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Public Procurement Statistics – 25 Key Figures
- Public procurement utilizes taxpayer money for essential services, but efficiency can be challenging.
- Government procurement carries a wide range of goods and services acquisition.
- Public procurement has a wide impact that goes beyond the economy.
While driving to work you find that the old and cracked road you’ve been grumbling about is under construction. They’re finally fixing something that has bugged you for many years! Huzzah!
These are the kinds of outcomes of public procurement or government procurement. As their funding is from the people, it is then supposed to serve the interests of the people.
Public procurement or government procurement statistical data is tricky to find so we’ve compiled the most significant ones from over the years, with the latest available ones in the latter part of this article.
Now, let’s take a statistical journey to get to know public procurement and see if it really takes that long to fix the road you take to work.
25 Key Figures for Public Procurement That You Should Know About
Here are 25 key public procurement figures essential to this topic. Don’t keep yourself waiting and read on!
1. Global procurement is estimated to be valued at 13 trillion annually
According to Spend Network, government procurement constitutes a significant market for international business. Global procurement is estimated at 13 trillion annually, which is no surprise considering the role of public procurement in the community.
2. Overall, public procurement represents on average 13% to 20% of GDP globally
Public or government procurement has a significant power to sway the broader economic landscape. This comes as no surprise considering public procurement represents on average 13% to 20% of GDP across countries worldwide, as reported by Webinarcare.
3. Global expenditure in procurement is estimated at nearly 9.5 trillion US dollars per annum
Webinarcare states that global expenditure in procurement is estimated at nearly 9.5 trillion US dollars per annum. Considering public procurement or government procurement carries the responsibility of providing for a whole nation, it reaches immense expenses.
4. 10-25% of a public contract’s overall value may be lost due to corruption
Already knowing the global public procurement expenditure per annum gives us a better picture of what exactly gets lost. According to Webinarcare, 10-25% of a public contract’s overall value may be lost due to corruption. 10% of 9.5 trillion is 950 billion.
To put this to scale, according to the United Nations Food and Agriculture Organization (FAO), an annual investment of around $267 billion is needed to achieve Zero Hunger by 2030. This means that it would take around 1,602 billion.
The amount of money being corrupted could not only eliminate world hunger, but it could eliminate world hunger thrice over and then some!
5. SME participation rate in public procurement is 18% on average
According to the World Bank, the firms’ participation rate in public procurement is 18%, ranging from 12% in South Asia to 22% in Sub-Saharan Africa. This is across 150 countries where Enterprise Surveys data are available.
SME’s are small and midsize enterprises. Their participation in public procurement would mean promoting economic growth and inclusive and sustainable development. Unfortunately, there are quite a few challenges about this.
Some of these challenges are the effort needed for bid preparation, the length of the process after bid submission, and corruption among others.
6. 21% of firms state that similar firms typically make informal payments or give gifts to secure government contracts
The World Bank reports that globally, 21% of firms that secured or attempted to secure at least one government contract state that similar firms commonly give informal payments or gifts to secure government contracts. This means that corruption is also a big obstacle in the journey to inclusive and sustainable development.
7. Approximately 33% of local governments in the U.S. have adopted an e-procurement system
E-procurement was always going to be an eventual occurrence in our technologically driven world. According to the Multidisciplinary Digital Publishing Institute, approximately 33% of local governments in the U.S. have adopted an e-procurement system.
8. Public Procurement accounts for approximately 10%–15% of a country’s gross domestic product (GDP)
Public procurement has a wide range of goods and services within its duties and these goods and services vary across all levels of government for the provision of critical public services.
Purchases are made using taxpayer revenue and according to the Multidisciplinary Digital Publishing Institute, Public Procurement accounts for approximately 10%–15% of a country’s gross domestic product (GDP).
9. Over $10 trillion or 77% of the total is spent by 16 countries
According to Spend Network, 77% of the public procurement total is spent by only 16 countries. The total is over $10 trillion. The countries in question are China, the U.S.A., Japan, Germany, India, France, the United Kingdom, Indonesia, Canada, Italy, South Korea, Australia, Brazil, the Netherlands, Russia, and Spain.
10. China is by far the largest procurer at $4.2 trillion
China is the largest procurer when it comes to public procurement according to Spend Network at $4.2 trillion. Note that this is according to the latest compilation by Spend Network, which was in the year 2020.
