Legitimacy of economic activity by local public entity

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Government contract is a means to procure goods and services needed for policy implementation, but often the proposed contract will be used as a means to achieve policy objectives unrelated. However, to use such contracts, the government may increase the procurement price. So if the use of government contracts as a means of policy is allowed or not, is the question. Freedom of contract cannot be justification, because the state does not enjoy the freedom of contract. The government contract is not a public activity, but a public activity. From that point, the use of government contracts as a policy instrument can be supported. On the other hand, it also raised the participation of state in market and the use of government contracts as a means of policy implementation could interfere with normal competitive market. Relationship between these two elements is to be resolved with the state-economy relations.