PROCUREMENT POLICY AND PUBLIC MANAGEMENT FUND IN LOCAL GOVERNMENT OF RWANDA

PROCUREMENT POLICY AND PUBLIC MANAGEMENT FUNDS IN

LOCAL GOVERNMENT OF RWANDA

ABSTRACT This study focused on public procurement system and management of public funds, a case

study of Gisagra district. The different reports show that the public institutions in Gisagara

district did not perform well because many of them did not explain how they used funds,

and others did not follow the regulations on the use of money. Moreover, reports also

revealed that donors took back a lot of money intended for development because of the

ineffectiveness of beneficiaries to use them appropriately while ensuring authentic

accountability. It is therefore within these gaps that this study aims to investigate into the

extent of effectiveness of procurement system and public funds management in Rwanda.

The main objective of this study is to assess the correlation between public procurement

and management of public fund in Rwanda.. The specific objectives are to assess the public

procurement process in Gisagara District; to evaluate the Public Procurement techniques

used in Gisagrara (2010-2013) to manage public fund; to establish the relationship between

public procurement assessment and management of public fund. This study should benefit

by researcher and public institutions. This research was designed both quantitatively and

qualitatively; both descriptive and correlational statistics were used. It used questionnaires

to collect primary data and documentary technique to collect secondary data. The Target

population was190 employees of Gisagara District and 30 contactors. The Sample Size was

composed of 86 employees and 30 contractors. The purposive sampling technique was

utilized to select the respondents. After data collection, the data was analyzed used SPSS

program. Concerning the first research objective, the Public Procurement methods used in

Gisagrara (2010-2013) to manage public fund, out of 86 respondents, 68 (79.1%) strongly

agreed that requirement identification is the factors influence public procurement process

in Gisagara District and 18 (i.e 20.9%) agreed that requirement identification is one of the

factors influence public procurement process in Gisagara District. Concerning the second

research objective, the factors influence public procurement process in Gisagara District,

out of 86 respondents, 73 (i.e 84.9%) of respondents strongly agreed that National

Competitive Bidding (NCB) is one of the Public Procurement methods used in Gisagrara

to manage public fund. Concerning the third objective, challenges faced by contactors in

Gisagra District, out of 30 respondents, 23 respondents (i.e76.7%) strongly agreed delay

of payment is among of the challenges faced by contractors in Gisagra District. This

research used Pearson correlation coefficient and found that correlation coefficient (r)

equals to 0.565 i.e 56.5%. Therefore, there is a positive relationship between procurement

system and public funds management. Regarding lower managerial skills of some Gisagara

District employees, the researcher recommends that Gisagara District should improve

mobilization in the field of managerial skills and competitive tendering, whereby these

should leads to the increase in competition.

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TABLE OF CONTENTS

ABSTRACT ............................................................................................................................................ i

TABLE OF CONTENTS ....................................................................................................................... ii

LIST OF TABLES ................................................................................................................................ iv

LIST OF FIGURES ................................................................................................................................ v

LIST OF ABREVIATIONS AND ACRONYMS ................................................................................. vi

DEFINITIONS OF KEY TERMS ....................................................................................................... vii

CHAPTER ONE: INTRODUCTION .................................................................................................... 1

1.0 Introduction .................................................................................................................................. 1

1.1 Background of the Study ........................................................................................................ 1

1.2 Statement of the Problem ............................................................................................................. 2

1.3 Objectives of the Study ................................................................................................................ 2

1.4 Research Questions ...................................................................................................................... 3

1.5 Significance of the Study.............................................................................................................. 3

1.6 Limitations .................................................................................................................................... 3

1.7. Scope of the Study ....................................................................................................................... 4

1.8 Organization of the Study ............................................................................................................. 4

CHAPTER TWO: REVIEW OF RELATED LITERATURE ............................................................... 4

2.0 Introduction .................................................................................................................................. 4

2.1 Theoretical Literature ................................................................................................................... 5

2.1.1 Overview of Procurement .......................................................................................................... 5

2.1.2 Types of public Procurement ..................................................................................................... 6

2.1.3 The Public Procurement Process ............................................................................................... 6

2.1.4 How to Improve Procurement Function .................................................................................. 11

2.1.5 Overview of Management Of Public Fund.............................................................................. 11

2.1.6 Methods for Procurement of Goods and Services ................................................................... 12

2.1.7 Importance of Public Procurement in Public Fund Management ............................................ 14

2.2 Empirical Literature.................................................................................................................... 15

2.3. Critical Review and Research Gap Identification ..................................................................... 17

2.4 Conceptual Framework .............................................................................................................. 18

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2.5. Summary ................................................................................................................................... 18

CHAPTER THREE: RESEARCHMETHODOLOGY ........................................................................ 19

3.0 Introduction ................................................................................................................................ 19

3.1. Research Design ........................................................................................................................ 19

3.2 Target Population ....................................................................................................................... 19

3.3 Sample Design ............................................................................................................................ 19

3.4 Data collection Methods ............................................................................................................. 20

3.4.3 Validity And Reliability .......................................................................................................... 21

3.5 Data Analysis Methods............................................................................................................... 21

3.6 Ethical Consideration ................................................................................................................. 21

CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSION ...................................................... 22

4.0 Introduction ................................................................................................................................ 22

4.1 Demographic Characteristics of Respondents ............................................................................ 22

4.2 Presentation of Findings ............................................................................................................. 24

4.2.1 The Factors Influence Public Procurement process in Gisagara District ................................ 24

4.2.2 The Public Procurement Methods Used in Gisagrara to Manage Public Fund ....................... 28

4.3 Perception of Contractors On Competitive Tendering And Challenges Faced .......................... 34

4.3.2 Challenges Faced By Contactors in Gisagra District .............................................................. 34

4.3.3 Relationship Between Procurement System and Public Funds Management ......................... 38

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ...................... 39

5.0 Introduction ................................................................................................................................ 39

5.1 Summary of Findings ........................................................................................................... 39

5.1.1 The Public Procurement Methods Used In Gisagrara (2010-2013) to Manage Public Fund

40

5.1.2 The Factors Influence Public Procurement Process in Gisagara District ................................ 40

5.1.3 Challenges Faced By Contactors in Gisagra District .............................................................. 41

5.1.4 The Relationship Between Public Procurement And Management Of Public Fund ............. 41

5.2 Conclusions .......................................................................................................................... 42

5.3 Recommendations ...................................................................................................................... 43

5.4 Suggestions for Further Study .................................................................................................... 44

REFERENCES ..................................................................................................................................... 44

QUESTIONNAIRE ................................................................................................................................ a

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LIST OF TABLES Table 3.1: Target population and sample size determination ................................................. 20

Table 4.2: Distribution of respondents by level of education ................................................. 22

Table 4.3: Distribution of respondents by Job experience ...................................................... 23

Table 4.4: Distribution of respondents by occupation ............................................................ 23

Table 4.5:Procurement planning ............................................................................................. 25

Table 4.6: Solicitation document ............................................................................................ 25

Table 4.7:Pre-bid..................................................................................................................... 26

Table 4.8: Submission of bids ................................................................................................. 26

Table 4.9: Publication ............................................................................................................. 26

Table 4.10: Contract award ..................................................................................................... 27

Table 4.11: National Competitive Bidding (NCB) ................................................................. 28

Table 4.12: International tendering ......................................................................................... 28

Table 4.13: Restricted tendering ............................................................................................. 29

Table 4.14: Request for quotations ......................................................................................... 30

Table 4.15: Single source procurement .................................................................................. 31

Table 4.16:Force Account ....................................................................................................... 32

Table 4.17: Community Participation ..................................................................................... 33

Table 4.18: Delay of payment ................................................................................................. 34

Table 4.19: Time for getting contract ..................................................................................... 34

Table 4.20: Views of contactors on lack of Skills .................................................................. 35

Table 4.21: Lack of transparence ............................................................................................ 36

Table 4.22: Time of contract implementation........................................................................ 36

Table 4.23: Incomplete specification ...................................................................................... 37

Table 4.24: Inefficiency of supervision .................................................................................. 38

Table 4.25: Relationship between procurement system and public funds management ........ 38

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LIST OF FIGURES Figure 2.1: Conceptual framework ......................................................................................... 18

Figure 4.2: The process of using competitive tendering in Gisagara District ........................ 27

Figure 4.3: The tendering methods adopted by Gisagara District ......................................... 33

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LIST OF ABREVIATIONS AND ACRONYMS

EDPRS: Economic Development and Poverty Reduction Strategy

GNP Gross National Product

GoR: Government of Rwanda

IBRD: International Bank for Reconstruction Development

ICB: International Competitive Bidding

IDA: International Development Association

LED: local economic development

LIB: Limited International Bidding

MINECOFIN: Ministry of planning, Economic and finance

NCB: National Competitive bidding

OECD : Organization for Economic Co-operation and Development

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RPPA: Rwanda Public Procurement Authority

WTO: World Trade Organization

DEFINITIONS OF KEY TERMS Procurement is a process of identifying and obtaining goods and services. It includes

sourcing, purchasing and covers all activities from identifying potential suppliers through to

delivery from supplier to the users or beneficiary.

Public procurement is a process to purchase or acquire the products, services such as simple

office items to sophisticated high-tech equipment from outside the organization to perform the

work in the public institutions.

Management of public fund Management of public fund is an optimal use and allocation of

public resources. In this research, the researcher needs to focus on public inventory control and

its management.

CHAPTER ONE: INTRODUCTION

1.0 Introduction

This chapter contains the background of the study in which we give specific problems of the

research, statement of the problem in which we show what the research seeks to solve,

objectives of the study global and specific, research questions which is the provision of

response to the problem, significance of the study where is the benefit of the research,

limitation and scope of the study.

1.1 Background of the Study

Procurement management is a process to purchase or acquire the products, services such as

simple office items to sophisticated high-tech equipment from outside the organization to

perform the work (Velnampy & Kamalarupan , 2009). Procurement management includes the

processes to purchase or acquire the products, services, or results needed from outside the

organization to perform the work. Procurement management also includes administering any

contract issued by an outside organization (The Buyer) that is acquiring the organization from

the performing organization (the seller), and administering contractual obligations placed on

the organization by the contract (George , Cynthia, Berg, Judith & Doll, 2004). Prior to World

War I, purchasing was regarded as primarily clerical. During World War I & II; the function

increased due to the importance of obtaining raw materials, supplies, and services needed to

keep the factories and mines operating.1950s & 1960s purchasing continued to gain stature as

the techniques for performing the function became more refined and as the number of trained

professionals increased. With introduction of major public bodies and intergovernmental

organizations, such as United Nations, procurement becomes a well-recognized science.1970s

& 1980s more emphasis was placed on purchasing strategy as the ability to obtain needed items

from suppliers at realistic prices increased (Weele , 2010).

Nowadays in the public finance literature, different governments are involved in four major

economic activities: (a) providing the legal framework for all economic activities, (b)

redistributing income through taxation and spending; (b) providing public goods and services

freely available to the public such as national defense, public safety, education, and

infrastructure (bridges and roads); and (c) purchasing goods, services and capital assets (Thai,

2011).

In recent years, the Government of Rwanda has made impressive progress in rebuilding its

public financial management system, which like so much of the country was largely destroyed

during the genocide against Tutsi of 1994. Rwanda Public Procurement Authority mainly

focuses on regulatory measures, monitoring and building capacity in public procuring entities.

