In public sector organizations, the procurement process is generally similar to the process in private sector organizations – but with some crucial differences. Because the people handling public funds must naturally follow strict principles during the procurement process, these principles can be considered an ethical code of conduct requiring public employees to be responsible for their purchases. Some of the principles may also be useful for organizations in the private sector.
The principles vary somewhat depending on the organization. Below are seven of the most common procurement principles in public sector organizations:
Value for money: the organization must manage funds efficiently and economically when purchasing goods and services. This may include performing cost-benefit analyzes and risk assessments. Low cost does not necessarily equal more excellent value; Features such as quality and durability also influence whether the purchase represents value for money.
Fairness: Procurement should not provide preferential treatment to individuals or suppliers. All proposals must be evaluated objectively based on how well they meet the organization’s needs.
Competition: Organizations should seek competitive bids from multiple suppliers unless there are specific reasons not, such as a single supplier where the product or service is only available from a single supplier.
Efficiency: Procurement processes must be carried out efficiently to help maximize value and prevent delays.
Transparency: Organizations should make relevant procurement information available to everyone, including the public and suppliers. Information should be kept confidential only when there are legal or other valid reasons.
Integrity: Those involved in public procurement should always strive to be perceived as trustworthy, reliable, honest, and responsible. The funds must be used for the intended purpose and the public good.
Responsibility: People involved in the procurement process are responsible for their actions and decisions. They are required to report procurement activities, including any errors, accurately.
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