FACTORS AFFECTING CONSULTANCY SERVICES.doc

8/17/2019 FACTORS AFFECTING CONSULTANCY SERVICES.doc

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PROJECT PROPOSAL:

FACTORS AFFECTING PROCURE OF CONSULTANCY

SERVICES IN PUBLIC INSTITUTIONS IN KENYA.

(CASE STUDY OF KENYATTA NATIONAL HOSPITAL)

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CHAPTER 1: INTRODUCTION

Tendering is an invitation to bidders without agreement usually in sealed envelopes to be

delivered at a specified time and date for the supply of goods and services. It is sought from a

group of suppliers broad enough to ensure competitive pricing. The method by which successful

supplier is identified is called open tendering or competitive bidding.

1.0: Back!"#$% "& ' *'#%+

Tendering embrace various types among them are Open tendering which is also referred to as

“public bidding,” the formal, public, and competitive procedure during which offers are

requested, received and evaluated for goods or services and after which the related contract is

awarded to the bidder that complies with the conditions specified in the notice of invitation. It

involves a series of stages, acts or steps that must follow rules prescribed in the bidding

documents.

elective Tendering is another method similar to open!public tendering, e"cept that the

invitations to bid are not issued to the public in general but only to firms selected by the

procuring agency. In general, the same procedures are used as for competitive bidding. It may

include a prequalification, this is a step in the bidding process in which the agency first selects

the firms to whom invitations to bid will later be issued.

#or this system to be effective, a technical specification has to be done which lays down the

characteristics of goods to be procured or their related processes and production methods, or the

characteristics of services to be procured or their related operating methods, including the

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applicable administrative provisions, and a requirement relating to conformity assessment

procedures that an entity prescribes. % technical specification may also include or deal

e"clusively with terminology, symbols, pac&aging, mar&ing or labelling requirements, as they

apply to a good, process, service or production or operating method. '(yson $))*+

1.1 STATE,ENT OF THE PROBLE,

There has been increasing need for use of tendering system in the ublic sector as an effective

procurement process, though poor implementation of the system may yield some drawbac&s.

Other factors that can affect the system include- inefficiency in the e"ecution of the tendering

system, slow tender appraisals, evaluation, adudication, communication, lac& of qualified and

e"perienced staff. /obler '100*+.

owever, observations reveal that, tendering system has been neglected by most public

institutions who have replaced it with quotations, which have been controlled by employees who

have vested interests in the procurements. They inflate prices or influence sources of

procurements and are not conversant with the system. The process of procurement in public

organisation is absolutely questionable.

The loss of huge amounts of funds in the public sector and collapse of most crucial proects is

attributed to poor tendering systems, hence a research study on effectiveness of tendering system

in public organi2ation. Oa&land '1034+

imilarly, strengthening the procurement capacity in the public sector directly increases

profitability and competitiveness in the mar&etplace. This study provides senior e"ecutives with

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the necessary s&ills to implement the most up5to5date and effective procurement tendering

strategies and policies to suit their organi2ational needs.

To achieve top5class tendering and contract management, procurement professionals must

develop a strong range of s&ills and competencies. The standards to which tenders,

specifications, evaluation criteria and contracts are written and managed dictate the success of an

organi2ation6s procurement processes.

This study aimed to develop the s&ills required to achieve optimal tendering results and to

optimi2e interaction with end5users and other sta&eholders to ensure the procurement function is

fully effective.

uccessful procurement of services or wor&s, ensuring completion of the proect on time, to

specification, within budget and without dispute, ta&es a s&illed professional. This study provide

participants with the &nowledge required to understand the issues and problems that surround

public organi2ations and effective tendering and contracting, and equip them with s&ills and

techniques to overcome these challenges. It also e"amined the management of ris& and e"plores

strategies for resolving claims and settling disputes.

1.- OBJECTIVES OF THE STUDY:

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1.-.1 GENERAL OBJECTIVE.

