Old rules, new realities : are existing public procurement systems addressing current and future needs?

Abstract

Public procurement is a key aspect of public administration that links the public financial system with economic and social outcomes, and as such is a major determinant of the quality of community services and infrastructure, and the effectiveness of government. This function cuts across almost all areas of planning, program management, and budgeting. However, while public procurement is often a priority, it has become less certain as to how this should be managed to deliver these efficiency and productivity outcomes. The governance structure for public procurement has traditionally been procedures-based, with a focus on integrity in the selection process. Procurement procedures have been reasonably simple and largely define the issues only in terms of whether the value of the transaction is expected to be small (less than US$20,000), medium (up to US$100,000) or large. The characteristics of the supply markets themselves are generally not acknowledged. These procurement procedures have remained essentially unchanged for decades, even though government procurement, such as for economic infrastructure, has become far more complex. This discussion paper provides a critical analysis of the traditional public procurement management model and presents alternatives that may be more appropriate for the complex procurement requirements for today's economic infrastructure.