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EFFECT OF PUBLIC PROCUREMENT ON ORGANIZATIONAL PERFOPRMANCE
(SUMAL FOODS, OLUYOLE, IBADAN AS A CASE
STUDY)
PREPARED BY
OLADIPUIPO KAYODE
BEING A RESEARCH PROJECT
DIPSON KAYUS RESOURCES CENTRE, IBADAN, OYO STATE, NIGERIA
08058573347; 07063796484
OCTOBER, 2015
ABSTRACT
The purpose of the study is to examine effect of public procurement on organizational performance. The research as reviewed the contributions of some authors on the research topic. This made up the literature review. The researcher also selected Sumal Foods, Oluyole, Ibadan as a case study. The sampled size used by the researcher for the study was 60. She also distributed 60 questionnaires to the company and the 60 questionnaires were properly filled and returned for the data analysis. After the analysis, the researcher found out that Sumal Foods has a well established policy and procedures on Public Procurement. The use of professionals in the area of procurement procedures improves operational efficiencies in Sumal Foods. Sumal Foods has formal strategic ways of evaluating and sourcing for suppliers. Sumal Foods makes use of purchasing order for procurement of Goods. Sumal Foods provides adequate finance for Procurement department. Procurement department of Sumal Foods has for long been overshadowed with inefficiency and corruption. Sumal Foods has sound Procurement policies and practices in place regulating institutions procurement procedures. Sub-standard materials are seriously affecting the Sumal Foods’ productivity. Procurement procedures in Sumal Foods, has for long been overshadowed with inefficiency and corruption. Procurement procedures demands high quality governance in terms of transparency and accountability. Based on the findin it was recommended that
TABLE OF CONTENTS
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Contents vi
List of Tables viii
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Purpose of the Study 3
1.4 Significance of the Study 4
1.5 Research Questions 4
1.6 Scope and Limitation of the Study 5
1.7 Definition of Terms/Concepts 5
1.8 Historical Background of Sumal Foods 7
1.9 Organizational Structure of Sumal Foods 10
CHAPTER TWO
2.0 Literature Review 11
2.1 The Concept of Public Procurement 11
2.2 Fundamental Principles of Public Procurement 13
2.3 Deficiencies in the Nigeria Procurement Procedures 16
2.4 Challenges of Sustaining Reforms in Public Procurement Process 17
and procedures
2.5 Management of Public Procurement Procedure in a Government 18
Institution
2.6 The Operational Efficiency of Procurement Procedures 26
2.7 Reform and Public Procurement Procedures 30
2.8 Implementation of Public Procurement 33
References 36
CHAPTER THREE
3.0 Research Methodology 38
3.1 Research Design 38
3.2 Area of Study 38
3.3 Sample Frame 38
3.4 Sample Size 39
3.5 Instruments for Data Collection 39
3.6 Method of Data Collection 39
3.7 Method of Data Analysis 40
CHAPTER FOUR
4.0 Presentation, Analysis and Interpretation of Data 41
CHAPTER FIVE
5.0 Summary of Findings, Conclusion and Recommendations 59
5.1 Summary of Findings 59
5.2 Conclusion 60
5.3 Recommendations 61
Bibliography 63
Appendix 65
List of Tables
Table 1: Analysis of Questionnaire Administered and Returned 41
Table 2: Analysis of Responses on Sex 42
Table 3: Analysis of responses on Age Distribution 43
Table 4: Analysis f responses on Marital Status 43
Table 5: Analysis of responses on Educational Background 44
Table 6: Analysis of responses on Length of Services 45
Table 7: Analysis of responses on Position Held 45
Table 8: Analysis of responses on whether Sumal Foods has a policy and procedures for evaluating and sourcing for suppliers 46
Table 9: Analysis of responses on whether the use of professionals in the area of procurement procedures improve operational efficiencies in Sumal Foods 47
Table 10: Analysis of responses on whether Sumal Foods has formal strategic ways of evaluating and sourcing for suppliers. 48
Table 11: Analysis of responses on whether Sumal Foods makes use of purchasing order for procurement of Goods. 48
Table 12: Analysis of responses on whether Sumal Foods provides adequate finance for Procurement department. 49
Table 13: Analysis of responses whether Procurement department of Sumal Foods has for long been overshadowed with inefficiency and corruption 50
Table 14: Analysis of responses on whether Sumal Foods, has sound Procurement policies and practices in place regulating organizations procurement procedures. 50
Table 15: Analysis of responses on whether Sub-standard materials are seriously affecting the Sumal Foods productivity 51
Table 16: Analysis of responses on Professional Buyers should be appointed as procurer in organizations in Nigeria.. 52
Table 17: Analysis of responses on whether Public Procurement has significant impact on Organisation Performance 52
Table 18: Analysis of responses on whether Procurement procedures demands high quality governance in terms of transparency and accountability. 53
Table 19: Analysis of responses on whether Proper audit and internal control system will reduce the various problems of finance in Sumal Foods. 53
Table 20: Analysis of responses on whether Accountability is put in place to curb fraud and misappropriation of funds in Sumal Foods. 54
Table 21: Analysis of responses on whether Special laws and regulation are put in place to curb fraud and misappropriation
of funds Sumal Foods. 55
Table 22: Analysis of responses on whether The adoption of Information Communication Technology enhances Procurement process in Sumal Foods. 55
Table 23: Analysis of responses on whether Recruitment and ` retention of unqualified purchasing personnel will contribute to the down fall of public sector procurement procedures. 56
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Edler & Georghiou, (2010) defined procurement as the process
of acquiring resources from outside suppliers. In this sense,
procurement activities are very critical to all organizational units
from households to firms, organizations, and the government. From
the functional viewpoint, procurement is an indispensable activity
and its successful achievement is essential to any organization. In
the private sector, procurement is considered as a profit center to
maximize the firm’s profit in saving material cost. However, there is
a major distinction in public procurement as it draws its funds from
tax revenue (Edler & Georghiou, 2010; Ladan 2011). Hence, unlike
procurement in the private sector, governmental procurement
should reflect public concerns as well as efficiency. Nevertheless,
both are quite similar in many ways such as cost savings, quality
assurance, supplier relationship, procurement ethics, supply market
analysis, green procurement and so on (Uyarra, 2010).
Procurement encompasses the whole process of acquiring
property and/or services. It begins when an agency has identified a
need and decided on its procurement requirement. Public
Procurement continues through the processes of risk assessment,
seeking and evaluating alternative solutions, contract award,
delivery of and payment for the property and/or services and, where
relevant, the ongoing management of a contract and consideration
of options related to the contract. Public Procurement also extends
to the ultimate disposal of property at the end of its useful life
(Jones, 2010).
Sound public procurement policies and practices are among
the essential elements of good governance. Uyarra, (2010) notes
the irregular procurement activities in public institutions provide the
biggest loophole through which public resources are
misappropriated. According Uyarra, (2010), the basic principles of
good public procurement practice include accountability, where
effective mechanisms must be in place in order to enable procuring
entities spend the limited resources carefully, knowing clearly that
they are accountable to members of the public; competitive supply,
which requires the procurement be carried out by competition
unless there are convincing reasons for single sourcing; and
consistency, which emphasizes the equal treatment of all bidders
irrespective of race, nationality or political affiliation .
1.2 STATEMENT OF THE PROBLEM
The Nigerian public procurement practice has been known to
be unprofessional, inefficient and ineffective. The guidelines of these
circulars on public procurement practice were grossly inadequate
and created rooms for malpractices and high level corruption in
contract management.
The researchers interest was arose as a result of ineffective
procurement officers especially in government parastatal across the
nation. This has been a threat on procurement activities in
government institutions thereby making them perform below
standard and expectation.
