In most countries the government, and the agencies it controls, are together the biggest purchasers of goods of all kinds, ranging from basic commodities to high-technology equipment. At the same time, the political pressure to favour domestic suppliers over their foreign competitors can be very strong. Increasing global competition means that organizations in both the public and private sectors need to concentrate on what they do best. Effective procurement strategies and well managed supply chains enable organisations to do just that: focus on developing and delivering products and services that exceed customer expectations.
The main international agreement related to public procurement is the World Trade Organisation (WTO) Agreement on Public Procurement, the Government Procurement Agreement (GPA). It is a “plurilateral” agreement, which means that it applies to a certain number of WTO Members who signed the GPA or that have subsequently acceded to it.
A newly-revised version of an Agreement among governments around the world to encourage transparency in public sector procurement will come into force by the end of March 2014. It includes updated tender rules and market access commitments. Its purpose is to open up as many business opportunities as possible to international competition and tendering. It commits countries to core disciplines over transparency, competition and good governance in procurement. It is designed to make laws, regulations, procedures and practices regarding government procurement more transparent and to ensure they do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.
The signatories have agreed that suppliers of goods and services in other signatory countries will be treated no less favorably than domestic suppliers in procurement covered by the Agreement, and that their laws, regulations and procedures relating to government procurement will be transparent and fair. In addition, locally-established companies will not be treated less favorably because of foreign affiliation or ownership, or because the goods and services they provide are of foreign origin.
The GPA applies to procurement by any contractual means, including purchase, lease or rental with or without an option to buy. The GPA members confirm significant potential market access opportunities. The World Trade Organization estimates that the value of government procurement opportunities covered by the Agreement is worth several hundred billion dollars annually. The GPA is to date the only legally binding agreement in the WTO focusing on the subject of government procurement.
Procurement opportunities, other additional information on the GPA, its Members, as well as general overview of the WTO can be found at: http://www.wto.org/