Research consultancy

IMPACTS OF END USER PARTICIPATION ON PROCUREMENT EFFECTIVENESS

AT TORORO DISTRICT LOCAL GOVERNMENT

CHAPTER ONE

1.0       INTRODUCTION

This chapter presents the Background, problem statement, purpose, general objectives, specific objectives, research questions, Significance of the study, score of the study and operational definitions of key concepts.

1.1              BACKGROUND OF THE Studying to OECD

Historical background

Several past researchers have had interest in ender user participation in different concepts.

Jessop and Morrison [1996] in their book storage and supply of materials emphasized that in order for organizations to achieve their goals major focus should be put on full inclusion of all stake holders in decision making for the purchase of a product. End User means any department division, Branch or section of procurement and disposal Entity including any project Unit working under the authority of procuring and disposing entity which initiates procurement and disposal requirement and is the user of the requirement PPDA ACT and regulations 2003 Sakire and unit 2003 in their analysis of public procurement procedures in turkey singled out that the first step as an important activity of procurement planning or procurement law is determination of end user needs, end user also help  in procurement planning   in order to achieve  procurement effectiveness, Thai 2004 considers procurement planning to involve the identification of procurement needs  this will promote procurement effectiveness, End user also propose technical specification to the procurement and disposal unit when necessary PPDA ACT 2003 SECTION 34 (d),  . An end user is the person who uses a product, i.e. the consumer. The term is based in the fields of economics and commerce. The end user may differ from the person who purchases the product (www.wiki/end user.com, 2012); According to James Ngobe (2007) Players in the Institution setup today include Procuring and Disposing Entities (PDEs). Each PDE carry out all its procurement under the Act, and regulations, the terms of the international agreement apply, rather than the Regulations or Act. Each PDE is composed of; the Accounting Officer, the Contracts Committee, the PDU, the User Department and the Evaluation Committee. Each of the parties has separate functions in the procurement process as indicated in the Act. The PDEs are regulated by PPDA.

Participation of end user is when end-users are involved in the procurement process, which is planning choice of procedure measure to solicit offers from bidder’s examination and evaluation of those offers, award of contract and contract management. The primary objective of participation of end-user in the procurement process is to ensure that they are provided with goods, service and works or any combination of the a above which meet their requirement and expectation in terms of quality, timely delivery, effective service delivery and value for money procurement (PPDA ACT 2003), procurement should ensure that items / services provided by suppliers meet the requirements and expectations of the end users (Lysons 2003)

Proper procurement of public goods and services is imperative for good economic management and addressing leakages of government funds Country procurement Assessment Review (CPAR 2004) Procurement is a function for obtaining by purchase lease or other Legal means equipments, materials, supplies and services required by an undertaking for use in production. (Lysons 2000), Procurement refers to the act of supplying the organization with a steady flow of materials and services to meet its needs, to ensure continuity of supply by maintaining effective relationships with existing sources of supply, either as alternatives by an ethical means, the best value for every money spent to develop staff policies, staff, procedures and organizational to ensure the achievement of the organizational goals David (1998).

Public procurement is inherently a politically sensitive activity, not least because it involves significant amounts of public money even within the context of a national economy. Pegnato (2003) estimated the US federal procurement figure at around US$200 billion per annum; while Coggburn (2003) put the combined level for state and local governments at more than US$1 trillion. Thai and Grimm (2000) estimated government’s collective purchasing at around 20% of GDP while, for developing countries, Nicow(2003) put the figure at 15% of GDP.David in the Journal of public procurement Volume 7, 2007 emphasizes that lack of professional expertise, ambiguities in laws, lack of transparency where public disclosure of relevant information is not given as required to ensure competitive and equal access and accountability as a weakness and absence of control procurement authority to oversee procurement as a factor contributing to poor service delivery.

globallyprocurement management is increasingly gaining inmportance due to significant role it plays in economic development . accor ing to oecd repot 2000 the value of government market was estimatedat usd 2000 billion which was equivalent to 7 percent of world gdp in 1998 while the eu union public procurement was estimated  to 13.9 to 14.9 percent of the eu gdp ( oecd report 2002) similsrly , witting (1999) estimated the procurement market place in sub saharan africa to be between 30 to 43 us dollars. on yhis part trionfetti 20000 was quoted by odhiambo and kamau(2003) estimates the size of  public procurement to be varying between 5 and 8 percent of gdp in most industrilaised countries.odhiambo and kamau ( 2003)too content that that estimate  of the central government procurement  in kenya tanzania was on  average of  8 % of the gdp for the years 19999/2000 while in Uganda the figre was about 30% of the  this therefore shows that public procurement is important in both economies of the developed and developing countries.procurement is defined by Kenneth lysons as that function of obtaining by purchase ,lease, or other legal means equipment ,materials,supplies, and services, required by an under taking  for use in production lysons 1993 (p,g 14) . according to gwilliam, forster and archorndo(2008) spending on procurement items like roads in susaharan Africa averages just 2% of the gdp this compares with 1 percent of the gdp in industrilaised countries  and 2-3 perceent of the gdp in growing and emerging economies the r5eport continues to highlight that Uganda in particular 2.8% of the gdp . A public procurement process can be said to be well functioning if it achieves the objectives of Transparency, competition, economy and efficiency fairness and accountability World Bank (2004) ,. World commission on environment and development (1989) define procurement effectiveness as procurement of goods, services, and works, to meet the needs of present generation without compromising ability of the future generation to meet their needs. According to EDGA AGABA the former public procurement and disposal of public assets chief says that effective procurement system is essential for the achievement of good governance, poverty reduction and development (the new vision 6^th match 2006).

