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This study investigates contract administration and the performance of school Projects, a case of Buikwe District in Central Uganda. Contract Administration is the independent variable while performance of School Projects, a case of Buikwe District in Central Uganda is the dependent variable. This chapter presents the background to the study, statement of the problem, purpose of the study, objectives of the study, research questions, research hypotheses, significance of the study and conceptual framework.
The level of success in carrying out school construction projects development activities will depend heavily on the contract Administration, quality of the managerial, financial, technical and organizational performance of the respective parties, while taking into consideration the associated risk management, the business environment, economic and political stability. According to Wang (2004), as projects are increasingly becoming more complex, a more sophisticated approach is necessary to deal with initiating, planning, financing, designing, approving, implementing and completing a project. Successful school construction project performance is achieved, when contractors meet their requirements, individually and collectively. However, in order to meet their requirements and continual participation, it is important for the contractors to address and distinguish the three orientation criteria that exist in the life cycle of a project: the ‘procurement’, the ‘process’ and the ‘result ‘orientation (Love et al., 2000).
Today, citizens receive public goods and services not only from their general-service central governments but also from a variety of vendors/ private companies working under contracts, including for-profits, nonprofits, and government agencies from other jurisdictions. Advocates of such alternative service delivery arrangement promote competitive contracting with promises of efficiency, cost savings, and improved effectiveness (Ferris and Graddy 1991; Ostrom and Ostrom 1977; Stein 1990). Citing a growing number of incomplete, failed, and corrupt contract arrangements, critics argue that contracting creates numerous accountability problems, sacrifices service quality for efficiency and cost savings, often does not result in improved efficiency and ultimately “hollows” the state (deLeon and Denhardt 2000; Milward 1996; Milward, Provan, and Else 1993). Missing in the contracting debate is rigorous analysis of the capacity of both governments and contract vendors to manage the contracting process. Contracting is not a one-size-fits-all proposition. The success or failure of any alternative service-delivery arrangement depends on how well governments can manage the entire contract process, from assessing the feasibility of contracting through implementation to monitoring and evaluation-activities that require strong government contracting capacity. Governments investing in contract-management capacity may be better positioned to harness the promise of effective contracting while avoiding its pitfalls.
World over, the public procurement is gaining traction, most especially when it comes to the question of how public resources are used. Tax payers are increasingly putting to task public agencies as custodians of public resources to provide sufficient accountability as well as adequate spend control in order to attain Value for Money (VfM) (Basheka, Oluka and Mugurusi, 2015; Schapper, Malta and Gilbert, 2006). As a result, the role of procurement in the public sector appears to stand out in order to support public agencies on issues of public sector expenditure control and services delivery (Thai, 2001: McCrudden, 2004). In fact, a recent study by Husted and Reinecke, (2009) found that like the private sector, public procurement spends also accounted for a substantial percentage of public expenditure with almost 30% likely to be spent on public goods and services (see figure 1 below). Therefore, the importance of leveraging public procurement practices, such as planning, contracts management etc. will lead to better performance, and ultimately better budget utilization.
Figure 1. 1: Public sector spending
Source: Husted and Reinecke, (2009)/Mckinsey
In general, procurement in the public sector has been described as that process of “acquisition by purchase, rental, lease, hire purchase, license, tenancy, franchise, or any other contractual means, of any type of works, services or supplies or any combination (PPDA Act 2003). The definition emphasizes that procurement is indeed a process (Walker, and Brammer, 2009), with defined purpose and outcomes (Schapper et al., 2006; McCrudden, 2004).
According to Weimer and Aiden (2001), contract administration covers the formal governance of the contract and any permitted changes to documentation during the life of the contract. This area of contract Administration ensures that the everyday aspects of making the contract run effectively and efficiently are taken care of. Good contract administration is important for the successful management of any contract. Contract administration also requires appropriate resourcing, and as part of the contract Administration planning both the agency and the supplier need to consider the level of resourcing required for the particular contract. Procedures should be in place for the management of the main contract Administration activities. These may include: contract variations, including change control, cost monitoring, ordering procedures, e.g. ordering of hardware, payment procedures management reporting Angeles and Nath, (2007). In contract planning, straightforward procurements, transition arrangements may be covered in the contract Administration plan (Angeles and Nath, 2007).
In a developing country like Uganda, having an effective procurement planning system will continue to be a challenge to many public entities (Oluka, 2013:16). Planning must become a priority for public entities. However, the Public Procurement and Disposal Authority (PPDA) must play a central role in providing training, technical guidance and ensuring compliance to all set rules (Muhwezi, 2013). Conceptually, this study will reveal the critical components of contract selection ranging from the process, through the expected practices, the actors to be involved, to its importance (Muhwezi, 2013). Planning is one area that needs careful attention from all stakeholders in public entities because it has a huge budget and if this budget can be managed in an accountable manner, then there will be improved service delivery and this is one way of accounting to the tax payers.
