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A public procurement law is a law developed to ensure that the goods and services purchased by a governmental entity are acquired in a fair, open, and justifiable way. There may be many parts to such a law, including a statement of need, bid requirement publications, administrative considerations, and open letting procedures. This ensures a level of fairness, especially when private contractors are bidding on the items in question. A public procurement law may only require a public bid or publication if certain thresholds and conditions are met.
The main thing a public procurement law attempts to do is ensure openness among the bidding public. To do this, the law often requires several things. The governmental entity must publish a public announcement that it seeks bids for a certain project, product, or service. These bids must contain information related to the bid, including the scope of the bid and the timeframe for delivery. The bids must then be opened in public, usually at a public meeting of the body making the award decision.
If these procedures are not followed, then a bidder or member of the public may be able to appeal the matter. In the United States, for example, federal bid appeals are usually handled by the Government Accountability Office, which produces decisions on appeals on almost a daily basis. If a violation has occurred, the agency handling the appeal can declare the bid award void. Once that happens, the project must be re-bid, or it may be possible in some cases to award a contract to a different party.
A public procurement law typically does not require all bids to be opened to the public. The law usually allows for exceptions in a number of different matters, including for procurements that stay below a certain price point, emergency situations, and procurements that may require a specialization that only a few companies may have the ability to handle. Some of these restrictions may be subject to appeal.
In addition to ensuring that private companies have a chance to review and bid on certain things, a public procurement law generally also has other provisions and oversight language. For example, some laws will outline who may authorize a purchase and when an authorized purchaser may have a conflict of interest. Those who make such purchases in violation of public procurement laws could be liable both in criminal and civil court.
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