Howeveranumber of studies in the south and east bafrica shows that many of procurement  project are poorly performing the problem affecting this projects has been identified as .

Poor quality of constructed workand low levels of productivity ( lema and prince 1998)

. use of incomplete designs in preparation of tender documents, poor workmanship, late nomination of subcontractors  and project manager who donot have appropriate  management  to balance cost, quality, schedule and utility requirement ( rwelamila, twalukaba and ngowi (1999))

-project documenet are quite often late to arrive they are incomplete contain large sections of irrelevant  material and lack skilled labour and poor site supervision ( rwelamila 1996).

The same problems are faced in  tororo district local government which among many include poorly constructed prim ary and seconday schools , failed roads projects , highly  expensive procurement especially  in construction sector,  the increase in time and cost could be limited end user participation in the procurement process since this appears to be the same trend for most of peocurement activies in tororo district local government.s

Theoretical back ground:s

The study will be guided by the theory of  procurement mangement the  theory of procurement management conceptualizes  project as transformation of inputs into out puts the theory conceptualizes both theoty embraces both the project theory and the product oriented theory and the thepry  of managemeng process. (The pmbok  guide 1999)  the pmbok guide states projects are composed of two kinds of process  project management process and product development process ( which specidify ) and create the project

The core project management process are planning execution and controlling these 3 are manged f inorder to meet the project objectives of time ,scope, cost and quality. In the same line procurement is onre of the activities executed in the project management cycle. The c ritical management process of planning , execution organizing and controllingare applicable to procurement. The theory of project management will help to identify the critical process sof  procurement managemeng which are  planning, procurement control, and procurement organization.

According to tunner 19993the project management is about  managing work and the work can  be managed by  decomposing work into smaller tasks,in the project management of knowlrdge guide Kendall (1912)  illustrated that thje theory of execution of work is that it should be planned completely before iotsexecuted.

Laffonte and tirole ( 1998) defined two types of strategic behavior in government procurement projects, adverse selection and moral hazard. Adverse selection  and moral hazard , adverse  selection happens when the private enterprise posses more exogeneous information that the government such as their possibilities and projects actual costs which enables it to extract rent from its interaction,n with thw government even if their bargaining ppwer is weak  in government advese behavior is strategic behavior which usually takes place in the government tendering process  and leads the government to select a contractor that is not optimal, moral hazard is a kind of ex-post contractual strategic behavior reffering to the edorgeneous  variables of the private actors such as reducing effot which may influence project cost  and quantity in government procurement projects

Conceptual background ;

In this study they are two main concepts  end user participation and procurement effectiveness . procurement  is critical business fuction for virtually every organization and vital input in effectiveness in aoganization .

EVENNET ( 2004) defines public procurement  as a process of acquisition by means of contractual arrangement after public competition of goods and services , works and other supplies by the public. Pmbok 2000 guide defines procurement  as the process required to acquire goods  and services from outside performing organization . hakiiza (2008) identified the procurement management process as procurement  planning , organization and control when planning is properly concurred it can serve as an important mechanism for extracting , distributing and allocating  resources ( james 2004)inorder to activate the procurement  plans , the organi function .

1.1.4 contextual background.

According to jones (2004) organizations  exist to create  valuable goods and services that people or organizational  stake holders desire . with in the context of public entities in Uganda tororo district local government established by

The likely causes of  current state of affairs are inadequate procurement managemenment s

Procurement simply means acquisition by purchase, rental, lease, hire purchase, license, tenure, franchise, or any other, contractual means, of any type of works, service, or supplies or any combination PPDA ACT 2003 procurement effectiveness is procurement of goods, service, works which are needed by end user and therefore meeting their expectations or purpose for which the item or service was meant for ( Lysons 2003). Participation of end user is essential to achieve procurement effectiveness in the following ways; end user help to initiate procurement and disposal requirement and forward them to procurement and disposal unit PPDA ACT 2003, need identification by end user is essential to allow the organization achieve procurement effectiveness by providing goods, services, or works, which conform to the needs of end users, According to Kenneth Lysons (1996) a specification is a statement of the attributes of  product,  process or service. He further says that specifications have two basic functions i.e. communication and comparison, when prepared by the purchaser they inform the supplier what is required and when prepared by the supplier they provide a prospective purchaser with the description of the attributes of a product. Specifications also provide criteria against which the products and services supplied or available can be compared.