In Sabiti, Basheka and Muhumuza (2011)’s study conducted in Uganda on developing public procurement performance measurement systems in developing countries: The Uganda experience, the authors note how proper planning may influence procurement performance. The key to accountability is the capacity to select the best contractors within the public sector. The internal contractor selection process of government, procurement and personnel has long received sustained attention as the centrepiece of reforms to promote accountability (World Bank, 2000). Accountability of public officials is critical in deterring corrupt practices and it creates an enabling environment for vibrant private sector activity (Kabaj, 2003). The researcher notes that the problems of accountability arise when government ignore or transgress social ethics and constitutional and legal provisions in conducting public affairs, administrative systems are fragmented, tasks to be performed are so many.
In Oluka’s study on the challenges of procurement (Oluka, 2013), she posits that restricted tendering is a procurement method that limits the request for tenders to a selected number of contractors (Oluka, 2013). According to the PPDA Regulation 2014, the restricted procurement method is a two-stage process. The first stage the employer advertises his project and invites contractors to express interest to be placed on a selected list of contractors who will be invited to bid for the project (Oluka, 2013). In creating a nexus between the earlier study and the proposed study, it is imperative that when contractors applying should be given a list of information, and information got about them in order to, pre-qualify. Stage two the shortlisted contractors who meet the selection criteria should be invited to submit a more detailed tender submission.
The study draws on the relational contracting theory of Macneil (1975: 1985:1987: 2001). It is stated that a relational contract is considered a contract whose effect is based upon a relationship of trust between the parties. The explicit terms of the contract are just an outline as there are implicit terms and understandings, which determine the behavior of the parties. According to Gudel (1998), relational contracts could also be informal agreements sustained by the value of future relationships and are very prevalent within and between firms. The dominant thesis of this theory is that relations are governed by a set of common characteristics (also called norms) that play an important role, regarding the content of the relation, the formation of parties’ obligations and the actual operation of the contracts. These norms according to Macneil, (2001) and Mertz (1999) are based on a set of internal values and the broad context social and economic factors, related to the relation. The point of this theory, is the effect of constant (re)negotiation, the resolution of conflicts between the parties, the interaction between agents in modern business contracts, the importance of the concept of the “exchange” as the boundary for modern contracts and of course the contractual norms (Macneil, 1985: 2001).
So drawing from these two theories, It’s the general view of this research that the success or failure in performance of a public sector project undertakings likely depends on how well governments can manage the entire contract process, from assessing the feasibility of contracting through implementation to monitoring and evaluation (Hernona & Nitecki, 2001). Effective contract Administration requires mitigating specific problems that can plague the contract process. Successful contract Administration is defined as existing when the arrangements for service delivery continue to be satisfactory to both customer and provider and expected business benefits and value for money are being realized (Prier & McCue, 2007). The aim of contract administration is to ensure that services are provided to the required standard, within the agreed timeframe whilst achieving value for money. It is important that contracts are actively managed throughout their life to help ensure that performance is satisfactory in terms of road works performance.
Contract administration involves those activities performed by organizational officials after a contract has been awarded to determine how well the organization and the contractor performed to meet the requirements of the contract (Hewitt, Money & Sharma, 2002; Jap, 1999; Lyons, Krachenberg & Henke, 1990). Contract theory is not merely the study of legally binding contracts. Broadly defined, it studies the design of formal and informal agreements that motivate people with conflicting interests to take mutually beneficial actions. Contract theory guides us in structuring arrangements between employers and employees, shareholders and chief executives, and companies and their suppliers. It encompasses all dealings between the organization and the contractor from the time the contract is awarded until the work has been completed and accepted or the contract terminated, payment has been made, and disputes have been resolved (Vickery in Nucharee, 2009). As such, contract administration constitutes that primary part of the contract process that assures the organization gets what it paid for.
In contract administration, the focus is on obtaining supplies and services, of requisite quality, on time, and within budget (Jin, 2004). While the legal requirements of the contract are determinative of the proper course of action of organizational officials in administering a contract, the exercise of skill and judgment is often required in order to protect effectively the service beneficiaries’ interest (Monczka et al., 2005).
Manthosi and Thawala (2012:86) and Ganderton (2012:14) report various methods besides planning such as negotiation, competitive, open-selective, design and build tendering approaches that have been used in construction projects. The Open tendering procedure allows practically any contractor to submit a tender for the work. This procedure involves either the client or consultant (on behalf of the client) placing a public advertisement giving a brief description of the works. Normally the client will require a cash deposit when contract documents are requested (Manthosi and Thawala, 2012). The study by Manthosi and Thawala (2012:86) mainly relied on secondary data that most times a reader may not be in position to tell how data control of the study was ensured. However, different from Manthosi and Thawala (2012)‟s study, the proposed study will rely on both primary and secondary data collection methods.
