To perform its functions prescribed by law, the State procures necessary goods, works and services every year. Such purchases are made in large volumes, and this gives the State ample opportunities to influence economy, especially in those industries where it is the dominant consumer. Thus, the role of public procurement can be not only that of a procurement process, but also of an instrument of economic activity regulation by the State. However, today Ukraine has no scientific approach to determining the potential of public procurement as a comprehensive instrument of economic activity regulation by the State, and therefore, there is no assessment of the potential impact of procurement on the economic development of the country.

 The purpose of the article is to introduce a scientific approach to public procurement as an instrument of economic activity regulation by the State, and the essence of this approach is that procurement may become such an instrument provided that appropriate grounds exist; to study the specific features of public procurement as an instrument of economic activity regulation by the State, in particular, the nature of its impact on the activities of participants which in some cases goes beyond that of a mere indirect instrument of State regulation, this being of significant theoretical and practical importance.

The author establishes that the main objective of regulation of public procurement is to ensure economic efficiency, i.e., achievement of the best result with available resources, which implies a value for money factor. At the same time, it is noted that the State is a special buyer, given the need for the protection of public interests; consequently, additional “horizontal” objectives in different areas of State policy are integrated into procurement. The author proves that if such objectives are integrated into the functional objective, public procurement becomes a standalone instrument of economic activity regulation by the State which should be characterized as an indirect instrument. At the same time, the article provides a detailed analysis of cases where public procurement by the nature of its impact on economic activities of participants, especially in areas where the State as a consumer has a decisive influence, can approximate direct instruments of State regulation. The author substantiates that in theoretical and practical terms it is important to distinguish between public procurement as an indirect instrument of economic activity regulation by the State, and an instrument which approximates a direct one, especially in the context of international procurement.

Bibliography

Authored books

1. Trepte P, Regulating Procurement. Understanding the Ends and Means of Public Procurement Regulation (Oxford University Press 2004) (in English).

2. Olefir A, Hospodarsko-pravove zabezpechennia derzhavnykh zakupivel u sferi okhorony zdorov’ia: teoretychni ta praktychni aspekty [The Economic and Legal Provision of Public Procurement in the Health Care Sector: Theoretical and Practical Aspects] (Iurait 2012) (in Ukrainian).

Edited books

3. Arrowsmith S and Kunzlik P, ‘Public procurement and horizontal policies in EC law: general principles’ in Arrowsmith S and Kunzlik P (eds), Social and Environmental Policies in EC Procurement Law: New Directives and New Directions (Cambridge University Press 2009) (in English).

4. McCrudden C, ‘EC public procurement law and equality linkages: Foundations for interpretation’ in Arrowsmith S and Kunzlik P (eds), Social and Environmental Policies in EC Procurement Law: New Directives and New Directions (Cambridge University Press 2009) (in English).

5. O’Cinneide C, ‘The GB Disability rights commissions and strategic law enforcement: transcending the common law mind’ in Lawson A and Gooding C (eds), Disability Rights in Europe. From theory to Practice (Hart Publishing 2005) (in English).

6. Semple A, ‘The link to the subject matter. A glass ceiling for sustainable public contracts?’ in Sjafjell B and Wiesbrock A (eds), Sustainable Public Procurement Under EU Law. New Perspectives on the State as Stakeholder (Cambridge University Press 2016) (in English).

Journal articles

7. Denning P B and Graff S and Wooten H, ‘Laws to require purchase of locally grown food and constitutional limits on state and local government: suggestions for policymakers and advocates’ [2010] 1(1) Journal of Agriculture, Food Systems and Community Development 142 (in English). 8. Marron D, ‘Greener Public Purchasing as an Environmental Policy Instrument’ [2003] 3(4) OECD Journal on Budgeting 79 (in English).

9. Martens M and Margerie S, ‘The Link to the Subject-Matter of the Contract in Green and Social Procurement’ (2013) 1 European Procurement & Public Private Partnership Law Review 17 (in English).