The absence of participation of end user therefore can lead to procurement inefficiency in terms of poor contract performance, poor service delivery, high cycle time, slow response to the user needs, the minister of state for local government Richard Nduhura was reported to have criticized the contractors who do shoddy work on government structures, he was by then inspecting Kyabungimbi Health centre in Bushenyi which had spend years without function because it had been poorly constructed , he added that this had been a common trend in many district in the recent past ( the monitor 30^th may 2005), According procurement news July 2011 the high level of procurement inefficiency is evidenced in CHOGM in which the government of Uganda lost billions of shillings during the course of importing CHOGM cars from Europe this therefore poses many questions as to what could be the possible reason that need to be examined if procurement is to be effective .

Tororo district local government is a public entity, according to Mangeni Richard Tororo district head procurement and disposal unit, procurement of goods service works is done after procurement planning and adequately following the procurement cycle established by the public procurement and disposal of public assets authority 2003.

However  procurement in Tororo district local government  is characterized by highly expensive procurement which is in most cases over and above the estimated budget shoddy work done by contractors , cycle time is also very high , poor service delivery by suppliers and above most suppliers supply sub standard supplies and above all incomplete projects. It’s on the basis of this level of inefficiency that the researcher intends to assess the impact of end user participation on procurement effectiveness.

  1.2     STATEMENT OF THE PROBLEM

It has been reported that there is high level of procurement ineffectiveness in Tororo District Local Government which is characterized by highly expensive procurement which is in most cases over and above the estimated budget shoddy work done by contractors, delayed delivery of supplies, poor service delivery by suppliers above all most suppliers supply sub standard supplies and also incomplete works projects, It’s on the basis of this level of inefficiency that the researcher intends to assess the impact of participation of end user on procurement effectiveness at Tororo district local government.

1.3       PURPOSE OF THE STUDY

The purpose of the study is to assess the impact of end user participation on procurement effectiveness at Tororo district local government.

1.4       SPECIFIC OBJECTIVES

1. To establish the impact of end user participation on procurement effectiveness at Tororo district local government.
2. To assess other ways of achieving procurement effectiveness at Tororo district local government
3. To establish key indicators of procurement effectiveness at Tororo district local government.

1.5       RESEARCH QUESTIONS

1. What is the impact of End users participation on procurement effectiveness at Tororo district local government?
2. What are the other ways of achieving procurement effectiveness at Tororo district local government?
3. What are the key indicators of procurement effectiveness at Tororo district local government?

1.6       SCOPE OF THE STUDY

1.6.0    Content scope

The study will covere the impact of end-user participation on procurement effectiveness, other ways of achieving   procurement effectiveness, and also key indicators of procurement effectiveness.

1.6. 1   Time scope

The study will be carried out between xxxxxxxxxxxxxxxxx.

1.6.2    Geographical scope

The study will be  carried out in Tororo district Local Government

1.7       SIGNIFICANCE OF THE STUDY

The study will benefit different individuals in different capacities in Uganda and other countries as well namely;

Local government; the study will benefit local government in understanding end user needs, it will also benefit the local government to appreciate the benefit of end user participation on procurement effectiveness, it will also help to reduce procurement inefficiency in the local government, understand key indicators of procurement effectiveness.

Public/citizens, it will help them understand the degree of their involvement in the procurement process; it will also benefit them in understanding how to achieve procurement effectiveness.

The government, it will benefit the government in determining the level of end user participation in the procurement process, help the government in deciding how to achieve procurement effectiveness, the government will also use it to carry out further research on procurement effectiveness.

Researchers, the study will help researchers with basic facts of participation of end users in the procurement process.

Academic institutions, they will be able to enrich their knowledge in the field of procurement and also understand benefits of participation of end user to procurement.

1.8       OPERATION DEFINITION OF KEY TERMS

User department

End User means any department division, Branch or section of procurement and disposal Entity including any project Unit working under the authority of procuring and disposing entity which initiates procurement and disposal requirement and is the user of the requirement PPDA ACT and regulations 2003

Procurement

A function for obtaining by purchase lease, or other legal means equipment, supplies, and services required by an under taking for use in production lysons 2003.

Procurement effectiveness

World commission on environment and development (1989) define procurement effectiveness as procurement of goods, services, and works, to meet the needs of present generation without compromising ability of the future generation to meet their needs.

CHAPTER TWO

LITERATURE REVIEW

2.0       INTRODUCTION

This chapter shall highlight key issues and gaps from various available literature and past studies performed by other scholars as well as surveys on the study variables.

