What is a Procurement Act?

Florence J. Tipton

A procurement act is a set of regulations that dictates how a local or regional government obtains goods and services. The policies and procedures of a procurement act may include the responsibilities of the board that approves the contracts to procure goods and services. It also usually details the process each business entity must follow to bid on and secure contracts with the government. For some local or regional governments, the act may also detail the responsibilities of the governing agency that administers the contract.

Procurement regulations for obtaining goods and services may vary based on the country.
Procurement regulations for obtaining goods and services may vary based on the country.

Procurement regulations for obtaining goods and services may vary based on the country. In general, the regulations outline each part of the bidding and contracting process. These regulations usually describe the role of the board, duties of the governing agency, and procedures for business entities that participate in the bidding process.

In most countries, the board is the governing body charged with the oversight of procuring goods or services through government contracts. The board typically ensures an equitable process in awarding government contracts to business entities. In general, the board selects contracts that are favorable and cost-efficient.

Methods described in the procurement act normally outline how the governing board solicits businesses to participate in the bidding process. Some procurement acts call for announcements open to the public to bid on securing government contracts. Other regulations may require restricted bidding when there are a limited number of possible suppliers qualified in providing goods and services.

When there are exceptions to the standard methods of the bidding process, the procurement act typically details the solicitation methods. These exceptions usually limit access to the bidding process for a select group of businesses. The exceptions may include special requests for proposals and emergency purchases.

In most cases, business entities that have previously expressed an interest in providing specific goods or services receive requests for proposals (RFPs). The government may ask this select group of businesses to submit a proposal without soliciting other businesses. The board may apply the standard approval methods to award a contract from RFPs.

Typically, an emergency purchase is acceptable when there is an urgent need for goods and services. Circumstances beyond the government’s control that could affect public safety may qualify for procuring emergency services, such as a natural disaster. Including this exception in procurement regulations may give the governing board latitude for providing goods or services to the public. Preserving their quality of life overrides the length of time it takes to complete the standard bidding process.

Most procurement regulations may describe the functions and responsibilities of the government agency that executes the contract with a business entity. Agency personnel usually administer the payment and provision methods required for awarded contracts. The government agency may also ensure that business entities adhere to the procurement regulations when supplying goods and services.

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