To find out factors affecting tendering system in an organi2ation

1.-.- SPECIFIC OBJECTIVES:

a+ To assess the effect of procurement need on the efficiency of open tendering in organi2ational

performance.

b+ To assess the effect of technical specification of bids on the efficiency of open tendering

c+ To identify the effects of evaluation criteria used on the efficiency of open tendering in the

organi2ational performance

d+ To identify the effects of award of tenders in public organisations.

1. RESEARCH /UESTIONS.

a+ ow does the procurement need affect the efficiency of open tendering in an organi2ational

performance8

b+ ow does the technical specification of bids affect the efficiency of open tendering of an

organi2ation8

c+ ow do the bids evaluation criteria affects the efficiency of open tendering in an

organi2ational performance8

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1. JUSTIFICATION OF THE STUDY.

The purpose of this study was to come up with effective tendering methods and policies aimed at

providing participants and senior e"ecutives with &nowledge and s&ills of tendering required to

suite their organi2ational needs and recommend necessary techniques to handle issues and

problems of procuring goods! services through tendering.

1.THE SCOPE OF THE STUDY

The research was conducted in procurement and : department at ;enya power and lighting


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CHAPTER -: LITERATURE REVIE3

-.0 INTRODUCTION

This chapter generally covers what various scholars on the topic under study have already

established. The relevance and importance of the topic will be illustrated in this area as portrayed

by available literature and other materials in relation to the area under study.

-.1 CONCEPTUAL FRA,E3ORK.

The &ey variables which will be measured in regard to researcher6s study will encompass the

independent and dependent variables. These variables will measure in regard to the ratings on the

percentage number of respondents. To this e"tent the measurement of the distinct variables will

be based on ordinal scale whereby the findings of each variable were evaluated according to the

percentage number of respondents hence this approach will give the researcher a basis to

quantify and ustify the authenticity of the data that would support the empirical findings of the

study. The researcher will use conceptual model indicated below to e"plain broadly the &ey

elements of tendering system and how they influence the public procurement.

=


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F4#! -.1: C"$c5'#a6 F!a78"!k

I$%5$%$' Va!4a96* D5$%$' Va!4a96

-.1.1. I$%5$%$' a!4a96*

The independent variables under this study entailed- identification of need for procurement,

technical specifications, the evaluation criteria, availability of funds, process followed, award of

contract and contract management. >ot all purchases calls for the need to tender. ome purchases

are preferred to certain suppliers due to the nature of their availability or direct purchase system

can be used rather than tendering.

3

Procurement

need

Technical

specs of bids

bids Tender system

Award of

Tender

Evaluation

criteria

Process and

procedures

involved


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N% &"! 5!"c#!7$'- before deciding on which method to use for procurement, the procuring

entity must identify the need and assess it if it warrants tendering. This is because tendering is

involved in terms of time and labour involved and should only be used if necessary.

%ccording to arsons '1004+, the procurement need requires a clear strategy which is so

involving and drafting such strategy affects both the decision and the performance of the

organi2ation.

%ccording to the researcher, the procurement need varies in terms of urgency and necessity of

the products in different departments and this may bring about strain of finances hence

interfering with the normal performance of the organi2ation.

Tc$4ca6 *5c4&4ca'4"$; %ccording to


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%ccording to the researcher, the tender committee must evaluate the tenders against the technical

specification laid down in the tender documents to determine whether they are fully conforming.

A8a!% "& '$%!: according to ;ot2ap '$))=+, the tender is awarded to higher responsive bidder

who meets the specifications needed.

%ccording to the researcher, the highest responsive bidder is awarded the contract and invited to

sign the contract on a specified date.

P!"c** a$% 5!"c%#!: %ccording to @orld Aan& '1009+,the %ct requires that before any

purchases are affected there must be some funds to meet the needs. % system will only be

effective when all the process and procedures involved are followed.

- .1.- D5$%$' a!4a96:

#rom the study, the independent variables affect immensely the dependent variable which is the

tender system used. In this case the efficiency of tendering system largely depends on the degree

of accuracy of the independent variables and the tendering processes followed.

