Public Purchasing in a Global Economy: An American Perspective Professor Steven L. Schooner

US Public Procurement: Salient Features Federal (Central) – State (Subcentral) Divide Defense Dominated (2/3) Services ($$$), Supplies (goods) ($$), and construction (works) ($) Cradle-to-grave (includes K performance) Heavily regulated, with emphasis on transparency, corruption control, accountability Competition (market) based, but Flexible (negotiation, cost-reimbursement contracting) Historic wealth distribution/preference regime for SME’s, domestic industry Constant reform/change

US Public Procurement Current Challenges Budgeting (and contracting) instability = uncertainty Anti-contractor sentiment (largely uninformed) in legislature, media, public Capacity – acquisition workforce – experiencing critical shortages (in personnel, training, experience, support) after two decades of under-investment and failed succession planning

Globalization Free trade facilitates the free flow of Capital Multinational markets Multinational firms Global supply chain Free trade facilitates the free flow of Capital Information Technology Personnel

Harmonization of international procurement norms? WTO GPA All eyes on China! EU OECD UN-UNCITRAL Model Law Bilateral, regional agreements

US-Global Issues Inconsistent Policies: Free Trade Proponent in Conflict with Web of Preferences for Domestic Manufacture SME’s (small, women, minority, veteran, high unemployment zones, indigenous (Alaskan, Indian), etc. Corruption Control: Complex, Voluminous Regulation False Claims Act (FCA) Foreign Corrupt Practices Act (FCPA) Security Counterfeit parts CIFIUS: Council on Foreign Investment in the U.S.

Global Observations (BRIC’s and beyond) Models Are Plentiful – Accordingly, Drafting Laws, Regulations & Policies is Easy Implementation is the Challenge Difficult, Time Consuming, Labor Intensive, Expensive The China Example Human Capital: Critical/Scarce Resource Government actors lack fundamental business skills (market research, negotiation, etc.)

Supplemental Information

Online Resources Acquisition Central – U.S. Government “Single Point of Entry” – www.acquisition.gov Federal Acquisition Regulation [FAR] – Uniform Regulation (and guidance) – http://acquisition.gov/far/ USA Spending – data (for contracts and grants) – http://usaspending.gov/ Government Procurement Law at GW –www.law.gwu.edu/Academics/FocusAreas/ govcon

Additional Reading (SSRN, JEL H57) The WTO’s Revised Government Procurement Agreement - An Important Milestone Toward Greater Market Access and Transparency in Global Public Procurement Markets, http://ssrn.com/abstract=1984216 Public Procurement: Focus on People, Value for Money and Systemic Integrity, Not Protectionism, http://ssrn.com/abstract=1356170 Tempering 'Buy American' in the Recovery Act - Steering Clear of a Trade War, http://ssrn.com/abstract=1358624 Desiderata: Objectives for a System of Government Contract Law, http://ssrn.com/abstract=304620

Capacity Building Human Capital Government Personnel, Resources Policy makers Legal, regulatory, guidance Requirements (needs) Market research Contracts drafting Attorneys (counsel) Negotiators Contract managers Contract support (CO, COR, COTR, QAR, etc.) Oversight Auditors Inspectors General Challenge regimes (judges?) Training External resources Industry Open Media Private Attorneys General (whistle-blowers) Capacity Building Human Capital

Capacity Building: Human Capital Identification, recruiting, deployment Education and experience Independence Incentives (compensation) and disincentives Professional Development, retention Professional standards Performance Ethics

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