1.3 PURPOSE OF THE STUDY
The aim of the study is to investigate on the effect of public
procurement on organizational performance. Other objectives of the
study are to:
a. Evaluate the roles and responsibilities of public procurement
b. Evaluate the constraint imposed on public procurement
system
c. Investigate the impacts of public procurement on the
organizational profitability
d. Investigate the ways of managing public procurement to
enhance organizational performance
1.4 SIGNIFICANCE OF THE STUDY
The effect of public procurement on organizational
performance is very important to every organization because it
enables government to procure materials from the appropriate
suppliers at a minimum cost and.
It will contribute to the improvement on public procurement
procedures in business organizationl.
It will provide the government more openness, availability and
accessibility of procurement information to the public that increases
the flow of public information, increase trust and satisfaction, and
better accountability.
And finally, it will be useful to improve the practice of
procurement in Sumal food, Ibadan.
1.5 RESEARCH QUESTIONS
Three research questions raised for this research work are:
1. What are the roles of public procurement on the organizational
performance?
2. What are the impacts of public procurement on the organizational
profitability?
3. What are the ways of managing public procurement to enhance
organizational performance?
1.6 SCOPE AND LIMITATIONS TO THE STUDY
The study will focuses on the effect of public procurement on
organizational performance, using Sumal Food, Ibadan as a case
study. Also, only those that can read and write will be considered,
other minority that cannot read will not be concerned.
The researcher will encounter problems while conducting the
research work. Some of it is that the respondents might refuse to
grant the researcher all the required attention needed to gather
enough data for the study due to security reasons. Other forms of
limitations are:
- Time constraint is one of the factors that might hinder the
completion of this research work. The time given for the completion
of the project may be very short, so the researcher will have to
make use of the available data.
- Lastly, lack of adequate finance is another issue that may limits
how widespread the data can be collected, as more data would have
been necessary to have a better assessment of respondents.
1.7 DEFINITION OF TERMS/CONCEPTS
In this make-up, there are some technical and registered terms
used in the construction of the project and the terms are defined in
this outline below.
• Procurement:- This is the term originated by the armed forces, it
includes the whole process of obtaining goods, services or required
resources.
•Public:- This could be describe as member of the community in
general
• Public Buyer:- This is the person who is responsible for buying
their goods or services needed for an operation to be enjoyed by the
members of the community in general.
• Researcher:- This can be referred to the person conducting the
interview or investing the fact, which concern the topic.
Accountability:- This is known as an act of explaining in clean and
clear details about. a particular issue.
• Efficiency:- It means producing results with little waste of effort.
• Transparency:- This is the ability to see through easily
1.8 HISTORICAL BACKGROUND OF SUMAL FOODS LTD,
IBADAN
In 1981 SUMAL FOODS Ltd. was founded by Mr Souhail Joseph
Nassar. In the same year SUMAL FOODS started with the production
of Twist Bubble gum. Robot chewing gum followed shortly
afterwards. In 1989 Mr Souhail Joseph Nassar and Mr Nouhad Joseph
Nassar collaborated together and started VITAL FOODS Ltd,
producing toffees, lollipops, candies, cough drops with different
varieties.
In 1993 SUMAL Extension started producing new bubble gum
products such as Chiclets, Super ball and Jumbo balls with different
colors and flavors. In 1997 Mr. Souhail Joseph Nassar and Mr.
Nouhad Joseph Nassar started YaleFoods producing Biscuits. In 2009
Yale Foods Ltd. started Wafer biscuit production line.
In 2011 Yale Foods Ltd started with a completely new product
concept, introducing YALE BREAD to the Nigerian market.
Company Profile
SUMALFOODS Ltd. is a name entirely synonymous with quality
and is highly committed to maintaining its moral beliefs. The
business is known for the high quality biscuits, chewing gum, and
toffees it manufactures under the SUMALFOODS group; as well as
for a number of leading companies under their own names
YALEFOODS and VITALFOODS. Well known products include
Digestive, Malted Milk, Robot gum, Drops, and etc.
Enjoyed across Nigeria, SUMALFOODS products are also
exported to neighboring countries. The Company buys the very best
raw materials available in the market and then processes them
through the most effective machinery. We employ a high quality
workforce, which is supported by our commitment to training and
development.
Mission and Vision
Mission
To become a pioneer and distinctive company in
manufacturing and marketing bakeries, sweets, and toffee
worldwide by fulfilling customers’ expectations
Vision
We seek to produce and sell a unique collection of high-quality
biscuits, sweets, and toffee confectionery worldwide. We desire to
have competitive prices by using modern technology and distinctive
professionals. We are committed to preserving and developing our
staff in order to reach overall satisfaction and to contribute to local
society’s development.
Values
Our values serve as a compass for our actions and describe
how we behave in the world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it's up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
1.9 ORGANISATIONAL STRUCTURE SUMAL FOODS LTD, IBADAN
Board of Director
Managing Director
General Manager Marketing Department
General Manager Production Department
General Manager Personnel Department
General ManagerFinancial Department
General Manager Purchasing and Supply Department
HAPTER TWO
2.0 LITERATURE REVIEW
2.1 THE CONCEPT OF PUBLIC PROCUREMENT
Okoduwa (2011) posits that procurement is an important part
of efficient management and supply and is critical for all levels of
institutions. An effective procurement process ensures the
Sales Research& Design Advert Department
Ware/Store/Material house Department
Purchasing and Supply Department
Account Department/Wages and Salaries Department
HRM Department
availability of the right materials in the right quantities, available at
the right time, for the right patient and at reasonable prices, and at
recognizable standards of quality. Procurement is not simply the act
of buying but encompasses a complex range of operational,
business, information technology, safety and risk management, and
legal systems, all designed to address an institution’s needs (Jacob
2011). Specifically, management of government public procurement
determine, accredit, and monitor appropriate supply sources;
evaluate suppliers’ performance; choose a buying strategy or
approach; monitor material delivery; assess quality and use
outcomes; and evaluate new products and the drug market.
Successful procurement is also a collaborative process, involving
people with skills in purchasing, finance, and management
specialties, quality control, and even the end user: the students
(Okoduwa 2011).
One of the basic rules of procurement is that in the end, it is
important to think in terms of the total cost of ownership (Fayomi,
(2013). This includes not only the purchase price, but also time and
resources that are expended in the pursuit of the ownership. By
understanding the steps involved with procurement, it is possible to
get a better understanding of the real cost involved with attaining
any good or service (Gikonyo 2014). Many public procurement
activities suffer from neglect, lack of direction, poor co-ordination,
lack of open competition and transparency, differing levels of
corruption and most importantly not having a cadre of trained and
qualified procurement specialists, who are competent to conduct
and manage such procurements, in a professional, timely and cost
effective manner (Bamisile, 2012). Inflexible and bureaucratic
systems of procurement contribute to unacceptable contract delays,
increased costs, the potential for manipulation of contract awards
and lack of fair competition, all of which create the perception in the
population at large, that public expenditure is slow, ineffective,
expensive and often corrupt.
Gikonyo (2014) opined that Information is critical to an
effective and efficient public procurement process, on the other
hand financing is the engine that drives it. Public procurement has,
for long, been overshadowed with inefficiency, corruption and
disregard of fundamental "value for money" considerations. This has
adversely impacted the rate and quality of progress in realizing the
objectives of national development, especially in developing and
transition countries. Transparent management is another concept,
which is closely related to accountability and Nigeria leaves a lot to
be desired in this facet. The idea behind transparency is that by
actively disclosing information on how decisions are made, as well
as measures of performance, we can improve public deliberation,
reinforce accountability and inform citizen choice (John and Hildah
2010) In addition, transparency helps to document and disseminate
information on the scope and consequences of corruption,
information which can help build support for anti-corruption
programmes and target enforcement efforts (Shirley 2012).
