Govt to centralize public procurement
President Prabowo Subianto has announced that all government procurement will be conducted through the National Public Procurement Agency (LKPP), in a move he claims will save the state hundreds of trillions of rupiah and which will have a profound impact on the business landscape.
President Prabowo Subianto has announced a centralization of all government procurement through the National Public Procurement Agency (LKPP). The President claims this move will save the state hundreds of trillions of rupiah and significantly impact the business landscape. Subianto emphasized that fiscal discipline must extend to how the government spends its funds, noting that previously, various ministries, institutions, and regional administrations purchased the same goods at different prices with varying specifications and volumes.
This inefficiency weakened the state's bargaining power. Regardless of whether it's the central government or regional bodies, all procurement will now be consolidated under the LKPP, which operates directly under the President's orders. The LKPP, created in 2007, already reported a 21 percent reduction in the procurement budget for 2025 through its efforts at the regional government level.
The President encouraged feedback on The Jakarta Post regarding any experiences, suggestions, or issues encountered with this new centralized procurement system.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
