Just as businesses must purchase the goods and services they need to keep their plants running and their customers satisfied, so must governments. However, there are some key differences between the ways governments and businesses obtain these items. First, all government procurement must be done within a strict code of laws and rules. Second, governments typically need to purchase items and services in larger quantity than businesses, so they often demand more from their vendors. Despite these drawbacks, many suppliers are eager to work with governments around the world in order to provide them with the necessities they need to keep their respective countries running smoothly.
Government procurement is not a task that can be taken lightly; it is simply one of the most important responsibilities in any country's leadership. For example, if governments cannot procure the proper food rations for their soldiers, thousands of young men and women could face starvation while they are defending the country. Likewise, if governments cannot purchase all of the equipment and materials needed to hold elections, the entire voting process could be delayed or disrupted. Practically everything governments provide to its citizens relies on some type of procurement. From the materials used to repave the roads to the teachers who work in the public schools, all of these things require strategic procurement practices.
Handling government procurement provides a number of benefits for both the buyers and sellers. First, all government purchases must be done in the open and in an arena that provides plentiful competition, at least in the United States. Other governments deal with procurement in different ways, but for the sake of this we will focus on the US method.
Because the procurement activities are open to competition, prices on the goods and services are usually lower. The government agents handling the purchasing decisions will also be able to select the most qualified vendor with confidence because they will be able to compare multiple sellers, instead of only having to choose between one or two. Otherwise, the government may end up overpaying for shoddy services and goods.
Vendors also benefit from this approach to procurement. Because competition is encouraged, all possible suppliers have a chance at earning the coveted government contract. Additionally, because of that same competition, a vendor who does work for the government also enhances its own reputation among other potential, non-government customers.
Before procurement begins, government purchasers need to be sure to follow some specific best practices to ensure that goods and services they get meet the desired standards. One of those practices is to review the rules and regulations regarding government procurement. These guidelines need to be followed exactly, and those in charge of procurement should be familiar with them. However, those rules should not be set in stone. They should be reviewed and updated as needed regularly so that the regulations do not hinder procurement activities.
Another procurement best practice is to establish the criteria by which to compare bids in advance. Comparisons can be difficult, especially if the quoted prices are in the same range. Having an established set of selection criteria can be useful in narrowing down the prospects. Criteria should include such factors as the completeness of the bid and conformance to conditions. An incomplete bid, for example, may have details left out that will cause the project to cost more in the long run while a failure to prove that the vendor will conform to specific project conditions may demonstrate a supplier who is not trustworthy or dependable. Regardless of the criteria used, the final reasons for the basis of any vendors selection must be documented. Otherwise, claims of bias or favoritism in the selection process could be made against the government, thus undermining the stability of the procurement process and the citizens' trust in their leadership.
One of the main trends in government procurement is heavy use of eprocurement, or electronic purchasing. Many government agencies have been able to purchase goods and services much more quickly and cost effectively using these practices.