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Federal procurement is the process used by national governments to purchase goods and services. Procedures differ between countries, but objectives are similar: increase competition, maximize value received, and promote responsible use of resources. Countries like the US, Canada, Europe, and Australia have their own procurement policies and regulations.
Federal procurement is the process used by national governments to purchase or lease goods and services. Specific procedures may differ between countries, but the objectives of procurement policies are very similar. These objectives are to increase competition by providing fair access to potential bidders, maximizing the value received through the expenditure of public funds, and promoting the responsible use of resources.
In the United States, federal purchasing policies are determined by legislative action and by recommendations of the Office of Federal Purchasing Policy, a subdivision of the Office of Management and Budget, created in 1974. These policies are published in the Federal Purchasing Regulations (FAR) , jointly issued by the Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA). The FAR applies not only to direct purchases made by the government, but also to purchases made by federal beneficiaries. Periodic audits called contractor procurement system reviews are performed on federal contractors and grant recipients to ensure federal regulatory compliance.
Federal purchases often require competitive bidding on contracts that exceed a certain monetary threshold. In these cases, a request for proposal (RFP) is issued with specific guidelines and bids are submitted for review. The contract is generally awarded to the bidder who can meet all required specifications at the lowest price. Exemptions from this policy may occur in cases where only one source of supply exists or when one supplier proves to be far superior in performance to the others.
In Canada, the government agency primarily responsible for federal procurement is Public Works Government Services Canada (PWGSC). A law passed in 2005 created a list of pre-approved vendors to be used for standing orders, which covers the purchase of several of the most commonly purchased assets, including automobiles, fuel, office supplies and professional services. If the purchase exceeds the defined monetary values for different categories, the PWGSC opens the bidding until the bidding process and announces it on the Government’s Electronic Bidding Service. This step can only be bypassed in cases where there is a life-threatening situation, national security may be compromised, there is only one source available for the product or for items that are below monetary thresholds.
Most European countries have similar federal procurement requirements and processes. European Community (EC) members, however, must also implement procurement regulations that comply with EC procurement policies. These policies include non-discrimination between member countries in the procurement process and requirements that suppliers meet certain standards of environmental sustainability. Contracts involving defense or national security are not subject to EC regulations.
In Australia, the Chancellor of the Exchequer issues the Commonwealth Purchasing Guidelines (CPG), which describe Australia’s federal purchasing requirements. Like Canada, Australia has developed lists of approved suppliers, called Common Use Agreements (CUA), for the purchase of a wide variety of goods, ranging from stationery and supplies to temporary labor. In most regions, government agencies are required to use a CUA, if one exists, for the products being purchased. Larger contracts that require an open bidding process are advertised on an electronic system called AusTender.
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