Ngari - Effects of Public Procurement and Disposal Act On Procurement in Parastatals in Kenya
Ngari - Effects of Public Procurement and Disposal Act On Procurement in Parastatals in Kenya
Ngari - Effects of Public Procurement and Disposal Act On Procurement in Parastatals in Kenya
OCTOBER, 2012
DECLARATION
I declare this research project is my original work and has not been presented to any
institution for the award of any academic certificate.
……………………………………… ……………………………..
Ngari Margaret Kagendo Date
D61/60087/2010
This research paper has been submitted for examination with my approval as the
University Supervisor.
……………………………………….. ……………………………..
Ombati Thomas
Date
Lecture School of Business
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DEDICATION
I dedicate this work to my Parents, Mr and Mrs. Michael Munyi, Siblings Scholastica
Karimi, Bridget Njoki and Anastasia Njeri and all those who supported me in the
completion of this project. Thank you and May God bless you abundantly
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ACKNOWLEDGMENT
I would like to take this opportunity to pass my heartfelt gratitude to all the people who
played a big role in assisting me complete my study. First of all, I give thanks to the Lord
for giving me good health to start and complete this project successfully, without Him, I
To my supervisor, Ombati Thomas, thank you for your dedication, time and effort to
guide me. Your comments, advice, criticism and suggestions are highly appreciated. To
My friends Joash Mageto and Samuel Afwande for their support without them, this
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TABLE OF CONTENTS
DECLARATION ...........................................................................................................ii
DEDICATION ............................................................................................................. iii
ACKNOWLEDGMENT .............................................................................................. iv
LIST OF FIGURES.....................................................................................................vii
LIST OF TABLES .....................................................................................................viii
LIST OF ABBREVIATIONS ...................................................................................... ix
ABSTRACT ................................................................................................................... x
CHAPTER ONE: INTRODUCTION .......................................................................... 1
1.1 Background of the Study ....................................................................................... 1
1.1.1 Public Procurement and Disposal Act ............................................................. 2
1.1.2 Oversight and Review Structures .................................................................... 4
1.1.3 Public Procurement in Parastatals in Kenya ..................................................... 5
1.2 Statement of the Problem ....................................................................................... 8
1.3 Objectives of the Study ........................................................................................ 10
1.4 Value of the Study ............................................................................................... 10
CHAPTER TWO: LITERATURE REVIEW ............................................................ 11
2.1 Introduction ......................................................................................................... 11
2.3 Effects of Regulations On Public Procurement..................................................... 13
2.4 Challenges in Public Procurement........................................................................ 15
2.5 Procurement in Kenya ......................................................................................... 17
2.5.1 The Legal Framework of Procurement in Kenya and its Evolution ................ 20
2.6 Theoretical Review .............................................................................................. 21
2.6.1 Legitimacy Theory ........................................................................................ 21
2.6.2 Agency Theory ............................................................................................. 22
2.7 Conceptual Framework ........................................................................................ 23
CHAPTER THREE: RESEARCH METHODOLOGY ............................................ 26
3.1 Introduction ......................................................................................................... 26
3.2 Research Design .................................................................................................. 26
3.3 Population ........................................................................................................... 26
3.4 Sample Design..................................................................................................... 27
3.5 Data Collection .................................................................................................... 28
3.6 Data Analysis ...................................................................................................... 28
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CHAPTER FOUR: DATA ANALYSIS, INTERPRETATIONS AND
DISCUSSIONS ............................................................................................................ 29
4.1 Introduction ....................................................................................................... 29
4.1.1 Response Rate ............................................................................................. 29
4.2 Demographic Information .................................................................................... 29
4.2.1 Sector of the Parastatal .................................................................................. 29
4.2.2 Number years the respondents had worked .................................................... 30
4.3 Procurement Processes .................................................................................... 31
4.3.1 Means through Which Parastatals Invited Suppliers to Bid for Tenders ......... 32
4.4 Factors affecting the use of Procurement Method(s) among Parastatals ........... 33
4.5 Methods Used to Evaluate Supplier’s Performance.......................................... 35
4.6 Effects of the Public Procurement Disposal Act............................................... 36
4.7 Challenges of Public Procurement and Disposal Act........................................ 38
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ................................ 40
5.1 Introduction ......................................................................................................... 40
5.2 Summary of the Findings ..................................................................................... 40
5.5 Suggestions for Further Research ......................................................................... 43
5.6 Recommendations for Policy and Practice ........................................................... 43
REFERENCES ............................................................................................................ 45
APPENDICES ............................................................................................................. 46
Appendix I: Questionnaire .......................................................................................... 46
Appendix II: List of Government Parastatals ............................................................ 51
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LIST OF FIGURES
Figure 2. 1: Conceptual Framework ............................................................................... 24
vii
LIST OF TABLES
Table 4. 1: Response Rate ............................................................................................. 29
viii
LIST OF ABBREVIATIONS
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ABSTRACT
The public procurement system in Kenya has evolved to an orderly and legally regulated
system governed by the PPDA, 2005. Prior to this, in Central Government it was
governed by Treasury Circulars from 1969, then the Supplies Manual of 1978, before the
promulgation of the Exchequer and Audit (Public Procurement) Regulations, 2001.The
PPDA, effective as of 1st January 2007, applies to all procurement of goods, works and
services, as well as the disposal of assets by public entities. The Public procurement
processes is a complex issue because of the multiple interests and objectives it strives to
achieve simultaneously coupled by the multiple regulatory policies and bodes it has to
adhere to. The objective of this study was to look at the effects of PPDA on public
procurement in Parastatals in Kenya. However the specific objectives were to establish
the effect of PPDA on the procurement process in Paratatals in Kenya and find out find
out the challenges to the implementation of the PPDA.
The study adopted a cross sectional descriptive research design. For the purposes of this
study, the population of interest was all parastatals in Kenya based in the Nairobi County.
The study adopted proportionate stratified Sampling design. Primary data was collected
for the purpose of this study. It was collected using interviewer administered
questionnaires. The questionnaires were piloted with three subject experts before final
administration. The filled questionnaires was inspected for completeness and edited.
The study targeted a sample of 30 respondents out of which 22 respondents filled in and
returned the questionnaire giving a response rate of 73%. The study concluded that that
PPDA improved the competitiveness of the procurement processes among parastatals. In
addition PPDA improved the quality of services and goods delivered, and finally it
promoted ethical standards among Parastatals in procurement. On the challenges of
PPDA, the study concluded that corrupt officers, unresponsive bids ignorance of the
PPDA guidelines, inefficiency of the PPOA on enforcing the penalties to the offenders
and lack of organizational incentives & pressures for Public procurement guidelines
implementation were to a great extent challenges.