2.2 FUNDAMENTAL PRINCIPLES OF PUBLIC PROCUREMENT
As stipulated in the Part IV Subsection 16 of 2007 Procurement
Act, all public procurement shall be conducted (Fayomi, 2013):
1. By open competition
2. In a manner which is transparent, timely, equitable for ensuring
accountability and conformity with the act.
3. With the aim of achieving value for money and fitness for
purpose.
4. In a manner which promotes competition, economy and
efficiency.
5. In accordance with the procedures and timeline laid down in the
procurement act.
All bidders for public procurement shall possess the following:
i. Professional and technical qualifications to carry out particular
procurements.
ii. Financial capability
iii. Equipment and other relevant infrastructure iv. Shall have
adequate personnel to perform the obligations of the procurements
contracts.
v. Possess legal capacity to enter into the procurement contract.
The 12 guiding principles which govern the administration of
public procurement as provided in constructed procurement guide
2008 are as follows:-
1. Accountability: effective mechanisms must be in place in order
to enable departmental Accounting Officers and their equivalents in
other public bodies to discharge their personal responsibility on
issues of procurement risk and expenditure (Fayomi, 2013).
2. Competitive Supply: procurement should be carried out by
competition unless there are convincing reasons to the contrary.
3. Consistency: suppliers should, all other things being equal, be
able to expect the same general procurement policy across the
public sector.
4. Effectiveness: public bodies should meet the commercial,
regulatory and socioeconomic goals of government in a balanced
manner appropriate to the procurement requirement.
5. Efficiency: procurement processes should be carried out as cost
effectively as possible (Fayomi, 2013).
6. Fair-dealing: suppliers should be treated fairly and without
unfair discrimination, including protection of commercial
confidentiality where required. Public bodies should not impose
unnecessary burdens or constraints on suppliers or potential
suppliers.
7. Integration: in line with the Executive’s policy on joined-up
government, procurement policy should pay due regard to the
Executive’s other economic and social policies, rather than cut
across them.
8. Integrity: there should be no corruption or collusion with
suppliers or others.
9. Informed decision-making: public bodies need to base
decisions on accurate information and to monitor requirements to
ensure that they are being met.
10. Legality: public bodies must conform to regulating bodies and
other legal requirements.
11. Responsiveness: public bodies should endeavour to meet the
aspirations, expectations and needs of the community served by the
procurement.
12. Transparency: public bodies should ensure that there is
openness and clarity on procurement policy and its delivery
(Fayomi, 2013).
2.3 DEFICIENCIES IN THE NIGERIA PROCUREMENT
PROCEDURES
Procedure was haphazard, no observance of extant rules and
guidelines by ineffective Tender Boards (Shirley 2012)
High cost of government purchases.
Application of selective tendering rather than competitive
tendering.
Low capacity and credibility in the handling of contracts.
Out of 4072 contract valued at N639.6 billion only about 1% or
40 contracts were exposed to open competition.
In the selective tendering, officials determine who to invite. No
prequalification.
Most Ministries did not keep register of contractors.
Limited use of Audit market survey and prices from Federal
Ministry of Works and Bureau of Statistics and adverts from
Dailies.
Rarely do Tender Boards and Procurement Officials negotiate
downwards.
Patronage of ghost companies (Shirley, 2012).
2.4 CHALLENGES OF SUSTAINING REFORMS IN PUBLIC
PROCUREMENT PROCESS AND PROCEDURES
Lack of sufficient Guide and Uniformity in Public Procurement
Process.
How far can the advert in Government magazine go?
How far do circulars go?
Observance of standards in advertisement.
Public reluctance at participating in public bidding where there is
no adequate measurable pre-determined yardstick to determine
lowest evaluated bid.
Over-centralization of Due Process activities.
Low-level involvement of National Planning Commission in Due
Process Certification.
Extent of Economic Liberalization / Competition.
Due regard for law and order
Protection of property rights
Sanctity of contracts
Respect for freedom and human rights
Low cost of business operation
Avoidance of delay in Budget Process and in passage of
Appropriation Bill.
Openness in budget preparation, execution and reporting to
ensure wider coverage and maximum comprehensiveness and
accessibility.
Effect of fund sufficiency in timely completion of work –
Indifference of the BMPI to schedule of payment.
Societal values and individual attitude to accountability –
attitudinal change required
Relevance of Good Governance.
Peaceful environment
Political stability
Strong judiciary for fair arbitration
Free flow of information
Government by representation
2.5 MANAGEMENT OF PUBLIC PROCUREMENT PROCEDURE
TO ENHANCE ORGANIZATIONAL PERFORMANCE
Public procurement procedures demand high quality public
governance in terms of transparency and accountability as well as
effective management that can deliver optimum risk management
and value-for-money outcomes (Shirley 2012). It also demands
coherence with other public policy environments, especially
business policy because of its significance in the economy (Musa
and Nwaorgu 2014) even though these various operational elements
often fail to come together into a coherent policy or politically
sensitive management framework. Within the management
environment, control, risk mitigation and transparency objectives
are often the focus of centrally mandated regulatory compliance
frameworks while management performance in terms of value
outcomes is often pursued through devolved decision-making and
deregulation. In what follows we seek to develop each of these
factors as a foundation for a framework within which they can be
more meaningfully ordered, related and understood. All of these
elements make up the procurement environment and need to be
accounted for in any useful framework if it is to reconcile the
activities of procurement managers with the demands of their
executives, the agendas of the politicians and the expectations of
the business sector, the media and the community (Musa and
Nwaorgu 2014).
Procurement Management Objectives
Many jurisdictions worldwide have, implicitly or explicitly, similar
management objectives for public procurement. Common policies
are widespread between jurisdictions, notwithstanding the great
variances in methodologies and operational practice. For example,
in a collective action by the forum for Asia-Pacific Economic
Cooperation (APEC) countries, their Government Procurement
Experts Group has developed a set of non-binding principles that
included transparency, value for money, open and effective
competition, fair dealing, accountability and due process (Beverlyne,
Robert, Charles, Obura, Thairu 2012). Individual member countries
decide on the applicability of individual elements to them, taking
into account the specific characteristics of their economies and the
costs and benefits of adopting specific measures. Such common
policies are generally constructed from the following elemental
objectives:
Public confidence – underpinned by attributes of accountability,
transparency, equity and fair dealing in relation to procurement
processes;
Efficiency and effectiveness – in the use of public monies to
achieve value for money and efficiency of delivery of
procurement outcomes; and
Policy compliance and consistency – of both the processes and
outcomes of procurement in relation to other policy objectives
and expectations of the public sector such as environmental
issues, training and apprenticeships, international obligations
and especially business and regional employment impacts.
These objectives are unsurprising and are consistent with
generic public management. They simply say that the management
of public procurement needs to be in accordance with community
standards, and effective, efficient and consistent with the broader
roles of government. However, while they seem simple, experience
is that translating them into operational reality involves issues and
policies that are frequently in conflict if not mutually incompatible
(George and Brian 2010).
Broadly, three approaches, sometimes in various degrees of
combination, are employed to deliver these objectives. The
following discussion includes each of these approaches, generally
defined in terms of their focus on regulation, management and
centralisation of public procurement (George and Brian 2010).
Regulation and Compliance
According to George and Brian (2010), In jurisdictions where
the dominant political concern has been the principles of
transparency, equity and fair dealing (public confidence),
management of public procurement through an extensive
regulatory framework often constitutes the status quo. This
framework reflects a traditional approach to public procurement –
and for many other government functions perceived as basic
processing – by relying heavily on regulation as the primary means
of control of administrative process and implementation of policy.
Regulations control the micro-management steps throughout the
procurement process.