The Rwanda Public Procurement Authority is a Public body established on February 20, 2008

by the law N° 63/2007 of 30/12/2007. It was created to replace the National Tender Board

during a reform process in Public financial management launched by the Government of

Rwanda (GoR), in which Public procurement reform was one of the most important

components (Transparency Rwanda, 2012).

As part of public financial management reform, the Government of Rwanda has been engaged

in a number of initiatives aimed at streamlining its public procurement system in order to align

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it with fundamental principles of transparency, competition, economy, efficiency, fairness and

accountability (Organization for Economic Co-operation and Development [OECD], 2007).

Procurement Management is the third pillar of the Government of Rwandan Public Financial

Management Reforms Strategy. The main objective of this reform was to establish sound

public procurement policies and practices that ensure good governance and value for money

(Ministry of planning, Economic and finance [MINECOFIN], 2007). Thus, the researcher

carried out the research called Rwanda Public Procurement Authority and management of

public fund, a case study of Gisagara district.

1.2 Statement of the Problem

According to Thai (2011), although public procurement is perceived as a major function of

government, and although governmental entities, policy makers and public procurement

professionals have paid a great deal of attention to procurement improvements or reforms,

public procurement has been a neglected area of academic education and research in the least

developing countries like Rwanda. Measuring government procurement for a large number of

countries, in a consistent manner, is not a trivial task and careful attention must be paid to

ensure that national data is gathered on the basis of harmonized procedures in all countries

covered (Audet, 2002). The Government of Rwanda initiated and implemented reforms in

Public Finance Management including its Public Finance Reform Strategy of 2008-2012. The

ultimate goal of these reforms is to ensure efficient, effective and accountable use of public

resources as a basis for economic development and poverty reduction through improved

service delivery which is consistent with both the Economic Development and Poverty

Reduction Strategy (EDPRS) and the Vision 2020 (MINECOFIN, 2008).

Despite of the progress made, creation of Sustainable capacity building to implement these

reforms has remained a challenge. According to Rwanda Public Procurement Authority

[RPPA], (2012), other pillars for a sound, effective and efficient procurement system have

been achieved i.e. the creation of a legal and regulatory procurement framework, the ability of

the market place to participate in procurement given the growth and development of private

sector in Rwanda and the integrity of the country by looking at the fact that Rwanda is now a

role model in terms of zero tolerance towards corruption. The pillar that remains partially a

challenge is procurement management capacity. Thus, Public procurement has been a

neglected area of academic education and research in Rwanda. The researcher came up with

an idea to carry out this research called Rwanda Public Procurement system and management

of public fund, a case study of Gisagara district.

1.3 Objectives of the Study

1.3.1 Main Objective

The main objective of this study is to assess the relationship between procurement policy and

management of public fund in Rwanda.

1.3.2 Specific Objectives

To achieve the main objective, the following specific objectives will be accomplished:

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(i) To evaluate the Public Procurement methods used in Gisagrara (2010-2013) to manage

public fund;

(ii) To assess the factors influence public procurement process and public fund in Gisagara

District;

(iii)To analyze the challenges faced by Gisagara District contractors in tendering process;

(iv) To establish the relationship between public procurement and management of public fund.

1.4 Research Questions

The following questions will guide us while carrying out our study.

(i) Is there any public procurement methods used in managing public tenders?

(ii) What are the factors that influence public procurement process and public fund in

Gisagara District?

(iii) What are the challenges faced by Gisagara District contractors in tendering process?

(iv) Is there any relationship between public procurement and public fund management?

1.5 Significance of the Study

This project is to help and address the factors that lead to the improper or poor procurement in

RPPA and how the problem can be solved or minimized through efficient management of the

resources available. The project also served as a reference material for any person that would

like to conduct research on public procurement control. This study is of great importance

basing on the fact that the procurement plays big role in the public institutions. Therefore, the

findings of this study provide literature that is important for the individuals, public and private

institutions.

To the researcher: The study is beneficial to the researcher himself; this is because the

researcher was able to understand properly, how public procurement can be used to influence

public institutions performance through better management of public fund. This study is also

beneficial to the researcher because it provides to him with the knowledge on how to manage

resources of public institution through better procurement.

To other researchers: Regarding individuals, the information collected and analyzed after the

study added to the existing literature which assisted other researchers more specifically

students writing their projects in the same or related area.

1.6 Limitations

The first limitation of the study is dealing with people who do not want to release information

thinking that the research is going to be commercial. This was addressed by telling them that

the information is going to be confidential and purely academic. The study was expensive as

it involved a lot of spending such as transport and report production costs. There can be a

problem of getting full information from managers, team leaders and supervisors because

they can think that information can be used by competitors. For gaining the attention of

filling the questionnaire, researcher convinced them by explaining the importance of the study

and the recommendations which help them to improve their performance.

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1.7. Scope of the Study

In order to ensure that the research remains focused on its objectives, it put up in content,

geography and time.

1.7.1 Content Scope

The research focused on the Rwanda public procurement authority and management of public

fund. The researcher focused in this field because, he recognized that sometimes those people

(contractors) with low income do not benefit tendering.

1.7.2 Geographical Scope

The research was carried out in Gisagara district, located in Sothern province.

1.7.3 Time Scope

The research was included fiscal period of 4 years from 2010 to 2013.The researcher has

chosen this period because, it is in this period whereby Rwanda Public procurement Authority

faced problems of fluctuating resources, inaccurate forecasts and low utilization of inventory

and then it is in this period whereby the researcher gets updated data .The research will be

carried out during 6 months.

1.8 Organization of the Study

The research work is divided into five main chapters, chapter one is compose of the general

introduction, background of the study, statement of the problem, purpose, objectives of the

study, research questions, and identification of the study variables, scope, significance and

organization of the study. Chapter two involved the review of relevant literature with reference

to different sources of data, definition of terms and concepts and framework of the study.

Chapter concerned with the methodology to be used in carrying out this study. Research

designs, techniques of data collection and methods used. Chapter four analyzed and presented

the study findings. It attempts to summarize the views from the questionnaires and

documentary review interprets them and then presents them as findings of the research.

Chapter five was a summary, suggestions for further studies and conclusion of results. The

research at the end attached references and appendices used in undertaking this study.

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.0 Introduction

This chapter is broadly aimed at reviewing the existing research and literature that is relevant

to the study under question. It represents different literature related to procurement, reviewed

the theoretical, empirical and critical literature on the subject related to the study. The over all-

purpose of this chapter is to identify gaps that this study will fill and contribute approaches to

better performance of public procurement.

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2.1 Theoretical Literature

2.1.1 Overview of Procurement

Procurement is a process of identifying and obtaining goods and services. It includes sourcing,

purchasing and covers all activities from identifying potential suppliers through to delivery

from supplier to the users or beneficiary. It is favorable that the goods/services are appropriate

and that they are procured at the best possible cost to meet the needs of the purchaser

in terms of quality and quantity, time, and location (Mangan, Lalwani & Butcher, 2008).

According to Weele (2010), procurement is the acquisition of goods, services or works

from an external source. It is favorable that the goods, services or works are appropriate

and that they are procured at the best possible cost to meet the needs of the purchaser in terms

of quality and quantity, time, and location. Corporations and public bodies often define

processes intended to promote fair and open competition for their business while minimizing

exposure to fraud and collusion.

Governments are significant purchasers of goods and services and these markets represent

huge opportunities for international trade. Measuring government procurement for a large

number of countries, in a consistent manner, is not a trivial task and careful attention must be

paid to ensure that national data is gathered on the basis of harmonized procedures in all

countries covered (Audet, 2002). Maurer (2004) argues that there is one important question to

ask when dealing with procurement. The question is; “How is the organization seeking

continuous improvement in its approach to procurement for new development, planned and

responsive maintenance?” To ensure improvement in procurement, he prescribes that

organizations should use ‘best value’ techniques, which embody aspects such as challenging

what organizations do and how they do it, making comparisons with others, consulting people

affected by the organization’s services, and establishing that value for money is obtained

during procurement.

The purpose of an effective and dynamic public procurement is to ensure among other things,

timeliness, efficiency, transparence, economy and accountability in the use of public funds for

the acquisition of works, goods and services. The rational of public procurement system

therefore refers to the reason that justifies public procurement system to be better option in the

development of country (OECD, 2007).

The procurement and contract administration process are prone to risks. There are risks in

determining need and planning procurements, developing specifications, selecting the

appropriate procurement methods, preparing solicitation documents and calling for offers,

evaluation and selection of firms and individuals, negotiating the contract, and contract

administration. Procurement management is about solving problems and managing risks.

Customers need supplies and services to solve immediate and future needs. They usually have

little understanding of procurement and unrealistic expectations about the procurement

process. Procurement planning and strategy development are important to reduce risk in the

procurement process. A comprehensive understanding of the procurement process, principles

and guidelines is also important to finding appropriate solutions and minimizing risks

(Benslimane, Plaisent, & Bernard, 2005).

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2.1.2 Types of public Procurement

Procurement of goods means objects of every kind and description including raw materials,

products, equipment and objects in solid, liquid or gaseous form, and electricity, as well as

services incidental to the supply of the goods if the value of those related services does not

exceed that of the goods themselves (Brackus, 2000). Procurement of service refers to any

services other than consultant services. This includes related services. “Related Services” is

used to denote services such as transportation, insurance, installation and commissioning,

training and initial maintenance, etc. which are included in the goods and works being procured

(Audet, 2002).

Procurement of works means all work associated with the construction, reconstruction,

demolition, repair or renovation of a building, structure or works, such as site preparation,

excavation, erection, building, installation of equipment or materials, decoration and finishing,

as well as services incidental to works such as drilling, mapping, satellite photography, seismic

investigations and similar services provided pursuant to the procurement contract, if the value

of those related services does not exceed that of the works itself; “Consultant Services” refers

to activities or services of an intellectual or of immaterial nature. It refers to services which

require professional skills in the execution of assignments with non-physical output, such as

studies, designs, etc. to be undertaken by individual consultants, consulting firms and other

specialists (Bovis, 2007).

2.1.3 The Public Procurement Process

All procurement requirements begin with the perception of a need; the need to cross a body

of water could create a requirement to build a bridge, a ferry, or other transportation systems.

At this stage it is necessary to clearly define the need, and this may be done by way of a study

to determine the best mode to cross the body of water (given the present situation and

forecasted future need), then the type of bridge to be constructed, or a comparative cost/benefit

analysis to determine the best solution between a bridge and other alternatives. The study

should include if the need can be satisfied in-house or contracted out, quantification of the

initial budgetary estimate, and an idea of the procurement lead-time. The conformation of the

study team should be multidisciplinary in order to address the different questions to be

answered to facilitate a comprehensive understanding of the need so as to clearly define the

actual requirement.

Jorge (2012) assumed that the role of procurement practitioners at this stage is primarily to

estimate the procurement lead time given the most appropriate procurement method that would

be suitable for such a requirement. Of course, the perceived need is not always as complex as

in the example above. There are also needs for goods and services, and those should also

undergo an analysis to clearly define requirements. At the end of the requirements definition

stage, a clear determination of the terms of reference, technical specifications or statement of

work (depending on the procurement category) should be possible, including an estimate of

the budget, and, most importantly, the procurement lead-time. This requirement definition

analysis is essential not only for new procurement requirements, and project initiation and

concept development, but also for requirements needed for maintaining existing operations.

