User:Noah Wetz/Procurement

Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. When a governing body acquires goods through this practice, it is referred to as public procurement.

Procurement generally involves making buying decisions under conditions of scarcity. If sound data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.

Procurement as an organizational process is intended to ensure that the buyer receives goods, services, or works at the best possible price when aspects such as quality, quantity, time, and location are compared. Corporations and public bodies often define processes intended to promote fair and open competition for their business while minimizing risks such as exposure to fraud and collusion.

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and fluctuations in the prices of goods. Organisations which have adopted a corporate social responsibility perspective are also likely to require their purchasing activity to take wider societal and ethical considerations into account. On the other hand, the introduction of external regulations concerning accounting practices can affect ongoing buyer-supplier relations in unforeseen manners.

 ALL I ADDED TO THE ARTICLE LEAD IS IN BOLD 

Public procurement Draft
Main article: Government procurement

Public procurement, also known as government procurement, is when a governing body purchases goods, works, and services from an organization for themselves or the taxpayers. In 2019, public procurement accounted for approximately 12% of GDP in OECD countries and in 2021 the World Bank Group estimated that public procurement made up about 15% of global GDP.

Benefits of public procurement
Public procurement is based on the idea that governments should direct their society while giving the private sector the freedom to decide the best practices to produce the desired goods and services. One benefit of public procurement is its ability to cultivate innovation and economic growth. The public sector picks the most capable nonprofit or for-profit organizations available to issue the desired good or service to the taxpayers. This produces competition within the private sector to gain these contracts that then reward the organizations that can supply more cost-effective and quality goods and services. Some contracts also have specific clauses to promote working with minority-led, women-owned businesses and/or state-owned enterprises. There is a great amount of competition over public procurements because of the massive amount of money that flows through these systems; It is estimated that approximately one trillion USD is spent on public procurement worldwide every year.

Green public procurement ( NOT MINE )
In public procurement, contracting authorities and entities take environmental issues into account when tendering for goods or services. The goal is to reduce the impact of the procurement on human health and the environment.

In the European Union, the Commission has adopted its communication on public procurement for a better environment, where proposes a political target of 50% Green public procurement to be reached by the Member States by 2010. The European Commission has recommended GPP criteria for 21 product/service groups which may be used by any public authority in Europe.

The EU has also launched the GPP 2020, which aims to implement 100 low-carbon tenders.

Social and environmental considerations can be applied to contracts both above and below the threshold for application of the EU Procurement Directives. The 2014 Procurement Directives enable public authorities to take environmental considerations into account. This applies during pre-procurement, as part of the procurement process itself, and in the performance of the contract. Rules regarding exclusion and selection aim to ensure a minimum level of compliance with environmental law by contractors and sub-contractors. Techniques such as life-cycle costing, specification of sustainable production processes, and use of environmental award criteria are available to help contracting authorities identify environmentally preferable bids.

Accessible procurement ( NOT MINE )
The United States Section 508 and European Commission standard EN 301 549 require public procurement to promote accessibility. This means buying products and technology that have accessibility features built in to promote access for the around 1 billion people worldwide who have disabilities.

Disadvantages of public procurement
One issue of public procurement is the inability of governments to measure economic productivity, because as the size of public procurement systems substantially grows, so do their complexity and influence. Public procurement is heavily embedded in all forms of public sector goods and services, from health care to road maintenance. Thus, making it incredibly difficult for the government to monitor the impacts, positive or negative. Monitoring public spending and its impact is important to reform public procurement, especially when pending economic instability calls for proactive responses.

In some cases, if a nation is extremely impoverished, it may not have the necessary funds or a large enough private sector to even procure companies to issue the goods or services to the people. Thus, omitting public procurement as a potential governing practice.

Another concern with public procurement is corruption; companies have much to gain from bribing public officials to obtain these procurements. In societies where corruption is endemic and enforcement is low, public officials are incentivized to accept bribes due to either necessity or greed.

Fraud ( NOT MINE )
Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an obligation or causing a loss to public property or various means during procurement process by public servants, contractors or any other person involved in the procurement. An example is a kickback, whereby a dishonest agent of the supplier pays a dishonest agent of the purchaser to select the supplier's bid, often at an inflated price. Other frauds in procurement include:


 * Collusion among bidders to reduce competition.
 * Providing bidders with advance "inside" information.
 * Submission of false or inflated invoices for services and products that are not delivered or work that is never done. "Shadow vendors", shell companies that are set up and used for billing, may be used in such schemes.
 * Intentional substitution of substandard materials without the customer's agreement.
 * Use of "sole source" contracts without proper justification.
 * Use of prequalification standards in specifications to unnecessarily exclude otherwise qualified contractors.
 * Dividing requirements to qualify for small-purchase procedures to avoid scrutiny for contract review procedures of larger purchases.

Integrity Pacts are one tool to prevent fraud and other irregular practices in procurement projects. The G20 has recommended their use in their 2019 Compendium of Good Practices for Promoting Integrity and Transparency in Infrastructure Development. A major European Commission pilot project entitled Integrity Pacts - Civil Control Mechanism for Safeguarding EU Funds is seeking to evaluate the effectiveness of Integrity Pacts in reducing corruption in 17 EU-funded projects in 11 Member States with a total value of over EUR 920 million.

The OECD has published guidelines on how to detect and combat bid rigging.

'''THE Green public procurement, Accessible procurement, and Fraud sections are NOT mine. However, I changed them to be Sub-headers 2 because my sections ( DISADVANTAGES AND BENEFITS) lead into them quite nicely so I incorporated them into my addition. AND I added a sentence to the article lead to introduce the Public Procurement section.'''