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CHAPTER ONE: INTRODUCTION
In today’s world, the economic environment is very turbulent. The need for organizations
to be competitive in the global marketplace cannot be overstated. Firms are under intense
pressure from consumers for goods and services that meet high service level
constant search for new and innovative ways to reduce costs and improve performance.
In this search, firms’ supply chains are examined on a continual basis for opportunities to
create the competitive edge required to make businesses successful. One area that has
The Oxford Dictionary describes procurement as process of acquisition of the initial raw
materials, finished products, works in progress and services and functions within and
outside a company to enhance the value chain to make products and provide services to
the customers (Cox et al, 1995). Quinn (1997) defines procurement as ‘all of those
activities associated with acquisition of goods, from raw materials stage through to the
end products. This includes sourcing and purchasing, order processing, inventory
(2001), public procurement refers to the acquisition of goods and services by government
or public sector organizations and is one of the key economic activities of government.
The earliest public procurement order was found in Syria written on a red clay tablet
dates from between 2400 and 2800 B.C. The purchase order was for “50 jars of fragrant
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smooth oil for 600 small weights in grain” (Coe, 1989). In addition to the history of
procurement was the emergence of the silk trade between China and a Greek colony in
The rise of procurement to a key function in the private and manufacturing industry in the
long term goal of considerable attention since the 1990s, (Gadde and Hakansson, 2004),
unlike in the public sector procurement and supply chain management. While the Public
Contract Law Journal dates back to 1981 and Public Procurement Law Review to 1992,
both had anchorage in the legal and regulatory disciplines. It was noted that there was
differentiation between public procurement and private sector procurement in the last
decade (Thai and Grimm, 2001). According to Makori (2011), public procurement
systems are inherently complex and dynamic due to the multiplicity of objectives they
have to achieve. For instance, the main motive of public procurement is to serve the
public through a political purpose and the general well-being of the society unlike
Public service agencies aim at making the best use of ‘value for money’ for the members
of the public this involves client satisfaction, public interest, fair play, honesty, justice
and equity (Korosec and Bartle, 2003). Recent studies have also pointed out the
The public procurement system in Kenya has reformed to an orderly and legally
regulated system governed by the PPDA, 2005. Prior to this, in Central Government it
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was governed by Treasury Circulars from 1969, then the Supplies Manual of 1978,
before the promulgation of the Exchequer and Audit (Public Procurement) Regulations,
2001, (Juma ,2009). All the aforesaid reform initiatives were geared towards improving
the public procurement system by enhancing accountability and transparency with the
aim of achieving value for money, and attracting investments by creating a sound
business climate. These reforms have ensured fairness and competition among suppliers
of goods, works and services, thereby restoring the confidence of Kenyans in the public
procurement process while at the same time ensuring that the Government gets the best
The PPDA, effective as of 1st January 2007, applies to all procurement of goods, works
and services, as well as the disposal of assets by public entities. Public entities are those
that procure goods, services or works utilizing public funds. As such, public entities
include the central and local governments, courts, commissions, state corporations,
cooperatives, and educational institutions such as colleges, schools and universities. This
Act does not directly seek to regulate the private sector, though it does regulate its
The PPDA does not directly seek to regulate the private sector, though it regulates its
interaction with public entities. It ensures the following issues maximize economy and
efficiency, promote competition and ensure that competitors are treated fairly, promote
the promotion of local industry and economic development, (Odhiambo, A.N, 2005).
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1.1.2 Oversight and Review Structures
The PPDA sets-up the Public Procurement Oversight Authority (PPOA), whose primary
role is to ensure that procurement procedures established under the Act are adhered to. In
doing this, the PPOA has to guide, set-up standards, and train procurement entities and
persons, as well as advise government on policy issues. Currently the PPOA role is :
personnel to ensure that procurement is carried out effectively and efficiently, building
suppliers ‘capacity so that they are better able to transact business within the public sector
four.
opportunities by putting in place communication channels at the PPOA and within the
Government Secretariat in the Office of the President, consulting banks to ease SME
Sound legal framework in place with the enactment of the PPDA and Regulations, Kenya
today has in place a sound and comprehensive legal framework for public procurement
with a clear hierarchical distinction. The PPDA clearly establishes the procurement
methods to be applied, advertising rules and time limits, the content of tender documents
and technical specifications, tender evaluation and award criteria, procedures for
submission, receipt and opening of tenders, and the complaints system structure and
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sequence. The PPDA and Regulations cover goods, works and services for all
procurement using national funds. Both documents are published and widely distributed
political implications. Recent estimates suggest that between 8 and 25 per cent of the
gross domestic product (GDP) of the Organization for Economic Co-operation and
Development (OECD) countries and 16 per cent of the European Union (EU) GDP is
The public expenditure incurred by the Kenyan Government can be used to estimate the
undergone significant evolution. From being a system with no regulations in the 1960s,
and a system regulated by Treasury Circulars from the 1970s, 1980s and 1990s, to the
introduction of the Public Procurement and Disposal Act (PPDA) of 2005 and the
Procurement Regulations as amended in 2006 introduced guidelines that led to sanity and
standard procedures for public procurement and disposal of goods and unserviceable
that public procurement was not operating efficiently and effectively and the state was
losing a lot of money through shoddy deals. The report advocated the need for reforming
the public procurement system in the country. In 1997, the Government in collaboration
with the World Bank commissioned another study to evaluate the country’s procurement
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procedures. The World Bank supported the study through the Public Procurement and
Capacity Reform Project. Which established the need for an over whole review and
execution of a reform process in the procurement systems. The study revealed that the
public procurement system in Kenya lacked transparency and fair competition. The study
further revealed that procurement staff were not adequately trained and lacked
professionalism. The lack of a professional body that would oversee and instill discipline
One of the major recommendations from both studies was that reforms in public
procurement systems were paramount if the government was to save resources that were
being lost through exorbitant procurement system. The World Bank study argued that
improvement in procurement systems had a direct and beneficial effect on the economic
situation in the country. The World Bank, the African Development Bank (AfDB) and
initiated the public procurement reform process in the late 1990s. That was to enable the
thresholds, planning, and the development of supplies manuals (World Bank, 2000).
The public procurement reforms also aimed at ensuring that the procurement laws were
which comprised mainly staff from the ministry of Finance was established to take a lead
in the reform process. The team passed its recommendations over to parliament.