CHAPTER B RESEARCH ,ETHODOLOGY

.0 INTRODUCTION

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This chapter discusses the research design, sample design and population of study. It also pre5

views the ampling techniques, data collection procedures, and analysis.

.1 RESEARCH DESIGN.

The study adopted a descriptive design which involved a survey that was carried out through a

semi structured questionnaire. The survey was administered through personal interviews by the

researcher to collect data.

.- TARGET POPULATION AND SA,PLE SI


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Ta96 .0B *a756 %4*'!49#'4"$ "& ' *'#%+.

CATEGORY TARGET POPULATION SA,PLE SI


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/ata was collected both through primary and secondary sources. econdary sources involved

review of written literature and primary data involved personal interviews.

..1 PILOT TESTING

This is a method that is used to test the design! methods! instruments prior to carrying out the

research. % pilot study was conducted before the researcher engaged in the actual research- the

Duestionnaire was tested for reliability of the data to be collected and it also allowed necessary

corrections to be done. ilot testing was done by senior procurement officials to ascertain its

viability.

. DATA ANALYSIS AND PRESENTATION:

/ata obtained through the questionnaire was analysed using descriptive statistics. The #indings

was analysed using percentages, charts and graphs.

CHAPTER : RESEARCH FINDINGS AND DISCUSSION

.0 I$'!"%#c'4"$

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The data collected was analysed both quantitatively and qualitatively, guided by the obectives of

the study. This chapter simplifies, organi2es and summari2es data, interprets and communicates

results in a clear and straight forward way.

.1 R*5"$* Ra'

Ta96 .1 A$a6+*4* "$ R*5"$* Ra'

Ca'"!+ N#79!"&

=#*'4"$$a4!*

4**#%

N#79! "&

=#*'4"$$a4!*

!'#!$%

R*5"$* Ra'

:espondents 4) $= 0)E

T"'a6 0 -> ?0@

Table 7.1 show that the response was 0)E .This was a good response.

.- /#a$'4'a'4 A$a6+*4* "& Da'a

Duantitative data analysis refers to a scientific method of investigation based on the use of

numerical data. The dominant methodology of quantitative research is to describe, predict and

e"plain the phenomenon. This can be achieved through collecting of numerical data on the

observable behaviour of events and people and subecting such data to statistical analysis.

.-.1G$%! "& ' R*5"$%$'*.

F4#! .1 A$a6+** "$ G$%!

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#igure 7.1 analyses indicate that out of 4) respondents 13 were men who represented *) E

while 1$ were women who represented 7)E. %lthough the number of male is bit higher as

compared to female, gender balance is evident as male were at *)E while female ta&e 7)E. This

shows that there is a fair representation of gender amongst the respondents.

.-.- A "& !*5"$%$'*

The research had requested the respondent to indicate their age. This was because of the view

that age influences the level of s&ills and relevant e"perience.

19

0

10

20

30

40

50

60

Male Female

Gender

P e r c e n t a g

e


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Ta96 .- A$a6+*4* "$ A

A F!=#$c+ P!c$'

$)5$9 19 9)

$*549 * $)

4*579 4 $)

79F above *

T"'a6 0 100

Table 7.$ shows that =)E of the respondents contacted are between $) to 4* years, only 4)E of

the respondent is above 4* years. This is a very productive age and thus has a very positive effect

on organi2ational performance. Only $)E are above 79Gears and therefore at retirement age

brac&et. This is healthy as when they retire a good number of e"perienced staff will be left

behind to train the new staff.

.-. Aca%74c /#a64&4ca'4"$*

The research wanted to establish the levels of academic qualifications with a view to lin&ing the

same to application of open tender process. The respondent were as indicated in table 7.4 below

Ta96 . A$a6+*4* "$ Aca%74c /#a64&4ca'4"$

Aca%74c F!=#$c+ P!c$'

1*


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/#a64&4ca'4"$

Haster6s /egree 1 4

Aachelor /egree 0 4)

/iploma 1$ 7)

ec sch


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#igure 7.$ indicate that *1E of the respondent had previous relevant e"perience in procurement

underta&ing. owever a significant 40E indicated no such e"perience.