Determining procurement method, during the requirement identification stage, the entity with

the need determines when they want the goods delivered, services rendered or construction

works completed. It is important to consult with the procuring entity at this early stage in order

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to determine the most appropriate procurement method for their specific need. The

procurement method should be determined at this early stage because of the impact it has on

the procurement lead-time, and also to ensure that the responsible entity is able to set realistic

timeframes and expectations for contract award in the initial stages of development and

definition of their procurement requirement (Saunders, Levin, & Thornhill, 2009).

This simple exercise of obtaining the assistance of the procuring entity early on helps to avoid

disappointments, unrealistic expectations and frustrations when, due to poor planning, it is

impossible to meet expectations set during the requirement definition phase. At this stage of

the process, it is also important to decide if a competitive or non-competitive procurement

method will be used. The complexity of a requirement, procurement category, and monetary

value are all important factors to consider when deciding on the procurement method. A

decision to use a particular procurement method must be based on the stipulations of the

procurement rules (Burguet & Che, 2004 ).

Caldwell ,Roehrich and Davies (2009) mentioned that it’s difficult to talk about procurement

planning without mentioning procurement strategy, because procurement strategy is developed

in conjunction with and during the procurement planning phase and is a key factor in

determining the most appropriate procurement method given the complexity and monetary

value of the requirement, and market availability. While procurement planning deals with

“when”, procurement strategy looks at “what”, “how”, “where” and “why”; which need to be

decided before the ‘when”

Procurement planning and strategy development procurement Planning is one of the most

important steps in the public procurement cycle. The procurement plan is expected to list all

the requirements that are under the responsibility of a particular procurement entity and that

are expected to be procured over a period of time (usually one year, but could be longer when

dealing with project procurement).There are instances where some items that are below a

certain monetary threshold are not listed on the procurement plan; however, effort should be

made to have everything that a particular procurement entity is responsible for procuring listed

on the procurement plan of that procurement entity. The procurement plan should also be

update at least every six months (or more if required), but constant updating should be avoided.

The fact that the procurement plan needs updating is an indication that it is not expected to be

a static document. This, however, should not lessen the importance of procurement planning

as the primary tool used for triggering procurement actions. This means that all procurement

actions taken by a particular procurement entity should be guided by an approved procurement

plan (Jorge, 2013).

The procurement plan isn’t only useful for determining what needs to be procured, and by

when, but it’s also for determining the need for additional manpower to support the preparation

of specifications and bid documents, requesting, receiving and evaluating offers, contract

negotiations and award, and contract administration, given the number of procurement

requirements within a certain period of time. Once the procurement plan is prepared and

approved after allocation of funds and consolidation (bundling) of similar requirements to

attract a broader pool of suppliers and for economies of scale, it should only be allowed to

change through approved amendments; and all requirements procured by the responsible

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procurement entity should be found on the approved procurement plan. Only for exceptional

reasons should a particular procurement be allowed to commence without being listed on the

approved procurement plan or on an approved amendment of the procurement plan (Burguet

& Che, 2004 ).

Procurement requisition processing, once the procurement plan is prepared and approved, the

requesting entities should begin submitting their requirements accordingly to the procuring

entity for processing. When a procurement requisition is submitted, the first step in processing

the request for procurement action is to determine exactly what is required. Although a general

idea would already exists as a result of the requirements determination and procurement

planning phases, it is at this point that the completed technical specifications or terms of

reference should be sent to the procuring entity to start the procurement requisition process.

The procuring entity in turn reviews the technical specification or terms of reference for

completion (Jorge, 2013).

Completing the technical specifications and terms of reference later than scheduled will have

an adverse impact on the execution of the procurement plan and the award of the contract,

which in turn will cause delays in acquiring the goods and services. It is important for the

procuring entity, in coordination with the requesting entity, to determine in advance if technical

expertise will be required to draft the technical specifications or terms of reference and if this

expertise exists in-house or will also have to be procured. Independent of the technical

expertise existing in-house, when technical specifications or terms of reference are unclear or

lacking in other important elements, the procuring entity must seek clarification in an effort to

resolve any apparent discrepancies before completing the solicitation documents. Ideally, the

requesting entity should maintain an open dialogue with the procuring entity while preparing

their technical specifications and terms of reference. Sharing informal versions and getting

feedback from the procuring entity up until the final version is ready for formal submission.

When the procuring entity receives the technical specifications or terms of reference in a

manner suitable for requesting offers, and with the proper fiscal authorization to commit the

allocated funds, the procuring entity can begin preparing the solicitation documents (Thai,

2011).

Solicitation documents preparation and publication, upon receipt of an approved procurement

requisition, and after reviewing the technical specifications or terms of reference for

completeness, the procuring entity is in a position to begin preparing the solicitation

documents; otherwise, the procuring entity needs to establish contact with the requesting entity

in order to get any missing information to complete the technical specifications or terms of

reference before they can begin preparing the solicitation documents. Solicitation documents

are prepared from a template called standard bidding or tender documents, and information

specific to the particular requirement, such as observed below, is used to complete the

solicitation documents. Assuming that the requirement is on the procurement plan, pertinent

information needs to be obtained and agreed with the requesting entity prior to completing the

solicitation documents (Burguet & Che, 2004 ). Once the solicitation documents are complete

and approved, a procurement notice is prepared and posted to approved websites and internet

portals, and also published in local and (if necessary) international newspapers.

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Pre-bid/proposal meeting and site visit, pre-bid meetings are usually held, if previously

mentioned in the solicitation documents, during the bid/proposal preparation period. Their

purpose is to clarify any concerns bidders may have with the solicitation documents, scope of

work and other details of the requirement. These meetings are formal and the results are made

available in writing to all prospective bidders that registered interest in the requirement be it

through requesting, buying or downloading the solicitation documents from an official website.

Prospective bidders are permitted to request clarifications by a date and time stipulated in the

solicitation documents (Jorge, 2013).

It is most beneficial to hold pre-bid meetings prior to formally responding to the request for

clarifications, that way the responses to the request for clarifications can be sent along with the

results of the pre-bid meeting, including a copy of the minutes of the pre-bid meeting. Although

prospective bidders should be encouraged to get as much information as possible (including

visiting the site) on a specific or upcoming requirement of a procuring entity, formal site visits

are usually planned and carried out for works procurement and more complex goods

requirements. When a site visit is planned, the details of the date and time must be stated in the

solicitation documents. And the site visit should take place before (but not too far in advance

of) the pre-bid meeting. The results are also formally sent to all prospective bidders that

expressed interest in the requirement, by way of minutes of the site visit and pre-bid meeting,

including consolidated responses to request for clarifications, also from prospective bidders.

The pre-bid meeting is usually open to all interested prospective bidders; however, in cases

where pre-qualification or short-listing is carried out, only pre-qualified or short-listed bidders

are invited to attend the pre-bid meeting. Site visits, as mentioned above, can and should

preferable be held prior to the pre-bid meeting.

During the site visit the prospective bidders survey the site and ask questions to clarify any

doubts or information provided in the solicitation documents. Sometimes, as a result of the site

visit/pre-bid meeting there might be a need to extend the bid/proposal submission date by way

of Addendum to the solicitation documents to give bidders sufficient time to address any

changes made to the solicitation documents as a result of the site visit and/or pre-bid meeting

(Shaw, 2010).

Bid/proposal submission and opening, the Lead Agency must receive the Bid Proposal at the

Issuing Officer's address identified on the bid cover sheet before the "Bid Proposals Due" date

listed on the bid cover sheet. This is a mandatory requirement and will not be waived by the

Lead Agency. Any Bid Proposal received after this deadline will be rejected and returned

unopened to the Contractor. Contractors mailing Bid Proposals must allow ample mail delivery

time to ensure timely receipt of their Bid Proposals. It is the Contractor's responsibility to

ensure that the Bid Proposal is received prior to the deadline. Postmarking by the due date will

not substitute for actual receipt of the Bid Proposal. Electronic mail and faxed Bid Proposals

will not be accepted (Bovis, 2007)

Contractors must furnish all information necessary to evaluate the Bid Proposal. Bid proposals

that fail to meet the mandatory requirements of the bid may be disqualified. Verbal information

provided by the Contractor shall not be considered part of the Contractor's Bid Proposal unless

it is reduced to writing. The Lead Agency will open Bid Proposals after the deadline for

10

submission of Bid Proposals has passed. The Bid Proposals will remain confidential until the

Evaluation Committee has reviewed all of the Bid Proposals submitted in response to the bid

and the Lead Agency has announced a notice of intent to award a contract. See Iowa Code

Section 72.3. However, the names of Contractors who submitted timely Bid Proposals will be

publicly available after the Bid Proposal opening. The announcement of Contractors who

timely submitted Bid Proposals does not mean that an individual Bid Proposal has been

deemed technically compliant or accepted for evaluation (Shaw, 2010).

Bid Evaluation and Awarding, the evaluation of tenders and awarding of contracts to suppliers

is an important phase of the procurement process (Maurer, 2004). It is the process that

determines the actual quality, reliability, delivery, etc. of the goods and services. The

procurement department coordinates the following: Analyzing and evaluating the bids against

set criteria, specification requirements presenting the analysis to an procurement appointed

committee, Verification of supplier capability and quality control/ assurance processes,

Reviewing product inspection results where necessary, Verification of technical evaluation

reports where applicable, Negotiates with vendors where it is recommended by the committee

and Placing orders and expediting the delivery.

In addition, Shaw (2010) contended that it is very important for the procurement department

to assess and consult on any big price variations, to avoid potential conflict of interest, undue

influence, price fixing and favoritism, and to ensure consultative decision making and sharing

of responsibilities. Also, the tender box should not be opened by one person only, and the

criteria used to evaluate bids should be tested and validated by the committee before

Contract Negotiations and award recommendation at the conclusion of the evaluation process,

the evaluation panel must both recommend and justify either the rejection of all offers,

proceeding with contract negotiations, or contract award. The evaluation panel’s

recommendation is made to the approving authority. Contracts for goods and works

procurement are not usually negotiated, except under exceptional circumstances, depending on

the complexity of the requirement. Complex requirements for supply, installation and

commissioning may be better procured through negotiations with the highest technically

qualified firm, as determined by the results of the evaluation of their technical proposals.

Similarly, under works procurement, design and build requirements may also need to be

negotiated; as well as, turnkey contract requirements (International Bank for Reconstruction

and Development[IBRD] &International Development Association [IDA], 2004).

According to IBRD & IDA (2004) in the case of consulting services, there are consulting firms

and individual consultants. Contracts for these two categories of consultants are negotiated

slightly differently. For individual consultants, after the technical evaluation, the highest

ranked consultant is invited to submit a financial offer and to negotiate the terms of the

contract. If for some reason an agreement isn’t reached, the next highest ranked consultant may

be invited, depending on the procedures, to submit a financial offer and to contract

negotiations. The focus of the negotiations should be to reach an agreement on the Terms of

Reference of the assignment, with minor modifications if necessary. Price negotiations should

be kept to a minimum and should only take place if the financial offer is considered

unreasonable based on documentary and/or historical evidence.

