Study On Effective Government Purchase Cost Controls

The Government Procurement Law, which formally came into force on January1st,2003, further standardized our government procurement and promoted it to a healthyand steady development.With in-depth implementation of the Procurement Law, thegovernment procurement played a more and more important role in the areas ofstrengthening government macro-control functions, reducing governmentprocurement cost, improving financial expenditure economic returns, combatingcorruption and building a clean government and etc. But it’s also occurred a series ofproblems during that process: the procurement budget is less scientific, procurementcost stays high, capital savings rate remains to be enhanced; purchased products wasteseriously, assets and equipment use low-efficiently, procurement managementinstitutions set-up unscientifically; the separation of procurement and managementimplements ineffectively; government self-interest leads to problems of rent-seeking,government supervision before and during the purchasing process needs to bestrengthened; performance evaluation is unscientific, legal responsibility is difficult todefine; government procurement specialized personnel is lacking. How to effectivelycontrol the failure of cost control is imminent.This paper selects government procurement cost effective control as the study subjectand explores it from five parts. Part one elaborates the significance and background ofthe selected topic and combs related research findings at home and abroad on thegovernment procurement cost control. Part two establishes theoretical foundation forthe analysis of government procurement cost effective control by introducing thebasic theories, like Transaction Cost Theory, Public Choice Theory, and PerformanceTheory. Part Three discusses the current situation and causes for the cost wastephenomenon in our government procurement. Part Four builds the mode ofgovernment procurement cost effective control on the basis of Performance FuzzyEvaluation Theory and expounds possible solutions for the effectively cost saving ofthe government procurement. Lastly, on how to effectively control the cost of ourgovernment procurement proposes some policy recommendations.