Kennedy
Kennedy
Kennedy
DOCTOR OF PHILOSOPHY
OF
2022
Contract Management on Procurement Performance in Public
Universities in Kenya
2022
DECLARATION
This thesis is my original work and has not been presented for a degree in any other
University.
This thesis is submitted for examination with our approval as the University
Supervisors.
JKUAT, Kenya
JKUAT, Kenya
ii
DEDICATION
This thesis is dedicated to my family for the material and moral support. Also, I
would like to dedicate this research study to my brothers and sisters for their
encouragement and immense valuable concern. Your definitive support and resolute
zeal for me to succeed always remained discernible in the course of compiling this
work.
iii
ACKNOWLEDGEMENT
I wish to express my sincere appreciations for the invaluable guidance and tolerance
to my university supervisors, Prof. Elegwa Mukulu and Dr. Sammy Odari for their
intellectual insights and suggestions that helped me to clarify many of the ideas
expressed in this study. The considerable ingenuity of my supervisors infused new
thoughts and this contributed to the hallmark of this research study.
Special thanks to Prof. Henry Bwisa, Prof. Willy Muturi, Prof. Gregory Namusonge,
Dr. Alice Simiyu, Dr. Mary Omondi and Dr. Rukia Atikiya for their scholarly advice
in perfection of this thesis. Also, I feel highly indebted to my colleagues in the Ph.D.
Supply Chain Management class 2013/2014 for their immense support.
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TABLE OF CONTENTS
DECLARATION ........................................................................................................ ii
ACKNOWLEDGEMENT ........................................................................................ iv
INTRODUCTION ...................................................................................................... 1
v
1.4 Research Hypotheses ....................................................................................... 24
LITERATURE REVIEW........................................................................................ 28
viii
4.5.1 Influence of Contract Management on Procurement Performance ........... 96
4.5.5 Special Committee for Handling Complex and Specialized Contracts .. 100
4.5.6 The Role of Special Committee that Handles Complex and Specialized
Contracts .................................................................................................. 101
ix
4.8 Inferential Statistics........................................................................................ 127
x
5.3.4 Contract Records Management ............................................................... 148
xi
LIST OF TABLES
Table 4.13: Special Committee that Handles Complex and Specialized Contracts 100
Table 4.14: Role of Special Committee that Handles Complex and Specialized
Contracts ............................................................................................. 101
xii
Table 4.18: Opinion of the respondents on the various aspects of Buyer-Supplier
Collaboration in relation to Procurement Performance ...................... 106
Table 4.19: Opinion of the respondents on the various aspects of Procurement Risk
Management in relation to Procurement Performance ....................... 108
Table 4.20: Opinion of the respondents on the various aspects of Transparency and
Accountability in relation to Procurement Performance .................... 110
Table 4.21: Opinion of the respondents on the various aspects of Contract Records
Management in relation to Procurement Performance ....................... 112
Table 4.22: Opinion of the respondents on the various aspects of Legal Compliance
in relation to Procurement Performance ............................................. 114
Table 4.23: Responses on the various aspects of Procurement Performance ......... 116
xiii
LIST OF FIGURES
Figure: 4.1: Normal Q-Q Plot of Buyer Supplier Collaboration ............................ 121
Figure 4.2: Normal Q-Q Plot of Procurement Risk Management .......................... 122
Figure 4.3: Normal Q-Q Plot of Transparency and Accountability ........................ 123
Figure 4.4: Normal Q-Q Plot of Contract Records Management ........................... 123
xiv
LIST OF APPENDICES
xv
ACRONYMS AND ABBREVIATIONS
AG Attorney General
DW Durbin Watson
EU European Union
xvi
KS Kolmogorov-Smirnov
LS Levene Statistics
PE Procurement Entities
TS Tolerance Statistics
UK United Kingdom
xvii
VIF Variance Inflation Factor
xviii
DEFINITION OF TERMS
xix
Management should that event occur (Christopher, 2018).
xx
ABSTRACT
xxi
CHAPTER ONE
INTRODUCTION
Lysons and Farrington (2012) postulates that the growing acknowledgment of the
need to automate and improve contractual processes and satisfy increasing
compliance and analytical requirements have equally led to an increase in the
adoption of more formal and controlled contract management procedures. As more
organizations are upgrading their contract management platforms to include
increased levels of automation, there are several benefits that are derived. These
include increased visibility of the contracts, reduction of errors and oversights within
the contract, heightened security on the contract records, easier retrieval of the data
and analysis of the contract progress. Automated contract management also comprise
features for contract initiation, drafting and negotiation, review and approval, digital
signing, lifecycle management, notifications, contract renewal, archiving, ability to
organize contracts by clients, installation of dashboards to view contract status and
milestones. All these underlined benefits have a far reaching implications to the
contractual obligations of buying organizations. In unlikely event litigations are
advanced to the learning institutions, then the concerned parties will be equipped
with the necessary documentations to avert any unlawful ruling of the lawsuit (Baily
et al., 2015).
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the business process. This business perspective should correspond with the overall
goals, values and the underpinned business strategy. In a nutshell, both the
procurement representatives of public universities, suppliers and contractors should
fully be cognizant of their role in the procurement process and should provide better
services that are efficient and effective in order to ensure value for money (VFM) to
their respective entities (Elliot & Quinn, 2019).
Baily et al. (2015) asserts that the fundamental success factors for post-award
contract management rely upon careful, complete and comprehensive
implementation of the upstream supply chain activities. During the pre-award stages,
the emphasis should be focused on the underlying need for the contract and whether
the suppliers will be in a position to deliver in service based on the requirements of
the buyer. On the contrary, careful considerations are only looked upon when the
contract has been awarded and therefore, any aggrieved party may have very limited
options in pursuance of the law. The institution’s high-level requirements should be
thoroughly researched so that there is a better understanding of purpose from
inception in all aspects of the procurement process. This approach creates a roadmap
on how contract will be formed, implemented and the monitoring and control
mechanisms that will be put in place to ensure a seamless transactional process
between buyers and suppliers (Schuhmann & Eichhorn, 2019).
3
Lowe (2013) affirms that in order to have an effective contract management it is
prudent to develop a contract strategy. The established strategical framework ought
to be used as the guiding principle when discharging contract related activities from
time to time. The overriding standard in contract management is that organizations
are duty bound to accord a particular contract with the university’s overall
procurement strategy. The formulation of a contract strategy is planned to institute
the form of the procurement and provide support in determining the generation and
award of the contract, the style and type of management to be adopted for the
subsequent service delivery, relationship management and contract administration
(Gulshan & Kapoor, 2018).
Lysons and Farrington, (2012)) argues that in developing the contract strategy it is
important to address issues based on the scale, nature and importance of the need to
the organization, type of specification, value of the need, complexity of the need
including innovation level, market capacity, attractiveness to the market, timescale
and phasing, level of understanding of the need by potential suppliers and
stakeholders. The use of supplier positioning matrices always assists in establishing
the action plan towards a contract, the nature of any deliberation that may need to be
conducted and the form of the supplier relationship following the award of contract.
Possible supplier relationship types range from the fixed contracts, spot buy through
call-off contracts, long term partnerships as well as strategic alliances. Issues of
relationship style such as partnership, hands- on or proactive should also be
considered (Hines, 2014).
Overby et al. (2017) cited that when establishing the contract strategy, a lot of
emphasis should be given to the evaluation roadmap which gives the direction for the
overall evaluation of suppliers and the predetermined tender process. It encompasses
such considerations as business purpose, relative priorities of the requirement,
critical success factors, communication guidelines, the modalities for determining
quantifiable and non-quantifiable items, evaluation procedures including appraisal
methodology, persons involved in the evaluation, supplier selection process
including direction on interpretation and marking of the responses. Another vital
consideration in determining contract strategy is utilization of Service Level
4
Agreements (SLA). The rationale behind SLAs is to let the customer to examine and
control the performance of the service received from the supplier(s) against the set
standards (Perera & Colverson, 2012).
Lysons and Farrington (2012) emphasizes that service levels should be established
and benchmarked for both customers and suppliers. It is imperative to ensure that the
service levels are established at a logical level; prioritized by the customer in order of
significance and on an agreed level for example essential, major, urgent, minor,
easily monitored, such as objective, tangible and quantifiable, unambiguous and
understandable by all parties and should be open to re-negotiation at any time. This
allows the parties participating in the contract to conduct a cost-benefit analysis
(CBA) and deduce the possible returns once the contract has been effected (Overby
et al., 2017).
Burt (2012) indicates that in contract management it is important to attest the fact
that various changes are bound to take place. Basically, changes within the contract
are almost mandatory during the time of a contract, particularly in the case of major,
complex construction and service contracts. Ideally, changes should not necessarily
be seen as causes for concern but should be managed effectively since they serve as
opportunities to advance the contract outputs. It is worthwhile to understand the
implication of change for both parties in business transaction. A change of any
significance is always deemed to affect the scope and potentially the viability of the
contract for either party. If a change results in a decrease in the value of the contract,
the organization could be faced with claims for increases in charges and legal claims
that there was, for example, misrepresentation in relation to the likely volumes
required over the time of the contract. If the change results in a substantial increase
in the value or scope, it is important that the organization continues to ensure that
value for money is maintained (Perera & Colverson, 2012).
Keith et al. (2013) suggests that public sector organizations should be aware of the
requirements of the state’s procurement directives that need considerable changes
during the contract period. Change can be determined by a number of factors;
amongst the more common are adjustments to the strategies and objectives of the
parties, the changing business requirements of the organization, market changes,
5
advancement in technology, economic trends which affect the feasibility of the
contract and statutory changes. These in turn can translate to changes in the service
required, the parameters needed, service infrastructure and workload. The end result
of contract management is service delivery and therefore, the ad hoc inspection and
acceptance committee members of the public universities are primarily concerned
with ensuring that the actual service provided by the suppliers or contractors is
commensurate with the agreed standards (Macintyre, 2015).
Hines (2014) states that the aptitude to measure the performance of the supplier and
provision of feedback is essential to successful contract management and supplier
development. Performance measures to cover every aspects of a contract should be
designed to fit the requirements of a given contract and should be set out in the
contract documentation to ensure suppliers are aware of the measurement
methodology before any contract is awarded. It is vital that the performance
measures selected provide clear and verifiable evidence of the success of the
relationship and in principle, issues such as financial outlay and value obtained
performance and customer satisfaction, delivery enhancement and added value,
delivery ability, benefits realized, relationship strength and openness (Roy & Adrian,
2013).
Hines (2014) submits that the criteria that is employed to justify supplier’s
performance in business activities should be specific, measurable, achievable,
relevant and time-bound (SMART). It is important to ensure that the actual
parameters selected are not over-specified, that they are, as far as possible, readily
derived from the direct performance of the contract and that they are linked to key
procurement issues. Once selected, the requirements supporting the performance
measures should be the main focus for contract management. They should form the
structure on which information needs and flows and contract management teams,
skills, activities and processes are developed (Macintyre, 2015).
Alan and Ray (2012) reveal that the ‘‘battle of forms’’ in contract management
indicates that the last entity in business transactions to submit conditions that the
other party accepts directly, or through implication or even through terms implied by
the statutes would have conditions that bind the contract. The terms of a contract are
6
said to be direct (express terms) if the parties themselves advertised to them at the
time of negotiations and actually agreed upon them (i.e. incorporated them into the
contract, either verbally or in writing). A term which the parties did not expressly
incorporate into the contract may nevertheless be regarded by the court as one of the
terms of the contract by implication. This will be done only when it is necessary in
the business sense to ‘give efficacy to the contract’. Terms implied by the statutes
entail sale of goods and hire purchase Acts. Normally, the terms will be implied
unless they are expressly excluded by the parties in case of contracts for the sale of
goods. It is imperative to reconcile the buyer’s terms and conditions with those of the
suppliers when faced with the battle of forms in business transactions (Keith et al.,
2013).
Keith et al. (2013) upholds that the difference between a void agreement and
avoidable contract is important in business transactions to avoid any confusion. A
voidable contract can be enforced or avoided by one of the parties. A void agreement
on the other hand cannot be enforced by either party. A valid contract sometimes
becomes an unenforceable contract because the time limit for filing suit to enforce it
7
has passed. Therefore, a key consideration in contract management is contract
enforcement which entails the attributes taken by the parties to a contract to make it a
success. Generally, when the parties enter in a contract the focus is primarily based
on its implementation. However, one party may fail to honour the contractual
obligations. This gives rise to the aggrieved party to seek legal redress and perhaps
enforce the contract as per the terms and conditions replicated in the contract. The
ability to make and enforce contracts and resolve disputes is fundamental if markets
are to function properly without interference from the parties to the contract
(Gulshan & Kapoor, 2018).
According to Sammons (2017) when entering into a contract the terms and
conditions should not be contradictory or repugnant to the subject matter of the
contract. Where the contract contains terms that are vague or ambiguous, the terms
are always interpreted by the court as contra proferentem meaning the clause will be
interpreted against the party seeking to rely on it. Good enforcement procedures
enhance predictability in commercial relationships and reduce uncertainty by
assuring investors that their contractual rights will be upheld promptly by local
courts. When procedures for enforcing commercial transactions are bureaucratic and
cumbersome or when contractual disputes cannot be resolved in a timely and cost
effective manner this attribute will destabilize the commercial transactions (Gulshan
& Kapoor, 2018).
Roy and Adrian (2013) opines that the concept of contract enforcement can be
embraced fully if there is a well-structured contract administration guideline.
Contract administration is concerned with the mechanics of the relationship between
the customer and the provider, the implementation of procedures defining the
interface between them and the smooth operation of routine administrative and
clerical functions. Contract administration handles the formal governance of the
contract and changes to the contract documentation. Clear administrative policies and
procedures ensure that all parties to the contract understand who does what, when,
and how. The procedures that combine to make up contract administration include:
Contract maintenance and change control, charges and cost monitoring, ordering
8
procedures, payment procedures, budget procedures, Resource management and
planning, management reporting and asset management (Gulshan & Kapoor, 2018).
9
done at two distinct levels, the State level and the Federal level. The legal attribute
binding all federal agencies is the Federal Acquisition Regulation (FAR) that
provides procedural guidelines to control procurement processes. Cost savings and
competitive processes are considered as key principles in all procurement decisions.
State governments are not regulated by FAR policies. However, they learn from
federal practice and conform to its principles when putting in place rules for state
agencies (Vonortas, 2015).
Howard (2015) asserts that procurement has become global in scope and this has
paved way to the need for contract management in international transactions. Rolling
out a contract lifecycle management (CLM) solution globally brings forth enormous
unique challenges. Contracts need to be in line with both international standards and
local requirements. Organizations need to maintain visibility to key contract data
required to effectively comply with international requirements and government
standards while still optimizing revenues and minimizing costs. Global contract
management should enable contract effectiveness, contract compliance and efficient
risk management across numerous countries as well as multiple regulatory and
business environments. In global transactions, customer relations exceed borders as
well as business practices and controls (Christopher, 2018).
Burt (2012) confirms that in order to resolve any issue emanating from contract
disputes the international chamber of commerce (ICC) came up with International
Commercial terms (Incoterms) which entail set of rules for interpreting trade terms in
10
international transactions. The main purpose of Incoterms is to provide a set of
international rules for the interpretation of the most commonly used trade terms in
foreign trade. Howard (2015) indicates that Incoterms have put in place international
procurement in the following ways: Defines responsibilities regarding title, risks and
costs, and eliminates possibilities of misunderstandings and disputes. Incoterms deal
with a number of identified duties imposed on the parties such as the seller’s
obligation to place the goods at the disposal of the buyer or hand them over for
carriage or deliver them at destination and with the distribution of risk between the
parties in these cases. Burt (2012) supports this by confirming that Incoterms deal
with the mandate to clear the goods for export and import, the packing of the goods,
the buyer’s responsibility to take delivery as well as the duty to provide evidence that
the respective requirements have been duly satisfied. All these developments are
geared to provide a legal direction in a situation whereby the buyer or the seller seeks
legal redress in case there is a dispute in international transactions.
According to COMESA (2018) contract management has been the key tenet of
redifing the contractual obligations in the regional perspective. The proximity of
most of the countries to Kenya, has necessitated multilateral trade to gain an upward
trajectory. The Common Market for Eastern and Southern Africa (COMESA) is one
of the classical regional economic community in Africa with twenty-one member
states. COMESA countries have a combined Gross Domestic Product of US$ 768
billion and this signifies vibrant contractual activities. In order to ensure seamless
contract administration, the member countries of COMESA have endeavored to
streamline the laws surrounding the establishment of the trading block. The backdrop
of this phenomenon has created a sense of synergy and enrichment of business in all
spheres of the economy to the member states (Lungu, 2020).
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for good governance (Wignaraja, 2019). In order to improve public procurement
systems of COMESA Member States, the laws, regulations and procedures
pertaining commercial activities have been strengthened. This phenomenon has far
reaching implications on transparency and accountability in public procurement
undertakings. The embedded laws, regulation and procedures as per the trading block
treaty, paves way to effective contract administration among the member countries.
Public and private sectors are cognizant of the principles and workings of the
national and regional public procurement systems as per the COMESA guidelines.
The promulgation of national legislation on public procurement in at least 60% of the
Member States is an indicative viewpoint of how COMESA countries are giving the
requisite consideration on transformative contractual undertakings (COMESA,
2018).
The clarion call, in EAC countries has been provision of uninterrupted flow of goods
and services to member countries through efficient contractual activities. The
premise of this underlying philosophy, enables the EAC countries to transact without
interference hence the reason for the proliferation of the trading block (Akinyi,
2019). A regional trade agreement (RTA) that is underpinned in the statutes of the
member countries, contains rules and regulations that are mainly geared to reinforce
cooperation and strengthen the contractual protocols to ease commercial
undertakings. Since the member countries are signatories to the established rules and
regulations, adherence to such guidelines are very critical in curbing disagreements
(EAC, 2022).
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1.1.3 State of Contract Management in Kenya
The greater strides made as part of the overall Public Finance Reform, a result of the
implementation of this reform program a Public Procurement and Disposal Act
(herein after referred to as PPD Act) was approved by parliament in 2005. In 2007
the PPDA Act was operationalized and established the Public Procurement Oversight
Authority (PPOA) as regulatory body for advancement and oversight of the Kenyan
Public Procurement System. The public procurement and disposal act, 2005 became
the reference point on contractual obligations of the public entities. In order to meet
the aspirations of the new constitution dispensation that was enacted in year 2010
and more importantly to enhance procurement performance in the public sector the
public procurement and disposal act 2005 has been replaced by the Public
Procurement and Asset Disposal Act, 2015 as per the Kenya Gazette Supplement
No.207 (Acts No.33).
