Overview of Government procurement

1. Need for government procurement

Government procurement or public procurement is the procurement of

goods, services and works on behalf of a public authority, such as a government
agency. Amounting to 12 percent of global GDP in 2018, government
procurement accounts for a substantial part of the global economy.

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.

2. Problems

Government procurement involves a high risk of corruption because of the great

size of financial turnover and the complexity of many procurement processes in
which businesses interact very closely with politicians and civil servants. Often
the personal interests of the public officials are not the same as the interests of
the public. The vulnerability of public buyers to private subversion has led
every country to restrict the discretion of procuring entities in what they buy
and pay. But while the regulation of the private sector empowers public officials
and enables them to extract bribes in exchange for regulatory relief, the
regulation of government constrains public officials. Public procurement
regulations reduce the discretion of buyers, typically with the intent of reducing
corruption.

3. Scope

Government procurement regulations normally cover all public works, services

and supply contracts entered into by a public authority. However, there may be
exceptions. These most notably cover military acquisitions, which account for
large parts of government expenditures. The GPA and EU procurement law
allow of exceptions where public tendering would violate a country's essential
security interests. Additionally, certain politically or economically sensitive
sectors, such as public health, energy supply or public transport, may also be
treated differently.