Planning must be done so that the chain of procurement is complete (Dawood, 2014). This method is most favored by construction clients as observed (Murdoch and Hughes, 2015:33; Dawood, 2014:21). In the studies conducted by Merna and Smith (2010:34), Trickey (2012:45) and Smith (2014:67) competitive tendering was seen as the best way to select a bidder with the lowest price (Pasquire and Collins, 2014:41). It was argued in the above studies that using lowest price as yardstick for selecting contractors ensures that the client gets value for money through free and fair competition. However, this argument was challenged by Pearson (2013), Dawood (2014:15), Pasquire and Collins (2014:69) who argued that the lowest contemporaneous price is not a guarantee for yielding the overall lowest project cost after execution and on this note the researcher buys the idea. It is on the basis of this idea that the researcher will base his argument. According to Lynch (2014:44) any decision to procure goods must be backed by planning (Lynch, 2014:56). And the basic characteristic of this method is that competition is confined to a certain number of firms either because only a few firms are qualified to fulfill the specific type of requirement, or certain conditions warrant the use of a limited number of firms in order to reduce the time and cost of the selection process (Arrows, 2010:34). Although considered a competitive procurement method, competition is limited to only firms shortlisted and the method involves two processes and it typically takes longer than the open competitive process which may result in contractor submitting speculative bids.
Performance of projects is being explained as a network of relationships that need managing to achieve project success (Pryke, 2006). Cleland and Bidanda (2009) have stated that in a highly connected and competitive world, most projects must function in an environment that interacts with joint ventures, alliances, multinational sourcing, sub-contractors, and intricate vendor relations. Relationships with external organizations are managed through contracts. In general, companies provide services or products based on the results of direct contract negotiations with the client. One of the most important factors in preparing a proposal and estimating the cost and profit of a project is the type of contract expected. The confidence by which a bid is prepared is usually dependent on how much risk the contractor will incur through the contract. Certain types of contracts provide relief for the contractor since onerous risks exist (Kerzner, 2009). He further states that the size and experience of staff, urgency of completion, availability of qualified contractors, and other factors must be evaluated carefully during contract negotiations. The advantages and disadvantages of all basic contractual arrangements must be recognized to select the optimum arrangement for a particular project.
According to the Project Management Institute (2013), all legal contractual relationships generally fall into one of two broad families: either fixed-price or cost reimbursable. There is a third hybrid type commonly in use called time and materials contract. The fixed-price contract type is recommended, although some projects also prepare team contracts to define ground rules for the project. However, in practice it is not unusual to combine one or more types into a single contract document. Once the contract has been signed, both parties must meet their obligations under the contract. The contract administrator is responsible for compliance by the contractor to the buyer’s contractual terms and conditions and to make sure that the final product of the project meets requirements. Project Management Institute (2013) further states that under fixed-price arrangement, buyers need to precisely specify the product or service being procured since changes in scope may only be accepted with an increase in contract price. Kerzner (2009) argues that although a contract administrator is a member of the project team for reporting purposes, the contractor administrator could report to a line function such as legal department and may even be an attorney. In later stages of the project, a contract administrator is responsible for verification that all the work performed and deliverables produced are acceptable to the buyer. Contractual closure is then followed up with administrative project closure of the project or phase.
In the construction sector, a number of studies have identified the importance of managing the interrelationships between parties within a project. Studies focusing on organizing projects as temporary multiparty organizations in the 1980s came from Bresnen (1988) in the United Kingdom, and from Packendorff (1995) in Europe. Brensen and Marshall (2000) further looked at partnering within the construction industry. A key issue remained of how to embed partnering relationship into the contract. The use of the contract form to govern the relationship and resolve conflicts among the contracting parties has been explored by various parties such as Lazar (2000), and Cicmil and Marshall (2005) but with no specific contractual devices developed.
In Uganda, public institutions have also realized the importance of contracting. Among these public institutions is Buikwe District in Central Uganda.
In recognition of the above, Government of Uganda, through Buikwe District, is implementing several intervention strategies to school infrastructures to reduce the deficit and school drops of children. Under the above project, is the BDFCDP whose focus is on schools and wash and no other basic services? This is mainly because of: (i) Buikwe’s specific needs (high motorization growth rates and topography) for improved connectivity and mobility, (ii) the health hazards associated with school dropouts (I i) the need to have limited and focused interventions which would have much impact and transformative, rather than spreading thin.
