Government procurement is tightly tied to trade, investment and competition within and outside national frontiers of any nation. Thus, government purchases of goods and services should not depend on production point, point of rendering the service or suppliers foreign affiliations. The move to clear restrictions was ignited by the realization that some economies placed restrictions on goods and services government procurements for variety of reasons. Because of limited domestic service industries, some economies do so to encourage and promote domestic industries.
Because of economic tensions, developed world view a level playing ground at international level as where least developed or developing nations have limited opportunities to expand their industries. In the same tone, some nations argue that regulations on government procurement hinters their ability to address non trade concerns such as human right issues, environmental issues and ecolabbelling aspects (Burt, Dobler, Starling, 2002, p. 47). To cite an example, if government sets labor standards, it may decide to discourage violation of human rights by making its purchases from firms that take into account and meet the stipulated standards.
In this case, if government procurement laws eliminate the government’s discretion, environmental protection, labor standards and other considerations are bound to fail. If government procurement is closely considered, then it can be blended the meaning or service as a global sourcing, stating a global supply management. Such supply managements operation view focuses on utilization and identification of foreign suppliers, with a cute consideration of potential benefits arising from a more integrated and strategic approach.
Global sourcing of today’s world should realize and recognize the intensifying global competition. In developing sound government procurement sourcing, nations have welcomed industry practice and academic research in the search for international expansion, efficiency and resource. Since several nations have had own and special restrictions against some government procurements, two perspectives regarding international supplies have been discovered (Burt, Dobler, Starling, 2002, p. 103).
For one, government sourcing can be said to be the way through which government purchases from different foreign suppliers. On the other hand government procurement can be an all dominant business function resembling market developments that have been bypassed with time. It is then generally perceived that through supply management, government procurement should be the integral part of a nations global avenue driving it towards leveraging own and unique competencies and thus benefiting from locational advantages.
Diversified and well coordinated government procurement scheme impacts benefits resulting from competitive advantage. It is a way through which various governments can interact with one another in social, economic and political beacons of life. Internalization of supply management ensure high quality, reduces unit prices, introduce competition to home based suppliers and also gains better access to product technology and process technology.
When the procurement process f any nation is stabilized through internationalization, the economy can very well mange purchasing alliances, strengthen supplier development, strengthen innovative power to a nation and ensures modularization and standardization of items within a nation. Due to the fact that government procurement is diverse and involving, the level of complexity in the market area should be controlled by collective bodies, working towards same goal and objectives (Palmer, 1988, p. 17).