                    Washington, DC 20503

The Director


                    November 26, 20001

Mr. Ralph Nader
P.O. Box 19312
Washington, DC 20036

Mr. James Love
Consumer Project on Technology
P.O. Box 19367
Washington, DC 20036

Dear Messrs. Nader and Love:

     Thank you for your letter of September 10, 2001,
proposing that the text of federal contracts be made
publicly available on the Internet.  We reviewed the
enclosed correspondence and considered the feasibility of
your proposal.  As a fundamental tenet, our government
should strive toward greater transparency, and I find
substantial merit in your proposal.

     As you may know, the Presidentís vision for government
reform is guided by three principles, one of which is that
the Federal Government be citizen-centered, not bureaucracy-
centered.  To further the Presidentís vision, the
Presidentís Management Agenda for Fiscal Year 2002 commits
the Administration to a number of major initiatives, one of
which is expanding electronic government.  This initiative
is being spearheaded by Mark Forman, who is OMBís Associate
Director of Information Technology and E-Government.

As part of the expanding electronic government initiative,
the Administration will take concrete steps to make it
easier for the public to do business with the Federal
Government, and for the public to obtain information about
the Federal Governmentís activities.  In particular, we will
expand the publicís ability to obtain government services
through the FirstGov.gov site.  In addition, we will make
the regulatory process more transparent by having agencies
disseminate more regulatory information on their websites.
In this regard, John Graham, the head of OMBís Office of
Information and Regulatory Affairs (OIRA), recently
announced a major initiative to post more information on
OMBís website about OIRAís review of draft agency
regulations.

     We, therefore, appreciate receiving your suggestion
that the Federal Government make its contracts routinely
available to the public through the Internet.  The
Administration shares your belief that the Federal
Government should use the Internet to give the public easier
access to information about its contracts.  Specifically, we
are working on making more contract data available through
the Federal Procurement Data System (FPDS)
(www.fpds.gsa.gov).  We have in process an initiative to re-
engineer the existing FPDS, which should result in a wealth
of additional data being made available to the public.  The
FPDS currently provides information about aggregate contract
awards by agency.  When we have completed our re-
engineering, the public will also be able to obtain more
specific individual contract award information through the
FPDS.

     In response to your suggestion, OMBís Office of Federal
Procurement Policy (OFPP) looked into whether it would be
feasible to routinely make federal contracts available to
the public on the Internet.  ORPP found several barriers
that would need to be overcome.  In particular, 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 on the web.

     Each year, the Federal government enters into more than
500,000 contracts in excess of $25,000 each, and more than 9
million ďsimplifiedĒ contracts of $25,000 or less.  As
explained above, in order to place all federal contracts on
the Internet, agencies would have to conduct a detailed
review of each of these contracts in order to identify any
confidential business information that should be withheld.
Given the very substantial amount of work that would be
required, we believe that this approach would be impractical
and would divert scarce agency resources away from other
electronic government activities that hold greater promise
for benefiting the public.  As a result, we have concluded
that it would not be feasible to make federal contracts
routinely available to the public on the Internet.  Of
course, if a member of the public is interested in a
particular contract, he or she may request it under the
Freedom of Information Act.  Moreover, as I noted earlier,
the Administration will be making more contract data
available to the public through the Federal Procurement Data
System.

     Again, thank you for your thoughts on this Matter.

Sincerely,

Mitchell E. Daniels, Jr.
Director