11

Post contract award considerations, contract award are the beginning of the contract

management phase where the Client/Procurement entity will supervise the performance of

contractor/consultant. In the case of goods, given that finished goods are usually being

received, contract administrations limited to inspecting goods received to ensure their comply

with requirement, and are fit for their intended purpose (Audet, 2002).

2.1.4 How to Improve Procurement Function

Lewis and Roehrich (2008) point out that in order to improve procurement, practitioners should

guard and mitigate against risk, understand the market, build relationships with Suppliers, meet

needs in a timely manner and constantly monitor performance to improve service provision. It

is also vital for organizations to have clearly defined procurement policies that are well

understood. Organizations should always ensure that sufficient procedures are done to check

that work has been satisfactorily done before payment is made (Shaw, 2010).

Organizations should have clear written guidelines that define when board members or officers

must declare a personal interest that may be deemed to be in conflict with their office (Mangan,

Lalwani & Butcher, 2008). Shaw (2010) says that procurement policies will vary from

organization to organization but are the organizational rules and regulations governing the

procurement function. The policies determine how different aspects of procurement will be

carried out in the organization and how people working in procurement should behave

(Nakamura, 2004).

In the past organizations have usually determined that the value for money was achieved by

accepting the lowest price tendered by suppliers of goods and services. Lately there is an

emphasis on the basis of the overall value for money offered, including the consideration for

nonmonetary factors and not on the basis of lowest price alone (Shaw, 2010).It is also essential

that the governments compare itself with other comparable organizations partly to test that

value for money is being achieved, but also as part of the process of Seeking continuous

improvement and identification of good practice. This is often done through a benchmarking

process (Maurer, 2004).

The primary purpose of benchmarking is to improve the performance of the company by

testing how it is performing, whether it is achieving better performance and the rate at which

its performance is improving. Without measuring the company’s performance, it is not possible

to check whether the targets that the company has set are being achieved. Benchmarking is

therefore critical to the process of continuous improvement.

The company among other indicators can use such comparisons as cost, time, and quality .The

involvement of the Logistics function in assessments will enable Logistics to plan for the

delivery of services, but for Logistics to succeed, the procurement plan must be well integrated

and visible in the overall response plan. In emergency situations, easily accessible logistics

preparedness and response will help to fast track the development of a response plan, tailored

for a specific situation (Shaw, 2010).

2.1.5 Overview of Management Of Public Fund

Management of public fund is an optimal use and allocation of public resources. In this

research, the researcher needs to focus on public inventory control and its management.

12

Inventory control involves the coordinating of materials availability, controlling, utilization

and procuring of materials. Inventory control is the direction of activities with the purpose of

getting the right inventory in the right place at the right time and in the right quantity and it’s

directly linked to production function of any organization which implies that the inventory

management system operated will affect the performance of an organization directly and

indirectly (Alm, 2000).

According to Kotler (2002), inventory management refers to all the activities involved in

developing and managing the inventory levels of raw materials, semi-finished materials

(working-progress) and finished good so that adequate supplies are available and the costs of

over or under stocks are low. The nature of inventory depends upon the type of activity carried

on. In the case of a manufacturing unit, inventory will generally include all types of

inventories mentioned above, while in the case of a trading concern, it will comprise only

finished goods or stock -in-trade owned by it for sale to customers in the normal course of

business. Inventory needs proper control as it is one of the largest assets of a business (Deloof,

2003).

Inventories should neither be excessive nor inadequate. If inventories are kept at a high level,

higher interest and storage costs would be incurred; on the other hand, a low level of

inventories may result in frequent interruption in the production schedule resulting in under-

utilization of capacity and lower sales (Falope & Ajilore, 2009). The objective of inventory

management is therefore to determine and maintain the optimum level of investment in

inventories which help in achieving the required objective. Inventories are the stock of raw

materials, work in progress, finished goods and supplies held by a business organization to

facilitate operations in the production process. Also if the company fails to manage its

inventory efficiently, it is likely to face profitability problems.

The goal of inventory management therefore is to provide the inventories required to sustain

operations at minimum costs (Brackus, 2000). Inventory is the stock stored that has a resale

value in order to gain profit. It represents the largest cost of the company especially for the

trading firms, wholesalers and retailers. It is mentioned as “piles of money” on the shelf.

According to (Raheman& Nasr , 2009) said that, in normal circumstances, it consists of the

20% - 30% of the total investment.

Therefore, the inventory should be properly managed in order to facilitate the company

operation. Inventory control is primarily about specifying the shape and percentage of stocked

goods. It is required at different locations within a facility or within many locations of a supply

network to precede the regular and planned course of production, trading and stock of

materials. Inventory conversion period is the average amount of time that a business

holds its (Kotabo, 2002).This study intends to measure the management of public funds using

accountability, positive balance of revenue and expenditures, teamwork and ownership of

budgetary implementation.

2.1.6 Methods for Procurement of Goods and Services

Methods for procuring goods and services in externally financed institutions vary widely

according to the nature of projects and financing institutions. However, donor agree that award

13

of procurement contracts most agree with efficiency, economy and transparence

considerations, procurement methods to be used are determined by during the project

preparation and appraisal and included in the project agreement. According to world bank (

2011) the methods widely used in procurement are:

National Competitive Bidding (NCB) is the competitive bidding procedure normally used for

public procurement in the country of the Borrower, and may be the most appropriate method

of procurement of goods, works, and non-consulting services which, by their nature or scope,

are unlikely to attract foreign competition. NCB may be the most appropriate method of

procurement where foreign bidders are not expected to be interested because (a) of the size

and value of the contract, (b) works are scattered geographically or spread over time, (c)

works are labor intensive, or (d) the goods, works and non-consulting services are available

locally at prices below the international market. NCB procedures may also be used where the

advantages of ICB are clearly outweighed by the administrative or financial burden involved.

Limited International Bidding (LIB) is essentially ICB by direct invitation without open

advertisement. It may be an appropriate method of procurement where (a) there is only a

limited number of suppliers, or (b) other exceptional reasons may justify departure from full

ICB procedures. Under LIB, Borrowers shall seek bids from a list of potential suppliers broad

enough to assure competitive prices, such list to include all suppliers when there are only a

limited number. Domestic preferences are not applicable in the evaluation of bids under LIB

(Thai, 2011).

Direct contracting is contracting without competition (single-source) and may be an

appropriate method under the following circumstances. The Borrower shall submit to the Bank

for its review and no objection a sufficiently detailed justification, including the rationale for

direct contracting instead of a competitive procurement process and the basis for

recommending a particular firm in all such cases, except for contracts below a threshold

defined on the basis of risks and the scope of the project, and set forth in the Procurement Plan

(Kunzlik, 2003).

Force Account, which are works such as construction and installation of equipment and non-

consulting services carried out by a government department of the Borrower’s country using

its own personnel and equipment. The use of Force Account requires that the Borrower sets

maximum aggregate amounts for the use of Force Account (Wardani, 2004). Performance

Based Procurement, also called Output Based Procurement, refers to competitive procurement

processes, resulting in a contractual relationship where payments are made for measured

outputs instead of the traditional way where inputs are measured. The technical specifications

define the desired result and which outputs will be measured including how they will be

measured. Those outputs aim at satisfying a functional need in terms of quality, quantity, and

reliability. Payment is made in accordance with the quantity of outputs delivered, subject to

their delivery at the level of quality required. Reductions from payments (or retentions) may

be made for lower-quality level of outputs and, in certain cases; premiums may be paid for

higher quality level of outputs (Audet, 2002).

Restricted tendering is another variation of formal bidding in which only those issued

invitations from the procuring entity’s restricted list of potential bidders are permitted to submit

bids. With these variations in mind, the procedures to be followed for each of these methods

14

of procurement are essentially the same. Restricted tendering (also known as limited bidding)

is essentially competitive bidding by direct invitation, without open advertisement. Restricted

tendering is an option generally where there is a limited number of possible potential bidders

or where contract values are small or other special circumstances that may justify departure

from competitive bidding. In open and restricted procedures contracting authorities may

request further information from tenderers in order to facilitate assessment of their offers, but

it is forbidden to negotiate the terms of such offers.

This important aspect of the transparency of open and restricted procedures has been stated

clearly by the Council and the Commission in the following terms: "In open and restricted

procedures all negotiations with candidates or tenderers on fundamental aspects of contracts,

variations in which are likely to distort competition, and in particular on prices, shall be ruled

out; however, discussions with candidates or tenderers may be held only for the purpose of

clarifying or supplementing the content of their tenders or the requirements of the contracting

authorities, and provided this does not involve discrimination. In an open procedure any

interested service provider may submit an offer in response to the publication of the contract

notice. In a restricted procedure there are two stages. In the first stage any interested service

provider may submit a request to participate in response to the publication of the contract

notice. Such service provider is called a "candidate". In the second stage the contracting

authority invites the submission of tenders from selected candidates (Burguet & Che, 2004 ).

Request for quotations is a procurement method used for small and routine purchases. It is also

defined as a method of procurement used primarily for procurement of goods or low value

procurement in which the procuring entity evaluates and makes award to the winning bidder

submitting a quotation on the basis of price alone. Request for quotations is an appropriate

method for procuring readily available off-the-shelf goods or standard commodities in

quantities of small value and in some cases, small simple works. Request for quotations does

not require formal bidding documents, and is carried out by requesting written. In evaluating

quotations submitted by bidders under request for quotations, price and ability to meet required

delivery requirements are usually the main selection considerations for these simple purchases

(Ogunsanmi, 2013).

Single Source (Also known as Direct Procurement or Direct Contracting) is a method of

procurement in which the procuring entity determines not to use competitive procurement on

grounds of urgency or some other legal principle and negotiates a contract with a single

qualified bidder Force Account. Direct contracting without competition is the method of

procurement open to procuring entities in a limited number of circumstances. In all cases where

direct contracting is proposed, procuring entities must ensure that it would not be feasible to

apply a competitive bidding procedure. The contractors or suppliers hired by direct contracting

must be qualified to perform the works or supply of goods on time, meeting specifications and

fulfilling the special requirements of the sole source contract (Brammer & Walker, 2011).

2.1.7 Importance of Public Procurement in Public Fund Management

Large share in public expenditure, it is apparent that even modest efficiency improvement in

the workings of the procurement system could potentially yield substantial savings. In addition,

public procurement in Rwanda is currently a primary source of revenue for the private sector

15

and an important tool in promoting the governance agenda which is one of the government’s

priorities (Ministry of planning, Economic finance [MINECOFIN], 2007).

Public procurement has in economic and social role in the development of a country. In

Rwanda for example, a great amount of national budget is channeled directly through local

governments. Procurement could be used to advance the social policy and local economic

development (LED) agenda. This can be done through tailor made guidelines on local

preference by local governments procuring entities. The level expenditure and the attempt to

direct the expenditure at local producers can be a major macroeconomic instrument to tackle

poverty. Additionally, procurement policy might be used to boost domestic industries or

encourage development in specific sectors of national interest. Social objectives could also be

advanced by preferences for specific groups or communities, especially the marginalized ones

(World Bank, 2011). The procurement is a service function that supports the activities of other

areas of the business; to perform the procurement function must flow between the procurement

department and other department (Audet, 2002).