Contract management is very conspicuous in line with the PPADA, 2015. Ideally, the
accounting officers of all public entities are responsible for preparation of contracts
in line with the award decision. They should also ensure that all contracts exceeding
a value of Kenya shillings five billion are cleared by the Attorney-General (AG)
before being signed. The country’s constitution gives the AG unfettered discretion to
provide a legal framework on the provision of these contracts although the AG can
provide interlocutory submission if the contract turns out to be complex. On regular
basis each Cabinet Secretary ought to inform the Cabinet and national treasury of all
13
government contracts exceeding Kenya Shillings five billion. The existence of a
contract is invariably confirmed through the signature of a contract document
incorporating all agreements between the parties and such contracts are signed by the
accounting officer or an officer authorized in writing by the accounting officer of the
procuring entity and the successful tenderer (Rok, 2015).
Procuring entities should enter into a written contract with the person submitting the
successful tender based on the tender documents and any clarifications that emanate
from the procurement proceedings. The written contract should be entered into
within the period specified in the notification but not before fourteen days have
elapsed following the provision of that notification provided that a contract shall be
signed within the tender validity period. It is important to note that a procuring entity
may amend the tender documents at any time before the deadline for submitting
tenders by issuing an addendum without materially altering the substance of the
original tender. As annexed in the tender document the latter information forms the
basis of the discussions in the tendering process. No contract is formed between the
person submitting the successful tender and the accounting officer of a procuring
entity until the written contract is signed by the parties. It is important to note that an
accounting officer of a procuring entity should not enter into a contract with any
person or firm unless an award has been made and where a contract has been signed
without the authority of the accounting officer, such a contract shall be declared null
and void (Rok, 2015).
Ogachi (2014) concurs with PPADA Act 2015, on the provision that the tender
documents form the basis of all procurement contracts and constitute at a minimum-
contract agreement form; tender form; price schedule or bills of quantities submitted
by the tenderer; schedule of requirements; technical specifications; general
conditions of contract; special conditions of contract and notification of award.
According to section 58(2) of PPADA 2015 the tender documents used by the
procuring entity under subsection (1) shall contain sufficient information to allow
fairness, equitability, transparency, cost effectiveness and competition among those
who wish to submit their application. A person who contravenes the provisions of
this section commits an offence. All suppliers participating in the tendering process
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should provide a tender security which is absolute value of not more than two
percent of the tender as valued by the procurement entity. The tender security shall
be forfeited if the person submitting the tender withdraws the tender after the
deadline for submitting tenders but before the expiry of the period during which
tenders shall remain valid.
Rok (2015) asserts that if the person submitting the successful tender refuses to enter
into a written contract as required under section 135 and section 61 of the
Procurement Act 2015, he or she losses his or her tender security and the
procurement process should proceed with the next lowest evaluated tenderer.
Likewise, subject to the regulations a successful tenderer shall submit a performance
security equivalent to not more than ten percent of the contract amount before
signing the contract. In case the contract is not fully or well executed, the
performance security shall unconditionally be fully seized by the procuring entity as
compensation without prejudice to other penalties provided for by the Act. However,
the tenderer shall not be liable for forfeiture of its performance security or
termination for default if and to the extent that it’s delay in performance or other
failure to perform its obligations under the contract is the result of an event of force
majeure.
Rok (2015) suggests that, the accounting officer of a procuring entity should publish
and publicize all contract awards on their notice boards at noticeable places and
website if available within a period as prescribed. An accounting officer of a
procuring entity should report all contract awards to the public procurement
regulatory authority (PPRA) as prescribed. Ideally, the director general of PPRA
plays an ombudsman role on contract management related activities in public entities
in Kenya and this calls for the person in charge of the position to be adept at
investigating procurement malpractices and show the unrelenting drive to get rid of
corruption (Rok, 2015). Any interested party or supplier who feels short changed in
any tendering process has the leeway to lodge his/her complaint with director general
who takes up the matter for adjudication before a procurement review board. Any
party to the review aggrieved by the decision of the review board may appeal to the
high court and the decision of the high court shall be final. A procuring entity which
15
disobeys the decision of the review board or the high court shall be in breach of this
act (PPADA, 2015) and any action by procuring entity contrary to the decision of the
review board or the high court shall be dismissed on the grounds that the entity is in
violation of the rules and the regulations.
Section 85 of PPDA, 2015 indicates that subject to prescribed thresholds all tenders
shall be evaluated by the evaluation committee of the procuring entity for the
purpose of making recommendations to the accounting officer through the head of
procurement to inform the decision of the award of contract to the successful tenders.
Section 86 (1) of the act, further indicates that the successful tender shall be the one
who meets any one of the following as specified in the tender document: (a) the
tender with the lowest evaluated price (b) the responsive proposal with the highest
score determined by the procuring entity by combining for each proposal in
accordance with the procedures and criteria set out in the request for proposals, the
scores assigned to the technical and financial proposals where request for proposals
method is used (c) the tender with the lowest evaluated total cost of ownership and
(d) the tender with the highest technical score, where a tender is not to be evaluated
based on procedures regulated by an Act of parliament which provides guidelines for
arriving at applicable professional charges (Rok, 2015).
16
approaches in all public universities in Kenya. The importance of these aspects is
paramount not only for the successful functioning of the public universities, but
mostly for the conceptual direction of the holistic public sector of the country in its
attempts to deliver services to the public in a more efficient and effective way
(Kirande & Rotich, 2014).
17
Further, restoration of public confidence in procurement process should be
compulsory, building public trust to stakeholders must be achieved, promotion of
local industry and spurring of economic development should be a priority. This
should be effected by ensuring that goods and service are obtained at the right price,
right quality, right quantity, from right source and delivered at the right place. These
public procurement objectives form the basis of contract management since any
deviation can bring adverse effects like unnecessary costs, customer dissatisfaction
and also fraud to public universities in Kenya (Chesang, 2013).
Gathua (2015) indicates that procurement process in public universities begins with
identification of needs by the user departments. Needs are those items or services
that should be procured to help the University achieve its strategic plans and goals.
All required items have to be budgeted for and their total value is what is referred to
as the "Annual Procurement Plan." Therefore, any requirement that has not been
budgeted for will not be processed for procurement. It is important to note that the
user departments have the responsibility of drawing up the correct specifications of
their procurement needs before forwarding them to the Supply Chain Department. If
need be, users may seek the assistance of technical experts in drawing up
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specifications since the goods/services should be described in sufficient details in
terms of performance without displaying biases towards particular brands.
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One of the key reforms in public procurement in Kenya is application of digital
platforms in execution of procurement activities. The considerable modules that are
recommended entail use of integrated financial management information system
(IFMIS) which is an online portal where suppliers perform various procurement
processes including tendering, requisition, payments and checking notifications of
tender awards. Electronic reverse auction (ERA) is another element whereby
suppliers upon registration compete for the tenders online and the rule of the
transaction is that the identity of all suppliers is concealed and the lowest bidder at
the closure of business is awarded the tender (Rok, 2015).
Further, Enterprise resource planning (ERP) is also another common method applied
in public procurement process in public universities in Kenya. It is a business
management system that is supported by multi-module application software that
integrates all the department’s functions of the universities and it allows chair of
departments (COD) from all departments to have a consolidated view of what is or is
not taking place throughout the universities and this platform creates a clear position
of enhancing procurement performance (Lysons & Farrington, 2012).
Public universities in Kenya have increased tremendously in the last one decade.
Currently there are 31 public chartered universities and 8 public constituent
university colleges. Due to the expansion of the public universities in Kenya the
government has also increased the budget allocation all the public universities. For
example, during 2014/2015, 2015/2016 and 2016/2017 financial years the exchequer
allocated 55 billion, 52.9 billion and 57.8 billion respectively to public universities.
Cumulatively this translated to 3.5 % of the country’s Gross Domestic Product (Rok,
2017). It is important to note that 60-70% of this budget is always channeled to
issues based on procurement in order to ensure capacity building and research
developments (PPRA, 2018). It is of interest, therefore, to explore the topical issue
that is in line with the influence of contract management on procurement
performance in public universities in Kenya. This is as result of massive amount of
money directed to these public entities and therefore, this compels the need for
stringent controls in utilization of resources to meet the university’s needs in short
term as well as in the long term endeavors (Rok, 2015).
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1.2 Statement of the Problem
21
public universities in Kenya. These included buying of goods and services above the
predetermined threshold using direct procurement method and also awarding the
contracts to the second lowest evaluated bidders without explaining why the tenders
were not awarded to the lowest bidders. In some cases, no bids were floated for
procurement of the services. All these contracts did not comply with the
predetermined rules and regulations depicted in the PPADA, 2015 and the
procurement regulations of 2020.The magnitude and trend of these transactions in
public universities merited intensive research, discussion and sound
recommendations if efficiency and effectiveness is to be achieved by the
procurement functions in public universities in Kenya.
Although the Kenyan government has introduced contract price variation in a tune of
25% of the original contract price for contracts exceeding one year, staggering
statistics have emerged that shows increase of contract variations in public entities in
Kenya (Rok, 2015). In particular, public universities in Kenya have been subjected to
contract variations during contract implementations. This has been compelled by
price fluctuations, complexity of contracts, lack of professional probity, delays of
disbursement of funds by the exchequer, omission of the required information in the
bill of quantities and unanticipated changes in the market. The net effect of these
outcome has been debarment of contractors on subsequent contracts, cancellation of
contracts, legal redress for the liquidated damages, withholding of payments, and
stern warning of the suppliers and contractors (CIP, 2013).
22
procurement performance in Kenyan universities and zeroed on organizational
budget, work environment, quality management systems and organizational
structure. It is imperative to note that although the researchers provided a broad
perspective of procurement performance in public universities, these studies did not
address the key tenets of contract management that were advanced by Vasudevan
(2015) namely: buyer-supplier collaboration, procurement risk management,
transparency and accountability, contract records management and legal compliance.
This study therefore, sought to bridge this knowledge gap by exploring the influence
of contract management on procurement performance in public universities in
Kenya.
23
1.4 Research Hypotheses
This study collected data on testable hypotheses and subjected them to empirical
investigation. These hypotheses were stated in a null context as follows:
H01: There is no significant influence of buyer-supplier collaboration on
procurement performance in public universities in Kenya.
H02: There is no significant influence of procurement risk management on
procurement performance in public universities in Kenya.
H03: Transparency and accountability has no significant influence on
procurement performance in public universities in Kenya.
H04: Contract records management has no significant influence on procurement
performance in public universities in Kenya.
H05: Legal compliance has no significant moderating influence on the
relationship between procurement contract management and procurement
performance in public universities in Kenya.
The in depth analysis of this study will make a great contribution to the existing
knowledge in the area of contract management and generally procurement
performance in the context of public universities in Kenya. The study will primarily
benefit stakeholders such as public universities, regulators and academicians.
The findings of this study will extensively benefit public universities in Kenya. The
top management and the signatories of crucial contractual business transactions on
procurement matters will be informed on how, when and what contracts need to be
endorsed for the interest of the respective universities. This will enable the university
staff in question to administer contracts in ways that will leverage long term
procurement performance in order to reduce procurement irregularities in subsequent
transactions.
24
1.5.2 Regulators
The regulators of public procurement and asset disposal act such as the National
Treasury in public procurement and assets disposal, Public procurement regulatory
authority and Public Procurement Administrative Review Board can use the study
findings to understand the bottom line role of contract management in public entities
in Kenya. The study will provide explicit insights on the possible approaches that can
enhance the procurement performance and hence guide in regulation and policy
formulation. This will therefore, help policy makers of the public universities to
develop and review the existing policies in order to achieve synergy in line with the
existing circumstances. Therefore, this thesis will enable the public procurement
regulators to have a new dimension on how to safeguard public resources in public
universities in Kenya. The actualization of the findings of the study by the
procurement regulatory bodies will create value for money in all the transactional
activities in public universities in Kenya.
1.5.3 Academicians
The students, researchers and academicians of all walks of life will use this study as
a basis for discussions on implementation of contract management in the public
universities. The study will be a source of material for future researchers on other
related topics and therefore, this study will be a classical reference point of inferring
relevant empirical information.
25
management on procurement activities have remained very crucial over the years
since conformance or non-conformance of procurement law has huge implications to
the government. The former consideration paves way to value for money while the
latter consideration results to financial losses.
It is also important to underscore the fact that universities have been earmarked by
the government to be the key drivers of the vision 2030 and this necessitates the need
for research in institutions of higher learning in order to address the pertinent issues
that may turn out to be impediment towards this strategic plan. The study was limited
to buyer-supplier collaboration, procurement risk management, transparency and
accountability, contract records management, legal compliance and their influence on
procurement performance of 31 public universities in Kenya. The researcher derived
a data of public universities from July 2013-June 2018 fiscal years.
The major constraints that turned out to be the stumbling block of this study were
restrains and confidentiality from the institutions to the questionnaire as some of the
public universities considered the information the researcher sought to be
confidential. In order to have a breakthrough on this impediment the researcher
provided a letter of introduction from JKUAT as well as a research permit from
National Commission for Science, Technology and Innovation (NACOSTI). The
researcher also assured the respondents that the information provided was to be used
for academic purpose and thereby the researcher was obliged to treat the information
with a sense of confidentiality.
26
questionnaires out of 124 questionnaires issued which translated to 84% of the
response rate.
The scientific limitation of the study was as a result of constrained by the extent of
existing knowledge in line with contract management on procurement performance
in public universities in Kenya. Some of the reviewed studies were not in tandem
with the topical issue of the study. However, this phenomenon was solved by finding
unparalleled theoretical basis that supported the research topic.
27
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter explores the fundamental aspects that are in line with the research topic
being studied. The chapter is divided into three distinct parts. The first part covers
the theoretical review on buyer-supplier collaboration, procurement risk
management, transparency and accountability, contract records management, legal
compliance, procurement performance and generally the concept of contract
management. This leads to the development of the conceptual framework that guided
the study. The second part deals with the review of existing literature in accordance
with the study variables. The third part deals with empirical studies carried out in the
past and in accordance with the variables presented in the research model, critique,
research gaps and summary.
The proponent of resource dependence theory (RDT) was Pfeffer (1978). The theory
started as a publication of the external control of organizations which was deemed to
be a resource dependence perspective discourse. Resource dependence theory
emphasize how organizational behavior is affected by external resources the
organization utilizes like raw materials and services. The theory is necessary because
an organization’s ability to gather, alter and exploit raw materials faster than
competitors can be fundamental to success (Collins & Hillman, 2009).
28
According to Cobb (2010) resource dependence theory is underpinned by the idea
that resources are essential to organizational performance and that access and control
over resources is a basis of power. Organizations normally build redundancy into
resource acquisition in order to reduce their reliance on single sources. The basic
argument of resource dependence theory can be summarized as follows:
Organizations rely heavily on resources, resources eventually emanate from an
organization's environment, the environment, to a considerable extent, contains other
organizations, the resources one organization needs are in most cases in the hand of
other organizations, resources are a basis of control, lawfully independent
organizations can therefore depend on each other and lastly power and resource
dependence are directly linked (Collins & Hillman, 2009).
In the recent times, resource dependence theory has been under investigation in
several review and meta-analytic studies: Collins and Hillman (2009); and Cobb
(2010); which all indicated the importance of this theory in explaining the actions of
organization such as forming interlocks, alliances, joint ventures, and mergers and
acquisitions, in striving to overcome dependencies and improve an organizational
autonomy and legality. While resource dependence theory is one of many theories
of organizational studies that characterize organizational behavior, it is not a theory
that explains an organization's performance per se. But still in many ways, resource
dependence theory predictions are similar to those of transaction cost economics and
shares some aspects with institutional theory (Drees & Heugens, 2013).
29
The open tent approach allowed institutional theory to develop fairly quickly from an
explanation for the rationalization of the organization to a wider theory about the
macro-cultural environment of organizations. The flexibility of institutional theory
made it attractive to management scholars who were looking for non-economic
explanations for organizational phenomena. Because institutional theory was seen as
more flexible, it became a formidable competitor to resource dependence theory in
management scholarship, which would gradually become the hot bed for influence
building in organizational theory (Sharif & Yeoh, 2014). The major philosophy in
line with Resource dependence theory emphasizes the need for synergy between
buying entities and the suppliers in business circles. This approach is one of the key
requirements on the concept of buyer-supplier collaboration and therefore, this
theory anchors the first specific objective of the study on the influence of buyer-
supplier collaboration on procurement performance in public universities in Kenya.
The theory of constraints was initiated by Goldratt (1984) through his bestselling
novel entitled the goal. The theory of constraints is a methodology for identifying the
most important limiting factor that is (Constraints) that stands in the way of gaining
goal and then systematically improving that constraint until it is no longer the
limiting factor. This is accomplished by establishing a methodological approach that
devises the prone areas that create disturbance in the set organizational activities.
30
implementation has the following benefits: Fast improvements of activities,
increased profits, improved capacity, reduced lead time and also reduced inventory
(Vorne, 2011).
Watson (2006) indicates that the underlying premise of the theory of constraints is
that organizations can be measured and controlled by variations on three measures:
throughput, operational expense, and inventory. Inventory is all the money that the
system has invested in purchasing things which it intends to sell. Operational
expense is all the money the system spends in order to turn inventory into
throughput. Throughput is the rate at which the system generates money through
sales. Before the goal itself can be reached, ideal conditions must first be met. These
typically include quality, safety, legal obligations, etc. For most businesses, the goal
itself is to make money. However, for many organizations and non-profit businesses,
making money is a compulsory condition for pursuing the goal. Whether it is the
goal or a necessary condition, understanding how to make sound financial decisions
based on throughput, inventory, and operating expense is a significant requirement
(Alexandre, 2009).
Dettmer (2003) confirms that the limiting factors of this theory are the impediments
or constraints. At any given time, an organization is faced with at least one constraint
that limits business operations. Typically, as one constraint is eliminated another
constraint will arise. The organization should then focus its attention on the new
constraint. And this process repeats itself continuously. According to the theory of
constraints, the best way for an organization to achieve its goals is to reduce
inventory, reduce operating expenses and increase throughput. Some criticisms of
this theory include the idea that Goldratt borrowed concepts and ideas from
preceding studies but failed to recognize these contributions to this theory (Wayne,
2009).