This operation therefore intends to support the Buikwe district twin objective of inclusive School dropouts around fishing communities. The focus of this research under contract administration and performance was to Repair and Maintain schools in Buikwe district which was contracted out to Radhe construction Ltd at Tongolo P/S in package 3 lot 3at a contract sum of Ugx 916,107,243
However, despite Buikwe mission, a lot of concerns had been raised about Buikwe’s performance on construction projects. Poor contract Administration in terms of supervisory function resulted in loss of funds, lack of a system of accountability that is manifested in inflated claims, forgery of documents and outright fraud that included payments for undelivered services, this results into sub-standard buildings, delayed/ non delivery of services to the expectations within Buikwe district stakeholders.
Kikajja Primary School. (Contract awarded to Prof Construction Ltd) Cost (UGX) 4,181,073,515. And also Zitwe Primary School. (Contract Awarded to Masse General Contractors) Cost (UGX)and supervision of the above works Cost (UGX)259,100,000. Totaling to Cost (UGX) 5,579,252,928 (Office of the Auditor General, 2013/4). Basing on the above, this study therefore seeks to examine the effect of contract implementation procedures and contract monitoring and control on the performance of Education Projects in Buikwe District.
Inefficient contract administration often results in misallocation of resources, including financial resources, personnel, and materials. Contracts may not be adequately monitored, leading to overspending, underutilization of resources, or diversion of funds from critical educational needs. The effectiveness of contract administration holds paramount importance across diverse sectors, encompassing both corporate entities and governmental organizations. Failure to adhere to contractual terms and conditions can expose schools to legal risks, contractual disputes, and financial liabilities. Incomplete or inaccurate documentation, lack of adherence to procurement regulations, and failure to comply with contractual obligations can result in costly litigations and damage to the school’s reputation (Lugeye, 2015).
Several challenges hinder the efficient administration of contracts and impede optimal school performance in Buikwe District. The PPDA report indicates that Buikwe district has many procurement gaps as many contractors don’t follow the procurement laws this therefore exposes the district contracts to challenges of poor performance. These challenges may include inadequate oversight mechanisms, insufficient resources allocation, limited capacity building initiatives, and the prevalence of corruption and unethical practices (PPDA, 2022). Additionally, factors such as geographical remoteness, socio-economic disparities, and political influences may further exacerbate these challenges, resulting in suboptimal contract administration and underperforming schools, without a clear understanding of the relationship between contract administration and school performance in Buikwe District, policymakers, educators, and stakeholders lack the necessary insights to implement targeted interventions and improve the quality of education. Consequently, this knowledge gap undermines efforts to enhance educational outcomes, promote accountability, and ensure the efficient utilization of resources in the district’s schools (Jesero, 2016).
Therefore, there is an urgent need for empirical research that investigates the dynamics of contract administration and its impact on school performance within the specific context of Buikwe District, Uganda. By addressing this gap in the literature, this study aims to provide evidence-based recommendations for policymakers, education authorities, and other stakeholders to enhance contract management practices, optimize resource allocation, and improve educational outcomes in the district.
The study examined contract administration and performance of school Projects, a case Buikwe District in Central Uganda.
The study was guided by the following objectives:
- To examine the effect of contract implementation procedures on the performance of school Projects, a case of Buikwe district.
- To establish the effect of contract monitoring and control on the performance of school Projects, a case of Buikwe.
- To examine the moderating effect of public oversight bodies on contract implementation procedures, contract monitoring and control on performance of school Projects, a case of Buikwe district.
The study answered the following research questions:
- What is the effect of contract implementation procedure on the performance of school Projects, a case of Buikwe district?
- What is the effect of contract monitoring and control on the performance of school Projects, a case of Buikwe district?
- What is the moderating effect of public oversight bodies on contract implementation procedures, contract monitoring and control on performance of school Projects, a case of Buikwe district?
The following hypotheses were tested:
- Contract implementation procedures significantly affect performance of school Projects in Buikwe district in Central Uganda.
- Contract monitoring and control have no significant effect on the performance of school Projects at Buikwe district in Central Uganda.
- Public oversight bodies significantly affect contract implementation procedures, contract monitoring and control on performance of school Projects, a case of Buikwe district.
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The conceptual framework shows the relationship between contract Administration and the performance of school Projects, a case of Buikwe district in Central Uganda.
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Figure 1. 2: Conceptual framework showing the relationship between the study variables
Source: Urquhart (2002), Cooper and Schindler (2008), Project Management Institute (2013), Cleland and Bidanda (2009) Aberdeen et al., (2006).
The conceptual framework shows contract administration as the independent variable whose indicators include contract Implementation procedures and contracts relationship management while the performance of school Projects is shown as the dependent variable measured in terms of time, Stakeholder satisfaction, cost/price. The assumption is that a good contract administration will result into better performance of projects, while poor contract administration will result into poor performance of the same.
