Prabowo Proposes Upgrading LKPP to a Government Procurement Agency to Stop APBN Waste
President Prabowo Subianto has revealed his plan to strengthen the National Public Procurement Agency (LKPP) by turning it into a Government Procurement Agency to consolidate the procurement of goods and services across all ministries and agencies in central and regional government.
He made the announcement in his speech presenting the Government’s Introductory Statement on the Draft State Revenue and Expenditure Budget (RAPBN) for the 2027 Fiscal Year, along with the Financial Note and supporting documents.
“The Government will immediately consolidate all procurement of similar goods and services. We will upgrade the institutional status of LKPP to become a Government Procurement Agency, and for that we request the support of the esteemed House of Representatives. It makes no sense for various bodies, various ministries and agencies, and various regional governments to buy the same goods at different prices. In fact, the prices are higher than what we could achieve,” said President Prabowo on Friday, 14 August 2026.
The Head of State explained his reasoning for wanting to consolidate government procurement of goods and services. He said that procurement by ministries and agencies, regional governments, and other institutions has often been non-standardised, meaning that the same goods can be purchased at different prices.
“We must stop the APBN being used to buy the same goods without coordination, as if there were thousands of buyers who do not talk to each other. Yet we are all part of the Unitary State of the Republic of Indonesia — whether central government, provincial government, or district and city government, we are the Government of the Republic of Indonesia,” Prabowo said.
Going forward, Prabowo stressed that the procurement needs of ministries, agencies, and governments will be consolidated, and specifications will follow centrally established standards.
“Volumes will be unified, and the government procurement process will be carried out digitally so that it becomes more transparent, competitive, and accountable. If the goods are the same, we buy them together. If the needs can be planned, we plan them together. If the state can obtain better prices and quality by working together, there is no reason for us not to do so. There is no reason for each institution to continue carrying out procurement separately,” Prabowo said.
For him, every rupiah saved represents additional fiscal space that can be used for the benefit of the people, including improving classrooms in schools, upgrading and building community health centres, and constructing additional hospitals.