However, the draft bill prepared by the task force on behalf of the Ministry of Finance
has not been approved by parliament to date. In response to the delay in parliamentary
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approval, the Minister for Finance approved the Exchequer and Audit - Public
interference with the tender process. While the Regulations do not give government
ministers, other than the Minister for Finance, any role in the procurement process, they
have nevertheless intervened and influenced the award of tenders. Many government
ministers simply have no regard for stipulated laws and regulations and often use their
residual powers to pursue their own interests. Indeed, where ministers want to manipulate
the procurement process, they use their powers to demand for information from the
procuring entity, which they then publish and use to cancel tenders, and then turn around
to claim that the process has been compromised and needs to be restarted (Amollo,2005).
All the public sector procurement entities approached by the study apply and adhere to
the provisions of the PPDA. The extent of their application of the PPDA is constrained by
their knowledge of the various provisions and, in some cases, by their financial ability.
Though the central government procuring entities indicate that they implement the
preferences contained in Section 39, it is not always clear that these have in fact been
consciously applied. On the provincial, district and local authority levels, many
Purchasing Officers (PO) were not aware of these provisions and did not appear to apply
them. However, the provisions are applied by default across the board, as suppliers of
goods, services and works generally tend to be local small and medium entities. With
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1.2 Statement of the Problem
The Public procurement processes is a complex issue because of the multiple interests
policies and bodes it has to adhere to. The major objectives public procurement include
ensuring the tax payers enjoy value for money, achieving efficiency and effectiveness,
contrast from the private sector whose raison de etre is the profit motive. In most
countries in the world over, public procurement is guided by the public procurement laws
and guidelines.
Ensuring that the process is economical and efficient is crucial. This requires in part that
the whole process is well understood by all the stakeholders including the government,
academic entities and the general public. Unfortunately, for most developing countries,
Although several developing countries have taken steps to reform their public
corruption and undercutting of costs leading to wastage of huge amounts resources. Some
of the major scandals include the sale of the Laico Regency hotel, the Triton saga, the
irregular sale of KCC and Kenya Seed Company, the JKIA airport expansion project,
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According to Odhiambo and Kamau (2005) the bulk of corrupt practices in Kenya have
occurred in public procurement. The explanation for this state of affairs is to be found in
the political dynamics of the state and its role in the economy. Corruption in public
Common corrupt practices in public procurement thus included public officers often
under the influence of powerful politicians and businessmen only inviting preferred
firms, favoring certain firms at the short-listing stage, designing tender documents to
Similar studies include; Muturi (2007), Muendo (2006), and Mukasa (2010). Muturi
(2007) studied procurement in the public sector and found out that government
the challenges of the Public Procurement and Disposal Act of 2005 as amended in 2007
and established that the reform solutions within government procurement systems do not
adequately include measures that address issues of accountability, transparency, value for
From the above studies it is evident that there has not been a study that links the effects
of (PPDA) on procurement in Parastatals in Kenya, this shows that little research has
been done on this area. This leaves a knowledge gap that has necessitated this study since
the Act was established to counter some of the above mentioned problems but to date
procurement within the public sector still faces some challenges. To achieve the intended
objectives, the study will seek to answer the following questions: How does the Public
Procurement and Disposal Act affect the procurement Process in Parastatals? What are
The general objective of this study was to look at the effects of PPDA on public
Kenya.
The results of this study will be of great significance to the public organizations of
Kenya. The government operates essential businesses through its public organization, as
a result of this change will be evident hence the study is of great significance as they will
The results will also directly point to the development and management of organizational
This study will also help managers as the decision makers to improve on public
identifying the major reasons as to why the public procurement should now move to
To the researchers and academicians, it’s expected that the study will form a base for
development of SCM as a discipline /field of study. The findings of this study will also
add new knowledge about public procurement in Kenya that will serve as a base for
further research
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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter introduces the review of contextual and theoretical literature relating to
procurement in the public sector with the aims to document the critical points
The concept of Public developed to bring sanity to the public procurement in state and
public owned entities where procurement process were riddled with corruption and mega
kickbacks and subsequent loss of billions of shillings were lost The procurement systems
in public sector agencies aim to maximize overall value for money’ for citizens. This
requires consideration of issues such as client satisfaction, the public interest, fair play,
honesty, justice and equity (Raymond, 2008). The importance of public administration as
a moral and ethical concern and recognize that administrative action is permeated by
moral choices and are therefore models of not only technical and professional
The takeover of goods and services by the public sector which includes the local and
central government is known as public procurement (Uyarra and Flanagan, 2010) this is
one of the major economic activities of government (Thai, 2001). There was no much
specialized study on public procurement until recently despite its long history and
importance (Brulhart and Trionfetti, 2004).Previous studies have shown the difference in
the various types of public procurement and argued that procurement is a significant
policy tool that could aid in achieving greater overall objectives of the society.
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The major issues that have been established in the research of public procurement include
country, as public procurement tend to promote the local companies over foreign
suppliers hence enhancing economic growth (Brulhart and Trionfetti, 2004), this can be
evidently seen in the case of US on “buy American” policies, these tendencies are
companies within a specified region. In recent forums it has been discussed that Public
procurement can enhance innovation policy on both European and national levels (Aho et
al., 2006). This theme is consistent with research in the private sector that has shown how
value chain activities affect innovation. This is due to, the gain gotten in the procurement
process in value chain, activities which are aimed at getting greater product quality and
In the context of the public sector, research in this area has shown that government
procurement is a major part of demand created innovation policy (Aschhoff and Sofka,
public procurement recently has acquired the policy framework that governs its processes
that are being followed by the public entities. Public procurement has been identified as
the process in which public entities/ organizations meet the needs for goods, services,
works and utilities while also gaining the value for money in totality for all the
stakeholders involved, and also putting into consideration the environmental aspect.
(Klassen, 2006).
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The public procurement function of government is more complicated when public,
because of the size of its spending, it is in this regards that it is viewed as a policy tool
used to address social issues, economic development (local preferences), and environment
protection (green procurement). These policy concerns have made procurement practices
more complicated. Finally, the recent globalization movement has further complicated
public procurement as procurement officials have to comply without only national laws
According to Bills (2004) public procurement is the purchase of goods and services by
the public sector. Public procurement, accounts for a big portion of both public
expenditure and need for goods and services in the economy. The public sector being
regarded as the largest buyer, it affects competition in some markets through its
number of effects.
effects, promotion of ethics and transparency. The public sector, by conformity of its
entry. According to Michaeldes et al (2003) on the other hand, it can restrict and distort
competition, e.g. by adopting procurement systems that have the result of restricting
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Other effects include its cause on investment, innovation and the competitiveness faced
in the market, i.e. effects that makes changes in market structure and technology caused
by public procurement, which would come out, in future tenders would improve effects
in the supply of other buyers; who are, affected by changes in competitiveness in the
market or changes in technology (Gade et al.., 2000).however the effects can work in
reverse. This may be due to strong promotion of short-term contracts amongst suppliers
Bid evaluation is costly, particularly where the buyer's needs are complex and
requirements cannot be simplified. The buyer therefore has to trade off the higher costs of
assessing a larger number of bids against the likely decrease in purchase cost as a result
of fiercer competition amongst bidders (Leavey, 2001). Limiting the number of bidders in
cases where the characteristics of the goods or services are hard to define the
specification the use of reputation and a proven ability to meet the particular
requirements may be efficient. In addition we need to know that more bidders may not
always lead to lower prices. This is due to increase in the number of bidders the prices
can be high since the bids are done with more precaution. (Klause et, al, 2002).
