Governments procure substantial amounts of goods and services to implement policies and deliver public services. This process entails using public funds to purchase goods, services and works by governments and state-owned enterprises. It is crucial for countries to prioritise efficiency, effectiveness and value for money in public procurement, as these factors directly affect citizens' quality of life.

Public procurement plays a critical role in the delivery of goods, services and works. Having transparent and innovative procedures is key to ensuring efficient, inclusive and cost-effective public procurement, as well as mitigating corruption risks and inefficient practices. The use of information and communication technology (ICT) throughout all stages of public procurement has several benefits, such as increasing transparency, facilitating the monitoring and evaluation of public procurement spending, improving digital access to public tenders, increasing outreach and competition, and allowing irregularities to be detected more easily (OECD, 2020). It can also help to save money and time by reducing administrative burdens and potential mistakes during the various stages of the public procurement cycle.

As public procurement processes become more strategic about achieving governments’ social and economic goals, professionals in the field need to acquire specific skills and competencies. It is thus in the best interest of governments to provide specialised capacity building and development programmes for public procurement officials. In fact, most inefficiencies in public procurement such as delays, and overpricing are related to the capacity of the public procurement workforce. These inefficiencies cause estimated losses in the Latin America and Caribbean (LAC) region of an average of around 1.4% of GDP annually (Muñoz Miranda et al., 2022). Professionalising this workforce has become a top priority in public procurement reforms; at its most basic, creating an environment that enables such professionalism means cultivating the values and principles of a fair and transparent public procurement system (OECD, 2023). Consequently, the starting point for any procurement system must be a team of professionals who value the public good, the rule of law and transparency (Cruz and De Michele, 2022).

Beyond saving costs and promoting operational efficiency, public procurement is strategically placed to promote social objectives such as sustainability, inclusion, community development and environmental responsibility. These objectives are promoted by a range of actions, including mechanisms to foster innovation, providing conditions for small and medium-sized enterprises (SMEs) to compete on equal footing, and favouring companies mindful of environmental sustainability and gender equality criteria. Although the use of public procurement as a strategic policy instrument is not a recent phenomenon, it is being increasingly adopted by public administrations in LAC countries (Delgado et al., 2023). Since governments define the rules for public procurement processes, they can also establish regulations that consider social objectives while tendering, awarding a bid or evaluating projects.

On average across Latin American and Caribbean (LAC) countries, 17.4% of total government expenditures are executed through public procurement systems (see 7.1 Size of public procurement), which shows the key role that public procurement plays in countries’ economies. This makes it of the highest importance that public procurement systems are aligned and build synergies with other areas of public governance. For instance, it is good practice to ensure that public finance management (such as budget planning and human resources allocation) is integrated into the procurement processes. Similarly, public procurement policies should include risk management strategies to identify potential risks in processes and projects. Identifying risks early allows governments to be prepared to respond appropriately if they do materialise. The need for these risk strategies was evident during the COVID-19 crisis, which led to increased demand for goods and services and disruptions in supply chains. These pushed public procurement systems to introduce emergency procurement measures, such as direct contracting and expedited bidding procedures, among other measures. Public procurement processes are also relevant to public infrastructure contracting, given the size of expenditure in the sector. Having public procurement frameworks in place for infrastructure contracts and maintaining well-defined procedures can help reduce the risks of corruption and inefficiencies.