2.1       DEFINITION AND OVERVIEW OF PROCUREMENT EFFECTIVENESS,

Procurement is defined by lysons 2003 as that function for obtaining by purchase lease or other legal means equipment ,materials supplies, and services required by an under taking  for use in production. Procurement is also defined by David (1998) as the process supplying the organization with a steady flow of materials and services to meet its needs, to ensure continuity of supply by maintaining effective relationships with existing sources of supply, either as alternatives by an ethical means, the best value for every money spent to develop staff policies, staff, procedures and organizational to ensure the achievement of the goals. According to Walter Odhiambo and Paul Kamau (2003) Public procurement is broadly defined as the purchasing, hiring or obtaining by any other contractual means of goods, construction works and services by the public sector.

Kari Heggstad, Mona Frøystad and Jan Isaksen (2010), Public procurement refers to acquisitions of goods and services by public institutions in a country, and concerns contracts between the government and the private in many different areas such as health, works, and construction. Reliable procurement practices will transfer funds to hospitals, schools and roads. Since procurement accounts for such a large part of public resources it is important that the procurement process occurs in an accountable, transparent and well managed manner

Effective procurement this is an important route towards securing the right service at the right price, maximizing the level of service provision which can be achieved within the local Supporting People programme. It is also fundamental in:· ensuring that we achieve a balanced budget; helping to achieve efficiency and therefore savings; creating a diverse market place and ensuring that innovation is not stifled;  delivering the organization’s strategic objectives (Newcastle city council, 2006), According to Tersine (1994), effective procurement process evolves systems. He singles out centralized and decentralized systems as the commonly used. Tersine (1994), warns that whereas some organizations are in the habit of using either system according to need, it is erroneous. He concludes that adherence to system is one sure way of strengthening the procurement effectiveness and ensuring user value for money.

Procurement effectiveness however is when procurement achieves the basic principles of, non-  discrimination, transparency accountability and fairness, competition, confidentiality, economy and efficiency, and ethics, PPDA ACT 2003 sections 44, 45, 46, 47, 48, 49 respectively.         

2.2       THE IMPACT OF END-USER PARTICIPATION ON PROCUREMENT EFFECTIVENESS

            End user initiate procurement and disposal requirement

According to PPDA ACT 2003 end user are part of the PDE they have the powers to; initiate procurement and disposal requirement hence this will make suppliers supply what is needed by end users leading to procurement effectiveness .

According to lysons (2003) procurement should ensure that items/ services provided by suppliers meet the requirements and expectations of the end users.

If suppliers provide what end user actually need this will certainly promote procurement effectiveness.

World Bank (2004) spells out that, “A public procurement process can be said to be well functioning if it achieves the objectives of transparency, competition, economy and efficiency fairness and accountability.

End users also propose technical specification to the PDU when necessary According to Bailey et al (1996) argues that there are two approaches to specifications; performance and conformance and both determine the quality of products which will result into procurement effectiveness, bailey further says that when specification is made by end users, purchasing function becomes efficient in provision of goods and ser vices.

• Performance specifications:

This idea is about the clear indication of the purpose, function, application and performance expected of the supplier, materials or services is communicated and the supplier is allowed or encouraged to provide an appropriate product.

The detailed specifications are in the hands of the supplier to suggest new or improved ways of meeting requirements.

• Conformance specification:

Specifications where the buying organization lays down clear and unambiguous requirements that must be meeting the specifications are of the product not the application.

Bailey et al (1996) continues to say that nevertheless the production of effective conformance specification is rather difficult to achieve on occasions. Even in situations where the greatest has been taken. It is sometimes the case that a supplier will deliver materials that meet the specifications as they understand it, while the end user   complain that the specifications take a variety of forms and can be drawn up by various departments.

According to Kenneth Lysons (1996) a specification is a statement of the attributes as a product process or service. He further says that specifications have two basic functions i.e. communication and comparison, when prepared by the purchaser they inform the supplier what is required and when prepared by the supplier they provide a prospective purchaser with the description of the attributes of a product. Specifications also provide criteria against which the products and services supplied or available can be compared.

Procurement news 2011 argues that seller should carefully read the technical requirements including quality sections during the request for quotation phase. Ask for Quotation clarification and note a document exception if any. And upon award of contract, the seller should Endeavour to, implement his /her quality programmed to meet the required standards, maintain contact regularly with the company for status updates, publication, question, problems, waiver or deviations and suggestions or improvements this will certainly check on quality of goods and services in order to promote procurement effectiveness.

            End user maintains and archive record of contract performance.

This enables procurement and disposal unit to select the right supplies during invitation for bids and evaluation process, contractors or supplies in order to work towards the benefit of end user. If supplies or contractors work towards the benefit of end user it will lead to the provision of the required work, good or service (PPDA ACT 2003 section 56 1 ).However, Bailey 1996 also argues that an ongoing assessment program should always be carried out to avoid spot on rejections upon delivery to make purchasing effective.

Certify invoices for payment

When end user certify invoice for payment it helps to promote transparency and value for money is achieved this will therefore promote procurement effectiveness According to World Bank (2004) it spells out that, “A public procurement process can be said to be well functioning if it achieves the objectives of Transparency competition, economic development by ensuring elimination of corruption.