Generally, it is hard to support collusion when the number of bidder’s increases, this is
due to the fact that bidders are more dissimilar (this may mitigate the positive impact on
competition due to the similarity across the several bidders). Other factors that cause
collusion include: Transparency this will lead to collusion since firms may not agree on
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the prices charged by other firms that may be below the agreed market rates. (Grauge,
2004). In addition another implication includes the exclusion of smaller firms since they
do not have the same strengths as bigger organizations when they are participating in the
same process. This puts them at a disadvantaged position in providing the goods or
services required. For instance competition is reduced, when SMEs are not able to tender
in instances where the buyer's specifications weighs more to strong economies of scale or
they tend to cover a much bigger scope of works, or where size and reputation of the firm
in previous works done are essential from the perspective of the public sector buyer.
(John, 2003).
According to Christiansen (2002), where repeated award of contract to the same firm
increases strong hold advantages (this is achieved through repetitive performance of the
same job and as a result there is perfecting the investments made by the successful
bidder), a buyer awarding a contract to the cheapest supplier in a series of tenders may
find itself with a rather restricted choice of suppliers in the long term. To the extent that
sector bidders anticipate such an outcome, they have an incentive to reduce their price
when a new requirement is first put out to tender in the expectation of little competition
competitiveness, accountability, efficiency, legality, and integrity, that ensure that the
“best value for money” in public procurement is achieved (HM Treasury, 2000). The
challenges of PPDA arise primarily because of the need on the organization to embrace
and practice it, coming directly from the character of the PPDA policy.
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For instance, since the immediate influence emphasizes the role of perceived costs and
benefits to engagement with the public sector it has been found that cost concerns are the
major obstacles for taking the various factors laid out in the procurement policy into
account in the purchasing process, especially when dealing with lack of product
availability which may be associated with greater costs of sourcing. Given the tight
PPDA are expected to play a particularly important role; this limits the organizations in
exercising the full policy as it is laid out in the PPDA, as most of the processes involved
The second challenge concerns the knowledge of the PPDA guidelines. In order for an
laid out policies and procedures. Organizations also need the required skills,
competencies and tools. PPDA guidelines are themselves complicated concepts, and
procurement professionals may not be competent enough to efficiently put into practice
the policies. A recent survey found that 83 per cent of purchasing professionals are not
fully qualified to deliver the required outcome through public procurement (Snell, 2006).
Studies have found that purchasing managers are unable to incorporate both the ethical
and social issues in public procurement by using them together (Cooper et al., 2000;
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The third challenge concerns the availability of goods and services. This is due to the fact
that most of the goods and services procured by the public sector are highly specialized;
therefore identifying the sources of supply may be very challenging in most cases. As
most of the specialized equipment’s do not have substitutes, example a specialist piece of
medical equipment.
The final challenge concerns organizational incentives and pressures for Public
procurement guidelines. In part, this depends on organizational culture and the degree to
(Gonzalez-Padron et al., 2008). This influence includes the extent to which there is
support for PPDA guidelines amongst senior management and whether organizational
The method used to procure public goods can have a significant impact on participation
of newer or smaller businesses (Eagan, 2005). The type and value of the contract are
important factors that determine the method of solicitation. Thus, public procurements
In Kenya, open tendering is the most used tendering system. It normally happens at two
levels: Open national tendering, which is open to participation on equal terms by all
providers through advertisement. It mainly targets domestic firms although foreigners are
terms by all providers but it specifically seeks to attract foreign firms. It is mainly used
where national providers may not provide competitive bids (Odhiambo and Kamau,
17
2003). Open tendering is usually advertised in prescribed national or international
Another method is restricted tendering mostly used where the value and condition are not
justifiable to the open tendering, whereby bids are obtained directly without sending it
out to the public, (Odhiambo and Kamau, 2003). Here, the procuring entity uses its
database of pre-qualified providers who are directly invited to tender. However, the
procuring agent must demonstrate that open tendering is not applicable. An invitation of
procurement agents seek to limit transactions costs, thus preferring to contact the firms
that have a proven track record, when calling for quotations. Request for quotations
Finally, direct or single source method is used where circumstances do not allow for
competitive bidding. It is used for small quantities in cases where time may not allow for
competitive bidding. However, as Eagan (2005) argues, this type of contract is conducted
through informal networks. He argues that it is usually more difficult for SME’s,
departmental heads. Buyers rely on their own lists to solicit vendors in practice, which
constitutes a barrier to small businesses, especially the new entrants. This method also
makes it difficult to monitor the participation of SMEs as the buyer may not keep records
of the purchases.
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Restricted and open tendering methods which are complex, time consuming and bear big
transaction costs are frequently used in the acquisition of capital goods and complex
carried out for goods and services for maintenance and small items. They are simple,
usually fall in the acquisition Quadrant (Talero, 2001).In actual practice, government
purposes and the legal requirements. However, the overall effect of open tendering
method makes the process more complex, expensive ,contract forming, and time
consuming and . This limits, most SMEs from participating in the process.
Procurement is one of the critical areas of Kenya’s public financial management system
Strategy (PFM Strategy) that was launched on 23rd June 2006. The reforms are meant to
promote favorable environment for private sector led growth; and strengthen
accountability in the management of public finances. A body that was established under
the PPDA 2005 was formed to ensure reforms took place, the Public Procurement
Oversight Authority (PPOA). The Authority was established on 1st January, 2007 when
the Public Procurement and Disposal Act, 2005 came into operation.