1.9 Justification of the study
Since little research has been done on how contract administration and performance of Education Projects, a case of Buikwe district in Central Uganda, the study will make a valuable contribution to this area. Therefore, this research was seeking to determine the moderating effect of public oversight bodies on contract implementation procedures, contract monitoring and control on performance of school Projects, a case of Buikwe.
1.10 Significance of the study
This study was to provide helpful information to various stakeholders as follows;
The government of Uganda (GOU): Through the donor embassy of Iceland and Buikwe district Local government, the study findings would provide vital knowledge to all state corporations regarding the effective contract Administration practices. It would also guide the government, policy makers and other stakeholders on sound and informed decision making on contract Administration issues; hence the achievement of value for money.
The Public Procurement and Disposal of Public Assets Authority (PPDA): The study will provide lessons that will help PPDA come up with appropriate measures that address problems resulting from poor procurement management of construction projects in donor funded school projects.
Current Researchers and Procurement scholarship: It’s hoped that other researchers will use the findings as a reference for further research in procurement management and performance of construction projects in especially the government funded school projects.
To the future researchers: To the future researchers, the study would form a basis upon which future studies would be done by establishing knowledge gap on the concept. As well, current and future students would use the research findings and conclusions to enrich their knowledge on the topic, create their literature review and establish new research areas. The findings from the study would also identify other crucial relationships that need further research, especially on contract Administration and operational performance.
Procurement professionals: Additionally, the study would be useful to the procurement and supply chain professionals on the importance of practicing good contract Administration; determinants of best practice; as well as its challenges and solutions. To the supply chain organizations, the study would enable them to practice appropriate contract Administration by identifying key activities involved in the process.
The study was carried out in Buikwe District Local Government in Central Uganda. It was selected as a case study of contract administration and performance of education projects with funding from the both Government of Uganda and Iceland embassy to construct and maintain schools owned by government in Buikwe district.
The study concentrated on contract administration and the performance of Education Projects, a case of Buikwe district in Central Uganda. Contract administration was restricted to aspects of contract Implementation procedures and contract monitoring and control Performance of education projects was restricted to time, scope, quality and schedule.
The research focused on a period of five years for obtaining information about contract administration and performance School Project. This is because it was recommended that any research should obtain information of not less than five years to be authentic (Amin, 2005).
Contract administration covers the formal governance of the contract and any permitted changes to documentation during the life of the contract. This area of contract Administration ensures that the everyday aspects of making the contract run effectively and efficiently are taken care of
Performance of school projects is being explained as a network of relationships that need managing to achieve project success (Pryke, 2006).
Contract Implementation is the process and activity associated with implementing a new contract which ensures supplier(s) have all the information they require to plan the migration of users to the contract, Organizations have all the information they require to use the contract e.g. suppliers’ contact details, information on the goods/services available from the contract and continuity of supply.
Relationship management seeks to keep the relationship between the economic operator and the contracting authority open and constructive, with the aim of resolving or easing tensions and identifying potential problems at an early stage, while also identifying opportunities for improvement. Relationships must be wholly professional throughout and must include a professional approach to managing issues and dispute resolution.
This chapter captured the review of literature related to the study. The chapter identified and analyzed information related to the problem. The sources for this literature included journals, reports, books and periodicals. Some of these sources were primary and others were secondary. It presented theoretical review, actual literature review and summary of the literature review. In theoretical review, key theories guiding the study were identified and analyzed. In the actual literature review, related information was reviewed objective by objective. The lessons and gaps identified from the literature review were captured in the summary, at the end of this chapter.
As earlier mentioned, the potency of the Scott (1987) Institutional theory and the relational contracting theory of Macneil (1975) in explaining the relationship of contracts administration and performance is much clearer when the critique of these same theories assessed as seen in literature. This is what is discussed here below.
The adoption of the institutional theory (Scott, 2001: 2005: Selznick, 1996), a traditionally sociological perspective to explain organizational structures and behaviour, perhaps highlights its inherent weakness. According to Dunn, (2010) and Scott, (2001) the institutional theory draws attention to the social and cultural factors that influence organizational decision-making and in particular how rationalized activities are adopted by organizations. True, the institutional theory has traditionally been the approach used to examine elements of public procurement (Obanda, 2010). Scott (2004) identifies three pillars of institutions as regulatory, normative and cultural cognitive. The regulatory pillar emphasizes the use of rules, laws and sanctions as enforcement mechanism, with expedience as basis for compliance.