In reference to this theory, there is conspicuous action plans analyzed, discussed and
recommended based on procurement risk management e.g. risk identification, risks
mitigation and most importantly rational decisions on how to avoid risks in
procurement functions. This theory therefore, links the second specific objective of
31
the study on the influence of procurement risk management on procurement
performance of public universities in Kenya.
The deontological theory is primarily the work of Kant (1785) in his approach of the
grounding for the metaphysics of morals that emphasized on developing a clear
understanding of moral principles that could prevent distractions. According to Kant
actions are moral if they are put in place without concealed motive and the moral
quality of an action is judged not according to the action’s consequences but
according to the motive that produced it. Also actions are moral if they are executed
out of respect for the moral law contrary to some other motivation such as a desire or
need.
Over the years various scholars have examined the idea of deontology theory. Han
(2012) confirms that the premises of deontology enforce a totalitarian system of
honesty at the expense of other social values such as secrecy, shame and trust.
Anthropologist have long undertaken ethnographically the relation between revealed
and concealed information and have increasingly taken up the subject in relation to
transparency and accountability.
32
misunderstand the symbiotic link between these terms. The prime model of
governmental data driven transparency paves way to neoliberal subjectivities that
decrease the risk of politics as a ground of dissent between real alternatives.
This theory addresses the fundamental ethical standards that ought to be followed by
public entities in the entire process of procurement e.g. impartiality, openness,
confidentiality, due diligence, fidelity to professional responsibility and honesty. To
this extent, therefore, the theory supports the third specific objective of the study on
the influence of transparency and accountability on procurement performance in
public universities in Kenya.
This model was pioneered by Upward (1996) with contributions from Sue
Mckemmish and Livia Lacovino as a rejoinder to the then developing debate that
was about the challenges of managing digital records and archives in the discipline of
Archival science. The records continuum model (RCM) was first published in
Upward’s 1996 paper "Structuring the Records Continuum Part One: Post custodial
principles and properties". Upward describes the RCM within the broad framework
of a continuum where activities and connections convert documents into records,
evidence and memory that are used for several purposes over time. The RCM is an
abstract conceptual model that clarifies issues based on understanding recordkeeping
activities.
33
The RCM states the enormous and diverse perspectives that contribute to records and
archives including individual, group, organizational, institutional and societal. These
frameworks disclose the need to take into account various stakeholders and co-
contributors in relation to use, access and assessment of records and archives. Over
the existence of a record numerous decisions are made by various personalities of the
records that include, but are not limited to records managers and archivists. Other
individuals can be identified at various dimensions of interaction, including those
involved in providing as well as community. Records are therefore not just physical
or digital representations of physical objects held and managed in an archive or
repository, but are proof of various perspectives, narratives and contexts that
contributed to their development (Upward, 1997).
Mutero (2011) alludes that the RCM is often described as being different or at odds
with the lifecycle records model. While the RCM is inclusive of numerous ways of
conceptualizing and performing recordkeeping, including a lifecycle concept, there
are some significant differences. Firstly, of all, where the lifecycle model shows
clearly demarcated phases in the management of records, a continuum model
conceptualizes elements as continuous with no visible parts. Secondly, the lifecycle
approach identifies clear conceptual and procedural limits between active or current
records and inactive or historical records, but a continuum approach deems records
processes as more incorporated across space-time. In the continuum it is
recordkeeping processes that carry records forward through space-time to enable
their use for various purposes. Archival records are thus not just historical, but are
able to be re-created, re-interpreted, and re-contextualized according to their place
and use in space-time. In this way, archival institutions are nodes in the system of
recorded information and its framework, rather than the end point in a lifecycle stage
for records.
Reed (2010) confirms that it is important to note that RCM is the most well-known
of all the continuum models created, but does not exist in isolation. Several other
complementary models have been developed by RCM creator Frank Upward, and
there are others created by continuum researchers that offer enhanced or alternative
ways of understanding the continuum. Basically, the new models advanced by Frank
Upward were initiated in order to compliment the records continuum model and
34
provide a solid base of conceptualizing and comprehending this model well. The
series of continuum models created by Frank Upward include: Information Systems
(Data) Continuum Model (data modeling and data flow), Cultural Heritage
Continuum Model (the stories the documents tell and the significance of those stories
to others), Publication (Access) Continuum Model (the reach of accessibility and the
way the document is issued), Information Continuum Model (Barbara Reed, Don
Schauder, Frank Upward) (the technologies driving the system and classification
methods). Other models include juridical contexts of the Records Continuum Model
(Livia Iacovino), Mediated Recordkeeping: culture-as-evidence (Leisa Gibbons).
Figure 2.1: Records Continuum Model; adapted from Upward Frank (1990)
35
2.2.5 Legal Theory
Legal theory popularly known as jurisprudence was started in year 1832 by John
Austin. This renowned scholar of law deeply explained the nature of law in its most
general form and provided a deeper understanding of legal reasoning, legal systems,
legal institutions and the role of law in society. Leiter (1998) indicates that legal
theory is a discourse that explains variety of conventional aspects that govern law in
all spheres of life. These include analytic jurisprudence, normative jurisprudence and
sociological jurisprudence. In his submission about the legal theory, Austin (1832)
argued that laws are rules, which are defined as the command. More precisely, laws
are general commands issued by a sovereign to members of an independent political
society and backed up by adverse consequences in the event of non-compliance.
Pillai (2016) asserts that contemporary philosophy of law, which deals with general
jurisprudence, addresses problems internal to law and legal systems and problems of
law as a social institution that relates to the larger political and social context in
which it exists. This aspect basically defines the judicial process that ought to be
followed by the magistrates and judges when making rulings of the cases presented
to them. The foundations of law are accessible through reason and it is from these
laws of nature that human laws gain whatever force they have. Analytic
jurisprudence rejects natural law's fusing of what law is and what it ought to be. It
espouses the use of a neutral point of view and descriptive language when referring
to aspects of legal systems. It encompasses such theories of jurisprudence as "legal
positivism", which holds that there is no necessary connection between law and
morality and that the force of law comes from basic social facts. Legal realism is also
another component of analytic jurisprudence and it indicates that the real-world
practice of law determines what law is, the law having the force that it does because
of what legislators, lawyers, and judges do with it (Raymond, 2009).
36
what the proper function of law should be. This gives rise to the question- what sorts
of acts should be subject to legal sanctions and what kinds of punishment should be
permitted if there is a non-compliance of what is ought to be done. If complying with
the legislated laws turns out to be unsurmountable to the citizens, it’s therefore,
incumbent upon the legislative organs of the country to revise the laws with a sense
of creating sound, reasonable and practical laws that are predominantly working
towards the interest of the country in general.
Criminal laws, for example, remove certain behaviors from the range of behavioral
options by penalizing them with disciplinary measures to deter the offenders from
repeating the mistakes. Likewise, civil laws require people to take certain precautions
not to injure others and to honor their contracts. But the principle of prima facie
should always prevail in all social activities, meaning that one party to the legal
proceedings has a burden of proof which requires it to present all circumstantial
evidence for a case to be concluded (Himma, 1998). According to Devlin (1965)
legal moralism is an important aspect in normative jurisprudence. It views that the
law can legitimately be used to prohibit behaviors that conflict with society’s
collective moral judgments even when those behaviors do not result in physical or
psychological harm to others. Aquinas (1988) suggests that legal moralism, implies
that it is permissible for the state to use its coercive power to enforce society’s
collective morality for the interest of the state and possibly remedy the affected
parties from unscrupulous undertakings.
Feinberg (1985) had a different view on the offence principle advanced in normative
jurisprudence. The scholar contends that the offensive principle does not provide
sufficient protection against the wrongful behaviors of others, as it is inconsistent
with many criminal prohibitions we take for granted as being justified. The harm
principle must be augmented by the offense principle, which he defines as follows:
“It is always a good reason in support of a proposed criminal prohibition that it
would probably be an effective way of preventing serious offense to persons other
than the actor and that it is probably a necessary means to that end.”
37
Bix (1995) confirms that sociological jurisprudence is a term coined by the American
Jurist Roscoe Pound to describe his approach to the understanding of the law. This
philosophical approach to law stresses the actual social effects of legal institutions,
doctrines, and practices. In Germany, Austria and France, the work of the "free law"
theorists (e.g. Ernst Fuchs, Hermann Kantorowicz, Eugen Ehrlich and Francois
Geny) encouraged the use of sociological insights in the development of legal and
juristic theory. In the second half of the twentieth century, sociological jurisprudence
as a distinct movement declined as jurisprudence came more strongly under the
influence of analytical legal philosophy; but with increasing criticism of dominant
orientations of legal philosophy in English-speaking countries in the present century,
it has attracted renewed interest. Increasingly, its contemporary focus is on providing
theoretical resources for jurists to aid their understanding of new types of regulation
(for example, the diverse kinds of developing transnational law) and the increasingly
important interrelations of law and culture, especially in multicultural Western
societies.
This theory connects fully with the moderating variable of the study that is legal
compliance in the sense that the rallying call for the law is compliance to the
stipulated guidelines. This is evidenced in the legal theory where a clear position of
the law indicates that willful breach of the law, or unauthorized departure from the
procedures derived from constituted guidelines prompts a disciplinary action.
The Supply chain operations reference (SCOR) model was originally developed in
1996 by PRTM, a management consulting firm and endorsed by the Supply Chain
Council (SCC) in 2004 as the cross-industry, standard diagnostic tool for supply
chain management. The SCOR model describes the business activities associated
with satisfying a customer's demand, which include plan, source, make, deliver,
return and enable. Use of the model includes analyzing the current state of a
company's processes and goals, quantifying operational performance, and comparing
company performance to benchmark data. SCOR has developed a set of metrics for
supply chain performance, and Supply Chain Council members have formed industry
38
groups to collect best practices information that companies can use to elevate their
supply chain models. This reference model enables users to address, improve, and
communicate supply chain management practices within and between all interested
parties in the extended enterprise (Rosenbaum, 2003).
Poluha (2007) suggests that by describing supply chains using process modeling
building blocks, the model can be used to describe supply chains that are very simple
or very complex using a common set of definitions. As a result, disparate industries
can be linked to describe the depth and breadth of virtually any supply chain. The
SCOR management processes replicate the following outcome in business
operations: Plan processes balance aggregate demand and supply to develop a course
of action which best meets sourcing, production, and delivery requirements while
considerations on source ensures processes that procure goods and services meet
planned or actual demand.
Make approach creates processes that transform product to a finished state to meet
planned or actual demand. As a way of providing processes that provide finished
goods and services to meet planned or actual demand deliver concept is emphasized.
Return ensure processes associated with returning or receiving returned products for
any reason is addressed. Lastly the enable approach ensures processes being
associated with the management of the supply chain e.g. business rules, performance,
data, resources, facilities, contracts, supply chain network management, managing
regulatory compliance and risk management are adhered to (Simchi et al., 2008).
According to White (2018) the supply chain operations reference (SCOR) model
helps businesses evaluate and perfect supply chain management for reliability,
consistency and efficiency. SCM is complex, but the SCOR model is intended to
help standardize the process and create a measurable way to track results. It’s meant
to work across industries using common definitions that can apply to any supply
chain process. Using the SCOR model, businesses can judge how advanced or
mature a supply chain process is and how well it aligns with business goals. There
are three levels used to measure supply chain performance. These levels help
standardize supply chain performance metrics so that companies can be evaluated
against other businesses, even if they’re operating differently. The SCOR metrics
39
that form the basis of supply chain performance comprise attributes based on:
reliability, responsiveness, agility, costs and asset management efficiency.
Businesses use these attributes to establish the requirements for the supply chain by
figuring out which performance indicator to prioritize and which areas the business
can perform at an average pace (Rosenbaum, 2012).
Stadtler (2005) confirms that a thinly veiled criticism on SCOR is also evident in the
vast array of metrics at each of the model’s three process levels. While it is true that
the hundreds of individual measures can seem daunting to say the least, it’s
important to understand what SCOR curators considers to be the fundamental
attributes of any supply chain: Reliability, Responsiveness, Flexibility, Costs and
Assets. Each process step or activity within SCOR contributes to them in some way,
so the metrics are intended to assess the outcome of each step with respect to those
attributes. This level of granularity enables practitioners to quickly identify
bottlenecks requiring the application of lean and other methods to improve process
efficiency and effectiveness. These actions lower costs and increase throughput,
quality and first-pass yield. To this extent therefore the SCOR model has limitations
that lead to gaps in the need for performance evaluation in organizations (Lemghari
et al., 2018).
40
This model relates to the dependent variable of the study that is procurement
performance which serves as a sub-set of supply chain performance. Broad analysis
on supply chain operations reference model are clearly indicated (see Figure 2.2).
Figure 2.2: Supply Chain Operations Reference Model; adapted from Supply
chain council 2010
This theory was developed in the United States by a renowned legal scholar by the
name Ian Roderick Macneil in 1969. Relational contract theory is based on the view
that contracts are relations-oriented rather than discrete business dealings. This
theory is based upon a relationship of trust between the parties involved in the
contract management. The explicit terms of the contract are just an outline as there
are implicit terms and understandings which establish the behavior of the parties.
Relational contract theory covers economic exchange in general, not just contracts
that would be acknowledged as lawfully enforceable agreements by courts in any
given jurisdiction, that relations are mostly held collectively by their own internal
values and the broad environmental, social as well as economic factors, and, at least
in relational theory in the Macneil mould, that exchange relations are governed by a
series of norms (Austen, 2009).
41
What is particularly distinctive about this concept is the postulation of a number of
"norms in a positivist sense," of which ten common contract norms relate to all
contracts: role integrity; reciprocity, implementation of planning; effectuation of
consent; flexibility; contractual solidarity; the linking norms; the power; propriety of
means; and harmonization with the economic, social and environmental matrix. This
last aspect is not to indicate that relational contract theory is normative in nature, it
sets out what ought to be the case properly and this creates a dimension that is
genuinely observable and normal factors are always at play (Campbell, 2001).
According to Baker (2009) previous writing may be taken in places to imply that the
substantive rules of contract law need to be reframed to recognize the relational, non-
discrete nature of contracts and this has not been subsequently pursued and current
scholars like (Eisenberg, 2000) have suggested that it is neither possible nor
necessary to reform the law of contract itself to work successfully with relationally-
constituted contracts. Baker who is well known scholar on matters of contact
management from England has more recently proposed a different version of
relational contract theory, called “comprehensive contract theory,” which posits
“comprehensive contract norms.” Although this scholar does not refute the validity
of Macneil’s norms as a complex tool of analysis of contract management its work
has immense glaring loopholes that make it hard for a proper direction to be followed
in dealing with procurement performance.
In the context of this theory, there are explicit attributes that address contract
management for e.g. enforcement of agreements in business transactions and the
need for procurement professionals to have clear knowledge on jurisprudence. This
theory therefore, instigated the general objective of the study and the intrinsic views
in contract management assisted in exploring how contract management influences
procurement performance in public universities in Kenya.
42
the dependent and independent variables. The dependent variable in this study is
procurement performance, which is represented by cost effectiveness, customer
satisfaction and procurement agility which are proxy indicators of university’s
performance. The independent variables are the influence of: buyer-supplier
collaboration, procurement risk management, transparency and accountability and
contract records management on procurement performance in public universities in
Kenya. The relationship between contract management and procurement
performance was moderated by legal compliance which was measured by Above
Average Compliant, Average Complaint and Non-Complaint in line with PPADA,
2015 (PPRA, 2018). The conceptual framework was developed from the review of
literature and assumed a linear relationship between the variables (see Figure 2.3).
43
2.3.1 Buyer-Supplier Collaboration
Lysons and Farrington (2012) indicates that world class organizations are replacing
the conventional buyer-supplier relationship with strategic collaborations that turns
out to be an explicit part of the procurement functions. This is as a result of a
backdrop of the need for organizations to be competitive in the market. Managing
buyer-supplier collaborations is a major concern to the buyers as source
consolidation continues to be effected. The objective is to increase business with
those key suppliers that are the most capable partners. Achieving this objective
requires that these partnerships be developed, structured, administered and evaluated
to determine whether they are successful in meeting the buyer’s needs. It is upon the
buying entities and suppliers to have shared common objectives and compatible
benefits that consists: agreed problem-solving methods and shared risks according to
who can best manage them, an active search for continuous measurement
improvements and ways of managing relationships proactively in order to avoid
breakdowns in future (Waithaka, 2015).
From the above studies it is prudent for organizations to have a common ground that
emphasizes the need for buyer supplier collaboration if a sustainable progression of
the set goals and objectives is to be achieved in the long run. This attribute is dictated
by the need for the buyers and suppliers to have a competitive advantage and be in a
position to tackle the turbulent challenges in the market. The bottom-line is the
continuous benefits that can be shared across the board through proper collaboration
when agitating for the true the interest of the organizations. Gebert (2013) denoted
that the consistency and focus of organizations in nurturing a business relationship
yields unending benefits between the parties involved hence a win-win situation for
the business operators because of the exponential returns from time to time.
45
2.3.2 Procurement Risk Management
Arjan and Van (2014) specified that procurement is a function that entail immense
risk factors that arise from internal and external environment, as well as strategic and
operational considerations. Basically, strategic risks are considered in relation to
medium and long-term goals and objectives of the organization. They include:
Political risks, economic risk, social risk, technological risk, regulatory risk and also
competitive risk. Operational risk entail: professional risk, financial risk, legal risk
and also environmental risk. Procurement’s role is to ensure that an organization has
a predictable supply of the external input/s it requires, offering demonstrable value
for money and delivered in a cost-effective manner to support the attainment of the
organization’s objectives. While its conventional role is in dealing with upstream
suppliers in a supply chain context, it may also deal with downstream transactions,
e.g. for logistic support in distribution of finished product (Liang, 2017).
Arjan and Van (2014) confirms that by its nature, procurement exposes an
organization to risk. Procurement practices have, for this reason been established
with inbuilt controls designed to deal with that risk, for example purchasing through
public or selective tendering, in the right circumstances, will encourage competition
and reduce the scope for fraud and collusion in acquisition processes. Procurement
should identify risk factors associated with each procurement, analyze the probability
of the risk occurring and consider the impending impacts. Risk management plans
should then be developed, based on the decision to avoid, assume, or transfer the
established risks.