.-. E&&c'* "& 5!"c#!7$' $%

The research sought responses on whether the procurement need affects the open tendering. This

was to gauge the effects on organi2ation performance. The response were as indicated in figure

7.4

F4#! . A$a6+*4* "$ ' &&c'* "& 5!"c#!7$' $% 4$ "!a$4a'4"$a6 5!&"!7a$c

13

61%

39%

Yes

No


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#igure 7.4 indicate that 9*E of the respondents agreed that procurement need affects open

tendering in an organi2ational performance while 77E did not

.-.2 P!"c#!7$' ,'"% C"77"$6+ U*%

The research wanted to establish which method of procurement is commonly used in the

organi2ation. The responses are indicated in figure 7.7

F4#! .A$a6+*4* "$ P!"c#!7$' 7'"% c"77"$6+ #*

10

56%

44%

Yes

No


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#igure 7.7 indicate that 9)E of respondents indicated that procurements are through open

tendering followed by quotations at 44E, 11E as direct procurement and *E as restricted tender.

.-.> D" +"# '4$k 'c$4ca6 *5c4&4ca'4"$* a&&c' "5$ '$%!4$ 5!"c**

The research wanted to find out whether specifications are a challenge to open tendering process.

These responses were tabulated as indicated in figure 7.9

F4#! .A$a6+*4* "$ 8'! 'c$4ca6 *5c4&4ca'4"$* a&&c' "5$ '$%!4$ 5!"c**

$)

0

10

20

30

40

50

60

Open Tender Direct

Procrement

!estricted

Tender

!e"est #or

$otations

Procurement Method

P e r c e n t a g

e


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figure 7.9, =4E of the respondent believe that specifications affect open tendering process while

only $=E feel that it does not affect in any way.

.-.? P!B4% ,'4$* 4$ "5$ '$%! 5!"c**

The research wanted to establish whether suppliers are invited for pre5bid meetings, the

responses were tabulated in table 7.7

Ta96 . A$a6+*4* "$ P!B4% ,'4$* 4$ "5$ '$%! 5!"c**

P!94' 7'4$* F!=#$c+ P!c$'a

Ges 1)

$1

0%

10%

20%

30%

40%

50%

60%

0%

&0%

Yes No

Response

p e r c e n t a g e


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>o $) 2>

T"'a6 0 100

Table 7.7 shows that only 44E of the open tenders carried out in the study period carried out

pre5bid meetings. The other *=E of the open tenders did not have pre5bid meetings.

.-.10 C"!!#5'4"$ a$% 4'* &&c'* "$ "5$ '$%!4$ 5!"c**

The research wanted to establish whether corruption affects open tendering process if any at

all. The responses were analysed as shown

Ta96 . A$a6+*4* "$ &&c' "& c"!!#5'4"$ '" "5$ '$%!4$ 5!"c**

R*5"$%$'* F!=#$c+ P!c$'a

Ges 4) 1))E

>o ) )E

T"'a6 0 100@

#rom Table 7.9, 1))E of the respondents agreed corruption greatly affects open tendering

process.

.-.11D" +"# '4$k "!a$4*a'4"$a6 5"64c+ a&&c'* "5$ '$%!4$ 5!"c**

Ta96 .2 A$a6+*4* "$ &&c'* "& "!a$4*a'4"$a6 5"64c+ '" "5$ '$%!4$ 5!"c**

$$


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D" +"# '4$k "!a$4*a'4"$

P"64c+ a&&c'* "5$

'$%!4$ 5!"c** F!=#$c+ P!c$'

Ges $= 0)

>o 4 1)

Total 4) 1))

#rom table 7.*, 0)E of the respondents strongly believe that organisational policies affect the

open tendering. Only 1)E of the respondents said that it does not affect.