Yet the institutional theory has been criticized for the apparent theoretical inconsistency within which the concept of institutionalism is presented at least in the context of public procurement (Palmer and Biggart, 2002). While the academic process thrives on the differences between points of view, the extent of those differences calls into question whether scholars are, indeed, talking about the same thing (Dacin, Goodstein, & Scott, 2002). After all, if one author states that institutional theory may be understood through concepts “a, b, and c” while another author states that the relevant concepts are “c, e, and f,” there is some conceptual overlap, but there are also inherent contradictions (Green, Babb, & Alpaslan, 2008).
In addition, and perhaps the biggest impediment of the institutional theory is that the term institution means so many things to different scholars, and that some of the alternative approaches are not only different but even contradictory (Greenwood, Oliver, Sahlin, & Suddaby, 2008). If one adopts some versions of the institutional approach he or she may have very different empirical evidence, and make very different predictions about behavior, then if one were doing research using another version (Holm, 1995). This is true even though this research is conducted using what is nominally the same theoretical approach. A central question then is just how much of an impediment these internal differences are and what if anything can be done to generate a more unified approach for institutional theory. This study does not go further in this direction to explore this, rather the focus is on the appearance and maintenance of institutional arrangements which can be used to explain projects performance.
Turning to the relational contracting theory of Macneil (1975), a somewhat “newer” theory in public procurement, it’s clear that ‘relational contracts’ analyzed by the few scholars in public procurement field do not map exactly onto the concept of ‘relationships’ as described in Macneil’s studies (Macneil, 1975: 1985:1987: 2001), but they do have a common viewpoint which is that all contracts contain a relational element. This is because even a discrete exchange has relational elements as a contract exists within society (Lindenberg, & De Vos, 1985). Moreover, because it is almost impossible to write a contract which does not include some elements which cannot be enforced by a third party: all contracts will contain relational elements.
From a purely legal perspective, it appears the relational theory fails to integrate contract and property, which according to Eisenberg, (2002) is a highly relational concept that performs its own vital social functions and that, as Macneil (1987) has repeatedly noted, provides the essential backdrop against which contractual exchange can be distinguished from theft. According to Harrison (2004), it would be surprising if the scheme of property that lies behind contract and that performs vital social functions of its own would fail to influence in any way a realistic understanding of the functions of contract. As such it is possible that the relational contracting theory neglects the contributions made that legally enforceable commitments be distinguished from legally unenforceable ones and to a means of drawing such a distinction.
Yet still and with the criticisms put across, the relational contracting theory, it is a potent tool to adequately explain contracting in much finer details, although it says little on performance. The assumption of this study is that these finer details, should in fact explain performance variations as contextualized in this study.
2.3 Contract Implementation procedures and performance of education projects
Good government/business relationships can serve the role of facilitator in the contract implementation process (Kamarck, 2002). Collaborating with private sector organizations is posited to be more efficient than traditional governance structures. In fact, both governmental agencies and suppliers are now advocating partnerships between governmental buyers and business sellers to facilitate the implementation of contracts (Kelman, 1990). With the increasing procurement of high-tech systems and services, collaborative and relational exchanges was required to realize the strategic goals for both government agencies and private business (Laurent, 2000). Furthermore, facing downsizing and declining budgets, federal agencies are strongly motivated to find new ways of doing business focused on “faster, better, cheaper” (Linscott, 1999).
Showing growing interests in the facilitator role of government/business relationships, agencies are reforming their pure transaction-based purchasing and attempting to explore the benefits of partnering with commercial entities (Murray, 2000). Public organizations try to streamline their Act (and a significant number of regulatory changes to dramatically decreased rigidity and bureaucracy (Kelman, 1990) and encouraged performance-based contracting, sharing-in-savings, and long-term contracting (Burman, 1998; Laurent, 1998). Purchasers may regard the implementation of contracts as the sole responsibility of suppliers, and may be inflexible to changing conditions and difficulties facing the suppliers. However, if public purchasers understand the need to cooperate with suppliers in order to realize the desirable objectives of the contract, then commitment is enhanced in the exchange process, and more likely to be responsive to suppliers’ requests.
Sollish and John, (2003) stated that it is in the very nature of some widely used standard contracts, particularly for works, that they should have clear and comprehensive provisions allowing the contracting authority to change the nature, quantity, quality and completion of the subject of the contract. From a contract management point of view, it is advantageous to be able to address changing circumstances in a transparent, timely, efficiently, effectively and professionally manner coping the way the challenges of contract management are arise during
Contract execution. Since the contracting period in government procurement differs greatly (from ten years long to a few days), the corresponding length of buyer-seller interactions differs greatly. It is reasonable to conclude that the contracting period will influence the facilitator roles of the relationships between government buyers and business sellers. When the buyers and sellers are involved in repeated exchange episodes, their relationships can experience awareness, exploration and expansion stages (Frazier, 1983) in an evolutionary style. The marketing literature has long recognized the importance of length of interaction in developing such relationship attributes as trust (e.g., Doney & Connon, 1997). In contrast, when the contract is short term, both parties will either develop interimistic relationships (Lambe, et al., 2000), or involve little relational interactions.