According to Edgar Agaba the former public procurement and disposal of public asset chief, the effective procurement system is essential for the achievement of good governance, poverty reduction and development (The New Vision 6^th March 2006)

            Influence procurement procedures.

According to Kenneth Lysons (1996), procedures are a system of sequential steps or techniques describing how a task or a job is done. Rules are extensions of procedures and directives relating to specific activities which sometimes specify penalties for their breach. (p. 242).the author further says that a good procurement procedure helps the organization achieve its goals

Bailey et al (1990) argue that public institutions are accountable to government as well as the public and that this requires elaborate procedures and records to be kept to give explanations and justification for every procurement decision and also bringing its effectiveness.

A clear comprehension and transparent legal framework is characterized by the presence of legal rules that are easily definable, that in themselves do promote all objectives stated above and that govern all aspects of the procurement process” (p. 18)

Thai k.v (2004) also argues that “Although the emphasis is on the individual it is important to bear in mind that the effectiveness of people’s performance is dependent on the organization itself, having a clear mission, strategy and objectives provide the overall direction is clear. It is then possible to specify the outputs to be achieved by the individual components of the organization, including departments, sections, individuals and the processes necessary to achieve those outputs. Without this clarity those some individuals, departments will be charging off in all directions without any particular destination insight”

2.3       OTHER WAYS OF ACHIEVING PROCUREMENT EFFECTIVENESS

            Proper procurement planning

According to procurement news (2005) it was reported that were procurement planning is inadequate; it has resulted in short comings of poor procurements made. Sakire & Unit (2006) in their analysis of the public procurement procedures in Turkey singled out more specifically that the first step as an important activity of procurement planning or procurement law is determination of needs. Therefore procurement planning has to be done after knowing needs of end-user.

Law is determination of needs. And that procurement carried out under appropriate conditions and timely manner leads to efficiently use of resources. LGDP reports and guidelines (2001 to 2005) also support the above view.

Never the less procurement planning does not only involve needs determination or what to procure.

According to the PPDA ACT 2003 end user   initiate procurement and disposal requirement and forward them to the procurement and disposal unit.

According to Drury, (2000), coordination of various future activities of an organization is by preparation of plans actions for future periods this minimizes risks and increases the degree of organizational success. Drury also further says that procurement plans made by the district should be to help in organization control and facilitate communication to ensure success in achievement of the required objectives.

Cole (1997) also argues that planning can lead to improved efficiency and effectiveness in delivery of goods and services he further says that planning is a deliberate attempt to design a future course of action with view to optimize the use of resources. He goes ahead to certain that an organization without a plan has planned to fail because it had not had particular route to follow.

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According to UN (2006), Good procurement planning is essential to optimize the contribution of the procurement function towards achieving the overall goals of the organization. UN (2006) asserts that good procurement planning supports: transparency, Development of Key Performance Indicators (KPIs) according to milestones and accountabilities set in the procurement plan, and use of the same to monitor performance, Effective and timely solicitation of offers, award of contracts and delivery of the goods, services and works required,  Early requisition to reduce any delays in procurement and timely delivery to project sites,  Early identification of right commodities and quantities to meet programme needs, Sourcing the right suppliers on time to avoid cutting corners under rush procurement to meet deadlines or budget expenditure, Effective supply strategy and timely programme and project implementation.

            Proper coordination between end user with procurement staff

Procurement staffs decide on the contracts to take on, the tenders to award preparation of bids, advertisement of bids and also proposing appropriate procurement methods (PPDA ACT and regulations 2003).

Procurement staff also is completely aware of the market situation so they were always advice end user on the better alternatives available.

Public procurement contracts provide the mechanisms by which the national development goals of states can be attained. According to Arrow (1997), public procurement contracts are means of achieving national development objectives.

According to New vision (2011) Public procurement is often plagued with corruption, unfair practices and price collusion in view of the huge amounts of money involved and there should coordination between different departments to encourage effectiveness in the system.

According to the PPDA ACT (2003) section 34 (a) it states that end user liaise with and assists procurement and disposal unit thought the procurement or disposal process to the point of contract placement.

Basheka B.C (2009) observed that in the last five years, corruption has been placed high on the international agenda. Corruption has taken an alarming dimension in recent years at the same time spreading in geographical and growing in intensity. Illicit payments now account for approximately ten to twenty percent of international transactions.

            Developing proper procurement policies.

If policies are ineffective, employees lack comprehension and it is difficult to explain to end users the why of the policies. Policies are only good if everyone understands them and can explain and defend them. Planning is deciding in advance what to do, how to do it, who will do it and when it will be done. If your employees don’t know why your business does what it does, where the business is going and how you will measure success, then it’s difficult to communicate your business value to your end users therefore good procurement policies need to be adopted and developed in order to achieve procurement effectiveness Erridge (2001).

            Maintaining an effective communication with the supplier.

