Effect of Public Procurement on Organizational Perfoprmance

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


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



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



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



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



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.


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



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.


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


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


3513-

12-

5822-

20-



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



3030--

5050---



the total population strongly agreed that Sumal Foods has formal

strategic ways of evaluating and sourcing for suppliers, while the


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



-40-

20

-67-

33-



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



2040--

3367---



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



4515--

7525---



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



401010-

661717--



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


Percentage


5010--

8317---



the total population believed that Sub-standard materials are

seriously affecting the Sumal Foods productivity, while the


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



-37-

23-

-62-

38-



the total population believed that Professional Buyers should be

appointed as procurer in organizations in Nigeria, while the


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



-60---

-100

---


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


Strongly AgreeAgreeUndecidedDisagree

2040--

3367--

Strongly Disagree - -Total 60 100



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


3218-

10-

5330-

17-


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


-60---

-100

---


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


-5010--

-8317--



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.


Percentage


2040---

3367--



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


28248--

474013--



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


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

Bamisile, A.,(2012) Procurement Management in Business Org. Ethiopian

Journal of Environmental Studies and Management EJESM Vol. 5 no.4 (Suppl.1)

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

Duggan, B. (2010). Procurement has no part to play in corporate strategy – Myth. Journal of TC Strategic and Management

Consultants. Vol. 1 Pg

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

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

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.

Jacob Ola Alla (2011): Procurement law in Nigeria, Challenge for attainment of its Objectives. Journal of Procurement

Management. USA Pp 1-20

Johanna Mäki (2012). Measuring the Effectiveness Of Public Procurement. Journal of International Business HAMK University

of Applied Sciences

Mathonsi, M.D. and Thwala, W.D. (2011): Factors influencing the selection of procurement systems in the South African construction industry. African Journal of Business Management, 6(10).

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

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

Ogbadu, E.E. (2010). Profitability through effective procurement system. Journal of Economics and International Finance, 1(4).

Oladinrin, O.T., Olatunji, S.O. and Hamza, B.T. (2013). Effect of selected procurement systems on Building project

performance in Nigeria. International Journal of Sustainable Construction Engineering and Technology. Vol 4,

Peter-John, L., Detlef, S., Harald, D. and Martha, D.T. (2012). Reinventing Procurement to Drive Growth and Profitability. Journal of Booz & Company. USA. Pp 1-12.

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

“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

Documents

Effect of Public Procurement on Organizational Perfoprmance