Christopher (2018) noted that the precondition to overall risk management is the risk
assessment. Risk assessments entail analyzing the chance and the effect of every
known risk on the attainment of established objectives, as well as the corrective
action to take should that risk occur. The risk assessment is therefore a requirement
for establishing how the risks should be controlled, managed and eliminated.
Mitigation seeks to put measures in place to lessen the severity of a risk event,
should that event occur.
46
Liang (2017) asserts that the procedure of the overall risk management plan is a
continuum based on the size or nature of the procurement. Planning can extend from
simple consideration or incorporation of risk registers as a part of the procurement
planning program, to inclusion of risks in more prescribed acquisition plans, to
comprehensive risk management plans on enterprise-wide projects where their
complexity and scope warrants it. To realize the maximum benefit of risk
management, the management and communication of risks needs to be fundamental
part of existing procurement and organizational functions.
Liang (2017) adds that all procurement professional should be an active participant
in risk management seeking to ensure integration between procurement risk
management and other relevant risk management activities. Desirable key activities
47
include: maintaining a procurement risk management framework which is integrated
with the procurement process and wider organizational risk framework, monitoring
sources of procurement risk for material change that may impact on the
organization’s ability to achieve its objectives, identifying tools and techniques that
will assist with the identification and assessment of risk, ensuring that the
organization’s procurement processes and methods are effective in treating identified
risks, clearly articulating the risks, in terms of uncertainty and severity when making
procurement decisions, actively participating in risk management discussion at
strategic and operational levels (Arjan & Van, 2014).
Accountability exists when rights holders and duty bearers both deliver on their
duties. This conceptually connects accountability to a rights-based understanding of
development following three principles: “inclusive rights for all people, the right to
participation, and the ‘obligations to protect and promote the attainment’ of rights by
states and other duty bearers” (Acosta, 2013). In order to enhance transparency in
public organizations, the managers should instill greater disclosure, accuracy and
clarity into communications with stakeholders. Also a lot of sensitization on issues of
transparency and accountability should be a priority in organization’s strategical
plans since the outcome of this initiative can dispel the notion that procurement is the
48
epicenter of fraud in business transactions. The intricate nature of this argument
brings negative connotation to procurement profession. As such, the active
engagement of a government on one side and its citizens on the other is necessary to
achieve any measure of accountability (Zyl, 2014).
McGee and Gaventa (2013) asserts that lack of transparency and accountability has
affected procurement performance of many public entities. Conventional wisdom
indicates that all stakeholders on matters of public procurement need to do a
thorough oversight on the process applied to acquire products or services. Although
many countries have a series of regulatory bodies to oversee procurement
performance, to a great extent the media in the recent history has become the
‘watchdog’ because of its independence. Many procurement scandals have been
revealed by the members of the fourth estate and a free press is an authoritative tool
to promote transparency and accountability in public procurement on contractual
activities.
Calland and Bentley, 2013 affirms that in public procurement the role of the media is
three-fold. Firstly, it is a channel for communication regarding public procurement
and the transfer of prescribed procurement information such as tender notices, award
notices, etc. Nowadays, public entities are required by law to publicize procurement
information. The purpose of this information is to fulfill obligations related to
disclosure and transparency. Secondly, the role of the media in public procurement is
to uncover procurement irregularities, and thus strengthen the claim for transparent
and accountable government. Carlitz (2013) alludes that the intrigues of modern
public procurement can make this difficult, but many procurement authorities invite
media representatives to public procurement trainings and workshops which enable
journalists to understand and critically investigate the subject matter. Although the
media has the responsibility to examine public procurement, some consider the
media coverage to be overly focused on scandals and to have too little positive
procurement news. Thirdly, the media can serve as a means for education regarding
public procurement, sensitizing the general public on procurement rules, systems and
regulations and principles (Carter, 2014).
49
Calland and Bentley (2013) alludes that there is slight doubt that under the right
circumstances improved transparency in public procurement can lead to better
accountability, improved service delivery and, ultimately, less misuse of public
resources. In the interim, a lot of factors should be considered when attempting to
strengthen transparency through improved access to information. Among the critical
areas is monitoring and controlling of the procurement process and the information it
produces e.g. tender documents, bids, minutes from technical committees, bid
evaluation records etc. Further, when investigating contravention of the procurement
law, it is prudent, practical and perhaps proactive to find out the beginning of the
malpractice and not to have a blanket condemnation to procurement function. The
giveaway signs in procurement department may be just a tip of the iceberg since in
procurement process there is segregation of responsibilities from the requisitioners,
evaluators, contract negotiators, contract validators and authorizers of the payment to
the suppliers or contractors. Each of these university representatives in the
procurement process are capable of instigating fraud.
Zyl (2014) indicates that under a system where observers are physically in
attendance during bid evaluation meetings, a key concern must be to maintain the
integrity and independence of these observers. This could be done through training
activities, rotation schemes or other actions to be considered. Transparency in public
procurement is about information. The access to key procurement information by the
media and other stakeholders, and the ways in which these actors can use the
information, directly affects accountability. More importantly, transparency is
deemed a highly cost-effective way of achieving greater accountability (Carter,
2014).
50
carried out and the outcome of such dealings, support action plans and decision
making in management, it protects the welfare of the organization, the right of the
company, customers, suppliers and help the organization to perform its business and
deliver its services in unwavering and impartial trend (Freda, 2014).
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providing evidence of the organization’s operations and ensuring progressive
performance. Despite the fact that businesses are increasingly being conducted
through automotive means, both within and between organization, records should
still be reserved to support and fully document all business, fiscal, legal, social and
past needs.
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2.3.5 Legal Compliance
Kirande and Rotich (2014) confirms that procurement staffs of all public entities
should be able to instill the key objectives of public procurement that include:
ensuring public organizations get value for money, enhancing transparency and
accountability, ensuring efficiency and effectiveness, promoting competition and
ensuring that competitors are treated fairly by use of competitive procurement
methods, promoting integrity and fairness of procurement procedures, restoring
public confidence in procurement process, building public trust to stakeholders,
facilitating promotion of local industry and economic development and ensuring that
goods and service are obtained at the right price, right quality, right quantity, from
right source and delivered at the right place.
Procurement staff should be mindful of the fact that legal compliance is mandatory
requirement based on the Latin maxim that ignorantia juris non excusat (ignorance
of the law does not excuse) an argument that states that a company (which, in law, is
a legal person) and its servants, such as procurement specialists, are presumed to
know the law. This law in Kenya is encapsulated in section 7 of the penal code which
strictly denote that ignorance of the law does not afford any excuse for any act or
omission. It is also worthwhile to note that all procurement staff should have an
awareness of the possible legal consequences of their actions (Mbae, 2014).
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2.3.6 Procurement Performance
According to Kakwezi and Nyeko (2019) contract management act as a catalyst for
procurement performance through maximizing operational efficiency and reducing
financial risks. It also involves building a good working relationship between
procurement function and the suppliers. It continues through various stages and it
involves managing proactively anticipated future needs as well as reacting to
situations that arise. The central aim of contract management is to obtain the services
as agreed in the agreements and achieve value for money. This means optimizing the
efficiency, effectiveness and economy of the service or relationship described by the
contract balancing costs against risks and actively managing the customer–provider
relationship in business operations.
Schuhmann and Eichhorn (2019) indicates that contract enforcement forms the basis
of successful contracts management and it is one of the pillars of the rule of law. The
ability to make and enforce contracts and resolve disputes is fundamental if markets
are to function properly. Good enforcement procedures enhance predictability in
commercial relationships and reduce uncertainty by assuring investors that their
contractual rights will be upheld promptly by local courts. When procedures for
enforcing commercial transactions are bureaucratic and cumbersome or when
contractual disputes cannot be resolved in a timely and cost effective manner this
attribute will undermine the commercial transactions. Salim (2013) suggests that the
key attributes of contract management in ascertaining procurement performance
include: management of service delivery. Service delivery management ensures that
the service is being delivered as agreed, to the required level of performance and
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quality. It is important therefore, to ensure that the services are assessed regularly to
determine procurement performance.
Basically, quality metrics ought to be created that allow the quality of service to be
assessed, even in areas where it is hard to quantify. At the most basic level, the
service must fulfill the terms of the contract. Relationship management keeps the
connection between the two parties open and constructive, aiming to resolve or ease
tensions and identify problems early. Another important attribute is contract
administration which is concerned with the mechanics of the relationship between
the customer and the provider. Also, it provides information on the implementation
of procedures defining the interface between them and the smooth operation of
routine administrative and clerical functions. Contract administration handles the
formal governance of the contract and changes to the contract documentation. Clear
administrative procedures ensure that all parties to the contract understand who does
what, when, where and how to execute the responsibilities at hand (Oluka &
Basheka, 2012).
Ramadhan (2012) posits that seeking improvements is not about extracting more
from the provider against their will, but about working together to improve quality,
performance, and value for money, or other aspects in such a way that benefits both
parties. Nguyen (2013) alludes that it is necessary to manage rapid changes in the
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market. New changes in the market makes some decisions agreed upon by the parties
to the contract to be impracticable. The parties to the contract should form a basis of
being bound by the new changes. The drivers for change during the term of a
contract can come from a range of sources. These sources can be internal or external
based. Internal drivers for change include: Evolving business requirements, the
organizational restructuring of either party, significant revisions to the corporate
strategy objectives of either party.
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make the relationship more vibrant and productive the buyers and suppliers should
set a policy that advocates mutual interest and working as a team. It is worthwhile to
build credibility for the program at the senior level and within the organization.
There is also a need towards a dynamic of greater trust, more information sharing
and enhanced transparency (Larson, 2014).
Gebert (2013) affirms that successful companies apprises suppliers of its long term
plans, a concept that makes it easier for suppliers to improve their designs, enhance
the quality and the systems they develop. However, relative few buyers approach
their collaborative initiative in a systematic manner. They might work with their
suppliers to reduce the cost of operations, but they don’t integrate suppliers into their
organizations or work with them to reduce complexity and this fact makes the
procurement departments to miss an opportunity to leverage supplier’s capabilities in
need to focus on business changes. This is because some of the appealing goods and
services may turn out to be obsolete and be overtaken by events.
Stella et al. (2013) studied a topic based on Information Sharing, Adaptation, Trust
Commitment in Buyer-Supplier Relationships in the Ugandan SMEs. The researcher
applied cross sectional survey design and adopted a quantitative approach that
focused on describing inferences from the findings on the relationship between
buyer-supplier collaboration, trust, adaptability, relationship continuity and
commitment. The findings of the study indicated that there was a significant positive
correlation between information sharing and commitment in buyer-supplier
relationship. Information sharing was also a significant predictor of commitment in
buyer-supplier relationship. This indicates that when buyers and suppliers agree to
share pertinent information in the process of undertaking business with each other
this approach invariably promotes commitment in their business dealings. The study
recommended that great attention should be emphasized on aspects of commitment
and trust in order to ensure unwavering relationship continuity between buyers and
suppliers in procurement related transactions.
Waithaka (2015) carried out a study on the role of buyer supplier relationship on
supply chain performance in Kenya’s state corporations. The researcher adopted
descriptive research design and census sampling technique. From the findings of the
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study 90% of the respondents agreed that quality affects buyer supplier relationship,
80% of the respondents confirmed that lead time also affects buyer supplier
relationship, 57% said that cost affects buyer supplier relationship and 53% of the
respondents noted that employee morale affect buyer supplier relationship on supply
chain performance. The researcher recommended the need for buyers to have good
relationship with suppliers in order to enhance efficiency and also obtain superior
quality products at competitive prices.
Kisaka (2014) studied ways of managing supply chain risks within the state
departments in Kenya. The research design incorporated empirical, descriptive and
survey research to evaluate supply chain risks and empirically analyze the
information. The Relative Importance Index (RII) ranked the top ten risk drivers in
order of importance. The ranking of the broader risk categories using the RII
identified procurement risk as critical and needing Government attention to address
exchange rate risks, single sourcing (non-competiveness), and unrealistic contract
duration risk. The study recommended that management and classification of supply
chain risks is important attribute to effective governance in public sector and the
mandate of risk mitigation is upon all the staff at all levels in a procurement entity.
Okonjo (2014) assessed procurement risks management practices and supply chain
performance in Kenya. The research design was a descriptive study. The researcher
found out that there was a very significant relationship between procurement risk
management practices and supply chain performance represented by adjusted R2
value of 0.646 which translated to 64.6% variance explained by the ten independent
practices of procurement risk management. The study recommended that all the
parties to transactions should endeavor to fully comprehend the procurement risk
management attributes in order to oblige them to undoubted performance of their
supply chains. Procurement risk management attributes are very dynamic and keeps
on varying hence need to replicate the study in line with changes that may affect
supply chain performance.
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Chemoiwo (2016) sought to find the influence of supplier appraisal on supply chain
risk management in Egerton University. The study employed a descriptive survey
research design and a Census survey design was employed whereby all members of
the target population participated in the study. The study found out that supplier
appraisal was the most influential influencing supply chain risk management in
Egerton University with correlation of (r = 0.763, p < 0.05). In order to improve
supply chain risk management in public universities in Kenya, the researcher
recommended all procurement departments to adopt supplier appraisal consistently
since this approach could identify the ideal suppliers to deal with in business
transactions.
Despite these linkages, scholars such as Carlitz (2013) and Carter (2014) argue that
while transparency is an important constituent for securing accountability, the link
between the two is neither unassailable nor automatic. Further the exercise of voice
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which is seen as a critical element for reaffirming this relationship is conditioned by
various factors. Transparency of information while providing the opportunities and
the material basis for the exercise of voice is not sufficient in impelling citizens to
pressurize officials in demanding the effective delivery of services.
Mukoruru (2014) carried out a research on the effects of public procurement disposal
act (2005) on transparency and accountability on management of public finance. This
study adopted descriptive survey research design and the sample was selected using
simple random sampling to ensure representativeness. The study indicated that
67.9% of the procurement activities and procedures were not transparent in that
decisions on procurement related activities did not follow the rules and regulations of
the Act and this information was not accessible to the general public. The study
found out that there were immense appeal cases that were pending on issues of
procurement. This meant that procurement procedures were not transparent. To add
on that procurement entities had no oversight mechanisms and the activities were not
audited regularly to ascertain arbitrary expenditures and ways of achieving
accountability.
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Some special contracts are executed under seal and the limitation period in these
cases is twelve years.
Dzifa and Reindolf (2015) studied the topic the analysis of records management and
organizational Performance. The authors used simple random sampling to select a
sample size of 30 respondents. Based on the survey results, it was discovered that
tertiary institutions often practice sound records management. It was also observed
that the institution’s records management is changing from manual to electronic
system of managing records by using automated systems. This allows the users to
complete and submit the information on stipulated time. The electronic filing system
prevents the users from making serious errors that could affect the operations and
reputation of the institution. Training, supervision and control on records
management skills are recommended for all relevant employees of the institution for
efficient records management to promote better institutional performance.
Dewah and Mutula (2015) conducted a study on the nexus between legal records and
human rights in the justice delivery system. The research defined the concepts of
court records management and justice delivery and explored the link between records
management and the discharge of justice. A survey research design was used on a
purposively selected sample of 30 participants employed in various sections of the
court. The findings of the study indicated that courts invariably use a range of
records to administer a justice. In most of the cases the aggrieved parties are denied
justice because of missing or incomplete records.
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procurement and disposal regulations, ethical practices during tendering process and
enforcement mechanisms influences the compliance of procurement and Disposal
Regulations in public entities in Kenya. The study recommended compulsory
training for all procurement officers on the procurement procedures, methods of
procurement, professionalism and excellence in order to provide consistency in
tender decision making and minimize costs that may relate to non- compliance such
as poor quality costs and legal charges arising from litigations filed by aggrieved
suppliers for discrimination in awarding of contracts.
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performance. Contract management and other factors accounted for 66% variation in
project performance. Contract management was found to have the strongest influence
on performance of outsourced projects. The fixed-price contract was beneficial in
ensuring project costs were within budget. Notably, 95% of all firms surveyed
considered a clear statement of project objectives in contracts important for
successful project delivery, while project acceptance criteria and dispute resolution
mechanism were rated as important contractual devices.
Mbae (2014) sought to find out public procurement law and procurement
performance of county governments in Kenya. The study found out that when two
parties strike a bargain, there must be some mechanism to ensure that each party will
stick to the terms. However, it’s important to understand the effect of any decision
taken by the parties to the contract. From an economy-wide perspective, the issue is
not whether a contract can be enforced but rather the cost of the various enforcement
mechanisms and their effectiveness in improving confidence between contracting
parties. To be efficient, the costs of enforcement must not outweigh the gains
achieved from increased contractual commitment. The study recommended that the
public entities are required to appoint procurement oversight committee that can
oversee the implementation of the procurement law and policies on procurement.
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The latter researcher indicated that quality, lead time, cost and employee morale are
the prime attributes that affects buyer supplier relationship. This is contrary to what
the former researcher found out since customer satisfaction, future expectations and
relationship loyalty formed the basis for an ideal buyer supplier relationship.
However, the two authors unanimously agreed that mutual trust should be the key
pillar towards buyer-supplier relationship on procurement performance of public
entities. This created concise, well-structured and thoughtful analysis that enhances
the understanding of buyer supplier collaboration on procurement performance in
public universities in Kenya.
Chemoiwo (2016) differed slightly with Kisaka (2014) and Okonjo (2014) on how to
mitigate risks in procurement functions. The authors noted that supplier appraisal
should be the starting point when addressing risk management in procurement since
this approach justifies the credibility of the suppliers that will be engaged from time
to time. On the area of transparency and accountability, Oberoi (2013) noted that,
this is a vital approach towards procurement performance. This suggestion was
echoed by Mukoruru (2014) who indicated that the performance of procurement
functions depend more on these attributes. Both studies employed statistical methods
that were meticulously chosen and applied though the granularity of the analysis
could have been improved to make the respective research studies conclusive for
easier extraction of inferences.
Dzifa and Reindolf (2015) highlighted the need for records management in
promoting organizational performance. Dewah and Mutula (2015) partly supported
this argument by emphasizing the fact that records enable courts adjudicate and
administer justice at the stipulated time. On the issues of legal compliance on
procurement performance, the authors review had a huge difference on this matter.
Awino (2014) advocated the need to adjust legal framework to provide efficient
system of procurement while Abere (2015) noted that legal compliance can only be
adhered to if proper training was to be considered by the procurement entities. On the
other hand, Marendi (2015) emphasized the need for due diligence before the award
of the contracts to cross check credibility of suppliers and contractors. Though there
is little research done in the area of legal compliance since the information in most of
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the empirical studies appears anecdotal, these researchers added insights to the
understanding of legal compliance and this approach provided inspirational
motivation for further research.