Procurement reforms in Kenya have gone through uninterrupted and supported efforts
over the years. In 1978, a supplies manual was developed which entailed policies and
programme in Kenya was formally launched on 25th November, 1998. Following this
effort, Public Procurement Regulations were passed in year 2001 under the Exchequer
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and Audit Act consolidating all the previous circulars that had governed public
weaknesses that undermined its capacity, there was a need to have laws to direct the
procurement system in the public sector and establish the necessary bodies that ensured
all procurement entities followed the laid out policies and procedures. (GoK, 2001)
The landmark in public procurement reforms came in 2005 when the Public Procurement
Review Board. With the gazettement of the Public Procurement and Disposal Regulations
The Public Procurement System in Kenya has evolved from a crude system with no
Procurement system was originally contained in the Supplies Manual of 1978, which was
supplemented by circulars that were issued from time to time by the Treasury. The
Director of Government Supply Services was responsible for ensuring the proper
observance of the provisions of the Manual. Public Procurement and Disposal Act, 2005
created the Public Procurement Oversight Authority (PPOA), the Public Procurement
Advisory Board (PPAB) and the continuance of the Public Procurement Complaints,
Review and Appeals Board as the Public Procurement Administrative Review Board
(PPARB) to hear appeals and complaints arising from procurement processes in public
entities
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2.6 Theoretical Review
This section documents the relevant theories and literature from similar past studies with
regard to the objectives of the proposed study. It also presents the conceptual framework
that underlies the study. The major theories discussed herein are the legitimacy theory
The legitimacy theory states that the organization has the mandate to state its activities to
the stakeholders, more specifically to the public and state the benefits the society will get
from it. (Wilmshurst and Frost, 2000). A state that is there when an organization’s value
system is in line with the value system of the society that the organization exists.
(Lindblom, 1993).
Legitimacy is a perception that the acts of the organization are acceptable in the
systems. The concept of legitimacy strongly suggests that the social contract which is
between the government and the public can be eliminated. In government procurement
context, there are issues (such as cronyism and corruption) that could endanger the
authority or department involved, and different government officers will be likely to have
different ideas of what is expected of them from the public and whether the department or
agency or local authority is viewed by the society as complying with the expectations that
is expected from them (Deegan et al., 2002).The legitimacy theory argues that officers
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makes the disclosure practice as a way of building a good reputation among the
Agency theory attempts to describe the agency relationship, this is where the principal
gives work to the agent who executes the work (Eisenhardt, 1989). There are challenges
in such kind of relationship, this is due to the fact that principal and agent have differing
objectives and this can result into conflict, in addition it is also difficult for the principal
to know what the agent is doing. Principal–agent researchers cover the theory of the
Agency theory is most relevant in situations in which contracting problems are difficult.
This ideally includes situations where there are substantial goal differences between
principals and agents and uncertain outcomes that trigger the risk implications of the
theory (Eisenhardt, 1989). Eisenhardt (1989.) discusses the assumptions of the theory and
raises the issue of principals learning about the agents when there is a long term
relationship, when there may be less need for outcome-based contracts. This may be
more the case with procurement in the private sector, where there are fewer regulations
than in the public sector, and where tendering is not required. Private businesses are free
to have long term relationships with software developers and consulting firms.
Jones (1995) suggests that long term relationships with vendors may in the long run lead
controlling goal conflicts. Sharma has extended the agency theory and focuses on the
1987).
22
2.7 Conceptual Framework
The conceptual framework provides a lens through which to explore the effects of the
such policies within parts of the public sector. The framework is applicable for a public
procurement context. According to Prajogo et, al. (2008), the public procurement and
public entities. Mwangi (2010) notes that it has become a common trend for losing
bidders to rush to the PPOA to file complaints. The appeal process is usually slow as the
slows down the procurement and compromises the competitive position of those public
entities in the commercial segment as they cannot keep the paces et by their counterparts
and relates not only to the levels of education and qualifications of the workforce but
also to the professional approach in the conduct of business activities it is also an ethical
permeated by their moral choices and are therefore officials involved in public
procurement must not make improper use of their positions while the application of the
highest ethical standards will help ensure the best achievable procurement outcome.
and their own processes and procedures According to Aho et., al (2006), the
due process has resulted in claims for damages from potential suppliers leading to loss of
23
taxpayers’ money and poor quality work. Therefore incompetency negatively affects the
The procurement procedures in the public sector have been heavily criticized of being
bureaucratic and complex (Mukasa, 2010). This has lead to poor perception amongst
potential suppliers. The negative perception has in turn led poor response from
experienced and qualified suppliers whenever the tenders are floated by public entities.
Moreover, although the public procurement and disposal act has introduced the much
needed sanity and transparency, the sector is still shrouded by the image of the former
self prior to the introduction of the PPDA that was characterized by corruption and
kickbacks hence some suppliers are still reluctant to bid for the tenders. This negative
Procurement in
The competency of Parastatals in Kenya
procurement staff 1. Improved
Efficiency
Perceived inefficiency in the 2. Competitiveness
cost policy 3. Transparency
4. Quality Goods
Organizational incentives and 5. Efficiency
pressures 6. Ethical Standards
7. Innovation
Suppliers’ availability and
Resistance
incentives to encourage good suppliers to do business with them. For instance the
guidelines discourage supplier development and collaborations due to the short term
24
nature of most corporations’ contracts. Secondly the payment procedures from goods
supplied and works done, take long time to release. Goldeman et al.,(2006) notes that this
short term attitude in turn leads to suppliers’ low variety and resistance to supply to
public entities.
Figure 2.1: Conceptual model of the influences on public procurement (adapted from
Gelderman et al., 2006) The framework is developed in the context of examining the
influences upon compliance with public procurement tendering directives (Odhiambo and
Kamau, 2005) and provides a useful a road map for examining the influences on the
degree to which any aspect of public procurement policy translates into practice.
25
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
This chapter outlines the overall methodology that was used to carry out this research
study. It embodied the research design, population under consideration, sampling design,
data collection methods, research procedures and the methodology that the researcher
The study adopted a cross sectional descriptive research design. Strauss and Corbin,
hypotheses or to answer questions concerning the current status of the subjects in study.
It involves formulating the objectives of the study, designing the methods of data
collection, selecting the sample, data collection and analyzing the results. Mugenda &
Mugenda (1999) state that the design provides an in-depth account of events,
Moreover previous researches like Amolo (2005), Muendo (2006), Muturi (2007) and
Mukasa (2010) have successfully employed the descriptive research design and is the
most appropriate when investigating this subject matter (Meng, 2010) and (Gadde, and
Dubois, 2000). Therefore this design will be adopted since it will provide an opportunity
3.3 Population
For the purposes of this study, the population of interest was all Parastatals in Kenya
based in the Nairobi County. The population of interest was divided into eight strata
26
(sectors). The parastatals straddle across all sectors of the economy. According to
Datamax website the total population of all the parastatals in Kenya as at December 2011
stands at 122. The facts studied did not vary substantially by sectors of the economy and
(Khakina, 2006).