Every purchase made represent an expenditure or commitment of company funds. It sets in

motion a series of accounting operations, much as changing the expense to the proper contract

or department account, the verification and approval of the invoice, payment of the change and

final audit. For proper cash flow planning, finance department needs regular reports from the

purchasing department on its outstanding commitments. Both departments should also

cooperate on cash discount policy. Depending on current interest rates, it may be more

advantages to the company to take the maximum to pay suppliers’ invoice clerks in the

purchasing department usually handle certain accounting operations. These would include

verifications of extensions and totals as well. In other institutions, invoices go directly to be

matched with the accounting purchase order and receiving reports copies. Any discrepancies

noted are then referred to the appropriate buyer in the purchasing department for resolution

(Bovis, 2007)

Starr (1989) asserts that, it is critical to know how to select supplier and what to expect of

them. Purchasing managers must supply basic methods of selection analytically and

aggressively. Maurer ( 2004) contents that there are four stages of supplier selection which

include: The survey, in which possible sources of product are exported; the inquiry stage, in

which the relative qualifications and advantages of potential sources are analyzed; Negotiation

and selection, leading to the issue of an initial order; Experience, in which a continuing vender-

suppliers relationship is established or the earlier steps are reviewed in the research for more

satisfactory source.

2.2 Empirical Literature

Different studies have confirmed the use of various types of procurement methods for the

project delivery. Ogunsanmi (2013) investigated the effects of procurement related factors of

procurement selection criteria, tendering methods and variation orders on project performance.

Purpose of the study was to evaluate the effects of procurement related factors on project

performance procurements have impacts on project performance. He confirmed that

procurements have impacts on project performance. He concluded that procurement selection

criteria, tendering methods and variation orders have impacts on project performance. Cost,

16

time, quality related factors, tendering methods and variation orders strongly affect project

performance.

Rainer and Veiko (2010) carried out a research on public procurement as an industria tool.

They used qualitative research design and found that government procurement should not be

seen only as an indirect support measure for development, but also as a direct vehicle for

promoting innovation and industries and, thus, growth and development. They also showed

that using public procurement for development assumes high levels of policy capacity, which

most developing countries lack.

Burguet and Che (2004) demonstrated the disadvantageous role of corruption through studying

the competitive procurement administered by a corrupt agent who is willing to manipulate his

evaluation of contract proposals in exchange for bribes. The authors used qualitative research

and documentary review argued that the inefficiency cost of bribery is in the same order of

magnitude as the agent’s manipulation capacity and found that corruption is among the factors

affect the level of procurement and public funds management.

Arozamena and Weinschelbaum (2009) focused on the existence of corruption and its effect

makes an honest buyer behave more aggressively during procurement. In their research, they

provided theoretical model for the effects of corruption on the behavior of honest buyers in

sealed-bid auctions that are mainly used during public procurement tenders in Ukraine. The

findings demonstrate that the first-price auction becomes inefficient with corruption. They

have also established that corruption hurts honest bidders, whereas the members of the

partnership always have a positive expected surplus to be divided between them.

Mulwa, Jeremiah, and Joash (2013) established the determinants of implementation of public

procurement regulations by headteachers in public secondary schools in Migwani District,

Kenya. The study was conducted in 27 secondary schools. The study employed descriptive

survey design and used questionnaires for 27 headteachers, 27 deputy headteachers, 27

accounts clerks, members of procurement committees and District Schools Auditors. Simple

random sampling procedure was used to select the procurement committee members.

Their findings indicated low level of compliance in the implementation of public procurement

regulations.

Stephen and Imeh (2013) stipulated that there is a significant difference between the rank-

order of procurement methods against selection criteria by averaging and outranking-satisfying

techniques. The use of outranking-satisfying analysis revealed that, the use of arithmetic mean

to determine the utility factors can lead to inappropriate association of procurement routes with

differing utility coefficients. They also argued that the measure of performance (i.e. utility

factors) of each procurement method has been an important issue in this research for the

appropriate procurement method for a particular project. The utility factor is a relative

measurement of suitability of a particular procurement method against a criterion.

Kalubanga (2012) stipulated that the need to improve organizational efficiency, reduce waste,

overcome supply chain risk, and achieve competitive position has made companies to start

considering environmental issues from a competitive view point. Procuring organizations are

more seriously involved in designing and implementing sustainable procurement policies

focusing on how environmental issues and issues relating to other aspects of the sustainable

17

development pillars (society and economy) can be integrated in the procurement process

activities. Reflecting broader concerns to achieve sustainable development, sustainable

procurement has recently acquired a high degree of salience in policy circles internationally.

Sustainable procurement builds on the traditional procurement practice which it seeks to

extend through the adoption of sustainability principles. Procurement is defined as acquisition

of goods, works and/or services from the supplier (this may be an individual or organization).

The procurement process is viewed as involving sourcing (planning: needs identification and

assessment, supplier selection) contracting, monitoring and evaluation (Brammer & Walker,

2011).

Kiage ( 2013) ascertained that the determinants of procurement performance in public entities

a case of Ministry of Energy. Specifically the study sought to establish the impact of

procurement planning on procurement performance; ascertain the influence of resource

allocations on procurement performance; discern the impact of staff competency on

procurement performance and finally reveal the extent to which contract management in the

procurement cycle affects procurement performance. Efficient public procurement system is

vital to the advancement of African countries and is a concrete expression of their national

commitments to making the best possible use of public resources. In both private and public

sectors, there is increasing pressure from customers, clients, government and the public to put

sustainable procurement into practice. The 2002 World Summit on Sustainable Development

stated that relevant authorities at all levels should: "promote public procurement policies that

encourage development and diffusion of environmentally sound goods and services". In

response to this, Business Operators and Professionals have been very fast to institute policies

and strategies embedding sustainable development concerns. Organizations practicing

sustainable procurement meet their needs for goods, services, utilities and works not on a

private cost-benefit analysis, but with a view to maximizing net benefits for themselves and

the wider world. In so doing they must incorporate extrinsic cost considerations into decisions

alongside the conventional procurement criteria of price and quality.

2.3. Critical Review and Research Gap Identification Rainer and Veiko (2010) carried out a research on public procurement as an industria tool.

Burguet and Che (2004) demonstrated the disadvantageous role of corruption through studying

the competitive procurement administered by a corrupt agent who is willing to manipulate his

evaluation of contract proposals in exchange for bribes. Arozamena and Weinschelbaum

(2009) focused on the existence of corruption and its effect makes an honest buyer behave

more aggressively during procurement. In their research, they provided theoretical model for

the effects of corruption on the behavior of honest buyers in sealed-bid auctions that are mainly

used during public procurement tenders in Ukraine. Mulwa, Jeremiah, and Joash (2013)

established the determinants of implementation of public procurement regulations by

headteachers in public secondary schools in Migwani District, Kenya. During their

research, they only focused on the detrminants of of implementation of public procurement

regulations, but they did not focused on their effect on management on public fund. Therefore,

the study of Fayomi and Ikeoluwapo ( 2013); Rainer and Veiko (2010) and other criical

studiies focused on public procurement and development of developing countries,but they did

not establish the methods that could be used to well manage the public fund and then they didd

not establish relationship between variables under study.

18

2.4 Conceptual Framework

Figure 2.1: Conceptual framework

Independent variable Dependent variable

Source: Researcher Developed

2.5. Summary

The literature review reviewing the existing research and literature that is relevant to the study

under question. Procurement is a critical activity in investment and inevitably contributes to

the success of plans..It is very crucial to assure a sound and transparent system of public

procurement because of its impact on the economic and governance issue. It represents

different literature related to procurement, reviewed the theoretical, empirical and critical

literature on the subject related to the study. Theoretical literature explained the process of

procurement and methods of procurement. This section focused also on other studies carried

out by other research on procurement and public funds management. From the critical review,

Public procurement

Procurement method

Procurement planning

Tender document

Publication

Bids opening

Evaluation of bids

Notification

Contract award

public fund Management

Accountability

Positive balance of revenue

& expenditures

Expenses rate

Teamwork and ownership

of budgetary implementers

Leadership style

Budgeting

Intervening variable

Government policies to promote private

sector

Participation of bidders

Political, socio-economic stability

Knowledge of private sector in business

competition

Procurement policies

19

it is indicated that the better application of procurement procedures leads to good management

of state funds and improve the competiveness among private sector. This is a basis for

evaluation of procurement system and procedures used by public institutions. The role of the

private sector and civil society has to be strengthened. Even if some researchers like Burguet

and Che (2004) used qualitative research and found that the inefficiency cost of bribery is in

the same order of magnitude as the agent’s manipulation capacity. Arozamena and

Weinschelbaum (2009) focused on the existence of corruption and its effect makes an honest

buyer behave more aggressively during procurement using theoretical model and then they

concluded that corruption affect price and cost of procurement. Mulwa,Jeremiah and Joash

(2013) research was very important in the region,but they did not think about their impact on

management of public fund.Thus,from the this gap,the present researcher intents to build a

bridge by carrying out a research called Public Procurement system and Public Fund

management ;on the case of study of Gisagara district.

CHAPTER THREE: RESEARCHMETHODOLOGY

3.0 Introduction

This chapter sets out and describes the methodology that was used to investigate and determine

the contribution of public procurement to management of public fund. It includes the design

of the study, the target population, sample design, data collection procedures and instruments,

study reliability, data processing procedures and data analysis.

3.1. Research Design

The researcher uses a descriptive-analytical research design in order to get in depth

information of the research topic. In addition, both qualitative and quantitative methods were

used. The researcher collected primary data and makes documentary analysis for secondary

data. The design of this research is descriptive research design with the aim of getting all the

required qualitative and quantitative information. This research design helped to describe the

relationship between public procurement and management of public fund.

3.2 Target Population

The study population was composed of 7 employees from tender committee of Gisagara

District,2 from executive secretary,7 from finance,1 from logistic,4 from administration,4 from

planning, monitoring and evaluation and then 143 from sectors .The study population will be

consisted of 190 employees of Gisagara District and 30 contractors .

3.3 Sample Design

A sample is subset or portion of the total population under study. This part concerns the sample

size and sampling procedures used to come up with the sample size. This study used non-

probability sampling methods to select sample size.

3.3.1 Sample Size

20

The researcher could not investigate the total population of 190 employees and 30

contractors; hence the sample of employees was selected using Yamane formula. n=

2(e)*N1

N 190

1+190∗(0.082)=

190

1+190∗0.0064=

190

2.216= 86

Where:

n = 86 employees, N = 190 = Level of confidence or error margin = 0.08, Using the formula

above the sample size is86respondents

Table 3.1: Target population and sample size determination

Category

Target

population

size

Sample size Purposive sampling method

District level 24 16 Executive secretary office

7 7 Tender committee

7 5 Finance

1 1 Logistic

4 3 Administration

4 2 Planning, monitoring and evaluation

Sector level 143 52 Accountant and executive secretary

Total employees 190 86

Contractors 30 30

Source: Gisagara District, 2014

3.3.2 Sampling Techniques

Apart from the sample size, the selection should detail how the researcher intends to select the

sample, ensuring representativeness of the target or parent population. The choice of sampling

technique was based on the feasibility and sensibility of collecting data to answer the research

questions and to address the objectives. Quantitative researches usually ensure sample

representativeness using “scientific, mathematical, and statistical/probabilities or random

sampling as quantitative research therefore, this study uses purposive sampling method.

The researcher used purposive sampling method in this research, because he needs the

employees who have skills in public procurement policies and public fund management.