In order to supplier what is needed According, to Nicol w (2003), all correspondence and communications with the vendor regarding problems, proposed changes, or the implementation of the procurement decision should be effective , According to McIvor (2005), in managing outsourcing relationships, communication with the vendor is of utmost importance during the life of the contract. Knowledgeable internal staff must be available to identify problems and work with the vendor to resolve them. Vendor selection should have provided a vendor whose business/functional culture aligns with that of the organization, so that communication is fostered and developed to support the effort should be documented and kept in order to resolve disputes or identify areas of strengths and weaknesses.

            Public entities involved in procurement should practice and encourage competition

and accountability.

Erridge et al (2001) point out that competition should deliberately enable bidders to compete with one another under the same terms and conditions using a relevant procurement method with a view to maximizing value for money. They point out that such competition should be non-restrictive, give sufficient time for bidding, and use standard bidding document and make bid evaluation using the same criteria. The authors describe accountability to include promotion of information sharing among all the players indicating reasons/ bases for certain actions / decisions and providing written or spoken description of what has happened under ones trust.

2. 4 THE KEY INDICATORS OF PROCUREMENT EFFECTIVENESS

Improved value for money, when there is value for money it means that even corruption is greatly reduced According to Basheka (2004), Procurement in local government in Uganda has not been corruption-free. Public procurement, at the local government level, is believed to be one of the principle areas where corruption in Uganda takes place (National Public Procurement Integrity Baseline Survey, (2006). Corruption is disastrous to the well functioning of any government department. Corruption has been an intractable problem in many developing countries; especially where it has become systematic to the point where many in government have a stake. This leads to ineffectiveness in the procurement system and value for money cannot be achieved if there is corruption.

end user participation also  is critical to developing effective procurement strategies and hence the best value for money outcomes. end user  provide relevant Information which is critical for provision of goods and service which suite their taste and preferences and hence Analyzing supply markets which provides information that can be used to explore opportunities to advance organization priorities by identifying; competitive local suppliers and suppliers who can offer products with improved sustainability performance, provide valuable information about suppliers’ strengths and weaknesses for post-offer negotiations where the outcome may improve value for money, identify comparable substitute goods and services that offer better value for money and identify opportunities to plan and schedule procurement to provide benefits for both suppliers and buyers.

Bring about effective competition, ensured that the organizations obtains a ‘healthy and competitive’ response to its requirements, thereby contributing to the achievement of high quality products, services and works resulting to effective procurement activities.

Identification and management of supply-related risks, end user participation assist in the development or redefinition of specifications to encourage competitive offers, identifying any standards to which goods or services must comply, it provides information which can assist in negotiations, where this may lead to reduction in the ‘degree of business risk’ and ensure that all procurement activities are done in line with the governing laws Nicol, W. (2003).

Reduction in costs of purchased components and materials, procurement effectiveness is essential to reduce on avoidable costs in procurement these costs are like purchase of unwanted goods, thought can be used to look for sources of greater value within the supply chain. The increasing development of the procurement function into strategic elements such as the management of the supply chain, world class status, lean supply cost of ownership, and so forth requires end user participation in the procurement process market intelligence to achieve best results Lysons ( 2007) says that reduction in the cost of procurement is the key procurement aim.

Dave Chaffey ,(2007) also ague that when the cost of purchased products is reduced in terms of lower acquisition costs,  shorter time of acquisition of goods and also sreduced cost in transportation is a sign of purchasing effectiveness.

Reduction of emergency procurement; it’s also essential in order to reduce emergency purchase which in most cases leads to compromising of quality at the expense of lack of time, according to procurement news July 2011 the government of Uganda lost billions of shillings during CHOGM when the politicians like former VICE PRESIDENT claimed that purchase OF CHOGM cars was an emergency this therefore made the government lose billions.

According to Dilulio, J.J. (1994) he says that planning of purchase should be done early enough in order to eliminate emergency procurement since this tends to be hectic for the purchasing department and is likely to lead to loss of resources.

Customer service quality means understanding the customer’s needs and wants and identifying ways to meet or excel them. Customers are satisfied when they receive the total product they desire at a price they can afford and accept (Noor and Radford, 1995). The level of customer satisfaction is the result of a customer’s comparison of expected customer service quality with perceived service quality (Ossel, 1998). A customer will be satisfied if the perceived overall service level meets his or her expectations. If an organization fails to do, this, and customers have other means of satisfying their needs, the customers will migrate and the firm will fail. Customer service will also lead to Customer satisfaction leads to customer loyalty, which is crucial for long term profitably (Noor and Radford, 1995). Loyal customers spend more, refer new clients and are less costly to do business with. On the other hand, customers are likely to switch suppliers because of poor service quality rather than poor product quality. Baines (1992), further adds that the effects of poor service are not only confined to customers perceptions of quality, nut all the checking clarifying instructions making corrections dealing with customer complaints, rectification etc, also add up to  a major cost penalty, generally known as the cost quality, which can represent up to 40% of sales. Wood and Pitts (1992) argue that attracting new customers is about six times as expensive as retaining an old

CHAPTER THREE

METHODOLOGY

3.0       INTRODUCTION

This chapter presents the methodology which consists of the research design, area of study, study population, sample population and selection, sampling technique, data collection method, data quality control, data collection procedures and limitations of the study.