The study adopted proportionate stratified Sampling design; this is any sampling method
where each element of the population has an equal chance of being selected. Mugenda
and Mugenda (2003) contend that a sample size should be at least 30 respondents or 10%
of the target population. The sampling specifically focused on the parastatals in Nairobi.
The 122 (see appendix I) corporations were assigned numbers. Thirty (30) were then
picked using random tables to constitute the sample as depicted in table 3.1.This
27
3.5 Data Collection
Primary data was collected for the purpose of this study. It was collected using
subject experts before final administration. This was done to cross verify the contents,
structure and nature of the questions asked and improve validity (Mitchell, 1996).
Administration of the questionnaire was on a drop and pick basis, the study will solicit
data from chief procurement officers or their equivalent in target institutions. Sections A
The filled questionnaires was inspected for completeness and edited. Descriptive
statistics: regression analysis was used to determine the effect of PPDA on the
the questionnaire. Standard deviation, range and co-efficient of variation were used to
determine the challenges in implementing the PPDA using data contained in section C of
information collected in the survey. This was used to support the results of quantitative
analysis in drawing conclusions and recommendations. The data collected from this study
28
CHAPTER FOUR: DATA ANALYSIS, INTERPRETATIONS AND
DISCUSSIONS
4.1 Introduction
This chapter presents analysis and findings of the study as set out in the research
objectives and methodology. The study findings and discussions are presented on the
respondents filled in and returned the questionnaire giving a response rate of 73%. This
commendable response rate was made a reality after the researcher made personal visits
to remind the respondent to fill-in and return the questionnaires. This response rate was
good and representative and conforms to Mugenda and Mugenda (2003) stipulation that a
response rate of 50% is adequate for analysis and reporting; a rate of 60% is good and a
29
Table 4. 2: Sector of the parastatals
Sector Frequency Percent
Commercial and services 5 23%
Manufacturing and Allied 3 14%
Environment and Natural Recourses 3 14%
Agricultural 4 18%
Energy and Petroleum 4 18%
Tourisim 1 5%
Construction and Allied 1 5%
Telecommunications and Technology 1 5%
Total 22 100%
Source: (Research Data, 2012)
From the research findings, 23% of the parastatals were in the commercial and services
sector followed by manufacturing and allied and other categories at 14% each.
represented by 5% each. There was no respondent from the automobile and accessories
sector. These finding indicate the diversity of the parastatals that responded in this study.
30
The research findings were as listed in the table 4.3:
From the study findings shown in the table 4.2.1 above, 32% of the respondents had
worked for 2-5 years followed by those who had worked for 10-15 years at 23%. 14% of
the respondents had worked for 15-20 years and 5-10 years each. 9% each had worked
The study set to establish the procurement method commonly used in government
parastatals. The respondents were required to indicate all the tendering method they
31
From the research finding above the study established that all the parastatals (100%)
applied open tendering system, 41% of the parastatals operated restricted tendering
where they from time to time send request for proposals to only the suppliers in their
database. 11% of the respondents also applied direct tendering systems in addition to
open tendering system. This provided them with leeway to reduce costs of tendering
especially where the contract values were small. 27% of the parastatals operated other
4.3.1 Means through Which Parastatals Invited Suppliers to Bid for Tenders
The study further sought to establish the means through which the parastatals invited
suppliers to bid for tenders. The findings were as indicated in the table 4.3.1:
From the data presented in the table 4.5 above, the study established that all (100%) the
advertisements.86% of the parastatals also employed use of emails during the invitation
for bids for tenders. Emails were mainly used where the parastatals had already
prequalified a list of suppliers. In such a way, the parastatals were at liberty to contact
the prequalified suppliers through all the available means of communication including
emails. 82% of the parastatals also made use of their websites in posting the tenders
32
together with the tender requirements for any supplier who wanted to access such
documentation. In addition, the use of websites ensured easy access and downloading of
tender documents for potential suppliers. 91% of the respondents also made use of
request for proposals where they send requests of proposals that contained the terms and
conditions regarding a given tender together with the tender evaluation procedures. This
assisted the suppliers in the customization of their tender bidding documents to the
requirements of the Parastatal. 14% of the parastatals indicated that they used
tendering systems, 50% of the respondents indicated that they also used other tendering
systems.
On whether the prospective bidders were invited for a pre bid conference, 41% of the
respondents indicated that their parastatals did invite suppliers for a pre-bidding
conference where they were provided with more information as regarded the tender and
how they were required to do their proposals. However, 59% of the respondents
indicated that their organizations did not have any pre-bidding conference for their
suppliers. They instead provided a window period within which the prospective
The respondents were asked to indicate their levels of agreement with the various
statements on factors that affected the use of procurement methods discussed above. The
response options ranged from 1-5 Where5= most important, 4= important, 3= neutral,
33
Table 4. 5: Factors affecting the use of procurement method
Mean Standard
Deviation
The provisions and guidelines of Public procurement and Disposal 4.6243 0.5618
Act
Commitment to continuous improvement by the supplier 4.2816 0.7139
The level of trust 3.486 1.2481
Past performance of the supplier 3.8194 1.0253
Influence by senior management 3.9581 1.3054
The number of suppliers in the market 2.8914 1.8169
The lead times allowable 3.8473 1.3510
Quality issues 3.5618 1.2914
Confidential nature of the contracts 3.9187 1.0816
The purchasing budget 4.3618 0.6814
Source: (Research Data, 2012)
From the above findings, respondents indicated that provisions and guidelines of Public
procurement and Disposal Act was very important factor that affected the use of
However, respondents were neutral to the fact that the level of trust affected procurement
indicated it was an important factor to the process with a mean of 3.8194. Influence by
3.9581.Asked whether the number of suppliers in the market affected the process;
respondents were neutral with a mean of 2.8914. On whether the lead times allowable
34
affected the process, respondents indicated it as important as supported by a mean of
3.8473.
The study further sought to establish whether quality issues affected the process.
Respondents indicated that it was an important factor with a mean of 3.5618. They also
indicate that confidential nature of the contracts was important with a mean of 3.9187.
Finally the purchasing budget was an important factor as supported by a mean of 4.3618.
The study sought to establish the evaluation criteria during the renewal of a contract with
a given supplier. From the data collected, the respondents indicated that their
organizations evaluated several factors including the performance of the supplier during
the just ended financial period. Under performance, the organizations evaluated the
capacity of the supplier, timeliness in the delivery of services or goods, the quality of
services and goods supplied financial stability of the supplier, the renewal terms
suggested by the supplier among other parameters. The organizations also considered
The study set to find out the methods used to evaluate supplier’s performance after the
award of contract.