10. Pitschas C and Priess H, ‘Secondary policy criteria and their compatibility with E.C. and WTO procurement law. The case of the German Scientology Declaration’ (2004) 4 Public Procurement Law Review 172 (in English).

11. Pitschas C and Priess H, ‘The use of secondary policy criteria in public procurement procedures: the Burma case and the German Scientology declaration’ (2000) 5 Public Procurement Review 111 (in English).

12. Taylor K T, ‘The proper use of offsets in international procurement’ [2003] 3(3) Journal of public procurement 341 (in English).

13. Bublii M, ‘Teoretychni ta metodolohichni osnovy orhanizatsii derzhavnykh zakupivel’ [‘Theoretical and Methodological Foundations of the Organization of Public Procurement’] (2011) 1(32) Teoriia ta praktyka derzhavnoho upravlinnia 2 (in Ukrainian).

14. Melnykov O, ‘Osoblyvosti publichnykh zakupivel yak ob’iekta derzhavnoho rehuliuvannia ekonomiky’ [‘Features of Public Procurement as an Object of Economy State Regulation’] (2016) 1(52) Theory and Practice of Public Administration 133 (in Ukrainian).

15. Mudrak R, ‘“Provaly” rynku ta prava yak faktory ryzyku prodovolchoho zabezpechennia domohospodarstv’ [‘Failures of Market and Law as Risk Factors of the Household’s Food Supply’] (2015) 1 Innovatsiina ekonomika 150 (in Ukrainian).

16. Petrunenko Ya, ‘Hospodarsko-pravova pryroda zasobiv zabezpechennia efektyvnoho vykorystannia derzhavnykh koshtiv’ [‘The Economic and Legal Nature of the Means of Ensuring the Effective use of Public Funds’] (2017) 3 Pidpryiemnytstvo, hospodarstvo i parvo 88 (in Ukrainian).

17. Poiedynok V, ‘Provaly rynku yak ob’iektyvni pidstavy derzhavnoho rehuliuvannia investytsiinoi diialnosti’ [‘Market Failures as Objective Grounds for State Regulation of Investment Activity’] (2012) 90 Visnyk Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka 35-8 (in Ukrainian).

18. Shabanov R ta Zhdan M, ‘Shchodo poniattia hospodarsko-pravovykh zasobiv derzhavnoho rehuliuvannia ekonomiky za zakonodavstvom Ukrainy’ [‘On the Concept of Economic-Legal Means of State Regulation of the Economy Under the Legislation of Ukraine’] (2016) 11 Pidpryiemnytstvo, hospodarstvo i parvo 87 (in Ukrainian).

Websites

19. ‘Buy American Act’ (Government Contracts) <http://www.wingovernmentcontracts. com/buy-american-act.htm> (accessed: 20.05.2019) (in English).

20. ‘Massachusetts Burma Procurement Law Challenged at WTO’ (Public Citizen) <https://www.citizen.org/article/massachusetts-burma-procurement-law-challengedatwto> (accessed: 27.05.2019) (in English).

 21. ‘Set-aside contracts for small businesses’ (U. S. Small Business Administration) <https://www.sba.gov/federal-contracting/contracting-guide/types-contracts#sectionheader0> (accessed: 20.05.2019) (in English).

22. ‘Na derzhavniі holtsi: yakyi biznes zalezhyt vid derzhzakupivel?’ [‘On the Stat Needle: what Kind of Business Depends on Public Procurement?’] (YouControl, 20.06.2018) <https://youcontrol.com.ua/news/na-derzhavniy-holtsiyakyy-biznes-zalezhyt-vidderzhzakupivel/> (accessed: 19.01.2019) (in Ukrainian).

23. ‘Reforma derzhavnykh zakupivel Ukrainy’ [‘Public Procurement Reform in Ukraine’] (Ministerstvo ekonomichnoho rozvytku i torhivli) <http://www.me.gov.ua/Documents/ Detail?lang=uk-UA&id=38c083f3-2571-466a-9583-3b43c2804ad9&title=ReformaDerz havnikhZakupivel> (accessed: 25.02.2019) (in Ukrainian).