Therefore Purposive sampling technique was used to question 86 employees and Census was

used to question 30 contractors, summarized in Table 3.1.

3.4 Data collection Methods

To make this research successful, the data to be collected included both primary and secondary

data. Primary data obtained through the use of self-administered questionnaires

3.4.1. Data Collection Instruments

21

To collect primary data, the researcher used a questionnaire as data collection instrument to

obtain the information that relates to the opinions, perceptions, intensions, and thoughts of the

members of the tender committee on procurement attribution. The questionnaire was prepared

in English.

3.4.2 Administration of Data Collection Instruments

The researcher distributed the questionnaires to the respondents and wait for them for three

days. And then the researcher made sure the number of questionnaire distributed has been filled

by all respondents.

3.4.3 Validity And Reliability

Therefore, the researcher first carried out a pilot study by testing questionnaires to at least six

members from the respondents in Gisagara District before going into data collection and then.

And then, in order to make sure that language and research instrument is arranged according

to research objectives, the research looked for experts for verifying them.

3.5 Data Analysis Methods

Data analysis techniques have been developed deal with manipulation of the information that

has been gathered so as to present the evidence. The contents of these tables are usually,

percentages, frequencies or some summary statistical measures. This study, both quantitative

and qualitative means of analyzing data was adopted. The researcher used Statistical packaging

for social science during data analysis.

Qualitative variables are used extensively in observation studies. The procedure of analysis

applied while dealing with unqualified responses. With this, the research made clear

observations on the views of respondents on the exciting phenomena.

The tools that were applied here by the research were data collection techniques. The

researcher analyzed qualitatively and quantitatively. For purpose of quantitative data analysis,

the collected data was expressed in different tables especially the responses from the

representative sample under the study. With reference to this study, the researcher analyzed

the data collected, basing on the number of responses. This was calculated in percentages on

which the researcher based while designing the conclusion.

3.6 Ethical Consideration

With regard to this study, the aims and objectives was conveyed to all the relevant authorities

during the process of acquiring permission to do research, and to the employees and managers

involved during the data collection stage. Respondent’s participation was voluntary and they

had the right to withdraw from the study at any time.

22

CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSION

4.0 Introduction

In this chapter, the researcher presents analysis and interprets the findings of the research.

Using tables the researcher did presentation of the collected data and figures while analysis

and interpretation were done based on frequencies, percentages and correlation coefficient.

The researcher used a sample of 86 respondents as indicated in chapter three. Those

questionnaires were distributed to 86 employees of Gisagara District and all questionnaires

were completed.

4.1 Demographic Characteristics of Respondents

In this section, the researcher presents the findings of the research extracted from the data

collection instruments. The researcher focused on distribution of respondents by level of

education, distribution of respondents by experience and distribution of respondents by

position in Gisagara District.

Table 4.2: Distribution of respondents by level of education

23

Frequency Percent

Valid Bachelor’s degree 76 88.4

Secondary level 5 5.8

Others certificates 5 5.8

Total 86 100.0

Source: Field Data

Table 4.2 shows the distribution of respondents by level of education, this study revealed that

out of 86 respondents, 76 (88.4%) were Bachelor’s degree, 5(5.8) were secondary level and 5

(5.8) of respondents had other certificates.

Table 4.3: Distribution of respondents by Job experience

Frequency Percent

Valid 1 to two years 3 3.5

3 years and above 83 96.5

Total 86 100.0

Source: Field Data

Concerning the distribution of respondents by job experience, Table 4.3 indicates that out of

86 respondents, 96.51 % of respondent work in Gisagara District above 3 years and 3.49% of

respondents worked in Gisagara District between 1 to 2 years.

Table 4.4: Distribution of respondents by occupation

24

Frequency Percent

Valid Executive Secretary Office 16 18.6

Tender Committee 7 8.1

Finance 5 5.8

Logistic 1 1.2

Administration 3 3.5

PM&E 2 2.3

Accountant and executive

secretary on the sector level 52 60.5

Total 86 100.0

Source: Field Data

Table 4.4 indicates that out of 86 respondents, 16 (18.6%) of respondents were from Executive

Secretary Office, 7 (8.1%) were from tender committee, 5 (5.8%) were from finance

department, 1 (1.2%) were from logistic department, 3 (3.5%) were from administration

department, and 2 (2.3%) were from PM&E, 52 (60.5%) were from Accountant and executive

secretary on the sector level.

4.2 Presentation of Findings

This subsection focuses on the objectives of the study, such as to evaluate the Public

Procurement methods used in Gisagrara (2010-2013) to manage public fund, to assess the

factors influence public procurement process in Gisagara District and to establish the

relationship between public procurement and management of public fund.

4.2.1 The Factors Influence Public Procurement process in Gisagara District

This subsection focuses on the factors influence public procurement process in Gisagara

District, such as Requirement identification, Invitation to tender, Procurement method,

Procurement planning, Solicitation document, Pre-bid, Submission of bids, Publication and

Contract award.

25

Table 4.5:Procurement planning

Frequency Percent

Valid Strongly agree 10 11.6

Agree 2 2.3

Disagree 69 80.2

Strongly disagree 5 5.8

Total 86 100.0

Source: Field Data

Table 4.5 indicates that out of 86 respondents, 10 (i.e11.6%) strongly agreed that procurement

planning is one of the factors influence public procurement process in Gisagara District, 2 (i.e

2.3%) agreed that procurement planning is one of the factors influence public procurement

process in Gisagara District, 69 (i.e80.2%) of respondents disagreed with the statement and 5

(5.8%) strongly disagreed with the statement.

Table 4.6: Solicitation document

26

Frequency Percent

Valid Strongly agree 4 4.7

Agree 5 5.8

Disagree 69 80.2

Strongly disagree 8 9.3

Total 86 100.0

Source: Field Data

Table 4.6 indicates that out of 86 respondents, 4 (i.e4.7%) of respondents strongly agreed that

Solicitation document is one of the factors influence public procurement process in Gisagara

District, 5 (i.e 5.8%) agreed that Solicitation document is one of the factors influence public

procurement process in Gisagara District, 69 (i.e 80.2%) of respondents disagreed with the

statement and 8 (9.3%) strongly disagreed with the statement.

Table 4.7:Pre-bid

Frequency Percent

Valid Strongly agree 86 100.0

Source: Field Data

Table 4.7 indicates that out of 86 respondents, all respondents strongly agreed that Pre-bid is

one of the factors influence public procurement process in Gisagara District.

Table 4.8: Submission of bids

Frequency Percent

Valid Strongly agree 86 100.0

Source: Field Data

Table 4.8 presents that out of 86 respondents, all respondents strongly agreed that Submission

of bids is one of the factors influence public procurement process in Gisagara District.

Table 4.9: Publication

27

Frequency Percent

Valid Strongly agree 86 100.0

Source: Field Data

Table 4.9 shows that out of 86 respondents, all respondents strongly agreed that Publication is

one of the factors influence public procurement process in Gisagara District.

Table 4.10: Contract award

Frequency Percent

Valid Strongly agree 86 100.0

Source: Field Data

Table 4.10 presents that out of 86 respondents, all respondents strongly agreed that Contract

award is one of the factors influence public procurement process in Gisagara District.

Figure 4.2: The process of using competitive tendering in Gisagara District

Source: Field Data

Figure 4.2 presents the process of using competitive tendering in Gisagara District. Concerning

submission of bids evaluation, awarding and publication the majority of respondents perceived

that they are useful elements in the process of using competitive tendering. Referring to the

53.3

46.7

66.7

53.3

66.7

33.3

40

26.7

13.3

20

26.7

46.7

6.7

13.3 13.3

6.713.3

20

13.313.3

6.7

0

10

20

30

40

50

60

70

80

Requirementidentification

Invitation totender

Procurementplanning

Submission ofbids

Bid Evaluationand Awarding

Publication

SA

A

NA/ND

D

SD

28

law NO 12 / 2007 of 27/ 03 / 2007 in article 6 for procurement planning; this study revealed

that during the procurement planning, the following processes requirement identification,

invitation to tender, submission of bids, bid evaluation and awarding, and the publication of

results should be taken into consideration and ensure that there is a sufficient budget allocation

. Therefore, Gisagara District follows the rules and regulations of Rwanda Public Procurement

Authority in order to improve the efficiency and effectiveness of competitive tendering in

public institutions.

4.2.2 The Public Procurement Methods Used in Gisagrara to Manage Public Fund

This subsection focuses on the Public Procurement methods used in Gisagrara to manage

public fund, such as National Competitive Bidding (NCB), International tendering, Restricted

tendering, Request for quotations, Single source procurement, Force Account and Community

Participation.

Table 4.11: National Competitive Bidding (NCB)

Frequency Percent

Valid Strongly agree 73 84.9

Agree 9 10.5

Disagree 4 4.7

Total 86 100.0

Source: Field Data

Table 4.11 presents that out of 86 respondents, 73 (i.e 84.9%) of respondents strongly agreed

that National Competitive Bidding (NCB) is one of the Public Procurement methods used in

Gisagrara to manage public fund, 9 (i.e 10.5%) agreed that National Competitive Bidding

(NCB)is one of the Public Procurement methods used in Gisagrara to manage public fund and

4 (i.e 4.7%) of respondents disagreed with the statement.

Table 4.12: International tendering

29

Frequency Percent

Valid Strongly agree 14 16.3

Agree 16 18.6

Disagree 52 60.5

Strongly disagree 4 4.7

Total 86 100.0

Source: Field Data

Table 4.12 presents that out of 86 respondents, 14 (i.e 16.3%) of respondents strongly agreed

that International tendering is one of the Public Procurement methods used in Gisagrara to

manage public fund, 16 (i.e 18.6%) agreed that International tendering is one of the Public

Procurement methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents

disagreed with the statement and 4 (4.7%) strongly disagreed with the statement.

Table 4.13: Restricted tendering

30

Frequency Percent

Valid Strongly agree 14 16.3

Agree 16 18.6

Disagree 52 60.5

Strongly disagree 4 4.7

Total 86 100.0

Source: Field Data

Table 4.13 shows that out of 86 respondents, 14 (i.e 16.3%) of respondents strongly agreed

that Restricted tendering is one of the Public Procurement methods used in Gisagrara to

manage public fund, 16 (i.e 18.6%) agreed that Restricted tendering is one of the Public

Procurement methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents

disagreed with the statement and 4 (4.7%) strongly disagreed with the statement.

Table 4.14: Request for quotations

Frequency Percent

Valid Strongly agree 14 16.3

Agree 5 5.8

Disagree 52 60.5

Strongly disagree 15 17.4

Total 86 100.0

31

Source: Field Data

Table 4.14 shows that out of 86 respondents, 14 (i.e 16.3%) of respondents strongly agreed

that Restricted tendering is one of the Public Procurement methods used in Gisagrara to

manage public fund, 16 (i.e 18.6%) agreed that Restricted tendering is one of the Public

Procurement methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents

disagreed with the statement and 4 (4.7%) strongly disagreed with the statement.

Table 4.15: Single source procurement

Frequency Percent

Valid Strongly agree 12 14.0

Agree 7 8.1

Disagree 52 60.5

Strongly disagree 15 17.4

Total 86 100.0

Source: Field Data

Table 4.15 indicates that out of 86 respondents, 12 (i.e 14.0%) of respondents strongly agreed

that Single source procurement is one of the Public Procurement methods used in Gisagrara to

manage public fund, 7 (i.e 8.1%) agreed that Single source procurement is one of the Public

Procurement methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents

disagreed with the statement and 15 (17.4%) strongly disagreed with the statement.