3.1       RESEARCH DESIGN

The study will use a cross sectional survey research design the design is widely used to measure trend or aggregate change over time hence making it appropriate for this study (Sekaran 1992, p. 64)) the design carries the advantage of beign inexpensive in terms of time and money by studying on local mgovernment to represent others ( amin 2005, mugenda and mugenda 1999, wood side and wilson 2003)

3.2       AREA OF THE STUDY

The study will be  carried out at Tororo district local government

3.2       STUDY POPULATION AND SAMPLE SIZE

The study will target District Officials, the procurement staffs of Tororo District Local Government, Accounting officers of the district and pre-qualified service providers.

3.3       SAMPLING size and selection

Using the accesible population of 43 the researcher will select 30 respondents  as the actual sample size . this is done with the help of krejcie and morgan (1970) sample size determination tables the sample will be devided into four categories and the stratified sampling technique will then be used .according  Hunt, Neville; Tyrrell, Sidney (2001)   Stratification is the process of dividing members of the population into homogeneous subgroups before sampling. Stratified  sampling technique will then be used to to select the respondents in each category using the formular below (barlett et  al 2001)  ,nh=(Nh/N)h , where ,nh is the sample size for category h, Nh is the population size for category h, N is the total population size while n is the total saple size. according to (Amin, 2005) sampling involves selecting a sample of the population in such a way that samples of the same size have equal chances of being selected.

The sample will be comprised of 30 respondents that will be selected in a way that 3 respondents will be from the procurement department, 10 from administration TDLG, 10 from prequalified suppliers and 7 respondents from health  Department. While carrying out research, purposive sampling will be  applied to the above different categories of respondents while only health departmen is one which shall use simple random sampling.

Table 1 below shows the summary of the sample size of the respondents and the sampling techniques used in the study.

Table: Sample size of the respondents

3.4       DATA COLLECTION METHODS

Source of data will be  from both primary and secondary sources.

• Primary data

Primary data will be obtained  from the questionnaires administered on the target respondents to gain opinions and practices on participation of end users and procurement effectiveness in Tororo District Local government Uganda.

• Secondary sources

Secondary sources of data will involves reviewing existing related information on the

Study such as reports, journals, magazines, newspapers, textbooks and electronic data bases.

3.5       RESEARCH INSTRUMENTS.

            The study will uses a questionnaire data collection method.

3.5.1    Questionnaire

According to amin 2005 Questionnaires is a form consisiting of interelated questions prepared by the researcher about the research problem under investigation based on objectives of the study . Questionnaires will be  used because they take shorter time to cover a larger sample  facts are evident and documented; they  also eliminate the element of shyness in respect of interviewing and yet give the respondent enough time to avail accurate answers. The researcher used both Open-ended and Closed ended questions for the purpose of having all research questions answered.

3.6        DATA COLLECTION PROCEDURES.

To negotiate the entry point to carry out research at TDLG  the researcher will obtain an introductory letter from ndejje university which will be availed to the chief administrative officer ( cao)

The cao will then distribute the leettr to different department of TDLG requesting for the permission of public official in order to request for their permission to corporate in the research process.

The rwespondents will be esxplained to the main purpose of the study( academics ) so as to mobtain their verbal consent  to participate in the research .

3.7       QUALITY CONTROL OF DATA INSTRUMENTS

This will involve testing the validity and reliabilty .

            Testing the validity and reliability.

           In research the fundamental rule of thumb is that every information got muist be accurate (validity) and consisited (reliability) in this study, the researcher will ensure validity and reliability of in the following ways.

3.7.1 validity .

            Validity reffers to the quality that a producer is or an instrunmentt ( tool) used in the research is is accurate ,correct, true meaning full and right to generat required data the content validity of the instrunment will entail giving of the tools to experts ( supervisors, lecturers) who will judge them through carefully and critically examinig the item  in the instrunment to to establish validity , the instrunmeny will then be given to five experts to evaluate the relevance of each item in the instrunment to the objectives.

The experts will then rate each item on the scale very relevant(4), quite relevant (2), and not relevant (1)   . validity will then be determined using the content validity index ( cvi) which is given by the formular.

CVI=ITEMS rate 3 or 4 by judges/total number of items in tools.

Items with a validity inddex or coefficient of atleast b0.70 will be accepted as valid in this study as recommended by kathuri and pals ( 1993).

3.7.2 reliabilty

            Reliability reffers to how consisited are search instrunments or procedure is. A pilot study of ranmdomly selected respondents will be done mugenda & mugenda ( 1994)suggested that the pilot sample may range from 1- 10%and in this study 9.6% (3 respondents ) will be taken , the pre test will be taken using cron bachs alpha to 1 , the higher the internal reliability , alpha of 0.70% as  recommende by kathuri and pals (1993)

3.8       DATA PROCESSING AND ANALYSIS

The raw data will be  coded, edited, and arranged ready for analyzing only completed raw data will be  analyzed using statistical tables and graphs.

