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Tuesday, 28 April 2015

Public Sector and Private Sector Procurement: Definition and Differences.


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E-procurement is one of the pioneer techniques that are using for procurement through online. It is gradually increasing worldwide and replacing the conventional procurement method.
As E-Procurement process is growing, many technical terms is repeatedly used over internet and other electronic means to describe the details of E-Procurement. If we classified procurement broadly then we can easily classified the E-Procurement in two terms- Public Sector Procurement and Private Sector Procurement.

Public Sector Procurement:-  "Public Sector Procurement" is the process of buying the services and products from suppliers to government authorities through the government portal.
In India there are many government portals who are managing the government's procurement process. In Public sector e Procurement is growing very rapidly. In India the public sector procurement is enhanced under the massive mission of "E-Governance" throughout the country.

Public Sector Procurement generally cover all the government public works and services by approx all the government departments. There might be some departments which are not included in the government public procurement like military services procurement due to it's sensitivity and confidentiality. It is also be remembered that in many cases there may be some restrictions by governments in terms of availability of any departments procurement. In India many departments like public health, nuclear energy and other important departments may have additional criteria to take part in procurement process.

Private Sector Procurement:-

Public Sector Procurement is the procurement process being conduct by the online portal owned by the private organization. This type of procurement is normally being conduct for delivering the goods and service to any private company or organization. The main focus of "Private Sector Procurement" is to emphasize the profitability.

Some Important Differences:-

Unlike in the public sector, where the emphasis is on providing effective and efficient services to the public, private sector procurement focuses primarily on profitability.

The other main difference is the procedure. Unlike procurement in the private sector, public sector procurement requires a bureaucratic procedure to be followed due to the nature of the institutions. A major characteristic of the public sector is the regulation of the procurement process by local, regional, national and international authorities.

Flexibility is another important difference between both the processes. Private sector procurement process is regarded more flexible and innovations friendly while public sector is very strict in terms of regulations and sometime it appears inflexible in many ways.

The other important difference is communication between both the ends. Private sector process is normally user friendly and generally has some features to communicate between the two ends easily while public sector is very rule based process to communicate each other and often it is very difficult to contact each other.

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