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New Whitepaper: Government Procurement

October 4, 2013
Categories: Global Supply Chains, Government Procurement, Intellectual Property

Download our New Whitepaper: Government Procurement Driving Responsible Business Practices

The purchasing power of governments throughout the world is mind-boggling.

So are the risks to public safety and national defense and security when government supply chains are contaminated by corrupt practices or counterfeit products and other forms of intellectual property theft.

These challenging cases are on the rise in government procurement. The stakes are high, and the consequences can be considerable, given the public nature of the purchases and any follow-on consumption; the relatively large scale of most public purchases; and the sensitive areas in which the supply often takes place, such as defense and health.

As documented in our newly published white paper, “Government Procurement: Driving Responsible Business Practices,” government agencies can be a powerful force in improving the way companies and their supply chain partners work together to prevent corruption and protect intellectual property (IP).

  • In the United States, for instance, the Federal Acquisition Regulation (FAR) governing federal procurements contains hundreds of contract clauses implementing federal statutes and regulations to encourage responsible, ethical business practices among their own contractors as well as their suppliers.
  • The EU Public Procurement Directive, 2004/18/EC, requires Member States to adopt laws that exclude from participation in government procurement any bidder that has been convicted of corruption or fraud and permits them to exclude bidders for “grave professional misconduct.”
  • Under California procurement law, a state contractor must “certify that it has appropriate systems and controls in place to ensure that State funds will not be used in the performance of this Contract for the acquisition, operation or maintenance of computer software in violation of copyright laws.”

Governments spend an estimated $4 trillion on procurement, amounting to 10-15 percent of GDP in most countries. The United States is the largest single purchaser — spending more than $537 billion in 2011 to purchase from tens of thousands of companies. One of the largest contractors, defense giant Lockheed Martin, in turn purchases from some 40,000 suppliers worldwide.

Some of the world’s best companies are already making strides to improve their supply chain management—recognizing the risks of corruption, IP theft and other illegal practices that come with operations in some countries where rule of law lags. The reason for these measures is to protect against legal ramifications as well as damage to profits and reputation that can be caused by misdeeds in their supply chain, even if company executives were unaware of them.

These types of improvements can bolster a company’s competitive edge in bidding for government contracts—offering greater reliability and lower risks down the line.

Learn more – download the whitepaper from CREATe. It’s a valuable resource for:

  • Executives in companies doing business with government agencies around the world.
  • Legal teams concerned about anti-corruption compliance and IP theft in the form of counterfeits, piracy and trade secret theft.
  • Government officials working in procurement and supply chain management.
  • Risk and compliance officers concerned about new laws and legislation.