11. The US spends $1.8 trillion for Public Procurement
The US comes in second with a public procurement spend of $1.8 trillion according to Spend Network. On top of that, around 14 countries spend between $100 billion and $1 trillion annually.
From highest to lowest as of the latest known data which is from 2020, these are Japan, Germany, India, France, the United Kingdom, Indonesia, Canada, Italy, South Korea, Australia, Brazil, the Netherlands, Russia, and Spain.
12. The amount of value opened up by open data is $362.8bn USD per year. This figure represents 2.81% of the total estimated value of public procurement spend – Spend Network
Open data in public procurement is set up to prioritize transparency and accountability. Now, according to Spend Network, the amount of value opened up by open data is $362.8 billion per year. This figure represents 2.81% of the total estimated value of public procurement spend.
13. This figure of $362.8bn represents a baseline
Note that the value opened up by open data according to Spend Network of $362.8bn represents a baseline. Many more contract notices are openly published worldwide, however their worth still needs to be determined.
14. The participation rate of private firms in public procurement is 18%
With a participation rate of 18%, private firms play a significant role in public procurement, according to the World Bank. This number highlights the substantial involvement of private sector entities in providing goods and services. This participation fosters competition, innovation, and efficiency in the procurement process, which benefits both public entities and taxpayers.
15. Large firms are 12% more likely to participate in public procurement than smaller firms
According to the World Bank, larger firms have a 12% higher likelihood of engaging in public procurement compared to smaller counterparts. This is because larger companies have better resources, capacity, and experience than smaller ones. They are also more likely to have corrupt dealings to secure their place within the government procurement space.
16. The participation rate of private firms in public procurement is below 20% in 60% of countries
The World Bank states that in 60% of firms surveyed, private firms who participate in public procurement are below 20%.
According to this data, private sector entities have limited involvement in public procurement. This could be due to things such as regulatory barriers, competition dynamics, and access to information.
17. Out of 60% of sectors at least 10% of firms from said sectors have attempted or secured a government contract
All sectors are participated in significantly at the global level. According to the World Bank, out of 60% of sectors, at least 10% of firms from said sectors have attempted or secured a government contract at least 12 months before the interview.
18. SMEs are statistically less likely to participate in public procurement than larger firms in 36% of countries
The World Bank found that SMEs or small and midsize enterprises are statistically less likely to participate in public procurement than larger firms in 36% of countries. This was after taking into account differences due to the age of the firm and the sector at the country level.
19. Open and completed projects jumped at 26.5% in 2023 from the year before
As a result of an increase in grant-funded initiatives, public agencies are exerting more effort in public procurement. This is evident in a 26.5% surge in both ongoing and finalized projects run through EUNA Procure in 2023 as opposed to the preceding year.
20. 2023 saw a 47.3% increase in vendor engagement
Procurement departments within public procurement especially are taking a serious interest in vendor engagement. 2023, according to EUNA Procure’s 2023 State of Public Sourcing report, saw a 47.3% increase from 2022 when it comes to invitations being sent out for vendor engagement. That is 6.5 million invitations!
However, the unfortunate reality is that these invitations only resulted in a 3.7% rise in proposals. The lesson here is that engagement is not always equal to bids.
21. Roughly 44% of respondents now use eProcurement software alongside an ERP, and 65% said they currently use a mix of legacy and current technology
EUNA Procure reports that roughly 44% of respondents now use eProcurement software alongside an ERP, and 65% said they currently use a mix of legacy and current technology.
22. 61% of survey respondents said they have initiatives for either environmental sustainability, vendor diversity, or both
EUNA Procure’s 2023 State of Public Sourcing report says that 61% of survey respondents said they have initiatives for environmental sustainability, vendor diversity, or both.
And that’s not all that they have initiatives for as they also have plans for higher education (75%), transportation (73%), and state/provincial/federal government (68%) leading the way.
23. 16% of Euna Procure client agencies now incorporate DBE-related fields into their projects
A Disadvantaged Business Enterprise or DBE’s objective is to provide small businesses owned by socially and economically disadvantaged individuals a fair opportunity to compete for federally funded transportation contracts.
According to EUNA Procure’s 2023 State of Public Sourcing report, 16% of Euna Procure client agencies now incorporate DBE-related fields into their projects. This is a 163% increase from 2021, according to EUNA Procure’s database.