Mbae (2014) conducted a research study in line with public procurement law and
procurement performance. The author zeroed on how public procurement process
affects procurement law and how procurement regulations affect the procurement
performance. The respondents strongly agreed that internal procurement procedures
affect the performance of public entities. It is worthwhile to note that based on the
authors report to a great extent procurement regulations affect the performance of
public entities. In regard to these studies, it is apparent that there is a sense of
disparity on the findings in line with the influence of contract management on
procurement performance. Further, some of the reviewed theories in relation to the
underpinned variables that comprise: Buyer-supplier collaboration, procurement risk
management, transparency and accountability, contract records management, legal
compliance and procurement performance are scanty. Conversely, the reviewed
theories provided a base of understanding the intrinsic aspects that are in line with
contract management in relation to procurement performance.
Several studies have been done in the area of contract management on procurement
performance in public universities in Kenya. For example; Manyenze (2013) who
carried out a research on procurement performance in the public universities in
Kenya focused primarily on ways of establishing mechanisms to reduce the effects of
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procurement challenges and determinants of effective procurement performance. To
add on that, Ngetich (2017) conducted a research on determinants of effective
procurement contract administration in selected public universities in Kenya. This
study concentrated on staff competences, information technology, staff
professionalism and accountability. Further, Kirande and Rotich (2014) conducted a
research study on the determinants affecting public procurement performance in
Kenyan universities and zeroed on organizational budget, work environment, quality
management systems and organizational structure.
This study therefore, covers additional important variables that were omitted by
previous studies like buyer-supplier collaboration, procurement risk management,
transparency and accountability, contract records management, as well as legal
compliance on procurement performance. These are crucial building blocks of
contract management and the extent to which they are implemented within the circles
of public universities in Kenya. Generally, these pillars affect directly or indirectly
the overall performance of the business operations of the universities. It is important
to note that these policies can only work if there is an already established framework
that gives a direction on what is supposed to be done by the parties involved. In
overall, empirical evidence showing the influence of contract management on
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procurement performance in public universities in Kenya is not explicitly researched
and notably, studies that are related on contractual activities on procurement
performance in Kenya are not well documented. Therefore, a gap exists which can be
filled through more research on this area.
2.7 Summary
The chapter has discussed in details various theories and models that are
commensurate with the research variables of the study. These include resource
dependence theory, theory of constraints, deontology theory, records continuum
model, legal theory, supply chain operations reference model and relational contract
theory. The research variables included: buyer-supplier collaboration, procurement
risk management, transparency and accountability, contract records management,
legal compliance and procurement performance. The study also looked into the
conceptual framework of the study and covered a review of the empirical studies that
that are in line with contract management on procurement performance in public
universities in Kenya. Reviewed theories revealed that, contract management helps
public universities in evading deviation of the procurement procedures. This is
because procurement regulation impacts the behavior and performance of
stakeholders in the public universities. Lastly, the critique of the existing literature
relevant to the study was also ascertained as well as the research gaps of the study.
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CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter gives a description of the methods and approaches that were adopted in
conducting this study. It includes the research design, research philosophy, target
population, sampling frame, census, research instruments, data collection procedure,
pilot study, data processing and analysis. The measurements of variables and data
analysis techniques are also discussed.
Kothari (2004) affirms that a research design is the arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure. It is the conceptual structure within
which research is conducted and it constitutes the blueprint for the collection,
measurement and analysis of data. As such the design includes an outline of what the
researcher is supposed to do when writing the hypothesis and its operational
implications to the final analysis of data (Orodho, 2003).
In regard to this study, the researcher adopted descriptive research design. This is a
research design that shows the state of affairs as it exists at the present (Mugenda &
Mugenda, 2003). The premise of descriptive research design is to gather information
based on what, when, where and how and it is appropriate for identifying
characteristics, frequencies, trends, correlations and categories. Therefore, by the use
of the research design, the researcher was in a position to ascertain and describe the
inherent characteristics of various variables of interest in different scenarios. This
created a possibility to observe the research phenomenon in completely natural in
unchanged environment. As a way of harnessing the study in a logical manner, the
study integrated the qualitative and quantitative methods of data collection (Sekaran,
2006).
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The multifaceted attributes in line with the adopted research design, created in-depth
analytical approach to the study. By the virtue of using the already established facts
and information that was revealed by the respondents the researcher was in a position
to make critical evaluation of the materials. All these undertakings prompted the
researcher to explore extensively the various aspects that are in line with contract
management and procurement performance in public universities in Kenyan context.
This study design has been used by Kinoti (2013) on the Determinants of Supply
Chain Management Ethical Practices Implementation in Government Ministries in
Kenya and also Memia (2018) on the Influence of Contemporary Supply Chain
Practices on Performance of Large Manufacturing Firms in Kenya. Therefore, this
research design was deemed appropriate as research methodology of this study was
extensively related to these studies.
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where it claims that the world exists independent of the mind, as opposed to non-
realist views. Philosophers who support realism often claim that truth consists in a
correspondence between cognitive representations and reality. Lastly, interpretivism
involves researchers in interpreting the elements of the study and it integrates human
interest into a study and hence it advocates key approaches that govern features of
the study (Bajpai, 2011).
The target population (Unit of Analysis) of this study comprised all the public
universities in Kenya that have been in existence from June 2013 to July 2018.
Specifically, the study zeroed on the procurement officers, finance officers, legal
71
officers and registrars-administration and planning staff of the 31 public chartered
universities in Kenya. The main reason for choosing these employees is because they
were considered to be responsible in transactional and operational activities in the
precincts of the universities. The selected participants are also deemed to have a
broad understanding on influence of contract management on procurement
performance in public universities in Kenya.
Procurement Officers 31
Finance Officers 31
Legal Officers 31
Total 124
Sampling frame is a list of all the items where a representative sample is drawn for
the purpose of a study. In an ideal sampling frame in a research study, every element
of the population of interest ought to be present in the frame (Nachmias & Nachmias,
2008). Therefore, the sampling frame for this study was derived from the list of all
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chartered public universities in Kenya that have been in operation between 1st of July
2013 to 1st June 2018. This constituted the unit of analysis for the study while the
unit of observation comprised: Procurement officers, Finance officers, Legal officers
and Registrars-Administration and planning. The period of the study consisted a
chronology of five fiscal years in the respective universities (see Appendix VII).
3.5 Census
This study adopted a census method. Basically, a census is a study of every unit,
everyone or everything, in a population (Sekaran, 2010). Since the population was
too small, census was considered to be the most preferred method for the study.
Mugenda and Mugenda (2003) affirms that census method brings forth a robust
sample in design and reliable representation of the whole population. Further,
adoption of a census in a study ensures complete enumeration of all the items in the
population and high level of accuracy in the inquiry (Kothari, 2004).
All the 31 chartered public universities in Kenya were selected for the study in order
to get proper precision of the information in line with the study as affirmed by
(Orodho, 2003). The cognizant of the fact that, it is a requirement for public
universities to undertake a segregation of responsibilities of the staff who participates
in contractual obligations through the procurement process as per the PPADA, 2015,
prompted the researcher to stratify the respondents in terms of their respective
service cadre. The university staff who were selected comprised four executives in
each of the public universities in Kenya (procurement officers, finance officers, legal
officers and registrars-administration and planning).
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3.6 Research Instruments
The research collected both primary and secondary data. In particular, primary data
comprised use of questionnaires which were administered to the respective
respondents in all public universities in Kenya. The researcher drafted both
quantitative and qualitative questions and this is in relation to Bajpai (2011) who
indicated that this approach prompts dependable and accurate data. The qualitative
questions were open ended with the essence of deriving the authentic details about
the subject matter. The preceding Likert scale for quantitative questions was adopted
whereby the resultant measures meant: 5= Strongly Agree, 4 = Agree, 3 =Neutral 2 =
Disagree 1 = Strongly Disagree. In the drafted questionnaire, the questions were
divided into eight distinct sections.
The first section comprised demographics and general information of the university
staff, section two covered contract management, section three encompassed
questions on buyer-supplier collaboration, section four entailed questions on
procurement risk management, section five was based on questions in line with
transparency and accountability, section six covered questions on contract records
management while section seven and eight comprised legal compliance and
procurement performance questions respectively.
The researcher also carried out key informant interviews (KII) in line with the
influence of contract management on procurement performance in public universities
in Kenya. Sekaran (2006) confirms that KII is a qualitative in-depth analysis based
on a topical issue. The study carried interview on opinion of selected respondents on
influence of contract management on procurement performance. In particular, the
study conducted KII from internal auditors, procurement assistants (in charge of
stores) and estate managers of public universities in Kenya. However, only four
public universities (Chuka University, Jomo Kenyatta University of Agriculture and
Technology, Maseno University and Meru University of Science and Technology)
granted permission for key informant interview to be conducted to the selected
respondents.
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This method was necessitated by use of interview guide that entailed the subject
matter of the study and the selected respondents were engaged to respond to the
questions raised by the researcher. This enabled the researcher to receive
clarifications pertaining issues that were addressed by the respondents hence this
initiative translated to derivation of the right information concerning the study. The
data derived from key informant interview was analyzed by use of content analysis
whereby the researcher classified the data to various themes to draw inferences to the
study.
Secondary data on the other hand was also part of the consideration in the research
study. According to Cooper and Schindler (2008) secondary data is a useful
qualitative technique for evaluating historical or contemporary confidential public
records, reports, government documents and opinions and this prompts the researcher
to collect this kind of data. The researcher used secondary data collection form to
derive the relevant data in line with this data collection method. The secondary data
was collected from auditor general’s report as well as public procurement
administrative review reports in the financial years starting from July 2013 to June
2018. The results of the secondary data were used to draw inferences to the study.
Prior to the data collection process, the researcher applied for letter of introduction
from the office of the chairperson, Procurement and Logistics Department-JKUAT
and later research authorization letter as well as research permit from National
Commission for Science, Technology and Innovation (NACOSTI). These letters and
the research permit were crucial for data collection process in the public universities
in Kenya. Upon the receipt of the letters and the research permit the researcher
appointed two research assistants who were engaged in fast tracking the
administration of the questionnaires to the respective respondents. Notably, before
the administration of the questionnaires to the respondents, the researcher convened a
training session in order to impart the necessary skills needed in data collection
process to the research assistants. Drop and pick method was used in the
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administration of the questionnaires since the targeted respondents were presumed to
be busy and probably couldn’t have time for a face to face interview.
Pilot test is a study that is conducted before the actual data collection to ascertain the
aptness of the research instruments. The rationale of pilot study is to administer the
instruments to small respondents who have similar characteristics with a larger group
of respondents to be involved in the main study. Pilot test enables the researcher to
refine the questionnaires and subsequently ensure the research instrument is credible
and objective (Hazzi & Maldaon, 2015). The pilot study exercise enabled the
researcher to assess the clarity and reliability of the research instruments. This
impelled simplification of the data collection process and this was evidenced in the
main data collection process since most of the respondents were in a position to
comprehend well the questions raised hence most of the questions were answered
objectively.
Before the actual data collection, pilot test was undertaken in 4 public constituent
university colleges. This amounted to 10% of the total number of population and
according to (Mugenda and Mugenda, 2003) this percentage is considered adequate
for pilot study. These public constituent university colleges included: Alupe
University College, Bomet University College, Kaimosi Friends University College
and Tom Mboya University College. In regard to this method every university was
equated to 4 purposive selected respondents perceived to be knowledgeable in
contract management and procurement performance related matters. These
respondents comprised selected staff in: procurement, finance, registrar-
administration and planning and lastly legal officer’s representatives of the public
constituent university colleges in Kenya.
Kothari (2004) asserts that validity is a level of precision of a concept in a study and
it specifies the degree to which an instrument measures what it is supposed to
measure. In research study the common types of validity comprise: content validity,
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construct validity and criterion validity. Content or logical validity measures the
extent to which a measure represents all facets of a given variable. This allows the
researcher to determine whether a given variable contain all aspects that should be
measured. Construct validity on the other hand is the degree to which a test measures
what it claims or purports to be measuring. This allows the researcher to understand
whether the test scores from the data obtained through the instruments can be applied
to induce inferences in line with the questions raised in the study. Lastly, Criterion
validity relates to researcher’s ability to forecast some future outcome or
approximate the existence of some current condition.
This study adopted content validity and under the framework of this method, the
researcher used competent and reliable experts in line with the supply chain
management to evaluate whether test items were in tandem with the subject matter of
the research study. The experts were in a position to compliment and critique some
of the items replicated in the questionnaire. Because of the attributes of content
validity that are simple and intuitive in nature, coupled with quality assessment of the
items of the research instruments, the verification of the questionnaire in regard to its
suitability to the study, turned out to be a distinct guideline to the researcher. This
enabled the researcher to maintain the questions that were well captured in the
questionnaire while the questions that raised eyebrows were adjusted and refined
accordingly to fit the comments of the experts.
The distinct indicators of a scale’s reliability are test-retest reliability and internal
consistency. The test-retest reliability of a scale is evaluated by administering it to
the same people on separate times and analyzing the relationship between the scores
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derived. High degree of test-retest denotes a more reliable scale. Internal consistency
is the scale to which the items that forms the basis of the measure have the same
causal attribute. Sekaran (2010) indicates that a Cronbach's alpha is the most
accepted guideline in testing reliability of the questions and the 93 rule of the thumb
for Cronbach Alpha is that the closer the alpha is to 1 the higher the reliability and a
value of at least 0.7 is recommended (see Table 3.2).
α ≥ 0.9 Excellent
Internal consistency was measured using the statistic Cronbach’s alpha and this
provided an indication of the average correlation among all the items of the research
study. The reliability results were used to improve on the data collection instruments
before the main data collection process.
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from the target population (public universities) the researcher embarked on data
analysis process of the study.
In the separate data processing and analysis stages, the researcher divided two sets,
public constituent university colleges and public chartered universities and further
analysis was done on each set to eliminate the influence of the dummy variable
representing legal compliance. Descriptive statistics that is measure of central
tendency especially the mean as well as measure of dispersion (standard deviation)
were employed to analyze the characteristics of study variables (the buyer-supplier
collaboration, procurement risk management, transparency and accountability,
contract records management and procurement performance among public
universities) using the statistical package for social sciences (SPSS) Version 22 tool.
Descriptive statistics was used to summarize and profile the status of the predictor
variables with dependent variable among public universities in Kenya. For inferential
statistics regression analysis and correlation analysis was used to analyze the
relationship between independent variables and dependent variable. The correlation
analysis was used to establish strength relationships between independent variables
and dependent variable. In particular Pearson correlation was applied to establish the
strength of the linear relationship. The study also used analysis of variance
(ANOVA) to examine the existence of significant differences the influence of the
predictor variables had on dependent variable of the study.
Multiple linear regression model was employed to establish the relationship among
independent variables on the dependent variable. Test statistics was used to
determine the relative importance of each independent variable in influencing
procurement performance. In this case t-test and F-test, statistics were considered to
be statistically significant when the value of the test statistic falls in the critical
region. As a result of this, the null hypothesis was rejected and the alternative
hypothesis was upheld. This was done to determine the relative contribution of each
independent variable in influencing the performance among 31 public universities
sampled for five years (July 2013- June 2018). The moderating influence of legal
compliance was also evaluated by using it as a dummy variable (Above Average
Compliant-81-99%, Average Compliant-51-80 and Non-Compliant-Below 50% to
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PPADA, 2015). The KII and secondary data results were used in the study to form
logical inferences.
Diagnostic tests are used in research to evaluate the model assumptions and examine
whether there are observations with large or even trivial influence on the analysis
that happens to be unnecessary in the research study. Therefore, the data is usually
tested for adherence to assumptions of regression analysis in line with linearity,
normality, autocorrelation, homoscedasticity and multicollinearity (Gujarati &
Porter, 2009). The study that is normally free from these occurrences is fit enough to
use linear regression model for inference and prediction of the subject matter being
studied (Statistics Solutions, 2013). If a data fails to adhere to the assumptions of
regression due to strong relationships amongst the predictor variables this
necessitates the data to be transformed into their natural logarithm. Further, the
regression analysis can also be done using the square of errors for the data. These
considerations create inverse function of the exponential analysis leading to the
definition and simplicity of the values applied in the study. This prompts the
researcher to be in a position to understand whether the stipulated guidelines are
being observed (Greene, 2012).
Stock and Watson (2007) affirms that linearity test seeks to determine the
relationship between independent variables and dependent variable. For a research
to be good in the regression model, there should be a linear relationship between the
predictor variables and dependent variable. Violations of linearity are serious in a
research study since when a researcher fit a linear model to a data that is nonlinear
the predictions of the study is prone to errors when the researcher extrapolate beyond
the range of the sample.
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correlation coefficient statistics which is a statistical measure of the strength of the
relationship between the relative movements of the variables. The values range
between -1.0 and 1.0. The decision making process in the linearity test suggest that if
the value sig. deviation from linearity >0.05, then the relationship between the
independent variables are linearly dependent. Further, if the value sig. deviation from
linearity <0.05, then the relationship between independent variables with dependent
variable is not linear (Hansen, 1999).
Normality test refer to statistical tests on a data to determine whether a data set is
well modeled by a normal distribution (Thode, 2002). Normally distributed data
yields better regression results because any random variable in a data set is normally
distributed. Kolmogorov-Smirnov (KS) and Shapiro-Wilk (SW) are common
measures used to test the data for adherence to the normality assumptions. The
Kolmogorov-Smirnov test is a nonparametric goodness of fit test and is used to
determine whether two distributions differ. Shapiro-Wilk on the other hand is
designed to detect all departures from normality. Thus, if the significant value of the
K-S and S-W Test is more than p-value of 0.05, the data is normal hence the null
hypothesis is rejected. If significance value is below 0.05, the data significantly
deviate from a normal distribution and therefore, the null hypothesis is not rejected
(Razali & Wah, 2011).
Dougherty (2016) confirms that a graphical method can also be used to establish the
degree of normality in a study. A graphical tool for assessing normality is the normal
probability plot, a quantile-quantile plot (Q-Q plot) of the standardized data against
the standard normal distribution. The correlation between the sample data and
normal quantiles (measure of the goodness of fit) measures how well the data are
modeled by normal distribution. For normal data the points plotted in the Q-Q plot
should fall approximately on a straight line, indicating high positive correlation.
