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What is a Procurement Law?

By Susan Zeller Dunn
Updated May 16, 2024
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A procurement law provides for legal oversight of purchasing transactions between the government and private business. It is designed to make sure that public money is spent carefully and wisely. Procurement laws are also in place to ensure that government contracts are not awarded for inappropriate reasons. These laws guarantee that all businesses are given a fair opportunity, based solely upon merit, to be awarded a government contract.

US federal procurement law is derived from two statutes: the Federal Property and Administrative Services Act of 1949 and the Armed Services Procurement Act of 1947. These statutes consolidated and organized a number of individual procurement laws. They also served as the basis for two sets of federal regulations addressing procurement law, the Federal Procurement Regulations (FPR) and the Armed Services Procurement Regulations (ASPR). The FPR provided for general oversight of governmental agencies and their contractors, while the ASPR dealt exclusively with military procurement. Together, the FPR and the ASPR were an enormous, multi-volume collection of public procurement law guidelines which contained many exceptions and alternate procedures.

Congress addressed the problems with the FPR and ASPR in 1979 with the passage of the Office of Federal Procurement Policy Act Amendments. These amendments required the federal government to develop a single simplified set of procurement regulations to cover all government agencies including the military. In response to this directive, the Federal Acquisition Regulations (FAR) were created and are set forth in Title 48 of the Code of Federal Regulations. FAR does not change existing law but does communicate it in a clearer, much simpler fashion. As such, the regulations are arranged by subject matter and the contradictory language has been removed.

FAR is central to US federal procurement law. Its individual sections are updated regularly by the designated federal department. Changes to FAR, brought about by changes in actual federal legislation, are announced in Federal Acquisition Circulars.

State procurement law and local procurement ordinances operate under a similar system as the federal government. They are not as complex, however, and usually require fewer procedures. Nonetheless, state statutes, regulations, and local ordinances help to remove fraud, waste and corruption from public procurement transactions.

Internationally, the key procurement law is the World Trade Organization’s Agreement on Government Procurement. This treaty is necessary because government procurement plays a significant role in the global economy. Government procurement represents at least 20% of the GDP amongst developed nations.

Certification and advanced training in procurement law is available through the National Institute of Governmental Purchasing. Courses are also available through the Federal Acquisition Institute. There is a graduate LLM program for the procurement lawyer at The George Washington University Law School.

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