This, precisely, is the problem with public procurement: people are too acquainted with the purchased items. They tend to confuse their daily, household-type, decisions with the processes and considerations, which should permeate governmental decision-making. They label perfectly legitimate decisions as "corrupt" – and totally corrupt procedures as "legal" or merely "legitimate", because this is what was decreed by the statal mechanisms, or because "this is the law".
Procurement is divided to defence and non-defence spending. In both these categories – but, especially in the former – there are grave, well founded, concerns that things might not be all what they seem to be.
Government – from India's to Sweden's to Belgium's – fell because of procurement scandals, which involved bribes paid by manufacturers or service providers either to individual in the service of the state or to political parties. Other, lesser cases, litter the press daily. In the last few years only, the burgeoning defence sector in Israel saw two such big scandals: the developer of Israel's missiles was involved in one (and currently is serving a jail sentence) and Israel's military attaché to Washington was implicated – though, never convicted – in yet another.
But the picture is not that grim. Most governments in the West succeeded in reigning in and fully controlling this particular budget item. In the USA, this part of the budget remained constant in the last 35 (!) years at 20% of the GDP.
There are many problems with public procurement. It is an obscure area of state activity, agreed upon in "customized" tenders and in dark rooms through a series of undisclosed agreements. At least, this is the public image of these expenditures.
The truth is completely different.
True, some ministers use public money to build their private "empires". It could be a private business empire, catering to the financial future of the minister, his cronies and his relatives. These two plagues – cronyism and nepotism – haunt public procurement. The spectre of government official using public money to benefit their political allies or their family members – haunts public imagination and provokes public indignation.
Then, there are problems of plain corruption: bribes or commissions paid to decision makers in return for winning tenders or awarding of economic benefits financed by the public money. Again, sometimes these moneys end in secret bank accounts in Switzerland or in Luxembourg. At other times, they finance political activities of political parties. This was rampantly abundant in Italy and has its place in France. The USA, which was considered to be immune from such behaviours – has proven to be less so, lately, with the Bill Clinton alleged election-financing transgressions.
But, these, with all due respect to "clean hands" operations and principles, are not the main problems of public procurement.
The first order problem is the allocation of scarce resources. In other words, prioritising. The needs are enormous and ever growing. The US government purchases hundreds of thousands of separate items from outside suppliers. Just the list of these goods – not to mention their technical specifications and the documentation, which accompanies the transactions – occupies tens of thick volumes. Supercomputers are used to manage all these – and, even so, it is getting way out of hand. How to allocate ever-scarcer resources amongst these items is a daunting – close to impossible – task. It also, of course, has a political dimension. A procurement decision reflects a political preference and priority. But the decision itself is not always motivated by rational – let alone noble – arguments. More often, it is the by product and end result of lobbying, political hand bending and extortionist muscle. This raises a lot of hackles among those who feel that were kept out of the pork barrel. They feel underprivileged and discriminated against. They fight back and the whole system finds itself in a quagmire, a nightmare of conflicting interests. Last year, the whole budget in the USA was stuck – not approved by Congress – because of these reactions and counter-reactions.