Public procurement refers to the process by which public authorities, such as government departments, local authorities or state-owned enterprises, purchase work, goods or services from the private sector.
Public procurement rules ensure that public money is properly used when public authorities make purchases from the private sector.
How do governments award contracts to business
To prevent fraud, waste, corruption, or local protectionism, the laws of most countries regulate government procurement to some extent. Laws usually require the procuring authority to issue public (competitive) tenders if the value of the procurement exceeds a certain threshold.
The standard way of awarding contracts for goods to businesses is competitive tendering, which allows the greatest number of firms to bid. Within competitive tendering, there are different types of public procurement procedure.
The 2012 WTO Plurilateral Agreement on Government Procurement (GPA)
The EU member countries have joined the WTO Agreement on Government Procurement (GPA). This is the main international agreement related to public procurement. It is plurilateral because not all WTO Members have joined.
The other 19 countries in the GPA are:
Armenia, Australia, Canada, Chinese Taipei, Hong Kong (China), Iceland, Israel, Japan, Liechtenstein, Montenegro, Moldova, the Netherlands with respect to Aruba, Norway, New Zealand, South Korea, Singapore, Switzerland, Ukraine, and the United States.
Other WTO members are negotiating accession to the GPA.
The GPA has two main elements
- procedures and rules on how a contract should be tendered
- lists of the procuring agencies and types of procurement that each country has agreed to open up to foreign business competition
Find out more about tendering opportunities through the integrated Government Procurement Market Access Information Resource (e-GPA) portal of the WTO.
This provides information on coverage, including on the applicable thresholds indicating the value above which the GPA rules apply.
The EU advocates open international public procurement markets both
More resources on public procurement
- overview of the WTO Government Procurement Agreement
- general introduction to public procurement
- information on European public procurement policies
- public procurement in trade agreements
You can find information about public procurement under specific trade agreements in the Markets section.