Rethinking public-sector contract negotiations to secure value for taxpayers

There is tremendous value associated with public-sector procurement, given that departments and agencies purchase goods and services along a wide spectrum of industries, including defense, education, healthcare, and infrastructure. Across the globe, annual public-sector purchasing amounts to more than $9.5 trillion of goods and services. With so much value at stake, it would make sense for public-sector organizations to deploy similar negotiating and contracting practices as the private sector, where companies have developed procurement and contracting strategies to protect their bottom lines. Yet our experience shows that while using similar practices as the private sector would be beneficial, it’s rare—and at times difficult—for public-sector organizations to do so. When they are able to utilize those strategies for major programs and systems contracts—including, but not limited to, infrastructure, large IT programs, and large service contracts—procurement departments see 20 to 40 percent savings on overall contracts, regardless of size.
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