These plots are easy to interpret and also have the benefit that outliers are easily
identified
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3.9.1.3 Autocorrelation Test
Autocorrelation refers to the relationship of a time series with its own past and future
values. It is also sometimes called ‘‘lagged correlation’’ or ‘‘serial correlation,’’
which refers to the relationship between members of a series of numbers arranged in
time. Autocorrelation occurs when the variances of the error term are sequentially
interdependent. Once this problem occurs a given disturbance term would then be
related to the previous value (values) in a stochastic manner (Mukras, 1993).
Homoscedasticity is the test of whether the data set has equal variances (deviations)
throughout from the first data point to the last. This is called homogeneity of
variance. The assumption of homoscedasticity (same variance) is central to linear
regression models. Data with homogeneous variances is said to be homoscedastic
while those with varying deviations is said to be heteroscedastic (Maddala, 2009).
Heteroscedasticity complicates the analysis because many methods in regression
analysis are based on an assumption of equal variance.
Homoscedastic data sets yield more accurate regression results while heteroscedastic
data present standard errors that are already biased. Levene Statistic (LS) is always
used to test the homogeneity of variance in the data sets. If the resulting p-value of
levene’s test is less than some significance level (0.05), the obtained differences in
sample variances are unlikely to have occurred based on random sampling from a
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population with equal variances. Thus, the null hypothesis of equal variances is
rejected and it is concluded that there is a difference between the variances in the
population (Knaub, 2014).
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performance among public universities in Kenya. The multiple linear regression
model that was adopted is similar to that used by many of the studies done in the area
of contract management and procurement performance (Silas, 2015). The replication
and revelation of this model showed a connection on what other researchers have
applied in earlier studies based on this topical area. The general regression model
used in this study was defined as follow:
Yit=β0+X’it+ε………………………………………………...………….……...(3.1a).
This equation was transformed to random effects model by specifying Eit as shown in
Equation 3.1b.
t= 2013…….2018.
PPit=β0+*LC++β1BSCit*LC++β2PRMit*LC++β3TAit*LC++β4CRMit*LC+ +ε..3.2.
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3.9.4 Operationalization of Variables
Internal controls
Risk sharing
Transparency and Impartiality TA
accountability
Due diligence
Procurement probity
Contract records management Audit trail CRM
Information accessibility
Information accuracy
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CHAPTER FOUR
4.1. Introduction
This chapter presents the research findings derived from the questionnaires, key
informant interview guide and secondary data forms and links them to the objectives
of the study. The results of this study is derived from the pilot study, response rate,
background information of the respondents, descriptive analysis of the study
variables, diagnostic tests result, inferential statistics results, hypothesis test results,
qualitative and secondary data analysis.
The pilot study was conducted between November 6th 2018 to 22nd January 2019
after approval of the research permit by NACOSTI in four public constituent
university colleges (Alupe University College, Bomet University College, Kaimosi
University College and Tom Mboya University College). This amounted to 10% of
the total number of population which is considered adequate for pilot study
(Mugenda, Mugenda 2003). Out of 16 questionnaires issued to the selected
respondents, 12(75%) were filled and returned while unreturned questionnaires
amounted to 4(25%). Subsequently, validity of the research instruments as well as
reliability of the research instruments was undertaken. These two important
approaches were undertaken primarily to fine tune the research instrument before
carrying out the main research study. The pilot study was an eye opener to the
researcher in terms of devising the strategical plans to incorporate in the main study.
This study adopted content validity and under the auspices of this method, the
researcher used subject matter experts to evaluate whether test items assess defined
content. Generally, the experts assessed whether the questionnaires could help in
establishing the influence of contract management on procurement performance in
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public universities in Kenya. In perfection of the research questions, the experts
recommended replacement of order fulfilment variable with contract records
management since the former variable seemed to be more aligned with dependent
variable (procurement performance). This corresponds with Drost (2011) who opined
that the erratic, vague and perplexing statements ought to be discarded in a research
study.
In this study, an internal consistency was done using Cronbach Alpha to measure
how well the items were correlated to each other for all the questionnaires issued to
the selected respondents for the pilot study. The essence of this process was to
ascertain the degree on which the research instruments yielded consisted results. The
general guideline for Cronbach Alpha is that the closer the alpha is to 1 the higher
the reliability and a value of at least 0.7 is recommended (Sekaran, 2010). The results
of Cronbach Alpha reliability coefficient are shown in Table 4.1.
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selected high scores for one item were likely to select high scores for the others.
Further, those who selected low scores for one item were likely to select low scores
for the others. The data collection instrument was therefore, reliable for the purpose
of the study. This enhanced the ability to predict outcomes using the scores and the
aggregation of the arithmetic mean.
The main data collection commenced in the month of February 2019 up to May
2019. The targeted respondents in the study were procurement officers, finance
officers, legal officers and registrars-administration and planning of all public
universities in Kenya. A total of 104 questionnaires were filled out of the expected
124, translating to 83.9% (see Table 4.2). This good response rate was attributed to
well thought data collection procedure, where the researcher in conjunction with two
research assistants administered questionnaires to the selected respondents who filled
them accordingly. Drop and pick method proved to be panacea of high response rate
since the selected respondents had adequate time to respond to the questions in the
questionnaire.
The response rate was good and representative and conforms to Mugenda (2008)
stipulation, that a response rate of 50% is adequate for analysis; a rate of 60% is good
and a response rate of 70% and over is excellent. Therefore, this response rate was
excellent for making conclusions and generalization of the study results and it can be
applied for policy development in public universities in Kenya.
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4.4 Demographics and General Information
The respondents were asked questions on their respective designations. This question
helped the researcher to establish the extent to which they deal with activities that are
in line with contract implementation in stirring procurement performance in public
universities in Kenya. The rationale behind this question was to ensure that all the
respondents engaged had the technical knowledge of the subject matter of the study.
The results of the study indicated that, the majority (26.9%, n=104) of the
respondents drawn from public universities in Kenya, were procurement officers.
Finance officers followed with 25% while 24% were both legal officers and
registrars-administration and planning (see Table 4.3).
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4.4.2 Highest Academic Qualification
The study sought to know the highest level of academic qualification of the
respondents. This enabled the researcher to find out their acquaintance with
contractual responsibilities in their respective universities. The level of education of
the respondents was also a key indicator of establishing their understanding of the
studied area and this enabled the researcher to draw conclusions and
recommendations. The results of the study are as follows are shown in Table 4.4.
The study sought to know the professional body the respondents had an allegiance to.
This was to ascertain the degree of values, advocacy and professional growth in their
respective area of specialization. The results of the study are depicted in Table 4.5.
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Table 4.5: Respondents Membership to Professional Bodies
The majority of respondents 98.1% belong to specific professional bodies (see Table
4.5). A tune of 27.9% of respondents belonged to Institute of certified public
accountants of Kenya (ICPAK) followed by 26% who belonged to Kenya Institute of
Supplies Management (KISM), 21% belonged to Law society of Kenya (LSK),
16.3% belonged to Institute of human resource management (IHRM), 3.9% belonged
to other professional bodies e.g. Kenya Institute of Management (KIM), 2.9%
belonged to Chartered Institute of Procurement and Supply (CIPS) while 1.9% did
not belong to any professional body. This shows that majority of respondents are
accountable and it is easy to discipline the members who flouts their professional
code of conduct (Munene, 2014).
The study sought to establish whether the respondents are sensitized on the current
procurement act either internally or use of external consultants in order to familiarize
on the contract management process envisaged in the law to reduce audit queries
from the auditor general reports. The results are shown in Table 4.6.
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Table 4.6: Participation in Sensitization Forums of PPADA, 2015
Majority (51%) of respondents indicated that they are sensitized annually on PPDA,
2015, 28.8% said that they are sensitized quarterly, 12.5% of the respondents said
that they are sensitized twice per year (Semi annual) while 7.7% said that they are
not sensitized. It is therefore, clear that sensitization forums on PPADA, 2015 are
carried out in public universities in Kenya to familiarize the staff on the procurement
law and new trends in the market that ought to be incorporated in transactional
activities in line with procurement. This is evidenced in PPRA (2017) annual report
which indicates that pursuant to section 9(1) of the PPADA, 2015 the regulatory
body, provided technical support to public entities (public universities included) on
general aspects of the public procurement law.
The study sought to establish the respondent’s ratings on their knowledge on contract
management process. This was to examine whether the respondents were endowed
with crucial information based on contract management on procurement performance
in Kenya (see Table 4.7).
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The majority (45.2%) of the respondents were of a view that they had good
knowledge on contract management process in Kenyan context, followed by 32.7%
of the respondents who said that have very good knowledge on contract management
process in Kenyan (see Table 4.3). A marginal number of respondents (11.5%)
indicated that they had adequate knowledge on contract management process in
Kenyan while 8.7% of respondents affirmed that they had excellent knowledge on
contract management process in Kenya. Lastly, a small number of respondents
(1.9%), felt that they had inadequate knowledge on contract management process in
Kenya.
These results shows that majority (98.1%) of respondents felt that they had enough
knowledge on contract management process in Kenyan according to PPADA, 2015.
This is an indication that most of the staff who are assigned responsibilities on
contractual activities in public universities in Kenya, are conversant with public
procurement regulations of 2006. Paradoxically, according to auditor general reports
on fiscal year 2013/2014 to 2016/2017, non-compliance to the stipulated contract
management regulations is a recurring issue in most of the public universities in
Kenya. This begs the question, ‘‘what is the cause of flouting procurement laws if
most of the staff working in public universities on contractual and procurement
related activities are conversant with public procurement regulations.
The study sought to establish the number of years the respondents were involved in
contractual activities in the procurement process. This was to ascertain to what extent
their responses could be relied upon to make conclusions for the study based on their
working experience. The results of the respondents in line with this subject matter is
shown in Table 4.8.
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Table 4.8: Years of Experience in Contractual Activities on Procurement
Process
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4.5.1 Influence of Contract Management on Procurement Performance
Contract management is the subject matter in the procurement since it dictates the
holistic performance in the upstream and downstream supply chain activities. In
order to understand the clear metrics in contract management that forms the basis of
procurement performance the study established varied findings. The study findings is
a reflection of the integral attributes that are deemed necessary by the public
universities in Kenya and constitutes the performance indicators in a procurement
process (see Table 4.9).
Majority of respondents (26.9%) said that contract management increases value for
money in the ordering process, 19.2% said that it enhances adherence to the terms
and conditions of the contract, 15.4% indicated that contract management builds a
vibrant relationship with suppliers. Further, 13.5% indicated that contract
management improves timely delivery of goods and services, 12.5% said that
contract management creates customer satisfaction, 8.7% said that it minimizes
occurrence of procurement risks. Lastly, 3.8% indicated that contract management
improves transparency and accountability of procurement process.
These results are similar to that of Yegon (2018) who conducted a study on
determinants of procurement contract management of the selected state corporations
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in Nakuru County, Kenya. The study found out that adherence to the terms and
conditions of the contract, cost management and contract documentation are key
pillars for sustainable contract management discourse. These findings of the study
are considerably replicated in the research study thus creating a distinct connection
on the two studies. These findings are commensurate with the findings of Key
informant interview carried out by the researcher. The results affirmed that value for
money in tendering process is the central requisite in determining viability of
contract management in relation to procurement performance.
Majority of the respondents (49.1%) opined that responsiveness of the tenders is the
primary consideration by the ad hoc evaluation committee when constituting an
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award of contract to suppliers or contractors. This was followed by the track record
of the suppliers/contractors which recorded 19.2% of the ratings. Competitivess of
the bids in terms of price discounts, warrants and aftersales services had a rating of
16.3% while production capacity of goods and services as well as technical
requirements had the same rating of 7.7%.
These results concur with section 86 (1) (a) (b) (c) and (d) of PPADA, 2015 which
indicate that successful tender should be the one with the lowest evaluated price, the
responsive proposal with the highest score in regard to the technical and financial
considerations, the tender with the lowest evaluated total cost of ownership. Finally,
the results reflected the key consideration in the act, which states that the successful
tender should be the one with the highest technical score where a tender is to be
evaluated based on the procedures regulated by an Act of Parliament which provides
guidelines for arriving at applicable professional charges.
Contract variations should be marginal and as per PPADA, 2015 should not exceed
25% of the absolute value in any project. In order to establish the frequency of
contract variations during contract implementation, the study deduced diverse
opinions from the respondents (see Table 4.11).
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Majority of respondents (36.5%) noted that contract variations rarely occurs during
contract implementation, 18.3% said contract variations ensues very often during
contract implementation, 16.3% indicated that contract variations often takes place
during contract implementations. Additionally, 15.4% and 13.5% of the respondents
said that contract variations sometimes and very rarely happen during contract
implementation respectively. In total 86.5% of the respondents noted that contract
variations ordinarily occur during contact implementation in public universities in
Kenya.
These results deviates slightly with Bakr (2014) who indicated that 80% of the
contracts varies during implementation process. Kimathi (2016) also carried out a
research study on investigation into estimation of building projects variation contract
period and found out that 70% of the contracts normally varies during
implementation.
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According to the study, the majority of respondents (36.5%) confirmed that
unanticipated changes in the market causes contract variations during contract
implementation. This was followed by price fluctuations in the market that had
15.4%. Complexity of the contracts had 12.5% and also 12.5% of the respondents
deemed the causes of contract variations in contract implementation not applicable.
9.6% of the respondents indicated that lack of professional probity was the cause of
contract variations while 8.7% of the respondents confirmed that omission of the
required information in the bill of quantities (BQs) was the cause of contract
variations. Lastly 4.8% of the respondents said delays of disbursement of funds by
the exchequer was the cause of contract variations during contract implementation.
These findings are supported by Yadeta (2014) who assessed the impact of variation
orders on public building projects in Addis Ababa and found out that complexity of
the contracts, poor procurement process, change in design by consultants and errors
and omissions in design are the prime causes of contract variations in public entities.
These findings are also evidenced in research study conducted by Mohammed et al.
(2017) who also confirmed that the main causes of contract variations comprise: lack
of stability of prices and exchange rate change as well as errors in design.
The study sought to demystify the existence of special committee for handling
complex and specialized contracts. This was a tactical move to ascertain whether
public universities have these committees since PPADA, 2015 envisages constitution
of working groups for intricate and expert-oriented contracts (see Table 4.13).
Table 4.13: Special Committee that Handles Complex and Specialized Contracts
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In regard to the study, the respondents unanimously indicated that there is existence
of special committee for handling complex and specialized contracts. This was
attested by enormous number (99%) of the respondents who confirmed the existence
of these special committee. On the flip side of that 1% of the respondents indicated
that there is no existence of special committee for handling complex and specialized
contracts in their universities. These findings support (PPADA, 2015) section 151 (1)
which indicates that for every complex and specialized procurement contract, the
accounting officers of procuring entities shall appoint a contract implementation
team.
4.5.6 The Role of Special Committee that Handles Complex and Specialized
Contracts
The committee members have special responsibilities that are based on handling
multifaceted contracts. The rallying call is always to safeguard the interest of the
public universities (see Table 4.14).
Table 4.14: Role of Special Committee that Handles Complex and Specialized
Contracts
Role of Special Committee that Handles Complex and Specialized Frequency Percent
Contracts
Monitoring and evaluation of the procurement contracts 44 42.3
Modification of the contract 3 2.9
Provision of technical expertise 39 37.5
Contract review to determine the accomplished milestone 3 2.9
Ensure compliance of the stipulated terms and conditions of the
11 10.6
contract
Not applicable 4 3.8
Total 104 100
The majority of the respondents (42.3%) indicated that the role of special committee
for complex and specialized contracts is to monitor and evaluate the procurement
contracts while 37.5% of the respondents said that the special committee provide
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technical expertise on complex and specialized contracts. In addition to that, 10.6%
of the respondents confirmed that the special committee ensure compliance of the
stipulated terms and conditions of the contract. Respondents in tune of 3.8% alluded
that the special committee is not very much applicable in handling complex and
specialized procurement. Lastly, 2.9% of the respondents indicated that modification
of the contract and contract review to determine the accomplished milestone of the
projects are key considerations by the special committee formed to handle complex
and specialized contracts. These findings are in tandem with the listed
responsibilities of the contract implementation team in (PPADA, 2015) section 151
(1) and therefore, this signifies that public universities in Kenya adhere to the
stipulated guidelines.
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Majority of respondents (47.1%) affirmed that the remedial actions for breach of
contract is cancellation of the contract (see Table 4.14). This was followed by 16.3%
of the respondents who indicated that they always call for meeting for arbitration.
Another remedial action for the breach of contract was seeking legal redress for the
liquidated damages was supported by 15.4% of the respondents. Further, 11.5% of
the respondents said that they give warnings to the suppliers while 6.7% of the
respondents confirmed that they subject the suppliers to a debarment on future
contracts. Lastly, 2.9% of the respondents said that they withhold payment of the
suppliers. These findings support the remedial actions for breach of contracts
reflected in the PPADA, 2015 act section 61 (3), 140, 144 and 153.
Public universities just like any other public entities in the country have the
obligation to introduce key performance indicators (KPI) on contractual engagements
with suppliers and contractors. These metrics justifies why the suppliers or
contractors can be deemed to be excellent, very good, good, fair or very poor (see
Table 4.16).
The majority of the respondents (53.8%) said that supplier’s performance on contract
administration is good while 24% of the respondents indicated that supplier’s
performance on contract administration is very good. Further, 17.3% and 3.8% of the
respondents had the view that supplier’s performance on contract management is fair
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and excellent respectively. A marginal rate (1%) of the respondents indicated that
supplier’s performance on contract administration is very poor. Cumulatively, the
results that were deemed good, very good and excellent amounted to 81.6%.
These results concur with (Cherotich, 2014) who conducted research study on
contract management practice and operational performance of state corporations in
Kenya. The study revealed that suppliers/contractors are highly rated in terms of
performance by most of the state corporations. According to the study, suppliers and
even contractors that are engaged on various activities in state corporations in Kenya
account for 83.6% of service level.
Descriptive statistics is the term given to the analysis of data that helps describe,
show or summarize data in a meaningful way and this allows the researcher to
visualize what the data is showing hence simplification and proper interpretation of
the data of the study (Sekaran, 2006). The descriptive statistics enabled the
researcher, to meaningfully describe a distribution of scores or measurements using
statistics. The type of statistics used depended on the types of variables in the study
and the scale of measurements. The study used mean, frequencies and standard
deviations to present the study findings. The general objective of this study was to
examine the influence of contract management on procurement performance in
public universities in Kenya. The study analyzed descriptive statistics for the
following observed variables: buyer-supplier collaboration, procurement risk
management, transparency and accountability, contract records management, legal
compliance and procurement performance.