32

Table 4.16:Force Account

Frequency Percent

Valid Strongly agree 7 8.1

Agree 7 8.1

Disagree 52 60.5

Strongly disagree 20 23.3

Total 86 100.0

Source: Field Data

Table 4.16 indicates that out of 86 respondents, 7 (i.e 8.1%) of respondents strongly agreed

that Force Account is one of the Public Procurement methods used in Gisagrara to manage

public fund, 7 (i.e 8.1%) agreed that Force Account is one of the Public Procurement methods

used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents disagreed with the

statement and 20 (23.3%) strongly disagreed with the statement.

33

Table 4.17: Community Participation

Frequency Percent

Valid Strongly agree 73 84.9

Agree 9 10.5

Disagree 4 4.7

Total 86 100.0

Source: Primary data, 2014

Table 4.17 indicates that out of 86 respondents, 73 (i.e 84.9%) of respondents strongly agreed

that Community Participation is one of the Public Procurement methods used in Gisagrara to

manage public fund, 9 (i.e 10.5%) agreed that Community Participation is one of the Public

Procurement methods used in Gisagrara to manage public fund and 4 (i.e 4.7%) of respondents

disagreed with the statement.

Figure 4.3: The tendering methods adopted by Gisagara District

Source: Field Data

Figure 4.3 presents the tendering methods adopted by Gisagara District. Findings in Figure 4.4

implies that Gisagara District follow law NO 12 / 2007 of 27/ 03 / 2007 in article 23 – 28, where

this law announced that “except where provided otherwise by the law, the procuring entity

shall apply open competitive bidding to supplies, works, goods and other services.. Therefore,

Gisagara District focuses on open competitive tender method to allow different bidders to

participate in the open competitive bidding to give equal chance to the competitors.

73.3

20

53.3

66.7

80

13.320

13.3

26.7

13.3 13.36.76.7 6.7

6.7 6.7

40

13.320

40

26.7 33.3

0

10

20

30

40

50

60

70

80

90

NationalCompetitive

Bidding (NCB)

Internationaltendering

Restrictedtendering

Request forquotations

Single sourceprocurement

CommunityParticipation

SA

A

NA/ND

D

SD

34

4.3 Perception of Contractors On Competitive Tendering And Challenges Faced

4.3.2 Challenges Faced By Contactors in Gisagra District

Table 4.18: Delay of payment

Frequency Percent

Valid Strongly agree 23 76.7

Agree 3 10.0

Non agree nor disagree 1 3.3

Disagree 2 6.7

Strongly disagree 1 3.3

Total 30 100.0

Source: Primary data, 2015

Table 4.18 indicates the views of contractors on delay of payment. Out of 30 respondents, 23

respondents (i.e76.7%) strongly agreed delay of payment is among of the challenges faced by

contractors in Gisagra District, 3 respondents (i.e10.0%) agreed, 1 respondent (i.e 3.3%) non

agreed nor disagreed, 2 respondents (i.e 6.7) disagreed and 1 respondents (i.e 3.3%) strongly

disagreed . This implies that, there is a big challenge concerning payment of contactors in

Gisagara District. Therefore, there is a need for Gisagara District to pay on time their contactors

in order to increase the level of integrity in tendering process and encourage competition.

Table 4.19: Time for getting contract

35

Frequency Percent

Valid Strongly agree 8 26.7

Agree 2 6.7

Non agree nor disagree 3 10.0

Disagree 8 26.7

Strongly disagree 9 30.0

Total 30 100.0

Source: Field Data

Table 4.19 indicates the time for getting contracts. Out of 30 respondents, 8 respondents

(i.e26.7%) strongly agreed that time for getting contracts is a challenge, 2 respondents

(i.e6.7%) agreed, 3 respondent (i.e10 %) non agreed nor disagreed, 8 respondents (i.e26.7)

disagreed and 9 respondents (i.e30 %) strongly disagreed . This implies that even if majority

of respondents disagreed that the time of getting a contract is not a challenge, but some of

contractors fails to get contract on time and this can affect the contract execution, Gisagara

District have to manage and award contracts on time in order to facilitate contractors in

execution of contracts which encourages competition for future tenders published by Gisagara

District.

Table 4.20: Views of contactors on lack of Skills

Frequency Percent

Valid Strongly agree 7 23.3

Agree 23 76.7

Total 30 100.0

Source: Field Data

Table 4.20 indicates the views of contactors on lack of Skills as among of the factors faced

by the contractors. Out of 7 respondents, 23.3% strongly agreed and 76.7% agreed with the

statement. All respondents confirmed that lack of skills is among of the challenges faced by

contactors in Gisagara District. Therefore, there is a need of capacity building in order to

improve the level of understanding in the District.

36

Table 4.21: Lack of transparence

Frequency Percent

Valid Strongly agree 7 23.3

Agree 16 53.3

Disagree 2 6.7

Strongly disagree 5 16.7

Total 30 100.0

Source: Field Data

Table 4.21 indicates that out of 30 respondents, 23.3% strongly agree that lack of transparence

is among of the challenges faced by contactors in Gisagra District, 53.3% agree, 6.7% disagree

and 16.7% strongly disagree.

Table 4.22: Time of contract implementation

37

Frequency Percent

Valid Strongly agree 4 13.3

Agree 7 23.3

3.00 = "Non agree nor disagree" 4 13.3

Disagree 7 23.3

Strongly disagree 8 26.7

Total 30 100.0

Source: Field Data

Findings in Table 4.22 indicate time of contract implementation, where out of 30 respondents.4

respondents (i.e 13.3 %) strongly agreed, 7 respondents (i.e 23.3%) agreed, 4 respondent

(i.e13.3%) non agreed nor disagreed, 7 respondents (i.e23.3) disagreed and 8 respondents

(i.e26.7 %) strongly disagreed . This implies that the majority of respondents said that contract

implementation should not affect the competitive tendering in Gisagara District, but there are

some of them who said that contract implementation affect competitive tendering in Gisagara

District. Hence, Gisagara District should improve the level of time of contract implementation

in order to attract and retain new contractors.

Table 4.23: Incomplete specification

Frequency Percent

Valid Strongly agree 8 26.7

Agree 14 46.7

Disagree 5 16.7

Strongly disagree 3 10.0

Total 30 100.0

Source: Field Data

Table 4.23 indicates incomplete specification, out of 30 respondents, 8 respondents (i.e26.7

%) strongly agreed incomplete specification as a challenge faced by contractors, 14

respondents (i.e46.7%) agreed, 5 respondents (i.e16.7%) disagreed and 3 respondents (i.e10.0

%) strongly disagreed. This shows that in Gisagara District, during competitive tendering, the

38

contactors face problems concerning specification, and may lead to the supply of poor quality

items, and the procuring entity will be forced to accept the supplies which do not meet the

standards. Incomplete specification misleads the budget allocation, and can also lead to

encoring unnecessary cost and jeopardize the principle of economy in public procurement.

Therefore this study revealed that Gisagra District lacks competent employee to establish

specification in order to manage resources during procurement of goods, works and services.

Table 4.24: Inefficiency of supervision

Frequency Percent

Valid Strongly agree 17 56.7

Agree 10 33.3

Disagree 2 6.7

Strongly disagree 1 3.3

Total 30 100.0

Source: Field Data

Results in Table 4.24 indicate inefficiency of supervision, Outof 30 respondents.17

respondents (i.e56.7 %) strongly agreed with the statement, 10 respondents (i.e33.3%) agreed,

2 respondents (i.e6.7%) disagreed and 1 respondent (i.e 3.3 %) strongly disagreed. This implies

that, the contactors contacted revealed that the ability of supervision during execution of

contact awarded through competitive tendering is not accurate. Poor supervision can

discourage competition in Gisagara District tendering process.

4.3.3 Relationship Between Procurement System and Public Funds Management

This subsection focuses on the relationship between procurement system and public funds

management using Pearson correlation coefficient and SPSS program. The researcher used

perception and opinions of respondents and found relationship between procurement system

and public funds management.

Table 4.25: Relationship between procurement system and public funds management

39

Procurement Policy

Public Funds

Management

Procurement Policy Pearson Correlation 1 .565**

Sig. (2-tailed) .000

N 86 86

Public Funds

Management

Pearson Correlation .565** 1

Sig. (2-tailed) .000

N 86 86

**. Correlation is significant at the 0.01 level (2-tailed).

Source: Field Data

Table 4.25 presents the relationship between variables under study, such as procurement

system and public funds management. This research used Pearson correlation coefficient and

found that correlation coefficient (r) equals to 0.565 i.e 56.5%. Therefore, there is a positive

relationship between procurement system and public funds management.

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

This chapter focuses on summary, conclusions, and recommendations. It highlights summary

of findings according to three research objectives, conclusions where the study answer the

research questions, recommendations and ends with suggestions for further study.

5.1 Summary of Findings

This study carried out on procurement systems and public management fund in local

government of Rwanda. The summary of findings are classified according to the research

objectives, such as the Public Procurement methods used in Gisagrara (2010-2013) to manage

40

public fund; the factors influence public procurement process in Gisagara District and the

relationship between public procurement and management of public fund.

5.1.1 The Public Procurement Methods Used In Gisagrara (2010-2013) to Manage

Public Fund

Concerning the first research objective, the Public Procurement methods used in Gisagrara

(2010-2013) to manage public fund, out of 86 respondents, 68 (79.1%) strongly agreed that

requirement identification is the factors influence public procurement process in Gisagara

District and 18 (i.e 20.9%) agreed that requirement identification is one of the factors influence

public procurement process in Gisagara District; all respondents strongly agreed that invitation

to tender is the factors influence public procurement process in Gisagara District; out of 86

respondents, 81 (94.2%) strongly agreed that Procurement method is one of the factors

influence public procurement process in Gisagara District, 2 (i.e 2.3%) agreed that

Procurement method is one of the factors influence public procurement process in Gisagara

District and 3 (i.e3.5%) of respondents disagreed with the statement; out of 86 respondents, 10

(i.e11.6%) strongly agreed that procurement planning is one of the factors influence public

procurement process in Gisagara District, 2 (i.e 2.3%) agreed that procurement planning is one

of the factors influence public procurement process in Gisagara District, 69 (i.e80.2%) of

respondents disagreed with the statement and 5 (5.8%) strongly disagreed with the statement;

out of 86 respondents, 4 (i.e4.7%) of respondents strongly agreed that Solicitation document

is one of the factors influence public procurement process in Gisagara District, 5 (i.e 5.8%)

agreed that Solicitation document is one of the factors influence public procurement process

in Gisagara District, 69 (i.e 80.2%) of respondents disagreed with the statement and 8 (9.3%)

strongly disagreed with the statement; all respondents strongly agreed that Submission of bids

is one of the factors influence public procurement process in Gisagara District; all respondents

strongly agreed that Publication is one of the factors influence public procurement process in

Gisagara District and then all respondents strongly agreed that Contract award is one of the

factors influence public procurement process in Gisagara District

5.1.2 The Factors Influence Public Procurement Process in Gisagara District

Concerning the second research objective, the factors influence public procurement process in

