The Procurement ClassRoom

Public Procurement

The Goal of Public Procurement and Contract Administration

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The goal of public procurement is to award timely and cost-effective contracts to qualified contractors, suppliers and service providers for the provision of goods, works and services to support national and local government, and public services operations, in accordance with principles and procedures established in the public procurement rules.

The goal of contract administration is to ensure proper mechanisms are in place to monitor and evaluate contractors, suppliers and service providers’ performance in the fulfillment of their contractual obligations, and to ensure appropriate actions are taken to promptly remedy any deficiencies observed in contract execution or the contract scope, and terms and conditions.

On the basis of their specific goals, there is a clear distinction between public procurement and contract administration. That distinction, far from lessening the importance of one as opposed to the other, actually reinforces each by identifying and focusing on their specific purpose.

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Procurement in Context

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Procurement is the process of acquiring goods and services, (including civil works) by a public or private entity to satisfy a specific need. Two broad categories of procurement are identified here: goods and services. I consider them as inclusive of civil works procurement, including utilities such as water, sanitation and electricity, given that (at least in public procurement) civil works is contracted out to ultimately provide a service –a medical facility is built to provide medical services, a school to house students in the process of delivering educational services, etc. So whatever infrastructure is built by government, its purpose is to deliver public services.

Given the above, it is important to further classify procurement according to the sector which it serves, that is: public or private; thus, the following is the classification we will use:

i. Public Sector Procurement,

ii. Private Sector Procurement, and cz-lekarna.com

iii. Project Procurement

      a. Public Sector Project Procurement, and

      b. Private Sector Project Procurement

Below, the first two (public and private sector procurement) are defined. Project Procurement is the subject of the next post:

Public Sector Procurement
Public sector procurement is the process of acquiring goods and services for the operation of government and to provide public services. It is carried out within a specific legal framework based on certain principles aimed at making the fulfillment of public procurement requirements competitively available to qualified firms and individuals in a transparent and nondiscriminatory manner based on pre-established selection criteria. The goal of public procurement is to provide everything necessary for the operation of government and, specifically, public services to the population within a country.

Private Sector Procurement
Private sector procurement, on the other hand, is the process of acquiring goods and services to satisfy the needs of a particular private entity (usually a business, for profit or not). These are goods and services needed for (i) the operation of the business or (ii) the business to use in the process of production of goods and/or services they provide to their customers. Respecting the former, a primary example are goods such as stationary, furniture, office equipment, etc. needed for a business to operate, and respecting the latter, are all the goods and services needed to satisfy customer demands.