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Government procurement, also called public tendering or public procurement, is the procurement of goods and services on behalf of a public authority, such as a government agency. With 10 to 15% of GDP in developed countries, and up to 20% in developing countries, government procurement accounts for a substantial part of the global economy.
To prevent fraud, waste, corruption or local protectionism, the law of most countries regulates government procurement more or less closely. It usually requires the procuring authority to issue public tenders if the value of the procurement exceeds a certain threshold.
Scope of application
Government procurement regulations normally cover all public works, services and supply contracts entered into by a public authority. However, there may be exceptions. These may notably cover military acquisitions, which account for large parts of government expenditures. The GPA and EU procurement law do not apply where public tendering would violate a country's essential security interests. Additionally, certain politically or economically sensitive sectors of government spending, such as public health, energy supply or public transport, may also be treated differently.
Regulation by jurisdiction
Russian Federal Law N94-ФЗ of 21.07.2005 require all federal, regional and municipal government customers to publish all information about government tenders, auctions and other purchase procedures on special public government websites.
Government procurement by public authorities in the United States accounts for about USD 7 trillion annually. Federal procurement is governed by the Federal Acquisition Regulation. FedBizOpps and USASpending.gov are websites where federal contracts are shown. Public announcements of awards has several exemptions, including contracts less than $3.5 million. Historically, the procurement data has been criticized for deficiencies leading to a number of reforms. As of 2013, there is an initiative to consolidate eight legacy databases into a single system called System for Award Management. Contracts are not posted online, although two agencies have explored the possibility.
In January 2014, the Office of Inspector General at NASA released a report criticizing the agency's lack of strategic sourcing. Because IT departments were spending autonomously, NASA spent $25.7 million on similar purchases.
The National Institute of Governmental Purchasing and the Federal Acquisition Institute are active in procurement certification and training. A specialized program in procurement law in the United States is located at The George Washington University Law School.
- Prieß, Hans-Joachim, ed. (2012). Public Procurement 2012: An overview of regulation in 40 jurisdictions worldwide (8. ed.). Getting the Deal Through. ISSN 1747-5910.
- Global Trade Negotiations Home Page at Harvard University, accessed 18 December 2006
- Prieß, Hans-Joachim; Harvey, Diana; Friton, Pascal. "Global Overview". Prieß (2012): 3–7.
- Update on FedBizOpps data. Sunlight Foundation.
- Halchin LE. (2013). Transforming Government Acquisition Systems: Overview and Selected Issues. Congressional Research Service.
- Martin, Paul. "NASA's Strategic Sourcing Program". NASA Office of Audits. Retrieved 5 March 2014.
- Busch, Jason. "NASA, or Need Another Sourcing Act: IT Security Spending Horror Stories". Spend Matters. Retrieved 5 March 2014.