Infrastructure presents unique problems in public procurement since it is extremely complex and specialized, and it frequently necessitates long-term economic, political, and social considerations. Governments must make a number of decisions in order to provide public infrastructure services to people or taxpayers.
The article presents a minimum set of essential economic ideas that governments may use to make sensible decisions at each level. Contracting out infrastructure to the private sector under high-powered incentive mechanisms, such as fixed-price contracts, appears to be a desirable option in general, according to theory. However, this is only true in specific circumstances.
Ownership should also be linked with the ultimate responsibility for or goal of infrastructure supply, according to theory. The advantages of public and private ownership are distinct, and they can solve various issues. It is further demonstrated that if several public tasks (for example, investment and operation) exhibit positive externalities, it is preferable to combine them into the same ownership, whether public or private.
The government has historically funded public works and infrastructure. The public budget is the source of funding for such conventional purchase.
The “single-till concept” governs public debt management in the majority of nations (i.e., borrowings are for general government purposes and are not connected to individual projects). However, the public sector may issue debt/funds for specific projects. This is not, however, the most usual technique; in the vast majority of cases, it is not practicable.
Furthermore, many governments used to have their own methods of delivering public works, including equipment and people. Almost all public works are now built by independent businesses that are most often hired through a public tender process. Some public businesses are outliers, but even in those situations, private corporations perform the majority of the labor through subcontracting methods.
Governments have already begun to focus on recovery, with procurement and infrastructure playing a critical and strategic part in the larger state response to post-crisis recovery. Both policy areas may make a substantial contribution to developing a more resilient and sustainable economy and society for future generations if they are used intelligently. The way governments spend public funds in vital commodities, public services, and infrastructure will undoubtedly be reorganized as a result of the global crisis.
To overcome the flaws highlighted by the world’s greatest catastrophe, public investment and expenditure policies cannot return to “business as usual” must move to a resilient “new normal.”
In the future policies, a more strategic approach to the role of public procurement and infrastructure investment in economic start-up and recovery will be considered individually.
The core of a government that delivers more formal services to the public in terms of quality and timeliness is to utilize procurement as an interface through which citizens may “connect” to the new level of trust, the general norm.
Better-equipped public procurement processes will aid governments in responding effectively to future crises, resulting in a more resilient and inventive government.
Simply defined, procurement refers to the acquisition of commodities or services. The process of transferring, storing, and activating the usage of acquired products and services for any of the Company’s businesses is known as logistics.
The findings of a research conducted by Engineers Against Poverty and the Institution of Civil Engineers into the issues in infrastructure procurement that are now impeding the attainment of social development goals are presented in this article. The impact/performance of the asset and the service it provides (the product) are examined, as well as the opportunities that arise throughout the project’s development and operation (the process).
The research used a wide definition of “procurement” to encompass all stages of the project life cycle, from project identification through final monitoring, enforcement, and assessment. In four case-study nations (India, Indonesia, Kenya, and Nigeria), evaluations of procurement documentation and practice, round-table talks, and in-depth interviews with stakeholders were used as methods. This resulted in a large list of impediments, as well as some hopeful reform attempts.
Procurement methods and contract agreements, the study finds, have the ability to advance social goals. However, the project’s objectives must be clearly defined, the budget and procurement strategy must be acceptable, and implementation must be monitored and enforced.