Government procurement or public procurement is the purchase of goods, works (construction) or services by the state, such as by a government agency or a state-owned enterprise. In 2019, public procurement accounted for approximately 12% of GDP in OECD countries. In 2021 the World Bank Group estimated that public procurement made up about 15% of global GDP. Therefore, government procurement accounts for a substantial part of the global economy.

Public procurement is based on the idea that governments should direct their society while giving the private sector the freedom to decide the best practices to produce the desired goods and services. One benefit of public procurement is its ability to cultivate innovation and economic growth. The public sector picks the most capable nonprofit or for-profit organizations available to issue the desired good or service to the taxpayers. This produces competition within the private sector to gain these contracts that then reward the organizations that can supply more cost-effective and quality goods and services. Some contracts also have specific clauses to promote working with minority-led, women-owned businesses and/or state-owned enterprises.

Competition is a key component of public procurement which affects the outcomes of the whole process. There is a great amount of competition over public procurements because of the massive amount of money that flows through these systems; It is estimated that approximately eleven trillion USD is spent on public procurement worldwide every year.

To prevent fraud, waste, corruption, or local protectionism, the laws of most countries regulate government procurement to some extent. Laws usually require the procuring authority to issue public tenders if the value of the procurement exceeds a certain threshold. Government procurement is also the subject of the Agreement on Government Procurement (GPA), a plurilateral international treaty under the auspices of the WTO.

Public procurement occurred in Europe in various forms since at least the 18th century, even it lacked regulations and strict procedures. Nonetheless, the need to regulate public procurement procedures and to constrain the powers of heads of administrative departments began to be deemed necessary as early as the French Revolution (1789).

Noteworthy in Italy is the first regulation on public procurements, dating back to the time of the Kingdom of Italy of Napoleon Bonaparte and dated May 1, 1807. This regulation contains many terms and principles typical of modern codes on public procurement.

Government procurement is necessary because governments cannot produce all the inputs for the goods they provide themselves. Governments usually provide public goods, e.g. national defense or public infrastructure. Public goods are non-rival and non-excludable, which means that one individual's consumption does not diminish the quantity or quality of the commodity available to others, and individuals cannot be prevented from freely consuming the commodity, or "free-riding". Consequently, private markets cannot provide public goods. Instead the government provides those goods and finances them by raising taxes from all citizens.

In addition to public goods, governments often also provide merit goods, such as education or health care. Merit goods are private goods which are rival and excludable and are therefore provided by private markets. Nevertheless, governments also provide merit goods because of reasons of equity and fairness and because they have positive externalities for society as a whole.