.-.1- D" +"# '4$k 5!"c#!7$' '4c* a&&c' "5$ '$%!4$ 5!"c**

F4#! .2 A$a6+*4* "$ &&c' "& 5!"c#!7$' '4c* '" "5$ '$%!4$ 5!"c**

$4


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#rom figure 7.=, 3)E of the respondent strongly believe that individual interest affects open

tendering process while the remaining $)E feel that it does not.

. /#a64'a'4 A$a6+*4*

Dualitative data refers to non5numerical data that has not been quantified. Dualitative data

analysis helps to understand what is necessary in order to analyse data meaningfully. Dualitative

data is associated with concepts as characteri2ed by their richness and fullness based on your

opportunity to e"plore your subect. @ittig '$))$+

The respondent gave other challenges facing open tendering process in public organi2ations.

These included continuous training of employees in procurement line for better understanding of

procedures, ublic rocurement %ct $))9 :egulations $))* not being availed to procurement

$9

0%

10%

20%

30%

40%

50%

60%

0%

&0%

Yes No

Response

P e r c e n t a g e


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staff which would act as a guide in decisions pertaining procurement method to be used and

rocurement %udits are not being carried out.

CHAPTER : CONCLUSIONS AND RECO,,ENDATIONS

.0 I$'!"%#c'4"$

In this chapter, the summary and the conclusions of the study are discussed. :ecommendations

for improvement of open tender system are also discussed.

.1 S#77a!+

The research established that the system had the following effect on &ey aspects of procurementB

eventy two percent '=4E+ of the respondents agreed that specification affect open tendering

process while $=E did not agree.


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. C"$c6#*4"$*

Open tendering procurement method is the most common in public procurement and has helped

to achieve some of the obectives of the laws of ;enya governing public procurement, but it

faces a number of challenges that have prevented it from reaching its full potential. The

processes has helped to improve the quality of purchases, reduces lead times, reduces reection of

goods delivered, improves supplier satisfaction, improves no customer satisfaction due to timely

delivery and improve transparency and accountability. owever, these challenges affect the

efficiency and effectiveness of the method.

The result of study shows that specifications helps users to understand their needs and also

communicates to the suppliers on what to supply. =$E of the population supported the idea that

specifications were a challenge to open tendering process, this is because the finalproduct of

items procured by open tender process heavily depends on how accurate specifications were

done before commencing the purchase.


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thics was also cited a challenge to open tendering process. >inety four percent '07E+ of the

population agreed that lac& of ethics affect open tender and only *E thought otherwise. this

suggests that if procurement officers involved in tendering process behaved ethically the process

would be a success, also public confidence would be restored as right procedures in evaluation

and award of tenders would be followed.

On organi2ation policy 0)E of the population strongly agreed that organi2ational policy is a

maor challenge to open tendering process. This is because the policies are rigid and very

bureaucratic that ma&ing the process unnecessarily comple" while 1)E felt that organi2ational

policy has no effect on open tendering process

. Rc"77$%a'4"$*

In this section the recommendations are based on the conclusion. pecifications help users to

understand their needs and also communicate to the suppliers on what to supply. This is because

the final product of items procured by open tender process or any other procurement method

heavily depends on accuracy of specifications. #or effective results, rocurement department

should always involve technical e"perts and user departments in preparation of specifications of

the required equipment6s before preparation of bidding documents. These specifications should

be written in a manner that potential suppliers will understand. @here possible they should be

standardi2ed for them to be used in future for a similar purchase. %fter advertising and selling the

bid documents to the suppliers they should be called for a pre5 bid meeting for emphasis on

specifications required.

$0


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unnecessarily comple". Therefore there is need to review these policies and do amendments were

possible, this will result to policies that embrace open tendering process and through this the

universities will be able to trade with the right suppliers.

. A!a* &"! F#!'! R*a!c.

#urther studies need to be done in both public and private companies6 country wide to ascertain

whether findings of this study are general to both manufacturing companies and in service

industries.

REFERENCES

%nderson arus %. '1037+. Procurement and Marketing , >ew Gor&, Hc?raw5 ill.


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;ot2ap erbert etal.'$))=+. Managing the Global Supply Chain

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