4.4: Goals of Public Procurement

The public sector views procurement as a tool aimed at helping users in government organizations achieve their mandates by buying what those organizations need. Public sector organizations are mainly driven by service delivery motives, which are mostly guided by the community needs as they keep increasing and changing over time. Transparency and accountability are given high importance to avoid corruption and fraud. The public sector’s view of procurement further illustrates that procurement is a stand-alone concept mainly governed by legislation, laws and regulations. The government generates income from tax revenues to procure goods, services and works to satisfy public needs. Because of the strict legislation, laws and regulations governing public procurement, very few (if any) strategic partnerships are formed in the value chain of procuring goods, services and works. Strategic partnerships would be seen as a form of favouritism and in violation of procurement processes that must be fair, equitable, transparent, competitive and cost-effective. The emphasis on transparency and competition creates a challenge in negotiation, resulting in the unique environment in which public-sector procurement operates.

To identify the primary procurement goals applicable to the public sector, procurement must first be considered from a generic perspective. These perspectives are described below:

• Value for money implies the maximization of benefits and minimization of payment when procuring services and products. Customer (public citizen) satisfaction should be emphasized when creating value for money.
• Acting with the public’s interest in mind is critical for procurement officers who are charged with the spending of public funds. This is supported by the government’s legal and procedural purchasing framework and principles.
• Competition occurs when a public entity invites all bidders and clearly describes the required services and evaluation criteria. A fair, competitive environment will lead to price reduction and improved quality of service.
• Transparency refers to the openness of the bidding process so that every step is open to public scrutiny. This promotes good governance and accountability.
• Accountability and integrity represent an obligation and improve the decision-making process as officials know that there are repercussions for poor or negligent decisions. All entities must be accountable to their stakeholders, thereby becoming more responsive to their needs.
• Fair procurement implies that procurement remains impartial, free from discrimination, and complies with laws and policies. When fair treatment is not applied, service providers may not submit tenders, and citizens will be deprived of goods or services that could have been more efficient and cost-effective.
• Social procurement objectives are attained by including socio-economic measures within procurement processes. These objectives can include economic and social advantages. They encourage the conduct of socially responsible businesses and advance diversity and inclusion.
• Efficiency in the public procurement process ensures that it is carried out smoothly.

These objectives are critical to the procurement function’s success within public entities. To achieve these procurement objectives, appropriate procurement practices must be applied.

While government structure and procurement policies promote uniformity in public-sector procurement practices, it does not necessarily guarantee excellence or success. To achieve this, the public sector must comply with practices that promote excellence within the procurement function.

Public procurement has the following shortcomings that could improve service delivery if solved. Some of these weaknesses include the perceived lack of concern for

• interest expenses and other inventory-carrying costs
• logistics and transportation expertise
• confidentiality about the dealings with suppliers, as all dealings are to be transparent

In public procurement, there is a greater emphasis on competitive bidding as opposed to negotiation in the entire procurement process. Also, there is a huge focus on the purchasing price rather than the total cost of ownership (TCO); supplier collaboration and long-term partnerships with suppliers are limited to ensure conformance to legal and procedural frameworks.

The goals espoused by public purchasing often prevent the public procurement system from delivering effective and efficient public services. For example, buying a simple pen or item of stationery might end up costing a government entity three times the actual cost of that stationery, considering the time it takes to start and conclude the procurement process.

Attributions

“4.4: Goals of Public Procurement” is adapted from “Public Sector Procurement: A Private Sector Procurement Perspective for Improved Service Delivery” copyright © 2021 by S. Manyathi, A. Burger & N. Moritmer from Africa’s Public Service Delivery & Performance Review, licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) License, except where otherwise noted.

The multiple choice questions in the Checkpoint boxes were created using the output from the Arizona State University Question Generator tool and are shared under the Creative Commons – CC0 1.0 Universal License.