Government procurement

For tendering in the public service, see Civil service examination.

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Government procurement or public procurement is when a governing body purchases goods, works, and services from an organization for themselves or the taxpayers.[1][2][3] In 2019, public procurement accounted for approximately 12% of GDP in OECD countries.[4][5] In 2021 the World Bank Group estimated that public procurement made up about 15% of global GDP.[6] Therefore, government procurement accounts for a substantial part of the global economy.

Public procurement is based on the idea that governments should direct their society while giving the private sector the freedom to decide the best practices to produce the desired goods and services.[7]: Chapter 1  One benefit of public procurement is its ability to cultivate innovation and economic growth.[8][9][10] The public sector picks the most capable nonprofit or for-profit organizations available to issue the desired good or service to the taxpayers. This produces competition within the private sector to gain these contracts that then reward the organizations that can supply more cost-effective and quality goods and services. Some contracts also have specific clauses to promote working with minority-led, women-owned businesses and/or state-owned enterprises.[11]

Competition is a key component of public procurement which affects the outcomes of the whole process.[12] There is a great amount of competition over public procurements because of the massive amount of money that flows through these systems; It is estimated that approximately eleven trillion USD is spent on public procurement worldwide every year.[13]

To prevent fraud, waste, corruption, or local protectionism, the laws of most countries regulate government procurement to some extent. Laws usually require the procuring authority to issue public tenders if the value of the procurement exceeds a certain threshold. Government procurement is also the subject of the Agreement on Government Procurement (GPA), a plurilateral international treaty under the auspices of the WTO.

  1. ^ "Public procurement - OECD". www.oecd.org. Retrieved 22 April 2022.
  2. ^ Khan, Naushad (11 January 2018). Public Procurement Fundamentals. Emerald Publishing Limited. doi:10.1108/9781787546059. ISBN 978-1-78754-608-0. S2CID 115362081.
  3. ^ Georghiou, Luke; Edler, Jakob; Uyarra, Elvira; Yeow, Jillian (2014). "Policy instruments for public procurement of innovation: Choice, design and assessment". Technological Forecasting and Social Change. 86: 1–12. doi:10.1016/j.techfore.2013.09.018. hdl:2086/14702. ISSN 0040-1625.
  4. ^ "Home". www.oecd-ilibrary.org. Retrieved 10 March 2022.
  5. ^ "How large is public procurement?". blogs.worldbank.org. 5 February 2020. Retrieved 8 October 2020.
  6. ^ Mihály, Fazekas; Rene, Blum, Jurgen (2021). "Improving Public Procurement Outcomes". World Bank Group. Policy Research Working Papers. doi:10.1596/1813-9450-9690. hdl:10986/35727. S2CID 236331814.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  7. ^ Peters, B. Guy (2018). The politics of bureaucracy: an introduction to comparative public administration (7 ed.). New York, NY. ISBN 978-0-415-74339-6. OCLC 1002302064.{{cite book}}: CS1 maint: location missing publisher (link)
  8. ^ "Productivity in Public Procurement - A Case Study of Finland: Measuring the Efficiency and Effectiveness of Public Procurement" (PDF). OECD. 2019. Retrieved 7 October 2022. {{cite journal}}: Cite journal requires |journal= (help)
  9. ^ Edler, Jakob; Yeow, Jillian (1 March 2016). "Connecting demand and supply: The role of intermediation in public procurement of innovation". Research Policy. 45 (2): 414–426. doi:10.1016/j.respol.2015.10.010. ISSN 0048-7333.
  10. ^ Edler, Jakob; Georghiou, Luke (1 September 2007). "Public procurement and innovation—Resurrecting the demand side". Research Policy. 36 (7): 949–963. doi:10.1016/j.respol.2007.03.003. ISSN 0048-7333.
  11. ^ "The Office of Federal Procurement Policy". The White House. Retrieved 13 April 2022.
  12. ^ Pliatsidis, Andreas Christos (1 January 2022). "Impact of the time limits for the receipt of tenders on the number of bidders: evidence from public procurement in Greece". Journal of Public Procurement. 22 (4): 314–335. doi:10.1108/JOPP-05-2022-0025. ISSN 2150-6930. S2CID 253312170.
  13. ^ Mihály, Fazekas; Blum, Jurgen. Improving Public Procurement Outcomes Review of Tools and the State of the Evidence Base. OCLC 1289178042.