Government procurement, also known as government purchasing, is the procurement of goods and services by government agencies. This is to say, government agencies are soliciting the public business sector for the goods and services they provide. This is a very formal process that is required by law, in which government agencies issue bid proposals and seek responses from companies. Responses are accepted until the closing date and the lowest bidder is awarded the contract. This is a very standard process across the United States and among most agencies, but it is important to fully understand the detailed processes of each agency if you intend on doing business with them.
Government procurement in the United States is big business. Well, to call it
big business might be an understatement considering it accounts for about $7
trillion annually, and comprises 10 percent to 15 percent of GDP in the U.S.
State procurement also contributes significantly to the economy. Large states like California, New York and Texas have enormous budgets, well into the tens of millions, for government purchasing. City and county departments are also large buyers of goods and services, with more of an emphasis on specialized products and services.