Data analysisi and interpretation will be done concurrently during the report writing relationship. Between the study variables will nbe analysied using the regression analysis which will help asses the strength of the cause and effect relationship saunders (1997) qualitative data will be analyzed through a search for general statement a bout rtelationships among the categories  of data themes and through contenet analysis comparison of answers from different respondents   will be analyzed.

3.9       MEARSUREMENT OF VARIABLES.

The study variable will be mearsured using the likert scale with modification to fit into the context of the study (mwambilu et al 2004) fisher 2004 and roberts (1998) as cited by ghebiregiorgis and karsten (2007) emphasised thst the likert scale is very convenient and most commonly used  in attitude surveys the response will be recorded using five value labels : 5 for strongly agree, 4 for agree ( A) 3 for neautral  (N) , 2 for disagree, 1 for strongly diasgree ( SD)

REFERENCES

1. Amin M (2005) Social Science Research Concepts, methodology and Analysis Makerere University Kampala.

2. BaiIey and David Farmer ‘managing materials in industry, 1998, Grower press ISBN. 0716101130

3. s’ Fisher R. (2004) ‘Creativity across the curriculum’ in Fisher R. & Williams M. (2004)Unlocking Creativity, David Fulton

4. The Economics of Public Procurement; G.Piga & Khi V. 2007 Thai PART I: MANAGING RISK IN PROCUREMENT Public Procurement under Limited Liability; A.R.Engel & A.Wambach Bid Average Methods in Procurement; G.Albano, M.Bianchi & G.Spagnolo PART II: EFFICIENCY IN PROCUREMENT

5. Basheka, B. C.(2009) Public procurement corruption and its implications on effective Service delivery in Uganda: An empirical study , International Journal of Procurement Management, vol. 2 Number 2, pp 415-440

6. Sekaran, Uma.1992. Research Methods For Business

7. Dave Chaffey ,2007 ‘e-business and e-commerce management 3^rd edition prentice hall ISBN 0-273-70752-3’

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8. Drury, C. (2000), Cost and Management Accounting, Thompson, Learning.

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10. Everett, C. (2000), Production and information Management concepts, models and behavior, Prentice Hall, London.

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14. Pegnato, J.A. (2003). “Assessing Federal Procurement Reform: Has the Procurement Pendulum Stopped Swinging?” Journal of Public Procurement, 3 (2): 145-175. S

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APPENDIX I: QUESTIONNAIRE

TOPIC: THE IMPACT OF END USER PARTICIPATION ON PROCUREMENT EFFECTIVENESS.

A CASE STUDY: TORORO DISTRICT LOCAL GOVERNMENT

Dear respondent

I am xxxxxxxxxxxxxxxx a student of xxxxxxxxxxxxxx, pursuing masters degree in xxxxxxxxx , this questionaire bis intended to enable me obtai n data in the topic of “end user participation on procurement effectiveness in tororo district local government in order to obtain the required information on this study you have been selected as a respondent because of the experience and skills you have reguarding the affairs of tororo district local government , i kindly request you to spare vsome time of your valuable time to complete3 th questioniare the information you provide will be used strictly for academic purposes , you are requested to feel free as youy answer in each questions. the response will be kept strictly confidential . you are therefore required to sighn on this questionire as proof that you are freely answering the questions without any coercin , accept to participate in the study . your coorparation is highly appreciated.

yours sincerely ,

xxxxxxxxxxxxxxxx

student

consent

i accept voluntarily to p[articipate in the study.

sighn;………………………………………..

SECTION A:             GENERAL DATA

1. Which department do you belong to in this organization?

PDU                    administration             pre-qualified suppliers

End user department

• Sex: Male                    female

• Age a) 18 -29 b) 30 – 39 c)  40 and above

• Educational level

Certificate                              Diploma                      Degree             Others

5. For how long have you been working with Tororo district local governments?

Less than one year                                     2-3 years

1–2 years                                                   above 3 years

Please tick one appropriate.

SECTION B:  IMPACT OF END USER PARTICIPATION ON PROCUREMENT EFFECTIVENESS AT TORORO DISTRICT LOCAL GOVERNMENT.

Key: SA=Strongly agree, A=agree, N=neutral, D=disagree, SD=strongly disagree

Please tick one appropriate.

SECTION C: OTHER WAYS OF ACHIEVING PROCUREMENT EFFECTIVENESS AT TORORO DISTRICT LOCAL GOVERNMENT.

Key: SA=strongly agree, A=agree, N=neutral, D=disagree, SD=strongly disagree

Please tick one appropriate.

SECTION D: 4.7. KEY INDICATORS OF PROCUREMENT EFFECTIVENESS AT TORORO DISTRICT LOCAL GOVERNMENT.

Key: SA= Strongly agree, A=agree, N=neutral, D=disagree, SD=strongly disagree