A highly regulated procurement environment is designed to
minimize discretion in circumstances considered to be at high risk
from undue influence. A highly prescriptive approach may also seem
appropriate in jurisdictions where officials have minimal
procurement skills, and which are striving to ensure transparency or
prevent or overcome corruption: the regulated approach is almost
universal in, but not exclusive to, developing countries. An attempt
to standardise procurement regulations is the Model Law on
Procurement of Goods, Construction and Services developed by the
United Nations Commission on International Trade Law (Shirley
2012) through its Working Group on the New International Economic
Order.
A highly regulated management environment is also often a
means of political risk minimization (Gikonyo 2014) in developed
countries. In these cases, the focus is on compliance with the
prescribed process as a means of elimination or avoidance of risk.
Assessment of procurement management performance is defined in
terms of compliance with the set rules. Examples of regulated
environments are diverse and include Canada, the USA, Brazil and
Thailand. Many of the US state and local entities also undertake
their procurement in a regulated environment, under the provisions
of the Model Procurement Code (MCP) for State and Local
Governments, developed by the American Bar Association (Gikonyo
2014).
The penalty for a highly prescribed framework is its lack of
flexibility in managing agency needs, placing it immediately in
tension with performance and efficiency. The detailed codification of
process is designed to eliminate scope for partiality in outcomes and
protect governments from scandal and corruption (often with limited
success), but in doing so also tends to eliminate all but the most
mechanical aspects of this activity (Bamisile, 2012). Regulated
frameworks are procedurally costly and, while readily prescribed for
simple procurement, are slow to adapt to changes that require the
re-engineering of process, or the development of increasingly
complex procurement associated with sophisticated supply chains.
Micro-regulation of the process also has the unintended
consequence of eroding the skill requirements of procurement
officials, thereby undermining professionalism in this activity.
Procurement training in this context consists of learning the rules.
This lack of professionalism can, in turn, be expected to increase the
need for further regulation of process as well as reduce value-for-
money in procurement which requires extensive management skills.
This erodes accountability except in terms of compliance.
Significantly, the transparency goal of this regulatory model
can also be self-defeating: the daunting volume of regulations acts
to obfuscate transparency by making the processes difficult for
stakeholders such as business to comprehend (Bamisile, 2012).
Managerialism and Performance
Bamisile, (2012) opined that social and economic pressures at
both domestic and global levels have required governments to seek
better performance from their public sectors. Successive waves of
management and financial reforms have, inter alia, focused on
improving public procurement efficiency, effectiveness and
outcomes. Many of these reform initiatives have featured
managerialism and a general shift towards devolution and
decentralization. Usually, this shift away from the centre has been
attributed to a need to respond more effectively to the sensitivities
of the client or the community; or to engage more fully the
capabilities of all of the human resources at the disposal of the
organisation or the public sector. The management of public
procurement has been subjected to the same reform pressures. For
example, this statement from the Australian Government’s
procurement reforms:
In seeking improvements to the accountability and
administration of the procurement function, the Government
expects departments and agencies to exploit fully procurement’s
potential to add value to program delivery, contain and reduce costs
in real terms and contribute to the achievement of broader policy
objectives, particularly for industry development (George McIntosh
and Brian Sloan 2010).
The requirement for procurement to deliver higher
performance in terms of improved value-for-money and fit-for-
purpose outcomes has led to the development of more complex
supply chains (e.g. through outsourcing and partnering
arrangements) to deliver comprehensive service solutions, requiring
more sophisticated relationships with suppliers. These more
complex supply chains represent a move away from simple
competitive markets and require a deeper understanding of industry
structures and capabilities. These higher value supply chains also
require more extensive management skills to develop and maintain
(e.g. Bamisile, A.,(2012). Some characteristics of this evolution are
presented in table below
TABLE 1 The Changing Nature of Public Procurement
Source: (Bamisile, 2012)
To be able to manage these more complex relationships and
outcomes, management of public procurement has faced increasing
pressure for devolution from centralized control to line agencies.
Accompanying this devolution has sometimes been an assignment
of greater flexibility, or varying degrees of deregulation within a
broader governance framework and with more highly skilled
managers. A lesser reliance on regulated prescription of the process
of procurement has also given rise to the need for more coherent
management tools and policies (which are not always provided) to
manage stakeholder interests and risks (Bamisile, 2012).
2.6 THE OPERATIONAL EFFICIENCY OF PUBLIC
PROCUREMENT
PROCEDURES
Fayomi (2013) claimed that the significance of public
procurement is the operational efficiency of the process as it relates
both to government and to business. Efficiency of process is a
concurrent consideration regardless of whether procurement is
defined as a regulated process or managerial task. The efficiency
equation is important in this discussion because it introduces
complications to the tension between centralisation and
decentralization of management of the framework. The efficiency of
procurement processes and some of the approaches intended to
deliver value-for-money outcomes are not neutral to the degree of
centralisation or devolution. Indeed, the sources of efficiency
available to best-practice procurement are multiple. The efficiency
and effectiveness of procurement are often sensitive to scale and
coordination and involve both public administrative processes and
industry structural and transactional issues. In this way, efficiency
overlaps with the concept of value-for-money outcomes.
Even in highly competitive markets, price can be negotiable in
terms of volume and time undertakings provided to suppliers – often
at little or no risk to buyers. Thus, additional to the low credit risk
represented by government, the level of supplier risk can almost
always be decreased through agency demand aggregation giving
greater certainty and volume to suppliers with the associated
savings available to be passed on. These benefits sometimes
become evident through, for example, outsourcing service
arrangements such as for IT networks and services. An example of
enhanced coordination and aggregation in IT acquisitions is the
opening up in early 2003 of the US General Services Administration
IT schedule to allow access by state and local governments, thereby
expanding the potential customer base for federal IT contracts, with
benefits for both buyers and suppliers (Gikonyo, 2014).
These factors militate against optimum efficiency outcomes
being consistent with complete devolution of contracting for many
simple goods and services as well as for more complex services
such as IT systems and networks and telecommunications
arrangements. These considerations explain the hybrid
management systems of some governments such as Singapore
(Gikonyo , 2014), while others employ consortia approaches.
A second avenue for efficiency relates to the costs of
transactions. Transaction costs are greater in the public sector
because of the generally more demanding requirements of
transparency (Jacob 2011). Also, the great majority of transactions
are small purchases, typically a few hundred dollars or less, such
that the cost of transaction processing becomes a large or even a
dominant proportion of the purchase. The significance of transaction
costs can be gauged by the cost of processing of a simple
procurement commonly estimated at between US$75 –US$100 and
the reality that generally about 70% of public sector procurement
transactions are less than US$500 (Gikonyo , 2014).
A third avenue for efficiency savings emerges through
redefining the outcome requirements themselves and represents an
overlap between efficiency and performance (Jacob 2011). This
category of opportunity requires significant management data as
well as strategic agency management with a strong interagency
coordination of efficiency goals. Here, public administration
challenges the existing and often traditional modes of business and
administration and seeks new solutions. For example, an
administration with 10,000 IT ‘seats’ may seek to use this buying
power to negotiate a better licensing deal with its desktop systems,
or it may consider alternative solutions altogether such as
outsourcing of all or part of the function, use of a shared service
centre, or a total re-engineering of the relationship with its clients
and stakeholders, such that much of the processing is done outside
the organisation as has occurred with e-tax in the taxation industry
in Australia (Shirley 2012). The first option represents an example of
aggregate buying while the latter ones are examples of more
strategic approaches.
