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EFFECTS OF USER DEPARTMENT PARTICIPATION ON PARTICIPATION ON PROCUREMENT PERFORMANCE. A CASE STUDY OF MUKONO DISTRICT LOCAL GOVERNMENT

CHAPTER ONE

INTRODUCTI ON

1.0 Introduction

This chapter covers the background of the study, Statement of the problem, purpose of the study, objectives of the study, research questions, scope of the study, significance of the study and definition of key terms.

1.1 Background of the study

The complexity and volume of procurement drastically increased globally in the recent years. Some of the causes that can be attributed to this include globalization, out sourcing, intense competition for existing markets as well as complicated and numerous partnership. Over the last fifty years many, of the world’s largest firms have advanced from being simple manufactures of hard goods, or providers of basic services, to being sophisticated vendors using advanced business models. This means that commitment of customers and suppliers to contractual obligations has increased, thus, the need for sustainable procurement planning polices (Krappe and Hannon, M. et al (2015). Procurement professionals find that combinations of quality, service, and price are seldom exactly equal. Burt, Dlamini, W., & Ambe, I. M. (2012) postulated that if quality and price are equal, then supplier should be selected solely on the basis of service and in such a scenario the end user needs to be included in the procurement to ensure that specification are adhered to in the procurement process, In most cases, Government acts in the best interest of the public; to strive to guarantee transparency, accountability and facilitate easy access to information.

New regulatory requirements, globalization, increasing number in signed/awarded procurement contracts and their complexity have resulted in an increasing need to put more emphasis on the importance and benefits of efficiency in the procurement process leading to the involvement of end users in the procurement process so that specification and quality are given first priority in the contract, (Abadeen group, 2004: Elsey, 2007). After an organization awards a contract it must monitor to ensure the service is being delivered as specified and in line with end user requirements. This implies that the service has been provided as to the agreed standards and price. Protiviti, (2009), argues that not having a formal, well defined and documented procurement planning process in place can have significant long term impact on the organization’s ability to track and monitor service delivery as well as meet stakeholders expectations.

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 2010)

Better procurement performance enables the establishment of the roles and responsibilities of public and private workers and is key to programme services ORC Marco, 2003).Egger (2010) suggests that contractors should be invited to provide recommendations about the service delivery demands of the organizations to ensure better procurement performance. Procurement planners must describe the problem that needs to be solved and under the current level of organizational needs. Sharer, (2010) asserts that contract planners should plan considering the objective of the contract to prevent short comings and achieve better performance in procurement performance.

Kerzner, H. R. (2013) contents that procurement End user is a key activity in the procurement process. He observes that one of practices involved would be conducting among research to collect and analyse information about how a specific industry or sector process contain types of products and services and the best ways of ensuring that customer needs are delivered and met timely in order to create efficiency in service delivery system. Such information would include contract strategy, type of contract used, pricing arrangements as well as terms and conditions with a view of ensuring service delivery efficiency.

In Uganda Baseline Survey Report on Public Procurement Systems in Uganda (PPDAA, January 2010), indicated significant variances between the actual and indicative time frames in contract completion. In addition, Sabiiti notes that the Government at times pays for no work done or very shoddy work and sometimes, purchases are not delivered on time which has affected the ability of the Government to deliver quality services to the general public (as cited in Cankwo, P., Obanda, P. W., & Pule, S. 2015) Meanwhile the Public Procurement and Disposal of Public Assets Authority (PPDA) Audit reports of Uganda National Bureau of Standards, (2009 and 2013) indicate high risks with 27% and 19% in 2009 and 2013 respectively accruing from service delivery management where there were missing procurement management records, delayed payment for received goods and services and delayed deliveries.

However procurement in Mukono 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 substandard supplies and above all incomplete projects Muhumuza, T.et al (2015).. It’s on the basis of this level of inefficiency that the researcher intends to assess the impact of end user participation on effective procurement

1.2 Statement of the problem

Local Governments have recently been reported as corrupt institutions, with its senior and low rank cadres cited in embezzlement, misappropriation and falsification of transactions (Onyango Obbo 2007). Besides, the Auditor General, the Public Accounts Committee and The Inspectorate of Government have raised allegations of mismanagement in district procurements.  This is in spite of the fact that procurement law is in place as well as the presence of PPDA as a regulatory authority. The accusations by the central government and the media suggest that Mukono District Local Government conduct in the management of public procurement affairs is questionable. The test for integrity in the conduct of Mukono District Local Government officials lies with compliance or non-compliance with the PPDA Act (2003) as well as End user involvement in the procurement process. At present, there is nothing to show that Mukono District Local Government is providing better services and facilities (Local Government Act, 2006). This study sets out to establish effects of end-user participation in effective procurement.

1.3 Purpose of the study

The purpose of the study is to investigate into effects of user department participation on participation on procurement performance, with specific reference to Mukono District Local Government.

1.4 Objectives of the study:

1. To establish the effectiveness of user department participation in the procurement performance in Mukono District Local Government
2. To assess the effects of user departments participation on the procurement performance in mukono district local government.

• Roles of user department participation on procurement performance

1. To establish other factors that affect the user department participation in procurement in mukono local government

1.5 Research Questions:

1. What is to the effectiveness of user department participation in the procurement performance in Mukono District Local Government?
2. What are the effects of user departments’ participation on the procurement performance in mukono district local government?

• What are other factors that affect the user department participation in procurement in mukono local government?

1.6 SCOPE OF THE STUDY

1.7 Subject scope

The subject scope of the study will cover into the effectiveness of user department participation in the procurement performance, the effects of user departments’ participation on the procurement performance and other factors that affect the user department participation in procurement.

1.7.1 Geographical scope

The researcher will consider Mukono District Local Government  headquarters in Nakawa..

1.7.2 Time scope:

The study will cover a period of eight months i.e. March to October 2016.

1.8 Significance of the study

The study may assist future researchers by adding to the existing body of knowledge, by giving good interventions on procurement performance

The study will help future researchers have information on the benefits of user department in procurement.

The study will help in adding literature on the relationship between of user department participation on participation on procurement performance.

The study will help the management of Mukono District Local Government have information on the other factors that may influence procurement performance in Mukono District Local Government .

1.9 Definition of key terms

1.9.1 Procurement

Procurement, According to Kenneth Lysons and Brian Farrington (2006), procurement refers to the acquisition of goods, services or works through purchase, rent, lease, franchise or any other legal means considering the 3 Rs like from the Right: place, time, price, quantity, and quality by use of shareholder’s money.