PUBLIC PURCHASING

Question 1

Special aspects of public purchasing…

Answer 1

• Economic limits (money)
• legal limits (public institutions must give company an appropriate amount of time to prepare an offer)
• quality control (are material of good quality, will they last)
• extraordinary dimensions
• transparency requirements (what do they want to buy, what are the criterias for buying that)
• external and internal control

Question 2

Variety of contractual forms

Answer 2

Normal supply
International offer
Subcontracting
Framework agreements
Concession
Partnership

Question 3

Variety of assignment procedures

Answer 3

• Open procedures (any interested supply can submit a bid)
• Restricted procedures (only pre qualified suppliers)
• Negotiated procedures (direct negotiation to finalize terms and conditions)
• Partnership for innovation ( develop products/services not yet available on the market)
• Competitive tendering (competition among suppliers to secure a contract)

Question 4

Public good vs. Merit good vs. Private good

Answer 4

1. Public good: non-rival, non-excludable. The consumption of public good affect the ability of other people to consume it
   - Typically founded by taxes
2. Merit good: Goods beneficial for society but may be consumed by private market due to various reasons
   - Government often subsidizes or directly provides good
3. Private goods: excludable and rivalous. SUbject of market exchange. VAT

Question 5

What is the role of taxation and the system of public finance?

Answer 5

To assimilate revenue for the government
To redistribute wealth in society
Economic stabilization
funding public goals and services

Question 6

What is the role of the audit system and the enforcment / comliance issue?

Answer 6

Audit system: through examination and reviews of taxpayers financial recors and tax returns to asses compliance with tax laws and regulations
Enforcment compliance mechanism In order to induce cooperation
How to enforce it? penalties and fines, information exchange, taxpayers education, risk assesment, litigation and legal action

Question 7

What are the factors influencing sale of services?

Answer 7

General economic compatibility
Technology
Professional skills
History of the system
Attitude of enterprise
Adequacy of legal conditions

Question 8

The special case of the transfer of rights

Answer 8

1. The right to do-the right not to do
2. The market for rights
3. The pricing of rights

Question 9

Legal aspects of public purchasing

Answer 9

• Competitive biding = competition for projects fairly
• Formation of contractual agreements
• Compliance with procurement law and regulations
  -Mechanism for dispute resolutions

Question 10

Which organizations are subject to legal regulations on public purchasing?

Answer 10

All governmental entities at all levels with all firms that want to formally sent goods and services to the government.

Question 11

What is the issue of contrasting interest between the public purchaser or private seller?

Answer 11

Both sides have diverging motivations:
Public purchaser: fair competition, quality and reliability, complience, social responsibility, value for money, transparency and accountability
Private seller: profit maximization, long term contracts, cost minimization, negotiation leverage
Points of conflict: pricing, contract terms, transparency, regulatory compliance, accountability