Features of public procurement in developed countries

Australia.

In 2009, the Australian government initiated a project called “Enhancing Australian Industry Participation”, which aimed to strengthen the role of its industry in public procurement. In 2011, the Buy Australian Home and Abroad Act was passed. In 2015, they introduced participation rules for indigenous peoples, where 3% of government contracts must necessarily be won by indigenous enterprises.

At the state level, there are laws that negatively affect foreign trade. In the most economically developed state - New South Wales, which creates 33% of the country's GDP, price preferences of 20% are given for small and medium-sized domestic businesses. And in the state of Victoria, the second largest contribution to Australia's GDP - 25%, there is also a requirement to localize public procurement.

European Union.

Although at the legislative level there is no mention of discrimination against foreign participants in public procurement, mention of the fact of such discrimination can be found in the report of the US government organization - the Office of the Trade Representative. The organization publishes a report annually for US companies on barriers to international trade. And the 2017 173-page report contains the following information on the specifics of public procurement in the European Union: “The Utilities Procurement Procedure Directive covers procurement in the water, transport, energy and postal sectors. This directive requires open and competitive tendering, but it allows Member States to reject applications that contain less than 50% local content from the EU and which are not covered by an international or reciprocal bilateral agreement. The EU local content requirements apply to foreign suppliers of production, transportation and distribution of drinking water; energy (gas and heat); urban transport (urban rail transport, automated systems, trams, buses, etc.); and postal services. Subsidiaries of US companies can bid on all government procurement contracts subject to direct you ".

In general, in order to be able to participate in public procurement, the EU requires 50% of the local component. This speaks of the actual requirement to open local production, buy local materials, provide jobs for EU citizens.

Also further in the report provides information on barriers in individual countries of the European Union. For example, in France, even with more competitive products, government orders are often given to French companies. In Italy, American companies complain about corruption. In Poland, compliance with public procurement requirements is not available to foreign companies.

USA.

Regarding restrictions on public procurement in the United States, you can look at the database of the European Commission. Europeans say some of the requirements of the Buy American Act of 1933 create barriers for foreign companies to participate in US government procurement. These requirements require everyone to participate in public procurement to use local materials, use local suppliers, and use local labor. Sometimes these requirements reach up to 100% local content, which means a completely American origin of the goods. Also learn more about help getting gsa.

The Europeans also emphasize that it is very difficult to find information about future tenders. And even if it is submitted on the websites of individual states, the information is often very unclear and vague. In general, the European Union notes that the existing barriers significantly reduce, and often make it impossible to win a government tender in the United States.

The website of the Canadian government organization  The Trade Com missioner Service  contains detailed information about the restrictions in each state of the United States. For example, many states give domestic companies a 15% price preference.

Countries such as China, Japan, India, Brazil and Turkey adhere to a similar policy of discrimination against importers.

If we talk about the reason for such discrimination, then we should simply recall the teachings of Keynes, which says that the state can stimulate economic development by placing government orders in the private sector. Thus, the business receives income, creates jobs, pays taxes. Thanks to the Keynes multiplier effect, these revenues go to other businesses. This creates new income, taxes and jobs. Etc. If the government order goes to imports, then the multiplier effect moves to the importing country, creating economic growth there. Therefore, in public procurement, developed countries are trying to keep government spending inside the country in order to get a greater effect.