Both private and public sector procurement organizations are created to acquire goods and services. The primary difference between the two types of organizations is their purpose of obtaining the goods and services. Public sector primarily focuses on social benefit whereas, the private sector is profit-centric.
The procurement activities of the private sector are for the sole purpose of making a profit. It doesn't mean that they completely rule out social benefits, however, it is not their primary objective. The two main objectives of procuring goods and services by the public sector are for supporting government operations and providing public services.
Another fundamental difference between these two sectors is their funding sources. While private sector procurement is funded by owners or shareholders of the organization, the funds for public sector procurement are mainly from the loans and or taxes acquired by the government from the citizens of the country.
Private sector procurement is governed by a contract or commercial law. With respect to the formation of these contracts, it is also governed by company policy. A private sector company can get into a contract with another private company or an individual and their procurement method can be governed entirely by company policies. Whereas, the public sector procurement process is governed by public procurement legal and institutional frameworks. In most countries, there are laws which govern the public sector procurement of goods and services. These laws set the basis for managing procurement.
Private sector procurement practitioners are answerable only to the management and are held responsible for their actions. The public sector procurement practitioners are accountable for both they do or fail to do with the public funds.