35
Table 4. 6: Methods for Evaluation
Evaluation Method Frequency Percent
Check list 21 95%
Formal Supplier Review template 19 86%
Self-Evaluation 19 86%
Peer Review 18 82%
Benchmarking 16 73%
Questionnaires to user departments 14 64%
Trend Analysis 13 59%
Critical Incident Method 9 41%
Source: (Research Data, 2012)
On the above findings, Check list was the most used method at 95% followed closely by
Formal Supplier Review template and Self Evaluation at 86% each. Peer Review was at
at 59% and finally the least used method was Critical Incident at 41%.
The study sought to establish the effect of public procurement disposal act on the
organizations during the process of procurement. The respondents were required to score
the level of their agreement with various statements on the PPDA. The scale ranged from
of 1-5 where 1=very small extent, 2=small extent, 3=some extent, 4= great extent, 5=
very great extent. The study computed means and standard deviation to help measure
effect of public procurement disposal act. The findings are illustrated in the table 4.6
36
Table 4. 7: Effects of PPDA
MeanStandard
deviation
PPDA has improved the speed with which parastatals procure goods 3.2581 1.5160
and services
PPDA has improved the competitiveness of the procurement 3.5461 1.2894
processes among parastatals
PPDA has improved the competitiveness of the procurement 3.3718 1.641
processes among parastatals
PPDA has increased the level of transparency among parastatals in 3.4910 1.1841
procurement
PPDA had improved the quality of services and goods delivered by 3.9147 0.9184
the suppliers
PPDA has reduced biasness in awarding of contracts by parastatals 3.1083 1.6187
PPDA has promoted ethical standards among Parastatals in 3.6891 1.4813
procurement
PPDA has promoted innovation among Parastatals 2.7163 1.0942
Source: (Research Data, 2012)
From the above findings, respondents agreed that to some extent PPDA had improved the
speed with which parastatals procured goods and services as supported by a mean of
3.2581. Asked whether PPDA had improved the competitiveness of the procurement
processes among parastatals, which respondents agreed to a great extent with mean of
3.5461. Respondents also indicated that to some extent PPDA had improved the
of 3.3718. PPDA had increased the level of transparency to some extent too with mean of
3.4910. To a great extent PPDA had improved the quality of services and goods delivered
37
However respondents were neutral to the fact that PPDA had reduced biasness in
procurement which was agreed at a great extent with a mean of 3.6891. Finally, to some
2.7163.
The study sought to establish the challenges of PPDA on the organizations. The scale
ranged from of 1-5 where (1) Very Small Extent, (2) Small Extent (3) Some Extent, (4)
Great extent (5) Very great Extent The study computed means and standard deviation as
Mean Standard
Deviation
Lack of commitment from top management 2.8642 1.0846
38
Source: (Research Data, 2012)
The study sought to establish whether lack of commitment from top management was a
challenge of PPDA which respondents agreed to some extent is with a mean of 2.8642.
They also agreed to some extent that interference of the process by government officials
in the tendering process was a challenge. Respondents however agreed that corrupt
guidelines was to some great extent a challenge with a mean 3.7493. Further inefficiency
of the PPOA on enforcing the penalties to the offenders was also to some extent a
However, inadequate budgetary allocation for the purchasing function was agreed to
some extent as a challenge with a mean of 3.4916. In addition organizations’ culture and
the desire to maintain the status quo was also agreed to some extent as supported with a
mean of 3.1364. Asked whether inefficiency of the treasury in releasing money to the due
departments was a challenge of which respondents agreed to some extent with a mean of
some extent, few suppliers in the Market and conflict between the PPDA and donor
39
CHAPTER FIVE
This chapter presents the summary of key data findings, conclusions drawn from the
findings highlighted and recommendations that were made. The conclusions and
The study targeted a sample of 30 respondents out of which 22 respondents filled in and
returned the questionnaire giving a response rate of 73%. Of the parastatals that
responded, 23% were in the commercial and services sector followed by manufacturing
and allied and other categories at 14% each. Agriculture, and energy and petroleum,
comprised of 18% of the parastatals that responded. Tourism, construction and Allied and
concluded that all the parastatals applied open tendering system. It also concluded that
41% of the parastatals operated restricted tendering where they from time to time send
request for proposals to only the suppliers in their database, 11% of the respondents
applied direct tendering systems in addition to open tendering system in order to save on
costs especially where the contract values are small while 27% of the parastatals
On the means through which the parastatals invited suppliers to bid for tenders, the
study concluded that all (100%) the parastatals that responded invited bids for tenders
through newspaper advertisements. It further concluded that 86% of the parastatals also
40
employed use of emails during the invitation for bids for tenders, 82% of the parastatals
also made use of their websites in posting the tenders together with the tender
requirements for any supplier who wanted to access such documentation, 91% of the
respondents also made use of request for proposals where they send requests of
proposals that contained the terms and conditions regarding a given tender together with
the tender evaluation procedures, 14% of the parastatals indicated that they used
professional magazines in their tender invitation processes while 50% of the respondents
On whether prospective bidders were invited for a pre bid conference the study
concluded that 41% of parastatals did invite suppliers for a pre-bidding conference
where they were provided with more information as regarded the tender and how they
were required to do their proposals. It also concluded that 59% of organizations did not
have any pre-bidding conference for their suppliers. They instead provided a window
period within which the prospective suppliers were required to raise any inquiries as
On the factors that affected the procurement method, the study concluded that provisions
and guidelines of Public procurement and Disposal Act was very important factor that
senior management, lead times allowable, and quality issues, confidential nature of the
contracts and the purchasing budget were important factors that affected the procurement
On the effects of public procurement to disposal Act, the study further concluded that
41
addition PPDA improved the quality of services and goods delivered, and finally it
On the challenges of PPDA, the study concluded that corrupt officers, unresponsive bids
ignorance of the PPDA guidelines, inefficiency of the PPOA on enforcing the penalties to
the offenders and lack of organizational incentives & pressures for Public procurement
The study concludes that PPDA improves the competitiveness of the procurement
procurement. In addition, the study concludes that corrupt officers, unresponsive bids,
ignorance of the PPDA guidelines, inefficiency of the PPOA on enforcing the penalties to
the offenders and lack of organizational incentives & pressures for Public procurement
The study faced both time and financial limitations. The duration that the study was to be
conducted was limited hence exhaustive and extremely comprehensive research could not
be carried on the effect of the PPDA on procurement in parastatals in Kenya. The study
relied purely on responses from the respondents and did not visit all the thirty prastatals
grounds where the questioners were dropped for follow up. Due to limited time the study
could not collect information through observation of the procurement process over a
period of time to assess the performance. The study, however, minimized these by
42
collecting information from the main stakeholders who are involved in the procurement
The study recommends that another study to be done on the effects of PPDA on public
procurement process in the public sector. This will allow for generalization of the
done on how the PPDA affects procurement in Private Sector in their engagement with
5.6 Recommendations
From the above presentations of summary and conclusion, the study makes the following
government and policy makers in these institutions enhance their efforts in eradicating
the challenges associated with PPDA. Mechanisms should be put in place to ensure
to the officials implementing PPDA in order to ensure better guidelines in the process.
positives of PPDA in their organizations and thereby putting mechanisms that would
ensure all the employees are in knowledge of the Act for the purpose of implementation
43
44
REFERENCES
Aschhoff, B. and Sofka, W. (2008), “Innovation on demand – can public procurement
drive market success of innovations?”, Research Policy, Vol. 38 No. 3, pp. 1235-47.
