Page 21 - Azerbaijan State University of Economics

Philipp Kunz, Richard Pospíšil, Ondřej Kročil: Economic Benefits of The Sustainable Public
Procurement Law

dollars (Krause, 2014). As such, the introduction of strict laws governing against
these acts, governments, companies, households, and citizens enhances significant
savings. In addition to the above, public procurement also ensures environmental
sustainability of projects. Notably, public procurement laws, policies, and practices
outline the do and don'ts during service provision or delivery of goods. In the
process, it guides against environmental exploitation (The National Agency for
Public Procurement, 2015). Precisely, public procurement is mainly essential in
protecting the environment against water wastage, greenhouse gas emissions,
deforestation, and pollution.

Moreover, public procurement has many significant positive impacts on business
and social development. Precisely, public procurement has substantial consequences
on various business aspects and sectors of the economy including outsourcing, social
and environmental considerations, competition, knowledge management, and risk-
taking. First of all, regarding outsourcing, public procurement lowers staff costs.
Specifically, it reduces the number of employees by creating a clear line of
responsibilities and enhancing administration and evaluation processes. About,
social considerations, public procurement through its regulations prevents child-
workforce and ensures that the working conditions are favourable for the staff. Also,
public procurement exerts pressure on the private sector by setting a good example
of adherence to essential environmental regulations. To match up with public
procurement, private organisational units observe how it prevents ecological
destruction and copy. Concerning, competition, public procurement processes offer
better prices and solutions; this is attributed to their nature of efficiency and lawful
acts that prevent extra costs incurred due to lack of transparency and corruption.
Moreover, due to the well-outlined and defined public procurement laws, their
processes are better managed, and rates are appropriate. Further, public procurement
platform allows for at-the-job learning from one another since public agencies do
not compete. As a result, training costs are reduced as opposed to the private sector.
In addition, public procurement processes eliminate unnecessary risks by ensuring
that solutions are well chosen. Consequently, there is little if no gambling with the
taxpayers' money and stability is achieved in the provision of services and goods
(Lindskog et al. n.d.). Other than the impacts mentioned above, public procurement
processes also benefit Small and Medium Enterprises (SMEs) and clients and end
users. It gives particular focus on SMEs and considers client’s needs and
requirements in the form of amendments even after the Request for Proposals (RFP)
has been published.

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