Gisagara District, out of 86 respondents, 73 (i.e 84.9%) of respondents strongly agreed that

National Competitive Bidding (NCB) is one of the Public Procurement methods used in

Gisagrara to manage public fund, 9 (i.e 10.5%) agreed that National Competitive Bidding

(NCB)is one of the Public Procurement methods used in Gisagrara to manage public fund and

4 (i.e 4.7%) of respondents disagreed with the statement; out of 86 respondents, 14 (i.e 16.3%)

of respondents strongly agreed that International tendering is one of the Public Procurement

methods used in Gisagrara to manage public fund, 16 (i.e 18.6%) agreed that International

tendering is one of the Public Procurement methods used in Gisagrara to manage public fund,

52 (i.e 60.5%) of respondents disagreed with the statement and 4 (4.7%) strongly disagreed

with the statement; out of 86 respondents, 14 (i.e 16.3%) of respondents strongly agreed that

Restricted tendering is one of the Public Procurement methods used in Gisagrara to manage

public fund, 16 (i.e 18.6%) agreed that Restricted tendering is one of the Public Procurement

methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents disagreed

with the statement and 4 (4.7%) strongly disagreed with the statement; out of 86 respondents,

41

14 (i.e 16.3%) of respondents strongly agreed that Restricted tendering is one of the Public

Procurement methods used in Gisagrara to manage public fund, 16 (i.e 18.6%) agreed that

Restricted tendering is one of the Public Procurement methods used in Gisagrara to manage

public fund, 52 (i.e 60.5%) of respondents disagreed with the statement and 4 (4.7%) strongly

disagreed with the statement; out of 86 respondents, 12 (i.e 14.0%) of respondents strongly

agreed that Single source procurement is one of the Public Procurement methods used in

Gisagrara to manage public fund, 7 (i.e 8.1%) agreed that Single source procurement is one of

the Public Procurement methods used in Gisagrara to manage public fund, 52 (i.e 60.5%) of

respondents disagreed with the statement and 15 (17.4%) strongly disagreed with the

statement; out of 86 respondents, 7 (i.e 8.1%) of respondents strongly agreed that Force

Account is one of the Public Procurement methods used in Gisagrara to manage public fund,

7 (i.e 8.1%) agreed that Force Account is one of the Public Procurement methods used in

Gisagrara to manage public fund, 52 (i.e 60.5%) of respondents disagreed with the statement

and 20 (23.3%) strongly disagreed with the statement; out of 86 respondents, 73 (i.e 84.9%) of

respondents strongly agreed that Community Participation is one of the Public Procurement

methods used in Gisagrara to manage public fund, 9 (i.e 10.5%) agreed that Community

Participation is one of the Public Procurement methods used in Gisagrara to manage public

fund.

5.1.3 Challenges Faced By Contactors in Gisagra District

Concerning the third objective, challenges faced by contactors in Gisagra District, out of 30

respondents, 23 respondents (i.e76.7%) strongly agreed delay of payment is among of the

challenges faced by contractors in Gisagra District, 3 respondents (i.e10.0%) agreed, 1

respondent (i.e 3.3%) non agreed nor disagreed, 2 respondents (i.e 6.7) disagreed and 1

respondents (i.e 3.3%) strongly disagreed, Out of 30 respondents, 8 respondents (i.e26.7%)

strongly agreed that time for getting contracts is a challenge, 2 respondents (i.e6.7%) agreed,

3 respondent (i.e10 %) non agreed nor disagreed, 8 respondents (i.e26.7) disagreed and 9

respondents (i.e30 %) strongly disagreed. Concerning time of contract implementation, out of

30 respondents.4 respondents (i.e 13.3 %) strongly agreed, 7 respondents (i.e 23.3%) agreed,

4 respondent (i.e13.3%) non agreed nor disagreed, 7 respondents (i.e23.3) disagreed and 8

respondents (i.e26.7 %) strongly disagreed; out of 30 respondents, 8 respondents (i.e26.7 %)

strongly agreed incomplete specification as a challenge faced by contractors, 14 respondents

(i.e46.7%) agreed, 5 respondents (i.e16.7%) disagreed and 3 respondents (i.e10.0 %) strongly

disagreed, out of 30 contractors, 27 (i.e 90%) of respondents confirmed that Gisagara District

advertise its tenders, while 3 (10%) respondents did not confirm the advertisement of tender;

out of 30 contractors, 17 respondents confirmed that they are satisfied with the tenders

approaches for Gisagara District, while 13 respondents were not satisfied. Even if, the majority

of respondents were satisfied, they are some contractors who were not satisfied; out of 30

contractors, 23 respondents consider the tendering approach open and competitive in Gisagara

District, while 7 respondents do not consider the approach open and competitive.

5.1.4 The Relationship Between Public Procurement And Management Of Public

Fund

This subsection focuses on the relationship between procurement system and public funds

management using Pearson correlation coefficient and SPSS program. The researcher used

42

perception and opinions of respondents and found relationship between procurement system

and public funds management. This research used Pearson correlation coefficient and found

that correlation coefficient (r) equals to 0.565 i.e 56.5%. Therefore, there is a positive

relationship between procurement system and public funds management.

5.2 Conclusions

Gisagara District advertises through newspapers as it is requested that “the procurement

method shall advertise the tender notice in at least one newspaper of nation- wide circulation.”

This is confirming the information, where Gisagara District follows Rwanda Public

Procurement Authority laws, the processes of competitive tendering in Gisagara District

optimize procurement cost and time consuming for both sides. Procurement in Gisagara

District gave procurement entity the best values for money through competitive tendering.

Gisagara Distrcit employees analyze the cost and expenses that occurred during competitive

tendering process compared to the budget allocated to procurement for works, goods and

services in procurement plan for the fiscal year and found that some savings accrued due to the

competition, where different bidders compete and optimize prices in order to win the tender.

Gisagara Distrcit employees analyze the cost and expenses that occurred during competitive

tendering process compared to the budget allocated to procurement for works, goods and

services in procurement plan for the fiscal year and found that some savings accrued due to the

competition, where different bidders compete and optimize prices in order to win the tender.

Even if the majority of respondents said that Gisagara District humanize corruption and

irregularities through Competitive tendering, there was some employees of Gisagara District

who said that there was no humanization of corruption and irregularities. This implies that,

there should be some tendering that tend to corruption and irregularities in Gisagara Distrcit.

Concerning submission of bids, bid evaluation, awarding and publication the majority of

respondents perceived that they are useful elements in the process of using competitive

tendering.

Referring to the law NO 12 / 2007 of 27/ 03 / 2007 in article 6 for procurement planning; this

study revealed that during the procurement planning, the following processes requirement

identification, invitation to tender, submission of bids, bid evaluation and awarding, and the

publication of results should be taken into consideration and ensure that there is a sufficient

43

budget allocation . Therefore, Gisagara District follows the rules and regulations of Rwanda

Public Procurement Authority in order to improve the efficiency and effectiveness of

competitive tendering in public institutions.

Gisagara District follow law NO 12 / 2007 of 27/ 03 / 2007 in article 23 – 28, where this law

announced that “except where provided otherwise by the law, the procuring entity shall apply

open competitive bidding to supplies, works, goods and other services.. Therefore, Gisagara

District focuses on open competitive tender method to allow different bidders to participate in

the open competitive bidding to give equal chance to the competitors. Concerning quality of

Service, competition between suppliers and kind of transparency, the majority of respondents

perceived that, these are the advantages of competitive tendering in Gisagara District.

Therefore, the researcher perceives that competitive tendering facilitate goals achievement

and performance contact in Gisagara District.

The study also concluded that, there is a big challenge concerning payment of contactors in

Gisagara District. Therefore, there is a need for Gisagara District to pay on time their contactors

in order to increase the level of integrity in tendering process and encourage competition.

During competitive tendering, the contactors face problems concerning specification, and may

lead to the supply of poor quality items, and the procuring entity will be forced to accept the

supplies which do not meet the standards. Incomplete specification misleads the budget

allocation, and can also lead to encoring unnecessary cost and jeopardize the principle of

economy in public procurement. Therefore this study revealed that Gisagara District lacks

competent employee to establish specification in order to manage resources during

procurement of goods, works and services.

5.3 Recommendations

The study findings yielded the following recommendations in view of procurement and public

funds management. To enable meaningful participation, even if majority of respondents

disagreed that the time of getting a contract is not a challenge, but some of contractors fails to

get contract on time and this can affect the contract execution, Gisagara District have to manage

and award contracts on time in order to facilitate contractors in execution of contracts which

encourages competition for future tenders published by Gisagara District. the majority of

respondents said that contract implementation should not affect the competitive tendering in

Gisagara District, but there are some of them who said that contract implementation affect

competitive tendering in Gisagara District. Hence, Gisagara District should improve the level

of time of contract implementation in order to attract and retain new contractors. Lastly, this

study recommends that;

Regarding lower managerial skills of some Gisagara District employees, the researcher

recommends that Gisagara District should improve mobilization in the field of managerial

skills and competitive tendering, whereby these should leads to the increase in competition.

This research also recommends that RPPA should make follow up on the rules, regulations and

policies procurement in local government. This study revealed that Gisagara District used

Newspaper during advertisement process. Hence, it should increase the means of

advertisement, by using Radios and Televisions.

44

Government of Rwanda is among of the world wide country with zero tolerance country in

corruption; therefore, this study recommends Gisagara District to follow the strategies set for

fitting against corruption.

5.4 Suggestions for Further Study

This study focused on procurement and public funds management; hence future researchers

should focus on; the contribution of procurement to the financial performance of institutions,

procurement and good governance, the contribution of procurement to employee performance

in private institutions, the contribution of procurement to the value of money.

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QUESTIONNAIRE

QUESTIONAIRE ADDRESSED TO GISAGARA DISTRICT EMPLOYEES

A. QUESTIONS REGARDING TO RESPONDENT PROFILE

1. Level of education

PHD

Masters

Bachelors

Secondary level

Others

2. Job experience:

Less than 1 year

1-2 years

3- 5 years

Above 5 years

3. Occupation category within Gisagara district

Executive Secretary Office

Tender Committee

Finance

Logistic

Administration

Planning, monitoring and evaluation

Fill the following tables using Strongly Agree (SA), agree (A), Disagree (D) and Strongly

Disagree

4. Factors affect Public Procurement

process in Gisagara SA A D SD

Procurement planning Solicitation document Pre-bid Submission of bids

b

Bid Evaluation and Awarding Publication Contract award

What are the other factors should influence public procurement process in Gisagara District?

The Public Procurement methods used in Gisagara to manage public funds

The Public Procurement methods used

in Gisagara to manage public funds

SA A D SD

National Competitive Bidding (NCB) International tendering Restricted tendering Request for quotations Single source procurement/direct

contracting

Force Account Community Participation

Are there other public procurement methods used in Gisagara to manage public funds?

If yes, what are they?

Thank you

QUESTIONAIRE ADDRESSED TO GISAGARA DISTRICT CONTRACTORS

c

1. What are challenges do you face in Tendering Process

List of challenges SA A NA/ND D SD Delay of payment Time for getting contract Time of contract implementation Incomplete specification Lack of skills

2. Does Gisagara district advertise the tender? Yes No

3. Are you satisfied with the tender approaches? yes No

4. Do you consider the approach open and competitive? Yes No

THANK YOU