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Table 4.17: Descriptive Statistics
Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation Variance
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4.6.1 Buyer Supplier Collaboration
The study sought the opinion of the respondents on the various aspects of buyer
supplier collaboration in relation to procurement performance. The respondents were
required to rate each statement that match the application of buyer-supplier
collaboration in their institution using a preceding 5 points likert scale were a rate of
5 represented, Strongly Agree and 1 represented Strongly Disagree. The analysis is
depicted in Table 4.18.
From the basis of Table 4.10 majority (71.2%) of respondents strongly agreed,
26.9% agreed while 1.9% were neutral with a mean of 4.69 and with a standard
deviation of 0.504 that they invariably advocate for strong commitment with their
suppliers on contractual obligations. On the opinion that they believe that a full
commitment on transactional activities leads to buyer supplier collaboration, 67.3%
strongly agreed, 28.8% agreed, 2.9% were neutral while 1% disagreed with the
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statement with a mean 4.62 and a standard deviation of 0.594. On the statement that
they have confidence that buyer-supplier collaboration builds credibility, 56.7%
strongly agreed, 40.4% agreed while 2.9% were neutral with a mean of 4.54 and a
standard deviation of 0.556.
On the statement that the institutions have inculcated a culture of trust with suppliers
on contractual activities in procurement processes, 47.1% strongly agreed, 41.3%
agreed while 11% were neutral with a mean of 4.36 and a standard deviation of
0.681. On the statement that the institution consistently leverage supplier’s capability
by analyzing their performance, 51.9% agreed, 36.5% strongly agreed, 9.6% were
neutral while 1% disagreed and strongly disagreed with a mean of 4.22 and a
standard deviation of 0.737. Finally, 41.3% of respondent agreed, 36.5% strongly
agreed, 11.5% neither agreed nor disagreed, 8.7% disagreed while 1.9% strongly
disagreed on the statement that the institutions always provide feedback to their
suppliers in terms of their performance with a mean of 4.02 and a standard deviation
of 1.005.
These findings correspond with Stella et al. (2013) who indicated that, a vibrant and
productive relationship between buyers and suppliers is as a result of teamwork,
dispute resolution mechanisms, communication and mutual understanding that builds
credibility on the transactional activities in the holistic business sector. Waithaka
(2015) partly differed with this results and emphasized more on the performance
metrics to be the key indicators of sustainable relationship between buyers and
suppliers in the business environment. This meant that successful relationship
between the buying organizations and suppliers depends primarily on the service
performance levels from time to time.
The study sought the opinion of the respondents on the various aspects of
procurement risk management in relation to procurement performance. The
respondents were required to rate each statement that match the application of
procurement risk management in their institution using 5 points likert scale were a
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rate of 5 represented, Strongly Agree and 1 represented Strongly Disagree. The
analysis is illustrated in Table 4.19.
From Table 4.18, the common number (51%) of respondents strongly agreed 42.3%
agreed, 1.9% neither agreed nor disagreed, 3.8% disagreed while 1% strongly
disagreed with a mean of 4.4 and with a standard deviation of 0.744 that they have a
vibrant supplier data base that act as the reference point in acquisition of goods,
services and works. On the statement that they are in constant contact with our
suppliers as a contingency plan tactic of understanding the changes in the market
majority of respondents (50%) agreed, 23.1% strongly agreed, 20.2% neither agreed
nor disagreed, 5.8% disagreed while 1% strongly disagreed with a mean of 3.88 and
with a standard deviation of 0.862.
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On the statement that they have in built quality control systems to verify all consignments
from our supplier’s majority of respondents (51%) of respondents agreed 35.6%
strongly agreed, 9.6% neither agreed nor disagreed, while 3.8% disagreed with a
mean of 4.18 and with a standard deviation of 0.760. On the statement they
emphasize segregation of responsibilities to all the staff who participate in
procurement processes majority of respondents (62.5%) of respondents strongly
agreed 31.7% agreed, 3.8% neither agreed nor disagreed, while 1.9% disagreed with
a mean of 4.55 and with a standard deviation of 0.667. On the statement that only
specified employees are mandated to generate requisitions to initiate the procurement
process majority of respondents (53.8%) strongly agreed 28.8% agreed, 9.6% neither
agreed nor disagreed, 2.9% disagreed while 4.8% strongly disagreed with a mean of
4.24 and with a standard deviation of 1.066.
The study sought the opinion of the respondents on the various aspects of
transparency and accountability in relation to procurement performance. The
respondents were required to rate each statement that match the application of
Transparency and Accountability in their institution using 5 points likert scale were a
rate of 5 represented, Strongly Agree and 1 represented Strongly Disagree as seen in
table 4.20.
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Table 4.20: Opinion of the respondents on the various aspects of Transparency
and Accountability in relation to Procurement Performance
The majority of respondents (86.5%) strongly agreed 11.5% agreed while 1.9% were
neutral with a mean of 4.85 and with a standard deviation of 0.413 that they award
the contract to the lowest evaluated bidders except when circumstances of the
contract warrant use of other provisions supported by PPADA, 2015. On the opinion
that they normally write bid rejection letters to all suppliers that are not successful
within a reasonable time frame (81.7%) of respondents strongly agreed 15.4%
agreed, 1% neither agreed nor disagreed while 1.9% disagreed with a mean of 4.77
and with a standard deviation of 0.561.
On the opinion that they always conduct due diligence, after tender evaluations but
prior to the award of contracts majority of respondents (65.4%) strongly agreed,
27.9% agreed while 6.7% were neutral with a mean of 4.59 and with a standard
deviation of 0.617. On the statement that they validate or dismiss the suppliers in
pursuant to the due diligence report majority of respondents (63.5%) strongly agreed
29.8% agreed, 5.8% neither agreed nor disagreed while 1% disagreed with a mean of
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4.56 and with a standard deviation of 0.651. On the statement that they have
procurement probity guidelines that strictly govern all the contractual activities,
majority of respondents (72.1%) strongly agreed 21.2% agreed, 3.8% neither agreed
nor disagreed while 2.9% disagreed with a mean of 4.62 and with a standard
deviation of 0.699.
On the statement that they usually subscribe to the rules and regulations anchored in
the procurement probity guidelines, majority of respondents (74%) strongly agreed
20.2% agreed, 4.8% neither agreed nor disagreed while 1% disagreed with a mean of
4.67 and with a standard deviation of 0.614. Finally, on the statement that the
premise of their procurement probity guidelines is to promote transparency and
accountability in the procurement process (81.7%) strongly agreed 12.5% agreed
while 5.8% were neutral with a mean of 4.76 and with a standard deviation of 0.549
(see Table 4.12). The findings of the study, connect well with the findings of
(Oberoi, 2013) who found out that transparency is central for making the system of
public service delivery effective.
The study sought the opinion of the respondents on the various aspects of contract
records management in relation to procurement performance. The respondents were
required to rate each statement that match the application of contract records
management in their institution using 5 points likert scale were a rate of 5
represented, Strongly Agree and 1 represented Strongly Disagree.
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Table 4.21: Opinion of the respondents on the various aspects of Contract
Records Management in relation to Procurement Performance
From Table 4.20, majority of respondents (79.8%) strongly agreed 19.2% agreed, 1%
while neither agreed nor disagreed with a mean of 4.79 and with a standard deviation
of 0.433 that they always file and secure all the records used in procurement process
to ensure smooth audit trail. On the statement the professional probity makes them to
be exonerated of any wrongdoing every time an audit trail is conducted majority of
respondents (40.4%) strongly agreed as well as agreed, 10.6% neither agreed nor
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disagreed, did 3.8% disagree while 4.8% strongly disagreed with a mean of 4.08 and
with a standard deviation of 1.049.
Finally, on the statement they normally authenticate the information replicated in the
university procurement records before handing over to the parties concerned majority
of respondents (62.5%) strongly agreed 31.7% agreed, 4.8% neither agreed nor
disagreed while1% disagreed with a mean of 4.56 and with a standard deviation of
0.636. These results compliment Dewah and Mutula (2015) study that explored the
link between records management and the discharge of justice and found that the
courts jurisprudence is guided by the range of records presented to the court.
The study sought the opinion of the respondents on the various aspects of legal
compliance in relation to procurement performance. The respondents were required
to rate each statement that match the application of legal compliance in their
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institution using 5 points likert scale were a rate of 5 represented, Strongly Agree and
1 represented Strongly Disagree. The analysis is described in Table 4.22.
The majority (85.6%) of the respondents strongly agreed while 14.4% agreed with a
mean of 4.86 and with a standard deviation of 0.353 that they continuously comply
with PPADA 2015. On the statement that the compliance score in line with PPADA,
2015 on contractual obligations is in tandem with the public procurement regulatory
authority majority of the respondents (67.3%) strongly agreed, 29.8% agreed while
2.9% neither agreed nor disagreed with a mean of 4.64 and a standard deviation of
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0.538. The statement that they have the conviction that compliance score of PPADA,
2015 depends primarily on the inherent culture of the university on procurement
activities majority of respondents (51.9%) strongly agreed, 37.5% agreed, 8.7%
neither agreed nor disagreed, 1% disagreed while 1% strongly disagreed with a mean
of 4.38 and a standard deviation of 0.767.
Majority of respondents (66.3%) strongly agreed, 29.8% agreed while 3.8% neither
agreed nor disagreed with a mean of 4.62 and a standard deviation of 0.561 on the
statement that in the realm of procurement process, they adhere to professional
fidelity on contractual responsibilities as a way of complying with the PPADA, 2015.
On the account of the fact that they believe that legal compliance is based on
procurement standards set by the public procurement regulatory bodies majority of
respondents (73.1%) strongly agreed, 25% agreed while 1.9% neither agreed nor
disagreed with a mean of 4.71 and a standard deviation of 0.496. On the statement
that they have confident that the conduct of executives in procurement process forms
the basis of legal compliance majority of respondents (60.6%) strongly agreed, 27.9
agreed, 6.7% neither agreed nor disagreed, 2.9% disagreed while 1.9% strongly
disagreed with a mean of 4.42 and a standard deviation of 0.889.
Lastly, on the statement that they are certain that legal compliance framework assists
all the executes who are involved on procurement process to confidently manage
their obligations effectively majority of the respondents (66.3%) strongly agreed,
27.9 agreed while 5.8% neither agreed nor disagreed with a mean of 4.61 and a
standard deviation of 0.598. The results of this study are in line with (Abere, 2015)
who conducted a research study on factors affecting compliance with the public
procurement and disposal regulations in Kenya. The study found out that training on
public procurement and disposal regulations, ethical practices during tendering
process and enforcement mechanisms influences the compliance of procurement and
disposal regulations in public entities in Kenya.
The study sought the opinion of the respondents on the various aspects of
procurement performance. The respondents were required to rate each statement that
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match the application of procurement performance in their institution using 5 points
likert scale were a rate of 5 represented, Strongly Agree and 1 represented Strongly
Disagree as seen in table 4.23.
According to the study, 31.7% strongly agreed, 51.9% agreed, 15.4% neither agreed
nor disagreed while 1% of the respondents disagreed with the statement that they
often register cost-effectiveness in all contractual activities with their
suppliers/contractors with a mean of 4.14 and a standard deviation of 0.703 (see
Table 4.23). On the statement that they have a framework of ensuring cost-
effectiveness in procurement activities 29.8% strongly agreed, 57.7% agreed, 9.6%
neither agreed nor disagreed while 2.9% disagreed with a mean of 4.14 and a
standard deviation of 0.703.
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The statement that the inherent synergy-focused drive in procurement process forms
the basis of customer satisfaction 33.7% strongly agreed, 52.9% agreed, 10.6%
neither agreed nor disagreed while 2.9% of the respondents disagreed with a mean of
4.17 and a standard deviation of 0.730. From the basis of the statement that their
customer satisfaction index necessitates vibrant working relationship 32.7% strongly
agreed, 51% agreed, 14.4% neither agreed nor disagreed, 1% disagreed while 1% of
the respondents strongly disagreed with a mean of 4.13 and a standard deviation of
0.764. Majority of the respondents (46.2%) strongly agreed, 41.3% agreed, 9.6%
neither agreed nor disagreed while 2.9% disagreed with the statement that they
always respond to their internal customer’s complaints as a way of sustaining and
enhancing customer satisfaction with a mean of 4.31 and a standard deviation of
0.764.
These results connect fully with Mbae (2014) who conducted a research study on
public procurement law and procurement performance of county governments in
Kenya. The results strongly support the researcher’s findings in the sense that when
two parties strike a bargain, there must be some mechanism to ensure that each party
will stick to the terms and conditions of the contract in order to ensure a smooth flow
of the contract. On another study conducted by Kiage (2013) on factors affecting
procurement performance the research study differed slightly with the results of this
study. The researcher revealed that procurement planning has a significant impact on
procurement performance since it accounts to 26%. Also the study revealed other
attributes that affect procurement performance whereby contract management
resulted to 23.3%, staff competency 20.1% while resource allocation registered
17.2%.
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4.7 Diagnostic Tests (Test of Multivariate Assumptions)
The linearity test was ascertained by use of the correlation coefficient statistics which
is a statistical measure of the strength of the relationship between the relative
movements of two variables (Stock & Watson, 2007). The decision making process
was guided by the assumption that if the value sig. deviation from linearity>0.05,
then the relationship between the independent variables are linearly dependent and if
the value sig. deviation from linearity<0.05, then the relationship between
independent variables with dependent variable is not linear (see Table 4.24).
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Table 4.24: Model Summary Statistics and Coefficients
ANOVA TABLE
Sum of Mean of
Df F Sig.
Squares Squares
Procurement performance* Between Groups (Combined) 505.484 11 45.953 4.769 0.000
Buyer Supplier Collaboration
Linearity 400.244 1 400.244 41.540 0.000
Deviation from
105.240 10 10.524 1.092 0.376
Linearity
Within Groups 1069.466 92 11.624
Total 1391.913 103
Procurement Performance* Between Groups (Combined) 386.938 13 29.764 2.666 0.003
Procurement Risk Management
Linearity 269.958 1 269.958 24.176 0.000
Deviation from
Linearity 116.980 12 9.748 0.873 0.577
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The analysis of variance (ANOVA) output of the variables (Buyer supplier
collaboration, procurement risk management, transparency and accountability,
contract records management and legal compliance) had p-values of 0.376, 0.577,
0.089, 0.312 and 0.140 respectively. These results showed sig. values deviating from
linearity (p-value>0.05) and therefore, we rejected the null hypothesis that all
variables have no linear relationship with procurement performance in public
universities in Kenya. We concluded that all the variables of the study have a linear
relationship with procurement performance.
The normality test used in this study was Kolmogorov-Smirnov (KS), Shapiro Wilk
(SW) as well as Q-Q plot. If the significant value of the K-S and S-W Test is more
than the p-value 0.05, the data is normally distributed hence the null hypothesis is not
rejected since the data sets follow a normal curve. On instances when the (p-
value<0.05) the data is deemed not to be normal and therefore, the null hypothesis is
not rejected. Further, if the Q-Q plot is within the straight line then the study shows a
positive correlation (Thode, 2002). The analysis of normality test is shown in Table
4.25.
The study results of normality which assesses the normalcy of the distribution of
scores provided significant results that supported the K-S and S-W assumptions (see
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Table 4.25). The hypothesis was tested at 5% level of significant and p-value for the
former and latter assumption were more than 0.05 and therefore, the null hypothesis
was not rejected. It was concluded that the data was normally distributed. Also the
study used the Q-Q plot to establish the degree of normality of residuals. The
standardized data was measured against the standard normal distribution. The study
measured, the correlation between the sample data and normal quantiles (measure of
the goodness of fit) which examines how well the data are modeled by a normal
distribution. The results showed that the plotted Q-Q were within the straight line
thus indicating positive correlation.
The predictor variable (Buyer supplier collaboration) registered normal Q-Q plots
since the distribution of the scores does not deviate from normality to a very big
extent (see Figure 4.1). This denotes that the distributions are linearly related in the
sense that the Q-Q plot lie approximately on the line. Basically, data clustering
around the line shows normality of the distribution of scores.
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4.7.2.2 Procurement Risk Management
The distribution of the scores that are based on procurement risk management are not
skewed (see Figure 4.2). Therefore, all the scores fall closely to the straight line and
basically this means that the set data of the study is well modeled by normal
distribution hence reflecting better regression results of the study.
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Figure 4.3: Normal Q-Q Plot of Transparency and Accountability
The general trend of the Q-Q plot follows a straight line (see Figure 4.4). This
signifies a good indicator of normal distribution based on contract records
management data derived from the study. This conforms to the stipulated normality
assumption that values along the linear line presents a normal distribution scores.
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4.7.3 Autocorrelation Test
Autocorrelation test was performed to establish whether the error terms were serially
interdependent. Basically, Durbin Watson statistics is normally used to establish the
degree of autocorrelation in the study. Autocorrelation is present if the DW statistics
is close to 0 and 4. A value of 0 shows evidence of perfect positive autocorrelation
while 4 shows evidence of perfect negative autocorrelation. A Durbin Watson value
between 2 and 2.5 indicates absence of autocorrelation. Absence of autocorrelation
implies that the data is reliable and suitable for estimation (Mukras, 2003).
Model Durbin-Watson
1 1.913
a. Predictors: (Constant), Legal compliance, Procurement risk management, Transparency
and accountability, Buyer supplier collaboration, Contract records management
b. Dependent Variable: Procurement Performance
Table 4.26 indicates that the model had a Durbin Watson value of 1.913 which
implies weak positive autocorrelation. The existence of weak positive autocorrelation
does not have statistically significant effect on the model estimation and prediction.
This results indicates that the data used in this study was reliable and suitable for
estimation purposes.
Data with identical variances is said to be homoscedastic and data sets yields more
accurate regression results while heteroscedastic data present standard errors that are
already biased (Maddala, 2009). Levene Statistic (LS) was applied to test the
homogeneity of variance in the data sets. This study was guided by the assumption of
homogeneity of variance which states that the p-value for Levene's Test should be
above 0.05 and if Levene’s Test yields a p-value below 0.05, then the assumption of
homogeneity of variance is deemed to be violated (see Table 4.27).