All of these issues and options are further complicated by the
structure of public procurement which in most countries is
dichotomised between low value, high volume procurement (such as
office supplies) and high value, low volume procurement such as
major capital works. Most transactions in every jurisdiction will be of
low value and high volume, including most office supplies for
example, although most expenditure will be involved with high
value, low volume exercises. Small transactions (for less than
$US5000) will usually be undertaken though a simplified quoting
system or even straight off a pre-existing contract. For higher value
procurement (typically above $US25000-100,000) a public bidding
or tendering process is usually the standard methodology. These
larger complex exercises require high levels of expertise relating to
not only contract specification and risk management, but also in the
ongoing relationship and performance management (Gikonyo ,
2014).
2.7 EFFECT OF REFORM ON PUBLIC PROCUREMENT
PROCEDURES
Fayomi, (2013) posits that Public procurement and public
administration more generally, have been the focus of successive
waves of management reform worldwide, stretching across a third
of a century. These reforms have included managerialism,
outsourcing, corporatisation, centralisation and devolution, and
have been driven by an imperative to improve the performance and
cost-effectiveness of the public service. These reforms have
frequently been confronted by apparent tensions between the basic
qualities of public governance, such as accountability and
transparency versus outcomes and performance (Fayomi, 2013).
Operational failures of procurement governance are attributed
by pro-regulators to weaknesses in the professionalism of
practitioners rather than to any inherent weaknesses in the
regulations as such; while pro-management advocates also attribute
failure to professional weaknesses but identify the causes with the
regulatory regime itself which tends to reduce the role of
management of everything other than mechanical compliance
(Shirley 2012). In both cases the broader political context and policy
roles are frequently not acknowledged at all. Governments have
responded to many of the issues with cyclical reforms of regulation
and management and sometimes centralisation to deliver the
corresponding expectations ofthe day in terms of compliance and
performance respectively. Some reforms have revealed a lack of
understanding of the basic elements of procurement. Well-planned
public procurement, especially aggregated buying, can frequently
outperform the spot and auction markets, yet some governments
have devolved away this option (for example the Australian
Government) while some others may be building unrealistic
expectations around the new capacity for online auctions which
potentially disaggregate buying and forgo returns to scale. The
drivers of these responses have been such as to generate
predictions that they condemn public procurement to never ending
cycles of reform, as illustrated that swing between rigid regulations
of micro-processes through to the deferment to performance
management (Gikonyo 2014).
Requirements for greater performance produce a refocusing of
procurement management away from accountability for compliance
through rule-bound codified processes (Bamisile, 2012) towards
accountability for outcomes. In turn, inevitable failures in due
process produce a return to regulation for compliance. A degree of
polarisation can be observed worldwide between jurisdictions
governed by compliance and those by value-for-money or
performance. Within a performance model for public procurement,
the role of regulation is primarily to establish management
principles and objectives rather than to micro-manage the
processes.
This substantially political tension between compliance and
performance and the relationships with centralisation versus
devolution lies at the heart of the debate around the reform of
public procurement, as it has done over its history (e.g. Bamisile,
2012). Piecemeal government reforms will often seem clumsy, but
at least some of the responsibility for this lies with management
itself. Management often exacerbates the problem by narrowly
defining the scope of procurement such that it cannot be expected
to encompass many higher level demands including often legitimate
political agenda (Bamisile, 2012).
2.8 IMPLEMENTATION OF PUBLIC PROCUREMENT
Procurement encompasses the whole process of acquiring
property and/or services. It begins when an agency has identified a
need and decided on its procurement requirement. Procurement
continues through the processes of risk assessment, seeking and
evaluating alternative solutions, contract award, delivery of and
payment for the property and/or services and, where relevant, the
ongoing management of a contract and consideration of options
related to the contract. Procurement also extends to the ultimate
disposal of property at the end of its useful life (Gikonyo, 2014).
Sound public procurement policies and practices are among the
essential elements of good governance.
Gikonyo, (2014) notes the irregular procurement activities in
public institutions provide the biggest loophole through which public
resources are misappropriated. According to Bamisile,(2012), the
basic principles of good procurement practice include
accountability, where effective mechanisms must be in place in
order to enable procuring entities spend the limited resources
carefully, knowing clearly that they are accountable to members of
the public; competitive supply, which requires the procurement be
carried out by competition unless there are convincing reasons for
single sourcing; and consistency, which emphasizes the equal
treatment of all bidders irrespective of race, nationality or political
affiliation.
The process should also uphold integrity by ensuring that there
are no malpractices; informed decision-making, which requires
public bodies to base decisions on accurate information and ensure
that requirements are being met. More still, the Procurement
practice should be responsive to aspirations, expectations and needs
of the target society. Finally, there is need for transparency to
enhance openness and clarity on procurement policy and its delivery
(Okoduwa 2011).
George and Brian (2010) contend that very little research has
so far been conducted on organizational misbehaviors and non-
compliance in purchasing and supply management. This is
surprising given that public procurement has been employed as a
vital instrument for achieving economic, social and other objectives
(Okoduwa 2011), and is regrettably an area vulnerable to
mismanagement and corruption. Besides, most of the studies on
public procurement compliance have been conducted outside
Uganda and mostly in the developed world.
In Uganda, a wave of procurement reforms that begun in 1997,
culminated into the enactment of the Public Procurement and
Disposal of Public Assets (PPDA) Act 2003, and regulations 2003.
Unfortunately, many central government ministries and agencies
have since then not followed prescribed practices (George and Brian
2010). The procurement audits carried out by the PPDA have
revealed that out of 322 contracts audited at the end of 2005, only
7 (2%) were assessed as compliant. Other successive audit checks
reveal that compliance in public procurement in Uganda is still
inadequate. Beverlyne, Robert, Charles, Obura, Thairu (2012)
stipulate that compliance occurs when the target performs a
requested action, but is apathetic about it, rather than enthusiastic,
and puts in only a minimal or average effort. However, as an
organizational outcome, compliance has traditionally been
understood as conformity or obedience to regulations and
legislation.
According to George and Brian (2010), public bodies have
always been big purchasers, dealing with huge budgets. Gikonyo
(2014) also reiterated that public procurement represents 18.42% of
the world GDP. In developing countries, public procurement is
increasingly recognized as essential in service delivery, and it
accounts for a high proportion of total expenditure.
REFERENCES
Okoduwa Rasheedat A.(2011). Aspects Of Corrupt Practices In Public Sector Procurement. A Paper Presented At a 2-dayWorkshop
on Public Sector Procurement and Financial Management. Held At the Public Service Institute of Nigeria, Dutsen-Alhaji, Abuja. Pp. 2-17
Jacob Ola Alla (2011): Procurement law in Nigeria, Challenge for attainment of its Objectives. Journal of Procurement
Management. USA Pp 1-20
Fayomi, Ikeoluwapo Omolara (2013). Public procurement and due process policy in Nigeria: Thrust, prospects and challenges.
Peak Journal of Social Sciences and Humanities Vol.1 (4), pp. 39-45, December, 2013
Gikonyo Peter Kiama (2014). Factors Affecting Implementation of Public
Procurement Act in SACCO Societies in Kenya. International Journal of Academic Research in Business and Social Sciences February 2014, Vol. 4, No. 2
John Karanja Ngugi and Hildah W. Mugo(2010). Internal Factors Affecting Procurement Process of Supplies In The Public Sector;
A Survey Of Kenya Government Ministries. Journal of Public Procurement,Vol.1 No.1, pp.9-50.
