Government procurement, also called public tendering, or public procurement, is the procurment 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. Government procurement is also the subject of the Agreement on Government Procurment, a plurilateral international treaty under the auspices of the WTO.
Governments in the United States spend between $1.3 and $1.6 trillion annually
for goods and services. The federal government on average spends over $230
billion per year. 87,525 sub-national governments in the United States spend an
additional $1.1 - $1.35 trillion each year.
Given the amount of money involved, it’s no surprise that the topic of government
spending receives a great deal of attention—from businesses, interest groups,
media and citizens. Of course, reduced resources and the uncertainty of future
funding makes government spending a sensitive topic. However, the subject of
government spending becomes especially intense when perceived waste or
fraudulent activity occurs, or if improper influence is believed to be associated
with spending decisions. All of these factors have increased the pressure to
strengthen the transparency of government spending and the processes
surrounding it.
The recent demand for transparency within government and the perception of
government purchasing as an “influenceable process” has led several states to
extend their lobbying laws and regulations not only to individuals who interact
with legislative officials, but also to those “procurement lobbyists” who interact
with executive agents responsible for awarding government contracts.