Government procurement pays hefty prices

A survey conducted by the Chinese Academy of Social Sciences has found that up to 80 percent of the prices in government procurement are higher than average market prices. It is indeed thought-provoking that people would “choose the expensive over the right” after three decades of reform and opening up, says an article in People’s Daily. Excerpts:

Since it is not easy to figure out how much money has been misused or wasted, it would be even harder for local governmental departments to voluntarily make public their government purchases. Potential behind-the-scene deals might be an important reason why the commodities they purchase are so much more expensive than those in the regular market.

It is stipulated in the Government Procurement Law that government procurement should follow the principle of openness and transparency, but the regulation has not been well enforced. The ultimate reason for transparency is to guarantee the people’s rights to know detailed information of government purchases and relevant public supervision, which definitely requires a well-established system, specific standards and convenient channels.

Purchases at high prices are sometimes due to both government departments and some suppliers. To fundamentally curb the bad custom, a well-functioning interaction between the government and market needs to be built on the basis of transparency.

The operation of government procurement as a specific institutional arrangement relies on the evolution and perfection of the entire fundamental social system. Since the government procurement system was established in China for only about a decade, it still needs a long time to be improved. Perhaps information disclosure would be a breakthrough to eliminate the current corrupt practice.