Shirley Gayle-Sinclair (2012). Public Procurement And International Trade Agreements: Smaller Developing Economy
Considerations From A Caricom Perspective. International Public Procurement Conference Proceedings 21-23 September
Bamisile, A.,(2012) Procurement Management in Business Org. Ethiopian
Journal of Environmental Studies and Management EJESM Vol. 5 no.4 (Suppl.1)
Musa Success Jibrin, Success Blessing Ejura and Nwaorgu Innocent Augustine (2014). The Public Procurement Reforms in Nigeria: Implementation and Compliance Challenges. Journal of Asian Business Strategy
Beverlyne Awinja. Ingari, Robert Kisavi Mule, Charles Omondi Ondoro,
Obura John Mark, Thairu Stella Njeri (2012). Procurement Best Practices, A Potential Solution to Kenya’s Supermarket Performance Problem. Business and Management Review Vol. 2(5) pp. 48 – 60 July
George McIntosh and Brian Sloan (2010). The Potential Impact of Electronic Procurement And Global Sourcing Within The Uk Construction Industry. School of the Built Environment, Napier University, 10 Colinton Road, Edinburgh, Scotland EH10 5DT,
UK. 232-240
CHAPTER THREE
3.0 Research Methodology
This chapter contains explicit step by step procedures on what
will be done by the researcher and how it will be carried out. It is the
blue print for the study. This chapter states the source of the data,
methods of data and types of data collection instruments and
analysis, sampling procedure and design as well as the basic
approach applied in this work.
3.1 Research Design
The survey research design will be used in this study. It
involves a self-designed questionnaire in collecting data from the
respondents. This is chosen in order to make reference to
phenomena as they exist in real life and it is relatively economical in
terms of time and resources.
3.2 Area Of Study
The study will focus only on the aspect of the effects of
sourcing decision on material availability in a manufacturing
company, strategies for proper sourcing decision implementation so
on.
3.3 Sample Frame
The sample frame of this study will be the entire staff
members’ i.e total population of the Sumal Foods, Ring-Road,
Ibadan, Oyo State, Nigeria and this is about 150 staffs.
3.4 Sample Size
The sample size that will be used from the population of the
study is 80 staff; this will represent the total population of the study
i.e. 80% of the total population which can be express as 250x32 =
60 staffs
100
3.5 Instruments for Data Collection
Primary and secondary sources of data will be used for this
research work.
3.5.1 Primary Data:
Primary source of data will be through the use of questionnaire
and they will be closed- ended questions. The questionnaire will be
in two parts. Part “A” will deals with the Bio-data of the respondents,
while part “B” will deals with data concerning the research
hypotheses.
3.5.2 Secondary Data
Secondary source of data will be various textbooks, journals
and internet materials which will enable the researcher to get
acquainted with the some empirically verified views of some
authorities on the research problem.
3.6 Method of Data Collection
The main instrument to be used for this study will be
structured assessment questionnaire with closed ended questions.
The questionnaire will be designed carefully in line with the relevant
issue or problem to be raised in the research. Thereafter, it will be
given to my supervisor for better modification before the
distribution among the staff members of Sumal Foods, Ring-Road,
Ibadan, Oyo State, and this will take me two week because of the
delay one might encounter from some of staffs of the institution and
the time to administer the questionnaires filled. Eighty
questionnaires will be served and hopefully expected to be fully
recovered and then administer.
3.7 Method of Data Analysis
The data collected will be analyzed through the use of simple
percentage, tables, descriptive analysis and Chi-square formula. The
Chi-square formula is as follows:
Formula: x2 = ∑ (F0 - Fe) 2
Fe
Where x2 = Chi-squareFo = Frequency Observed Fe = Frequency Expected
The operational assumption of 5% level of significance will be
utilized. The method will be use in chapter four (4), which follows
suit to the hypothesis formulated in chapter one.
i) Reject the null hypothesis if the calculated value is greater than the
table value and accept the alternative hypothesis.
ii) Accept the null hypothesis if the calculated value is lower than the
table value and reject the alternative hypothesis
CHAPTER FOUR
4.0 PRESENTATION AND ANALYSIS OF DATA
4.1 INTRODUCTION
This chapter deals with the presentation and analysis of data
collected during the research work conducted. The effort here is to
present the data collected from the different respondents in a more
meaningful ways to the readers. Hence, each response is presented
in percentage in relation to the general or overall responses
received in each particular case. This was done to raise comparison
among the variables involved and the guard the heart of the
researcher into proper findings.
4.2 QUESTIONNAIRE RESULTS
As formerly stated in chapter three, the questionnaires sent to
the staff of Sumal Foods, Oluyole Ibadan were all collected back with
the following statistics of respondents.
Table 1: Questionnaire Administered and ReturnedNumber of Number of Percentage
Questionnaires Distributed
Responses Received
of Responses
60 60 100%
Source: Field Survey, 2015
The table one above shows that 60 questionnaires were
distributed among the sampled staff of Sumal Foods. However, the
responses receive was 60 respondents representing 100% of the
total questionnaires distributed.
Table 2: Personal Data of the Respondent on SexVariables Numbers of the responses
received
Percentage
Male
Female
38
22
63
37
Total 60 100
Source: Field Survey, 2015
From the above table, 38 respondents which represent 63% of
the total population are male, while 22 respondents which represent
37% of the total population are female.
It can therefore be deduced that male respondents are more
than female respondents.
Table 3: Age Distribution of the RespondentsVariables Numbers of the responses
Received
Percentage
21-30yrs
31-40yrs
41yrs &
above
30
25
5
50
42
8
Total 60 100
Source: Field Survey, 2015
From the above table, 30 respondents which represent 50% of
the total population were between the age range of 21-30yrs, 25
respondents which represent 42% of the total population were
between 31-40yrs, while the remaining 5 respondents which
represent 8% of the total population were between the age range of
41yrs & above.
It can therefore be deduced that respondents within the age of
21-30yrs responded more to the questionnaire compare to others.
Table 4: Marital Status of the RespondentsVariables Numbers of the responses
Received
Percentage
Single
Married
Divorced
24
36
-
40
60
-
Total 60 100
Source: Field Survey, 2015
From the above table, 24 respondents which represent 40% of
the total population are single, while 36 respondents which
represent 60% of the total population are married.
It can therefore be deduced that married respondents are
more than single respondents.
Table 5: Educational Background of the RespondentsVariables Numbers of the responses
Received
Percentage
ND
HND/BSc
Professional
20
28
12
33
47
20
Total 60 100
Source: Field Survey, 2015
From the above table, 20 respondents which represent 33% of
the total population are ND holders, 28 respondents which represent
47% of the total population were HND/BSc holders, while the
remaining 12 respondents which represent 20% of the total
population are also having professional certificates.
It can therefore be deduced that majority of the respondents
who filled the questionnaires are HND/BSc holders.
Table 6: Length of ServicesVariables Numbers of the responses
Received
Percentage
1-4yrs
5-10yrs
11 & above
13
35
12
22
58
20
Total 60 100
Source: Field Survey, 2015
From the above table, 13 respondents which represent 22% of
the total population have serve the organization between 1-4yrs, 35
respondents which represent 58% of the total population have
served the organization between 5-10yrs, while the remaining 12
respondents which represent 20% of the total population have also
serve the organization for more than 10 years.
It can therefore be deduced that majority of the respondents
who filled the questionnaires have served the organization between
5-10yrs.
Table 7: Position HeldVariables Numbers of the responses
Received
Percentage
Junior Staff
Senior Staff
Management
20
36
4
33
60
7
Total 60 100
Source: Field Survey, 2015
From the above table, 20 respondents which represent 33% of
the total population hold a junior position in Sumal Food, Oluyole
Ibadan, 36 respondents which represent 60% of the total population
hold senior staff position, while the remaining 4 respondents which
represent 7% of the total population also hold a position of
management.
It can therefore be deduced that majority of the respondents
who filled the questionnaires are staff members who are holding a
position of senior staff.
SECTION B
4.3 DATA ANALYSIS AND INTERPRETATION
Table 8: Question 7: Sumal Foods, has a well established policy and procedures on Procurement
Variables Numbers of the responses Received
Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
3723---
6238---
Total 60 100Source: Field Survey, 2015
From the above table, 37 respondents which represent 62% of
the total population strongly agreed that Sumal Foods has a well
established policy and procedures on Procurement, 23 respondents
which represent 38% of the total population support the opinion.