When public managers choose not to enforce contract terms, and consequently, fail to obtain desired outcomes, public value can be compromised and tensions can be created between administrators and political principals. As such, contracting has raised key questions about discretion—especially the potential for corruption and abuse in discretionary actions and the lack of accountability to citizens Behn 200, Cohen and Eimicke 2008). Discretion can open up the implementation process to manipulation and exploitation, particularly when resources are being allocated (Goodin 1988, as cited in Forsyth 1999), as in government contracting. Interviewed managers reported that discretion can also lead to confusion and inconsistency. Essentially, when discretion is used and the “rules of the game” are in constant flux, it can make management even more difficult, especially when operating in a severely resource-constrained environment
Discretion also allows for greater flexibility and, as a result, increases efficiencies. New Public Management, with its emphasis on discretion and results-based management, is a direct response to the failures of rules and processes created by the political system (Morgan 1990). Turning implementation over to public servants allows decisions to be based on information and competence instead of political goals, ultimately increasing efficiency in implementation (Forsyth 1999; Morgan 1990). Managers often need to balance the rigidity of rules with the flexibility of context, and discretion allows for subjectivity in decision making based on the unique requirements of the situation (Lipsky 1980).
2.4 Contract monitoring and control and Performance of road projects
Agere (2009:69) in his study on the effectiveness of contract monitoring and control in Austria notes that contract monitoring requires the systematic management of contract creation, execution, compliance and analysis to maximize performance and minimize risk (Agere, 2009:71). With the increase in the complexity of doing business in public entities coupled with the increase in transaction volumes and value in an ever tightening regulatory framework has resulted in businesses taking note of the importance of proper monitoring of contractors (Bagaka & Kobia, 2010). The missing link on the earlier study is on the sampling techniques used. Non probability sampling techniques specifically convenient sampling was adopted to select the sample, in creating a nexus between the two studies, the proposed study will rely on both probability and non-probability sampling techniques to select the sample.
Relationship management seeks to keep the relationship between the economic operator and the contracting authority open and constructive, with the aim of resolving or easing tensions and identifying potential problems at an early stage, while also identifying opportunities for improvement. Relationships must be wholly professional throughout and must include a professional approach to managing issues and dispute resolution (Muhairwe et al., 2002). Relationship contract Administration is concerned with keeping the relationship between the two parties’ open and constructive, resolving or easing tensions and identifying problems early Literature indicates that the relationship model tends to lie somewhere on a continuum between a traditional arm’s-length arrangement and a full partnership arrangement.
According to Niwagaba, Godfrey, Gisagara and Howard (2010), relationship management is arguably the key component of contract Administration. It has the aim of attempting to guarantee that the association between the two parties is open and constructive, with the aim to identify and resolve any problematic issues. The approach was dependent on the nature of the contract; the greater the importance and/or monetary value, the more attention, time, and resources were allocated. It is important that the specific roles are not neglected, even if some are not the direct responsibility of the designated contract manager. Management structures of a contract need to be designed to facilitate a good relationship. The main aims should be to ensure, a strategic approach to managing the contract, to achieve maximum value for money, guarantee budget efficiency & effectiveness for all parties and good working practices adopted and added value achieved.
According to Hinton (2003) in his study on the “Best practices in government: Components of an effective contract monitoring system”, contracting involves collecting and analyzing information to provide assurance on the performance of the contractor on the agreed timeframes and towards providing the contract deliverables (Arrows, 2010). Key Performance Indicators (KPIs) should be clearly set within the contract and then measured, reported and monitored on a regular basis. Arrows (ibid), further observes that while significant contract monitoring occurs when the vendor is actually performing the service (contract period), preparation during the pre-contract period is essential to effective contract monitoring. In the proposed study, contract monitoring involves those activities performed by government officials after a contract has been awarded to determine how well the government and the contractor performed to meet the requirements of the contract. It encompasses all dealings between the government and the contractor from the time the contract is awarded until the work has been completed.
According to Mbalangu (2013) in his study on compliance monitoring and procurement performance carried out in Uganda notes that supplier contractor monitoring has slowly become an important component for effective supplier relationship management that is directly linked to securing the supply of key commodities needed for sustaining business. According to Kansiime (2014) in his study on the impact of public procurement reforms on service delivery in Uganda, he notes that monitoring of this formalized relationship allows an organization a degree of control over the deliverables and performance requirements. The use of contracts in business relationships has long been the lifeblood of a business, as the contracts provide the terms, pricing, and service levels of customer, partner and/or supplier relationships (Mbalangu, 2013). Contracts provide a framework by which an organization manages and mitigates risk in its supplier relationships (Mbalangu, 2013). As a result, contracts have become the living breathing documents that control the dynamics of everyday business in an ever increasing fashion. The above study adopted qualitative techniques of data analysis compared to the proposed study that will adopt mixed methodological approaches of data analysis.
