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U.S. Trade and Development Agency and George Washington University Announce New Partnership to Develop the Global Procurement Initiative

Thursday, August 1, 2013

(USTDA)  Designed to Foster Best-Value Determination and Life-Cycle Cost Analysis in Public Procurements

WASHINGTON, DC - The U.S. Trade and Development Agency (USTDA) and the George Washington University (GW) have signed a Memorandum of Understanding establishing a partnership to develop the Global Procurement Initiative: Understanding Best Value.

The Initiative is designed to share best practices in procurement with officials from emerging economies in order to foster fair and transparent procurement systems that utilize best-value determination and life-cycle cost analysis. Training activities will be tailored to decision makers responsible for procurement in high-technology infrastructure sectors such as energy, transportation and telecommunications.

Procurement policies in emerging markets often limit competition by relying upon low-cost as the determining factor for award, failing to consider the benefits that can be gained from high-quality products and services that include warranties, maintenance agreements and reliable customer service. The Global Procurement Initiative: Understanding Best Value will improve procurement officers' abilities to make better informed decisions that take into account all relevant costs of goods and services over their entire lifecycle. The Initiative will improve the transparency and professionalization of the procurement workforce, opening the door for increased competition in international tenders.

"Low-cost procurement methods limit the opportunities for U.S. companies to compete in emerging markets," said USTDA Director Leocadia I. Zak. "Procurement systems that utilize a 'best-value' determination will help to level the playing field for high-quality, high-value goods and services provided by U.S. companies.

"A predominant focus on low-cost procurement methods often leads countries to acquire goods and services that fail to meet their long-term objectives over the life of the investment. A more sophisticated analysis of the total cost of ownership can lead to smarter, longer-term investments with overall savings to our partners overseas."

As a first step, USTDA has already incorporated life-cycle cost assessments into the economic analysis conducted for all of its feasibility study and technical assistance projects.

"The George Washington University has made a commitment to preparing students for an increasingly globalized society," said Law School Interim Dean Gregory E. Maggs. "In keeping with this value, we are very pleased to partner with the USTDA to promote best practices in government procurement. Drawing on the knowledge and experience of GW Law School's Government Procurement Law Program, the Global Procurement Initiative will be a resource for countries with emerging economies, providing information and resources to help them make optimal use of spending on public contracts to obtain the best value for their citizens."

The Initiative's curriculum will be guided by the internationally recognized faculty of GW's Government Procurement Law Program, led by Associate Dean Daniel I. Gordon.

Taking into account the importance of multilateral bank financing in developing and middle-income countries, the Initiative will seek opportunities wherever possible for collaboration with the major development banks, including the World Bank, the Asian Development Bank, the Inter-American Development Bank, the African Development Bank, and the European Bank for Reconstruction and Development.

Director Zak said, "The involvement of the major financiers for development is crucial to the success of this program. The value of their expertise on best procurement practices and the importance of their central role in driving emerging market public works cannot be overstated."