It can therefore be deduced that Sumal Foods, has a well
established policy and procedures on Procurement
Table 9: Question 8: The use of professionals in the area of procurement procedures improves operational efficiencies in Sumal Foods.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
3513-
12-
5822-
20-
Total 60 100Source: Field Survey, 2015
From the above table, 35 respondents which represent 58% of
the total population strongly agreed that the use of professionals in
the area of procurement procedures improve operational
efficiencies in Sumal Foods, 13 respondents which represent 22% of
the total population support the opinion, while the remaining 12
respondents which represent 20% of the total population disagreed.
It can therefore be deduced that the use of professionals in the
area of procurement procedures improve operational efficiencies in
Sumal Foods.
Table 10: Question 9: Sumal Foods has formal strategic ways of evaluating and sourcing for suppliers. Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
3030--
5050---
Total 60 100Source: Field Survey, 2015
From the above table, 30 respondents which represent 50% of
the total population strongly agreed that Sumal Foods has formal
strategic ways of evaluating and sourcing for suppliers, while the
remaining 30 respondents which represent 50% of the total
population support the opinion.
It can therefore be deduced that Sumal Foods has formal
strategic ways of evaluating and sourcing for suppliers.
Table 11: Question 10: Sumal Foods makes use of purchasing order for procurement of Goods.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
-40-
20
-67-
33-
Total 60 100Source: Field Survey, 2015
From the above table, 40 respondents which represent 67% of
the total population agreed that Sumal Foods makes use of
purchasing order for procurement of Goods, while the remaining 20
respondents which represent 33% of the total population disagreed.
It can therefore be deduced that Sumal Foods makes use of
purchasing order for procurement of Goods.
Table 12: Question 11: Sumal Foods provides adequate finance for Procurement department.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
2040--
3367---
Total 60 100Source: Field Survey, 2015
From the above table, 20 respondents which represent 33% of
the total population strongly agreed that Sumal Foods provides
adequate finance for Procurement department, while the remaining
40 respondents which represent 67% of the total population support
the opinion.
It can therefore be deduced that Sumal Foods provides
adequate finance for Procurement department.
Table 13: Question 12: Procurement department of Sumal Foods has for long been overshadowed with inefficiency and corruption.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
4515--
7525---
Total 60 100Source: Field Survey, 2015
From the above table, 45 respondents which represent 75% of
the total population believed that Procurement department of Sumal
Foods has for long been overshadowed with inefficiency and
corruption, 15 respondents which represent 25% of the total
population support the assertion.
It can therefore be deduced that Procurement department of
Sumal Foods has for long been overshadowed with inefficiency and
corruption.
Table 14: Question 13: Sumal Foods, has sound Procurement policies and practices in place regulating organizations procurement procedures.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
401010-
661717--
Total 60 100Source: Field Survey, 2015
From the above table, 40 respondents which represent 66% of
the total population believed that Sumal Foods, has sound
Procurement policies and practices in place regulating institutions
procurement procedures, 10 respondents which represent 17% of
the total population support the opinion, while the remaining 10
respondents which represent 17% of the total respondents were
undecided.
It can therefore be deduced that Sumal Foods, has sound
Procurement policies and practices in place regulating organizations
procurement procedures.
Table 15: Question 14: Sub-standard materials are seriously affecting the Sumal Foods productivity
Variables Numbers of the responses Received
Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
5010--
8317---
Total 60 100Source: Field Survey, 2015
From the above table, 50 respondents which represent 83% of
the total population believed that Sub-standard materials are
seriously affecting the Sumal Foods productivity, while the
remaining 10 respondents which represent 17% of the total
population support the assertion.
It can therefore be deduced that Sub-standard materials are
seriously affecting the Sumal Foods productivity.
Table 16: Question 15: Professional Buyers should be appointed as procurer in organizations in Nigeria.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
-37-
23-
-62-
38-
Total 60 100Source: Field Survey, 2015
From the above table, 37 respondents which represent 62% of
the total population believed that Professional Buyers should be
appointed as procurer in organizations in Nigeria, while the
remaining 23 respondents which represent 38% of the total
population disagreed.
It can therefore be deduced that Professional Buyers should be
appointed as procurer in organizations in Nigeria.
Table 17: Question 16: Public Procurement has significant impact on Organisation PerformanceVariables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
-60---
-100
---
Total 60 100Source: Field Survey, 2015
From the above table, 60 respondents which represent all of
the total population agreed that procurement procedures in Sumal
Foods, has for long been overshadowed with inefficiency and
corruption. It can therefore be deduced that procurement
procedures in Sumal Foods, has for long been overshadowed with
inefficiency and corruption.
Table 18: Question 17: Procurement procedures demands high quality governance in terms of transparency and accountability.Variables Numbers of the
responses ReceivedPercentage
Strongly AgreeAgreeUndecidedDisagree
2040--
3367--
Strongly Disagree - -Total 60 100
Source: Field Survey, 2015
From the above table, 20 respondents which represent 33% of
the total population strongly agreed that Procurement procedures
demands high quality governance in terms of transparency and
accountability, while the remaining 40 respondents which represent
67% of the total population support the opinion. It can therefore be
deduced that Procurement procedures demands high quality
governance in terms of transparency and accountability.
Table 19: Question 18: Proper audit and internal control system will reduce the various problems of finance in Sumal Foods.Variables Numbers of the
responses Received Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
3218-
10-
5330-
17-
Total 60 100Source: Field Survey, 2015
From the above table, it can be seen that 32 respondents
which represent 53% of the total population strongly agreed that
Proper audit and internal control system will reduce the various
problems of finance in Sumal Foods of finance in the research
SUMAL FOODS. 18 respondents which represent 30% of the total
respondents support the opinion, while the remaining 10(17%)
disagreed.
It can therefore be deduced that Proper audit and internal
control system will reduce the various problems of finance in Sumal
Foods.
Table 20: Question 19: Accountability is put in place to curb fraud and misappropriation of funds in Sumal Foods.Variables Numbers of the responses
Received Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
-60---
-100
---
Total 60 100Source: Field Survey, 2015
From the above table, it can be seen that 60 respondents the
total respondents agreed that the accountability is put in place to
curb fraud and misappropriation of funds in Sumal Foods.
It can therefore be deduced that accountability is put in place
to curb fraud and misappropriation of funds in Sumal Foods.
Table 21: Question 20: Special laws and regulation are put in place to curb fraud and misappropriation of funds Sumal Foods.
Numbers of the responses
Variables Received Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
-5010--
-8317--
Total 60 100Source: Field Survey, 2015
From the above table, it can be seen that 50 respondents
which represent that 83% of the total respondents agreed that
Special laws and regulation are put in place to curb fraud and
misappropriation of funds Sumal Foods, while the remaining
10(17%) which represent the majority were undecided.
It can therefore be deduced that Special laws and regulation
are put in place to curb fraud and misappropriation of funds Sumal
Foods.
Table 22: Question 21: The adoption of Information Communication
Technology enhances Procurement process in Sumal Foods.
Variables Numbers of the responses Received
Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
2040---
3367--
Total 60 100Source: Field Survey, 2015
From the above table, it can be seen that 20 respondents
which represent 33% of the total respondents strongly agreed that
the adoption of Information Communication Technology enhance
Procurement process in Sumal Foods, while the remaining 40(67%)
which represent the majority of the respondents support the
opinion.
It can therefore be deduced that the adoption of Information
Communication Technology enhance Procurement process in Sumal
Foods.
