Outsourcing Procurement in the Public Sector

Abstract

This publication explores the option of outsourcing the procurement function to specialized agencies. Through selected case studies, it discusses the various benefits and issues surrounding two major approaches, namely a market-based system and a centralized procurement agency model. In analyzing these approaches, the report also looks at the broader issue of linkage with development impacts, particularly on the potential of procurement agents to improve project outcomes and overall development effectiveness. Finally, it discusses some basic considerations in successfully developing and implementing the legal, regulatory, and institutional frameworks for a procurement agent system.