A louder call for these initiatives has also resulted in more proposals from disadvantaged vendors. The jump in DBE-submitted proposals from last year was 38%.
24. Construction made up 14.8% of all projects run through Euna Procure in 2023
According to EUNA Procure’s 2023 State of Public Sourcing report, it was construction made up 14.8% of all projects run through Euna Procure in 2023. This is a 41.5% increase in construction projects compared to 2022. This will continue as infrastructures age and need maintenance.
However, part of this surge is due to the growing emphasis on enhancing climate change resilience in infrastructure planning as there is now more aim to mitigate catastrophic failures of vital infrastructure caused by extreme weather events.
25. Software initiatives made up 6.2% of total projects for 2023
Software initiatives made up 6.2% of total projects this year as found in the EUNA Procure 2023 State of Public Sourcing report. Total software project volume has also increased by 17.5% in 2023 as compared to 2022.
Here are the top four priorities, which are all key trends: cybersecurity, digital government services, workforce upskilling and modernization, and upgrading legacy technology.
What is Public Procurement?
Public procurement can be defined as the purchase of governments and state-owned enterprises of goods, services, and works. A good chunk of taxpayer money goes into public procurement as it is supposed to be for the services of the masses.
Of course, an unfortunate fact of life is that taxpayer money is rarely, if ever, handled well. What does this mean for public procurement? It means that it’s common for public procurement not to be as efficient as it could be.
There’s a variety of goods and services that public or government procurement acquire. These things can range from buying common goods like stationery, furniture, and foodstuffs to acquisition of complex items such as weapon systems. There are also large-scale infrastructure and urban development projects and commissioning of essential public services in the health and social care sector.
Why is Public Procurement Important?
Public procurement is for the public so it takes no stretch of the imagination to understand that it’s important. It’s used to maintain roads, build new buildings, and maintain or try to better the quality of life for the benefit of the public.
Public procurement is very much foundational for the kind of society we live in today. It is a substantial component of the overall economy and it can even be the most important source of revenue for certain sectors such as the health industry, research-related industries, and construction and transportation.
All of this means that public or government procurement has the potential to significantly affect the global supply chain. In recent years, with the rising significance of sustainability, public procurement has been recognized as a means for states to fulfill their human rights obligations and achieve sustainable government procurement.
So government procurement is tasked with a duty to ensure that suppliers help in the prevention of human rights abuses from happening within the value chains and the businesses that government departments or public authorities employ. They especially have to make sure that those carrying out service delivery to the general public are complying with human rights standards.
Recommendations for Public Procurement
As we all know government or public procurement has many flaws and has rampant corruption. We’ve seen the numbers and we know they’re big. The corruption that bleeds out government procurement budgets is immense and needs prevention. That’s why we’ve found some recommendations to help this cause.
Transparency is a priority in public or government procurement as there’s so much room for corruption and mishandling of ginormous funds taken from taxpayer’s money. With this said, it comes as no surprise that reforms are urgently needed.
It is heavily recommended for governments to publish open real-time and quality public procurement data. No information is too trivial either, whether it’s as basic as contract start and end dates as well as currency and contract values.
Standardizing this level of meticulousness in transparency would be of great value for public procurement. This is especially true with the help of special tools and processes to ensure data quality and completeness.
These would not only give businesses information on how to bid for a contract, which increases competition and value for money but it would hold governments and suppliers accountable for the spending of taxpayer money. Taxpayers should have the right and access to know if their taxes are well spent.
Public procurement emerges as a vital force shaping our society, and contributing to various sectors. Its impact extends beyond the economic realm, playing a crucial role in shaping the global supply chain and influencing sustainable practices.
Recognized as a tool for fulfilling human rights obligations, government procurement holds the responsibility of ensuring suppliers adhere to ethical standards and prevent human rights abuses within value chains.
It exemplifies a commitment to improving the quality of life for the public and reflects the evolving role of procurement in fostering a sustainable and socially responsible world if done right.
What is Public Procurement?
Public procurement can be defined as the purchase of governments and state-owned enterprises of goods, services, and works.
Are public procurement and government procurement the same?
Yes, public procurement and government procurement are the same thing.
Why is public procurement important to the economy?
Public procurement is important in the economy because it holds the money of the people to keep the interests of the people and holds a significant percentage of the global economy.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.