Schmitz and Platts (2004) in their study conducted in Ghana did investigate the procurement reforms in Ghana. They assert that the main aim of contracting is to ensure that goods or services are delivered on time, at the agreed cost and at the specified requirements. It means developing effective working relationships with your suppliers, ensuring effective service delivery, maximizing value for money and providing consistent quality for stakeholders and end users (Schmitz and Platts, 2004). The primary goal for contractor monitoring within any company is to ensure that commitments and obligations to customers and suppliers are clearly visible to the relevant people in the organization and that they are executed upon (Schmitz and Platts, 2004). Contracts are used to control virtually every part of the trading relationship between buyers, sellers, and intermediaries, and have an impact on various functions within the enterprise. For example, the sell-side involves sales, marketing, finance, legal, sales operations and customer service. The earlier study pretested the results based on qualitative approaches, in bridging the gap, this study will pretest the results using both quantitative and qualitative methodological approaches.
Hinton (2003) further in his study carried out in England he identifies capacity of employees; written policies and procedures; contingency plans; clearly communication of expectations to vendors, performance measures, and post-award meetings; administration plan; organized contract files as effective components for contract monitoring (Arrows, 2010). The other components Hinton mentions are timely payment; regular reports; access to records and right to audit; and, dispute resolution procedures (Hinton, 2003:46). While these are crucial components not all contracts are monitored using the same components to measure success (Rendon, 2010).
2.5 Role of public oversight bodies in contract implementation procedures, contract monitoring and control, and performance of road projects
Effective and credible mechanisms inside the government for managing regulation are indispensable for reform (OECD 2002). OECD evidence shows that a well-organized and monitored process, driven by “engines of reform” with clear accountability for results, is important for the success of the regulatory quality policy. While in 1996 only 14 OECD countries had set up a dedicated body (or bodies) responsible for promoting the regulatory policy and monitoring and reporting on regulatory reform and regulatory quality in the national administration from a whole of government perspective, 140 countries had one in 2010, according to preliminary results from the most recent survey on regulatory quality indicators. These institutions have brought important improvements for the regulatory systems and the reform processes.
In Uganda, regulatory committees have been set up by law with a “general mandate to develop and co-ordinate regulatory policy and to review and approve regulations.” Their main functions are to give some strategic perspective in the regulatory reforms, to undertake research, to monitor improvement efforts of each agency such as Buikwe and to make sure there is coherence between their actions. In addition, extensive inter-ministerial coordination and supervision has been put in place for supervision of policy makers and regulators, a programme to audit law-making processes has been established
Oversight bodies are an essential regulatory institution, which enhances quality in regulatory processes and their reforms. Their mission is to supervise, co-ordinate, challenge and advice regulators while promoting reform, regulatory quality and its benefits. These institutions have the capacity to co-ordinate, maintain a whole-of-government perspective and a broad concept of reform, holding sufficient authority and preferably benefit from a permanent mandate. They also play a key role in making sure that regulatory reform meets quality standards, complies with a general economic strategy and that Regulatory Impact Analysis (RIA) is undertaken appropriately.
2.6 Summary of the Literature Review
Whereas the previous studies have always looked at contract Implementation procedures and performance, not all factors have been dealt with within the context of Buikwe contract administration. The public sector scorecard suggested by Moullin (2012) measures project performance on five perspectives: (1) The achievement of its strategic objectives, (2) Service user/stakeholder satisfaction, (3) Organizational excellence; (4) Financial targets and (5) Innovation and learning.
While regulating public procurement contract Administration is perceived by many as one way to usher in transparency, accountability, economy, and integrity in the use of public funds, there appears to be limited literature on the other side regarding the possible or desirable outcomes of public procurement compliance on regulations to procurement performance (Dorothy, 2010). In particular, how these outcomes impact project success is now a well discussed phenomenon in the literature. These deserve more attention.
Further, some studies indicate that use of good contract administration is important for the successful management of any contract and also requires appropriate resourcing, and as part of the contract Administration planning both the agency and the supplier need to consider the level of resourcing required for the particular contract. Most of previous studies have always looked at factors influencing performance of works and services in public sector but does not wholly bring out the effect of contract administration to the performance of education projects in public sector. This study filled this gap through establishing the effect of the various contract monitoring and control on performance of education projects.
