Transparency in government procurement

Company information

Goods and services acquired by governments account for about 15 percent of global gross domestic product (GDP).  In many cases, the government is the largest purchaser of goods and services.  There are some international rules in place for government procurement - most notably, 37 countries, including the United States, Japan and European Communities, have signed onto the World Trade Organization's Agreement on Government Procurement (GPA), which sets standards for transparency and non-discriminatory treatment for foreign suppliers.  New members of the European Union automatically become subject to the GPA.  However, the procurement process in many countries lacks transparency and remains closed to foreign competition.  Some vital countries - including China, India, Brazil and much of the developing world - are not subject to the GPA.  The lack of transparency that exists can sometimes lead a government to favor inefficient local companies, while discriminating against foreign suppliers.  Closed and/or opaque procurement systems can encourage corruption and waste.

HP's position

	•	HP believes that the successful negotiation of a comprehensive agreement on transparency in government procurement in the current round of World Trade Organization (WTO) negotiations would be a significant step forward.  Such an agreement should apply to all public sector procurement opportunities of goods and services as well as a broad range of investment, contractual, and financing arrangements, and should be binding on a full range of central and local government entities.
	•	HP backs the negotiation of a comprehensive chapter on government procurement in negotiations for free trade agreements (FTA) and in bilateral negotiations, which must apply to procurement by all central and local government bodies.
	•	At a minimum, HP supports the following provisions in all future agreements on transparency in government procurement: • Governments must provide timely public notice to all bidders of future procurement opportunities, and should designate a minimum of 60 days from publication to the proposed closing date for submissions. • Notices must conform to broad, internationally-recognized standards and must not be tailored in any way to discriminate for or against any particular supplier. • Procurement notices should set forth objective criteria by which bids will be evaluated, and contracts should be awarded to the bidder that supplies the best value based on these criteria. • Procurement notices and awards should be published internationally • Bidding documents and tenders should be made available publicly. • Government contractors should provide unsuccessful bidders recourse to pursue an impartial, domestic review of compliance with the bid process, through a regularized procedure. • Protection of intellectual property rights must be maintained throughout the procurement process.  Countries must agree to protect company information by designating technical data as proprietary and confidential.

	Impact on HP

HP is substantially vested in foreign markets - Over 60 percent of HP's revenue is derived from outside the United States.  In some countries, much of HP's business is transacted with sovereign governments.  Government procurement within those closed systems not subject to international agreements is estimated at around $287 billion.   An international commitment to transparency and a rules-based system for government procurement would open these markets to foreign competition, where HP is well-positioned to compete.  Additionally, the methods by which governments procure products set an example for the rest of a nation's economy.  Greater transparency leads to increased competition in local economies and taxpayer savings.  Transparency also encourages foreign investment and can help to discourage capital outflows.