IMPACT OF PROCUREMNET STRUCTURES ON PROCUREMENT PERFORMANCE
INTRODUCTION
1.0 Introduction
The study will be conducted on the effect of procurement structures on procurement performance with Mukono District Local Government as a case study. The chapter introduces the background of the study, the statement of the problem, purpose of the study, objectives of the study, research questions, scope of the study and significance of the study.
1.1 Background to the study
Procurement is the process of acquiring goods, works and services. Public Procurement (PP) as a function of government includes decisions about the services that will be delivered to local authorities and the communities they serve (Hughes, 2005). It is utilized not only to secure goods and services required by public sector organizations for their missions and to support services provided to taxpayers, but it is also used to implement national policies and to achieve social and other objectives (Thai, 2005). Many national and international instruments have been concerned with building an effective procurement system. In this context, particular procurement issues, such as the implementation of secondary policies, the review mechanism to address complaints, provisions on electronic procurement or rules governing privately financed projects, have received an in-depth examination (De Castro, 2006). In the past decades, the public procurement system in Uganda has undergone significant developments. From being a system with no regulations in the 1960s, and a system regulated by Treasury Circulars in the 1970s, 1980s and 1990s, the introduction of the Public Procurement and Disposal Act (PPDA) of 2003 and the Procurement Regulations of 2003 has introduced new standards for public procurement in Uganda.
The gist of public procurement audits is to ensure that public funds are expended for their intended purpose, and with a view to maximizing value received by the public purchaser, ensuring that proper and accountable systems are in place and adhered to, and identifying any weaknesses in procurement (TISA, 2009) and as such public procurement audits ought to be adequately sensitive to procurement related issues (PPOA, 2007). The elaborate process of public procurement audit includes a bid process audit, contract audit, award audit, contract award audit, performance audit and disposal audit (RoK, 2003).
A public procurement process can be said to be well effective if it achieves the objectives of Transparency, competition, economy and efficiency fairness and accountability World Bank (2004). 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. According to Country procurement Assessment Review (CPAR 2004) procurement effectiveness of public goods and services is imperative for good economic management and addressing leakages of government funds.
Procurement is usually one of the largest expense items in a company’s cost structure and can have a significant influence on company’s overall performance. Croom and Johnston (2003) recognize that procurement activity is an important activity in all organizations whether public, private or governmental. Procurement managers are constantly looking for solutions to lower the high procurement costs (processes, risks, reliability) by automating the supply chain (Attaran & Attaran 2002; Trkman & McCormack 2010).
In Uganda, the procurement law is governed by the PPDA Act 2003 which was enacted and implemented to address the inadequacies of the former Central Tender Board. The law spells out the acceptable and prohibited procurement practice, recognizing that prohibited conduct constitutes malpractices and indeed an offense. The procurement law lays down the roles, expectations and limits of procurement officers engaged in procurement. However, whereas the law is clear in these aspects, there are officers who have flouted the law by engaging in procurement practices prohibited by the law. For example, according to the Auditor General reports (2008-2010), most district local governments in Uganda have engaged in violations against the provisions of the PPDA Act (2003).
Procurement involves many processes and stages during the purchasing process, this is because the key stages of need identification by the user is critical for the procurement process to start, while specification, budget approval , and monitorinbg and evaluation oif the procurement process are key to the success of any procurement activity to ensure proper organizational performance. Mukono district local government is faced with numerous procurement challenges , mainly due to failure by the district to follow stipulated procurement laws , This study intends to investigate into the impact of procurement structures on procurement performance with specific reference to Mukono District Local Government.
1.2 STATEMENT OF THE PROBLEM
Regardless of the effort by the governments of developing countries, like Uganda and development partners like World Bank to improve performance of the procurement function, public procurement is still marred by shoddy works, poor quality goods and services. Failure to implement or delayed implementation of recommended performance standards has resulted in unnecessarily high operation costs, uncoordinated business activities, and failure to attract and retain experienced and skilled personnel in the procurement positions, thus affecting the structures’ performance (David, 2002; DCD/DAC, 2003; NSSF, 2005; Atkinson, 2006; and PPDA, 2007).
It was reported in 2006 that the procurement functions of most public entities were not complying to set procurement process and performance procedures, leading to irregular and subjective decisions (PPDA, 2006). These decisions have had costly consequences for any public entity, and the country at large. It’s against this backdrop that the study is seeking to establish effect of procurement structures on procurement performance in Mukono District Local Government.
1.3.0 STUDY OBJECTIVES
1.3.1 Major objective
The major objective of the study is to examine effect of procurement structures on procurement performance in Mukono District Local Government.
1.3.2 Specific objectives
- To establish the role of procurement structures on procurement performance in Mukono District Local Government.
- To examine the relationship between procurement structures and procurement performance Mukono District Local Government.
- To identify other factors affecting procurement performance in Mukono District Local Government.
1.4 RESEARCH QUESTIONS
- What is the role of procurement structures on procurement performance in mukono district local government?
- What is the relationship between procurement structures and procurement performance mukono district local government?
- What other factors affect procurement performance in mukono district local government?
1.5 SCOPE OF THE STUDY
The scope of the study will include
1.5.1 Geographical scope
The study will be carried out in Mukono District Local Government. This is because of the convenience to the researcher in terms of cost and accessibility.
1.5.2 Time scope
The study time period will cover between 2010 and 2014 to allow adequate realization of the expected data from the respondents.
1.5.3 Content scope
The study will be centered on the effect of procurement structures on procurement performance. It will focus specifically on content such as the role of procurement structures, relationship between procurement structures and performance and other factors affecting procurement performance.
1.5 SIGNIFICANCE OF THE STUDY
The study findings may be significant in many aspects as follows:
The study finding may help to highlight more on the role of procurement structures in local governments.
The study findings may also help policymakers in local governments by availing them with information that they may use to procurement structures for better resource use.
The findings may be of great use to the academia, especially those who may wish to carry out further research on the relationship between procurement structures and procurement performance. More so, it will contribute to the body of knowledge that may be used by other researchers.
