Abstract:
The process of acquiring goods and services, or procurement, accounts for a sizeable amount of development and ongoing budgetary expenditures in many nations. National governments have decided to set up the necessary legal and regulatory frameworks, systems, and procedures to enable the function to be carried out in a way that would support good governance and guarantee accountability to the public because it has grown in importance. Laws, rules, and organizations governing procurement are in place in many nations. After the laws were put into effect, several issues surfaced, and attempts are being made to resolve them. For instance, in the United Republic of Tanzania, public sector procurement is regulated by the Public Procurement Act No. 7 of 2011 and its Regulations of 2013, as revised in 2016. Observations about the growing administrative or transaction costs associated with procurement, about the value of the private sector and procurement volumes, have been widely discussed after the country update. This paper first explains the need for economy and efficiency in procurement management before attempting to highlight the issues surrounding transaction costs. Additionally, it compares the state of affairs with private sector practices and sheds light on the origins and reasons behind transaction costs in the public sphere. Through evaluation, the author suggests solutions to the problems caused by high transaction costs.
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