Bovaird, T. (2006), “Developing new forms of partnership with the ‘market’ in the
procurement of public services”, Public Administration, Vol. 84 No. 1, pp. 81-102.
Coe, C. K. (1989). Public Financial Management. Englewood Cliffs, NJ: Prentice Hall.
Erridge, A. and Henningan, S. (2007), “Public procurement and social policy in Northern
Ireland: the unemployment pilot” PrAcademics Press, Boca Raton, FL, pp. 280-303.
Http://www.datamaxkenya.com/Government.htm (2011)
45
Odhiambo., W. and Kamau. P (2003) Public Procurement: Lessons from Kenya,
Tanzania and Uganda,
Odhiambo ,A.N, (2005). Procurement practices in the public sector: A case of Kenya’s
Ministry of Agriculture: Unpublished MBA project, University of Nairobi.
OECD, (2009). Working Paper, Ministry of Finance, Proceedings of the 1st National
Public Procurement Consultative Meeting, Safari Park Hotel, Nairobi
Prajogo, D.I., McDermott, P. and Goh, M. (2008), “Impact of value chain activities on
quality and innovation”, International Journal of Operations & Production
Management, Vol. 28
Thai, K. V., and Grimm, R. (2001). “Government Procurement: Past and Current
Developments.” Journal of Public Budgeting, Accounting & Financial Management,
12(2); 231-247.
Thai, K.V. (2001), “Public procurement re-examined”, Journal of Public Procurement,
Vol. 1
Uyarra, E. and Flanagan, K. (2010), “Understanding the innovation impacts of public
procurement”, European Planning Studies, Vol. 18 No. 1, pp. 123-43.
Wilmshurst, T.D. and Frost, G.R. (2000), “Corporate environmental reporting – a test of
legitimacy theory”, Accounting, Auditing & Accountability Journal, Vol. 13 No.
APPENDICES
Appendix I: Questionnaire
Sections A of the questionnaire contain information on respondents’ details and
organizations under study while section B contains questions on procurement processes.
Section C contains information on the limitations and challenges of the PPDA
46
1. Name of the Respondent’s Organization…………………………….
2. Sector
Agricultural Commercial and services Tourism
Energy and Petroleum Construction and allied
Environment and Natural recourses Environment and Natural Recourses
Telecommunications and Technology
3. Kindly indicate the number of years you have worked for the Company?
Bellow 2Years 2 to 5 Years Co 5-10Years
10-1 5 Years 15-20Years Over 20 Years
Others (Indicate)……………………........
B: PROCUREMENT PROCESSES
7. In a scale of 1-5, indicate the extent to which the following factors affect your
organization to use the procurement method(s) indicated in 9 above.Where5= most
important, 4= important, 3= neutral,2=less important and 1= not important.
47
5 4 3 2 1
The provisions and guidelines of Public procurement and
Disposal Act
Commitment to continuous improvement by the supplier
The level of trust
Past performance of the supplier
Influence by senior management
The number of suppliers in the market
The lead times allowable
Quality issues
Confidential nature of the contracts
The purchasing budget
Others1.
2.
3.
8. In awarding the contract what are the renewal terms in the next
phase/………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
9. What methods are used to evaluate the supplier’s performance after the award of the
contact?
Formal Supplier Review template
Questionnaires to user departments
Benchmarking
Peer Review
Trend Analysis
Self-Evaluation
Check list
Critical Incident Method
48
Effects of Public Procurement Disposal Act
Listed in the table below are some of the effects of Public Procurement and Disposal Act.
Please indicate the extent to which you agree with each statement given the scale of 1-5
where 1=very small extent,2=small extent,3=some extent,4= great extent, 5= very great
extent.
Extent
Extent
Extent
Extent
extent
Great
Small
Small
Some
great
Very
Very
PPDA has improved the speed with which parastatals
procure goods and services
PPDA has improved the competitiveness of the
procurement processes among parastatals
PPDA has improved the competitiveness of the
procurement processes among parastatals
PPDA has increased the level of transparency among
parastatals in procurement
PPDA had improved the quality of services and goods
delivered by the suppliers
PPDA has reduced biasness in awarding of contracts by
parastatals
PPDA has promoted ethical standards among Parastatals
in procurement
PPDA has promoted innovation among Parastatals
In your opinion, in what ways apart from the ones listed above has PPDA has affected the
procurement processes in the government parastatals?
_______________________________________________________________________
_______________________________________________________________________
49
CHALLENGES OF PPDA
10. In the statements provided below, state the extent to which the following challenges
have hampered the implementation of the PPDA in your Organizations where (1) Very
Small Extent, (2) Small Extent (3) Some Extent, (4) Great extent (5) Very great
Extent (√) as appropriate.
Extent
Extent
Extent
Extent
extent
Great
Small
Small
Some
great
Very
Very
Lack of commitment from top management
Interference of the process by government officials in the
tendering process
Corrupt officers/
Lack of qualified procurement professionals
Lack of unresponsive bids
Ignorance of the PPDA guidelines
Inefficiency of the PPOA on enforcing the penalties to
the offenders
Inadequate budgetary allocation for the purchasing
function
Organizations’ culture and the desire to maintain the
status quo
Inefficiency of the treasury in releasing money to the due
departments
Lack of organizational incentives and pressures for
Public procurement guidelines implementation
Few suppliers in the Market
Conflict between the PPDA and donor guidelines
Others 1.
2.
3.
4.
50
Appendix II: List of Government Parastatals
1. Agricultural Development Corporation
51
21. East African Portland Cement Co.
52
42. Kenya Electricity Generating Company
53
63. Kenya Post Office Savings Bank
54
84. Local Authority Provident Fund
55
105. Pest Control Products Board
56
57