Table 23: Question 22: Recruitment and retention of unqualified purchasing personnel will contribute to the down fall of public sector procurement procedures.Variables Numbers of the
responses Received Percentage
Strongly AgreeAgreeUndecidedDisagreeStrongly Disagree
28248--
474013--
Total 60 100Source: Field Survey, 2015
From the above table, 28 respondents which represent 47% of
the total population strongly agreed that Recruitment and retention
of unqualified purchasing personnel will contribute to the down fall
of public sector procurement procedures. 24 respondents which
represent 40% of the total population support the opinion while the
remaining 8 respondents which represent 13% of the total
population were undecided.
It can therefore be deduced that Recruitment and intention of
unqualified purchasing personnel will contribute to the down fall of
public sector procurement procedures.
4.4 TESTING OF HYPOTHESIS
Ho: Public Procurement has no significant impact on Organisation
Performance
Hi: Public Procurement has significant impact on Organisation Performance
Testing Of Hypothesis Using Table 17: Question 16 In The Questionnaire
Tool employed:
Formula: x2 = ∑ (Fo - Fe) 2 Fe
Where x2 = Chi-square
Fo = Observed data
Fe = Expected data = Fo = 60 = 12 5 5
Table 22: Construct Chi-square Test
Responses Fo Fe Fo – Fe (Fo – Fe)2
(Fo – Fe)2
FeStrongly agreed - 12 -12 144 12
Agreed 60 12 50 2500 208
Undecided - 12 -12 144 12
Disagreed - 12 -12 144 12
Strongly Disagreed - 12 -12 144 12
Total 60 60 - - 256
Calculated Chi-square x2= 256
The degree of freedom is calculated as follows
Df = (R-1) (C-1)
(5-1) (2-1) = (4) (1) = 4
Where R = Row, C = Column
Df = 4
Df = 4 and 5% level of significance
(0.050) x2 = 9.49
Since 256 > 9.49 we reject the null hypothesis and concluded that
Public Procurement has significant impact on Organisation
Performance
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
The findings revealed that Sumal Foods has a well established
policy and procedures on Procurement. The use of professionals in
the area of procurement procedures improves operational
efficiencies in Sumal Foods. Sumal Foods has formal strategic ways
of evaluating and sourcing for suppliers. Sumal Foods makes use of
purchasing order for procurement of Goods. Sumal Foods provides
adequate finance for Procurement department. Procurement
department of Sumal Foods has for long been overshadowed with
inefficiency and corruption.
The findings revealed that Sumal Foods has sound
Procurement policies and practices in place regulating organizations
procurement procedures. Sub-standard materials are seriously
affecting the Sumal Foods’ productivity. Professional buyers should
be appointed as procurer in any government institutions in Nigeria.
Procurement procedures in Sumal Foods, has for long been
overshadowed with inefficiency and corruption. Procurement
procedures demands high quality governance in terms of
transparency and accountability. Proper audit and internal control
system will reduce the various problems of finance in Sumal Foods.
The findings also revealed that accountability is put in place to
curb fraud and misappropriation of funds in Sumal Foods. Special
laws and regulation are put in place to curb fraud and
misappropriation of funds Sumal Foods. The adoption of Information
Communication Technology enhance Procurement process in Sumal
Foods. Recruitment and retention of unqualified purchasing
personnel will contribute to the down fall of organization
procurement procedures.
5.2 CONCLUSION
Measuring and reporting the effectiveness of procurement is a
new challenge in the field of purchasing. In many organizations the
effects of purchasing have not been determined or evaluated. The
procurement effectiveness reporting tool will produce information
on the effects of procurement that can be then used in developing
the purchasing activities in an organization.
When measuring procurement effectiveness, it’s important to
include a wide range of different factors. Among these factors are
the strategic and financial influence, quality of people and skills
level and transactional versus value added activity. Other factors to
consider are integration with business operations, management of
suppliers, innovation and risk management (Duggan, 2010).
Depending on the role of the procurement function, the
effectiveness of procurement is determined. In the case of the role
being weak and non-participative, the effects stay quite low. On the
contrary when the procurement role is strong, the effectiveness
becomes higher and more visible (Duggan, 2010).
5.3 RECOMMENDATIONS
Based on the findings it was recommended that:
When assessing the effectiveness of the procurement function,
one of the first things Sumal Foods should do is to be accounted
for its strategic influence. This means the level of participation
and involvement from the procurement function to the strategic
decisions made in the organisation. Another factor to consider is
the financial influence the procurement function has towards the
organisation. This is determined by the amount of non-pay roll
spend and contract compliance. (Duggan, 2010).
The Key parameters for Sumal Foods should use in identifying the
quality of people and skills level are the development and
training programs organised for the procurement staff. Whether
the procurement function is transactional or value added activity
will affect the effectiveness of the procurement in Sumal Foods.
This includes all the different areas of procurement; operational,
tactical and strategic and how they account to the procurement
processes (Duggan, 2010).
The cooperation with Sumal Foods other functions and processes
as well as with stakeholders relates to how effective the work of
the procurement function is. How the supplier management is
organised in the organisation is a definite factor to take into
account. The processes dealing with contracting and
communication and cooperation with the suppliers are issues that
will directly have an impact on the effectiveness (Duggan, 2010).
When innovation has a strong role in the procurement function,
the effectiveness can be increased for example through
innovative product development with the supplier. Continuous
identification of risks and managing and controlling them and
how well this performed will influence the results of the
effectiveness of Sumal Foods(Duggan, 2010).
BIBLIOGRAPHY
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“APPENDIX”
QUESTIONNAIRE
THE POLYTECHNIC, IBADAN
DEPARTMENT OF PURCHASING AND SUPPLY
Dear respondent,
I am an undergraduate student from the above named institution; I am to
undertake a research work on the topic “The Effect of Public Procurement on
Organisation Performance (A Case Study of Sumal Food, Oluyole Ibadan), this is part
of the requirement for the award of Higher National Diploma (HND).
All information given shall be treated with utmost confidentiality.
Thanks for your co-operation,
Yours Faithfully,
SECTION A: DEMOGRAPHIC DATAMARK (√) WHERE APPLICABLE
1. Sex: Male Female
2. Age: 21-30yrs 31-40yrs 41yrs above
3. Marital Status: Single Married
4. Educational Ground: ND HND/BSc MSc/MA Professional
5. Length of Service: Below 5yrs 5-10 yrs 11yrs & Above
6. Position Held: Management level Senior Junior
SECTION B
Please respond to each statement by ticking (√ ) the appropriate box on the following scale: SA =Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree
S/N SA A U D SD
7. Sumal Foods, has a well established policy and procedures on Procurement
8 The use of professionals in the area of procurement procedures improve operational efficiencies in Sumal Foods
9 Sumal Foods has formal strategic ways of evaluating and sourcing for suppliers
10 Sumal Foods makes use of purchasing order for procurement of Goods
11 Sumal Foods provides adequate finance for Procurement department
12 Procurement department of Sumal Foods has for long been overshadowed with inefficiency and corruption.
13 Sumal Foods, has sound Procurement policies and practices in place regulating organizations procurement procedures
14 Sub-standard materials is seriously affecting the Sumal Foods’ productivity
15 professional buyers should be appointed as procurer in organizations in Nigeria
16 Public Procurement has significant impact on organisation Performance
17 Procurement procedures demands high quality governance in terms of transparency and accountability
18 Proper audit and internal control system will reduce the various problems of finance in Sumal Foods
19 Accountability is put in place to curb fraud and misappropriation of funds in Sumal Foods
20 Special laws and regulation are put in place to curb fraud and misappropriation of funds Sumal Foods
21 The adoption of Information Communication Technology enhance Procurement process in Sumal Foods
22 Recruitment and retention of unqualified purchasing personnel will contribute to the down fall of organizations procurement procedures