COVID-19: Lessons Learned in Public Procurement. Time for a New Normal?

Abstract

The COVID-19 crisis upended markets and assumptions in public procurement, and posed an almost existential threat to traditional procurement systems. Seismic changes in economic relationships – governments were no longer monopsonists, government officials failed as economic intermediaries between suppliers and the public, and supplies that were traditionally treated as private (such as medical equipment) suddenly became “public” goods under worldwide demand. Traditional trade rules were rendered irrelevant, as the goal was no longer simply to open individual procurements but rather to open borders to intense global demand. Although the disruption was revolutionary, ironically the solution is to return to first principles of transparency and integrity to preserve governments’ fragile legitimacy in a crisis. The press of the pandemic also showed the need for governments to reduce transaction costs by buying cooperatively and effectively across borders. These lessons highlight the need (and the opportunity) to rethink public procurement systems, to craft a “new normal” against the dark background of a worldwide pandemic.

Keywords: European Union, United States of America, Public sector, Principe of equal treatment, Principle of transparency, Public procurement, COVID-19, Pharmaceutical, Healthcare, Distribution

JEL Classification: H57