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Table 4.27: Test of Homogeneity of Variance
The p-value of levene’s test on test of homogeneity variance showed that all the
variables had (p-value>0.05) hence the null hypothesis was not rejected. Since all the
variables had no homogeneity of variance, we conclude that heteroscedastic data was
not existing in the study meaning that the data sets had equal variances according to
the robust tests for homoscedasticity. This also implied that the data that was
presented was unbiased.
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4.7.5 Test of Multicollinearity
Collinearity Statistics
Model Factors Tolerance VIF
Buyer Supplier Collaboration 0.640 1.562
Procurement Risk Management 0.715 1.399
Transparency and Accountability 0.706 1.416
Contract Records Management 0.611 1.638
Legal Compliance 0.664 1.505
Dependent Variable: Procurement Performance
According to the study’s results, the tolerance statistics for buyer supplier
collaboration had tolerance of 0.640 and a VIF of 1.562, procurement risk
management recorded tolerance of 0.715 and a VIF of 1.399. Transparency and
accountability registered tolerance of 0.706 and a VIF of 1.416 while contract
records management had tolerance of 0.611 and a VIF of 1.638. Lastly, legal
compliance had tolerance of 0.644 and a VIF of 1.505 (see Table 4.28). This shows
that all of the predictor variables and the moderating variable had a tolerance of less
than 1 and the VIFs were all below 10. This indicates that there is no multiconeriarity
among the study variables.
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4.8 Inferential Statistics
The results show that the correlation between buyer supplier collaboration on
procurement performance had R of 0.536 and p-value of 0.000 at 95% confidence
levels. The coefficient value was between 0.5 to 1.0 and this indicated a strong
correlation between Buyer supplier collaboration and procurement performance
hence variables are associated. The results concur with Stella et al. (2013) who found
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that there is strong correlation between buyer supplier collaboration on procurement
performance.
Regression analysis is a set of statistical techniques that allow one to assess the
relationship between more than one independent variable and one dependent
variable. Regression is often used when the intent of the analysis is prediction. The
goal of regression is to arrive at the set of regression coefficients (Beta values), for
the independent variables that bring the Y values predicted from the equation as
close as possible to the Y values obtained by measurement. The regression
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coefficients that are computed minimize the sum of the squared deviations between
predicted and obtained Y values and they optimize the correlation between the
predicted and obtained Y values for the data set (Barbara & Linda, 2007).
The linear regression analysis models the relationship between the dependent
variable which is procurement performance and independent variable which is
influence of contract management (Buyer supplier collaboration procurement risk
management, transparency and accountability and contract records management).
Coefficient of determination explains the extent to which changes in the dependent
variable that is explained by all the four independent variables (Buyer supplier
collaboration procurement risk management, transparency and accountability and
contract records management).
The correlation of coefficient (R) was 0.764, the coefficient of correlation (R2) was
0.741 and the adjusted R square was 0.717. The correlation of coefficient indicated
that all the predictor variables accounted to 76.4% of variations on procurement
performance in public universities in Kenya. Further, the correlation of determination
indicated that all the independent variables accounted to 74.1% of variations on
procurement performance in public universities in Kenya. Lastly, the adjusted R
square showed that all the explanatory variables accounted to 71.7% of variations on
procurement performance in public universities in Kenya. This correlation showed
the explanatory power of the model.
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The R square (R2) was computed as the preliminary test for multiple linear regression
model. The goodness of fit of the model explained by R square 0.741 implies that the
independent variables accounted to 74.1% of variations on procurement performance
at 5% significance level. Only 25.9% of variations on procurement performance in
public universities is determined by the stochastic terms not included in the model.
Therefore, the independent variables greatly influence procurement performance in
public universities in Kenya which makes the model fit for policy inferences.
ANOVAa
Model Sum of Squares Df Mean Square F Sig.
1 Regression 582.547 4 145.637 17.814 0.000b
Residual 203.616 99 8.175
Total 786.163 103
a. Dependent Variable: Procurement Performance
b. Predictors: (Constant), Buyer Supplier Collaboration, Procurement Risk Management, Transparency
and Accountability and Contract Records Management
The regression results of the ANOVA indicate an F-statistic of 17.814 which was
significant at 5% significance level (p-value 0.000<0.05). This implied that the null
hypothesis was rejected and we concluded that the overall model was significant at
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5% significance level. The coefficients fitted in the multiple regression model were
not equal to zero. Therefore, the model used was significant and of a good fit for the
variables being tested. The findings inferred that the influence of buyer supplier
collaboration, procurement risk management, transparency and accountability and
contract records management had a significant influence on procurement
performance in public universities Kenya.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 5.198 4.392 1.183 0.240
Buyer Supplier Collaboration 0.434 0.119 0.342 3.662 0.000
Procurement Risk Management 0.199 0.104 0.173 1.915 0.048
Transparency and Accountability 0.126 0.114 0.098 1.099 0.044
Contract Records Management 0.355 0.125 0.268 2.854 0.005
a. Dependent Variable: Procurement Performance
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The results in Table 4.32 generates a regression equation as follows:
The regression results indicate that buyer supplier collaboration had a statistically
significant influence on procurement performance (p-value 0.000<0.05). Holding
other factors constant, a unit change in buyer supplier collaboration would lead to
change in procurement performance by 0.342. This implies that 1% change in buyer
supplier collaboration results to 34.2% change in procurement performance in public
universities in Kenya. The results concur with Otieno (2012) who conducted a
research on buyer supplier relationship in Kenya’s public universities and found that
buyer supplier relationships are very significant in enhancing procurement
performance. Further, Mejooli and Senelwa (2022) in a study entitled effect of
supplier relationship on procurement performance of public universities in Nairobi
County, established that buyer supplier relationship had a significant effect on
procurement performance. The significant value in ANOVA results was (p-value
0.000<0.05).
The results equally show that procurement risk management had a statistically
significant effect on procurement performance (p-value 0.048<0.05). Holding other
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factors constant, a unit change in procurement risk management would lead to
change in procurement performance by 0.173 units. This implies that 1% change in
procurement risk management leads to 17.3% change in procurement performance in
public universities in Kenya ceteris paribus. This result corresponds with Odongo
and Chepkwony (2019) study which affirmed that risk reduction was statistically
significant (p-value 0.051<0.05). This results indicated that risk reduction had a
positive influence on procurement performance. Also, Owuor et al. (2019) found that
supply chain risk management practices had R2=0.483 on supply chain performance.
This meant that 48.3% of supply chain performance of public universities in Kenya
is accounted for by supply chain risk management practices. This finding represent a
slight high index of supply chain risk management practices on supply chain
performance in public universities in Kenya.
Further, the regression results showed that transparency and accountability had a
statistically significant effect on procurement performance (p-value 0.044<0.05). The
results revealed that a unit change in transparency and accountability would lead to
change in procurement performance by 0.098 units. This implies that 1% change in
transparency and accountability leads to 9.8% change in procurement performance in
public universities in Kenya. This meant that the transgression of the ethical
principles that included impartiality, due diligence and procurement probity affects
procurement performance in public universities in Kenya. These results are
commensurate with Chesseto et al. (2019) study that showed that transparency was
statistically significant on influencing procurement performance in public
universities in Kenya (p-value 0.0205<0.05). To add on that, according to Wanyonyi
et al. (2018) study transparency and accountability had a positive significant effect
on procurement performance. The results showed (p-value 0.012<0.05). The results
implied that a unit increase in the adoption of transparency practice would lead to an
increase in procurement performance.
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Objective 4: To find out the Influence of Contract Records Management on
Procurement Performance in Public Universities in Kenya
Moderator variables influence the relationship between dependent variable and other
independent variables. The direction and the magnitude of the relationship between
the dependent variable and the independent variable is reliant on the value of a
moderator (Saunders et al., 2009). The legal compliance on procurement
performance is underlined under the threshold of Above Average Complaint (81-
99%), Average Complaint (51-80%) and Non-Complaint (Below 50%) in regard to
PPADA, 2015 (PPRA, 2018). The study objective was to examine the moderating
influence of legal compliance on the relationship between procurement contract
management on procurement performance in public universities in Kenya. In this
study, legal compliance was hypothesized to be a moderator affecting the
relationship between dependent (procurement performance) and the independent
variables (Buyer supplier collaboration, Procurement risk management,
Transparency and accountability and Contract records management) for purpose of
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testing moderating effect. The moderating effect of legal compliance was represented
in regression equation below:
The null hypothesis (H05) was that legal compliance has no significant moderating
influence on the relationship between contract management and procurement
performance in public universities in Kenya. In order to achieve this objective, the
researcher first tested whether there is a relationship between the independent
variables and the dependent variable without a moderator. Afterwards, the researcher
tested the relationship between independent variables and dependent variable with a
moderator and the regression results (see Table 4.33).
Coefficients
Unstandardized Standardized
Coefficients Coefficients
Std.
Model B Error Beta t Sig.
1 (Constant) 5.198 4.392 1.183 0.240
Buyer Supplier Collaboration 0.434 0.119 0.342 3.662 0.000
Buyer Supplier Collaboration*M (0.387) (0.120) (0.305) (3.216) (0.002)
Procurement Risk Management 0.199 0.104 0.173 1.915 0.048
Procurement Risk Management*M (0.191) (0.103) (0.167) (1.858) (0.006)
Transparency & Accountability 0.126 0.114 0.098 1.099 0.044
Transparency & Accountability*M (0.079) (0.116) (0.062) (0.684) (0.046)
Contract Records Management 0.355 0.125 0.268 2.854 0.005
Contract Records Management*M (0.289) (0.129) (0.218) (2.243) (0.027)
a. Dependent variable: Procurement Performance
The results in Table 4.33 indicates the moderating effect of legal compliance on the
relationship between (predictor variables) and procurement performance in public
136
universities in Kenya. The goodness of fit of the model given by adjusted R squared
(0.730) implies that 73.0% of the relationship between (Predictor) and procurement
performance was moderated by the legal compliance. The overall significance of the
model given by the F-statistic (15.191) indicate that the model was significant since
the (p-value 0.000<0.05) at 5% significance level.
The result also indicates statistically significant effect of interaction term of BSC*LC
on procurement performance (p-value 0.002<0.05). This implies that BSC*LC has a
positive contribution to a unit change in procurement performance (β=0.305).
Therefore, ceteris paribus, a unit increase in interaction term of legal compliance and
buyer supplier collaboration leads to appreciation of procurement performance by
30.5% holding other factors constant. The study results imply that legal compliance
has positive significant moderating effect on the relationship between buyer supplier
collaboration and procurement performance in public universities in Kenya.
Similarly, the significant effect of PRM*LC on procurement performance (p-value
0.006<0.05). This infers that PRM*LC has a positive contribution to a unit change in
procurement performance (β=0.167). Therefore, holding other factors constant, a unit
increase in interaction term of legal compliance and procurement risk management
leads to appreciation of procurement performance by 16.7%.
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4.9 Hypothesis Testing
To draw inferences about the population of the sampled data t-test is widely adopted
for hypothesis testing. This test-of significance method is to verify the truth or falsity
of a null hypothesis by using sample results, showing that the means of two normally
distributed populations are equal. As a result, the key idea behind tests of
significance is that of a test statistic (estimator) and the sampling distribution of such
a statistic under the null hypothesis. In all the tests, the decision rule is that if the p-
value observed is less than the set alpha (α) that is the confidence level of 0.05, then
the null hypothesis is rejected and if the p-value observed is greater than the set alpha
of 0.05, we fail to reject the null hypothesis (Sekaran, 2010). The testing of the
hypotheses was done at level of significance of 0.05 and comprised the following
stated null hypothesis:
The study used multiple linear regression analysis, and result on Table 4.24, show
that influence of buyer-supplier collaboration on procurement performance in public
universities in Kenya from 104 respondent drawn from 31 universities was
statistically significant. This is because it had p-value of 0.000 which is less than the
designated threshold of significance that is 0.05 and therefore, we reject the null
hypothesis and conclude that there is significant influence of buyer-supplier
collaboration on procurement performance in public universities in Kenya.
138
H02: There is no significant influence of Procurement Risk Management on
Procurement Performance in Public Universities in Kenya
The null hypothesis that transparency and accountability has no significant influence
on procurement performance in public universities in Kenya was equally rejected
since the p-value was 0.044<0.05. Therefore, we concluded that there is significant
influence of procurement risk management on procurement performance in public
universities in Kenya.
The p-value of null hypothesis was 0.005 below the significance level of 0.05. This
implied that the null hypothesis of the study was statistically significant and
therefore, we reject the null hypothesis and conclude that contract records
management has significant influence on procurement performance in public
universities in Kenya.
139
4.10 Optimal Model
-Commitment
-Trust
Procurement Performance
-Continuous Improvements
-Cost Effectiveness
-Customer Satisfaction
Contract Records Management
-Procurement Agility
-Audit Trail
-Information Accessibility
-Information Accuracy
Legal Compliance
-Average Compliant
-Non-Compliant
Based on the tests carried out and concluded in this study, the overall regression
results established that from the four independent variables (Buyer supplier
collaboration, Procurement risk management, Transparency and accountability,
Contract records management) and the moderating variable (Legal compliance) used
in the study, two predictor variables and the moderating variable had statistical
significance with dependent variable. The proposed study model was therefore,
revised based on the significance of the independent variables on dependent variable
(see Figure 4.5).
140
CHAPTER FIVE
5.1.Introduction
This chapter provides a summary of the major findings of this study and also sets to
draw conclusions and make recommendations for practice and suggestions for
further research based on the results of this study. The summary captures the key
findings which are categorized based on the study objectives buyer-supplier
collaboration, procurement risk management, transparency and accountability and
records management on procurement performance in public universities in Kenya.
Further, conclusions are presented which are based on the study findings and finally
recommendations drawn from the conclusions as per the study objectives are
presented.
5.2.Summary
The overall objective of this study was to determine the influence of contract
management on procurement performance in public universities in Kenya. In
particular, the study sought to determine the influence of buyer-supplier
collaboration, procurement risk management, transparency and accountability and
contract records management on procurement performance in public universities in
Kenya. The study found that contract management increases value for money in the
ordering process, enhances adherence to the terms and conditions of the contract,
builds a vibrant relationship with suppliers, improves timely delivery of goods and
services, creates customer satisfaction, minimizes occurrence of procurement risks
and improves transparency and accountability of procurement processes.
The study also established that the key considerations when constituting an award of
contract to suppliers comprise: responsiveness of the tenders, track record of the
suppliers or contractors, competitiveness of the bids, technical requirements as well
as production capacity in terms of goods and services. Further, the study revealed
that the frequency of contract variations in public universities is minimal and in
141
unlikely event these variations occurs the main cause is in line with unanticipated
changes in the market, price fluctuations in the market, complexity of the contracts,
lack of professional probity, omission of the required information in the BQs and
delays of disbursement of funds by the exchequer.
As anchored in the PPADA, 2015 section 151 (1) all public universities except one
case have special committee members that handles complex and specialized
contracts. The role of this committee members is to: monitor and evaluate the
procurement contracts, provide technical expertise, ensure compliance of the
stipulated terms and conditions of the contract, review the contracts to determine the
accomplished milestones and modify the contracts in case there are some changes in
scope of the work design. Public universities in some cases face partial performance
or even non-performance from the suppliers or contractors in line with the existing
contracts. The remedial actions for breach of contract consist: cancellation of the
contract, call meeting for arbitration, legal redress for the liquidated damages,
warning of the suppliers, debarment on future contracts or withholding of payments.
However, these litigation advancements don’t occur often since the rating of the
suppliers in terms of their overall performance in public universities in Kenya is
considered to be good.
In regard to procurement performance the respondents had the view that public
universities in Kenya have a framework of ensuring cost-effectiveness which result
to seamless contractual activities with suppliers and contractors. The inherent
synergy-focused drive in procurement process forms the basis of customer
satisfaction. Further, the respondents opined that customer satisfaction index
necessitates vibrant working relationship, public universities always respond to their
internal customer’s complaints as a way of sustaining and enhancing customer
satisfaction. Lastly, the study showed that public universities in Kenya, constantly
embrace procurement agility in contractual obligations and hence strategies on
procurement agility enhances the general procurement performance.
142
From inferential statistics results the regression model had strong adjusted R square
and this denoted that the four predictor variables (Buyer supplier collaboration,
procurement risk management, transparency and accountability and contract records
management) that were studied could explain high influence of contract management
on procurement performance in public universities in Kenya. This revelation,
therefore, means that other factors not studied in this research study contribute to
minimal percentage of procurement performance in public universities in Kenya. The
results of the ANOVA for the regression model used showed an F statistic within the
expected range. This meant that the explanatory variables had significant joint
influence upon consolidation and this implied that the model fitted in the multiple
regression model was fit.
143
5.2.2 To establish the Influence of Procurement Risk Management on
Procurement Performance in Public Universities in Kenya
From the findings, public universities in Kenya have a vibrant supplier data base that
act as the reference point in acquisition of goods, works and services, public
universities are in constant contact with suppliers as a contingency plan tactic of
understanding the changes in the market. Also, the public universities have in built
quality control systems to verify all consignments the suppliers, emphasize
segregation of responsibilities to all the staff who participate in procurement
processes and only specified employees are mandated to generate requisitions to
initiate the procurement process. Further, the public universities encourage multiple
sourcing as a means of diversifying risks and outsource non-core activities as a
strategy for risk sharing. From the regression results the study found that a unit
increase in procurement risk management would lead to increase in procurement
performance by a positive factor. The study further, found that influence of
procurement risk management on procurement performance in public universities in
Kenya was significant because it had a p-value which was less than the set threshold
and therefore, resolved that there is significant influence of buyer-supplier
collaboration on procurement performance in public universities in Kenya.
The study found that public universities award the contract to the lowest evaluated
bidders except when circumstances of the contract warrant use of other provisions
supported by PPADA, 2015. Also, the study revealed that public universities
normally write bid rejection letters to all suppliers that are not successful within a
reasonable time frame and always conduct due diligence after tender evaluations but
prior to the award of contracts. Similarly, public universities validate or dismiss the
suppliers in pursuant to the due diligence report and have procurement probity
guidelines that strictly govern all the contractual activities. Further, public
universities usually subscribe to the rules and regulations anchored in the
procurement probity guidelines that promote transparency and accountability in the
144
procurement process. From regression results the study found that unit increase in
transparency and accountability would lead to increase in procurement performance
by a positive factor. The study also established that influence of transparency and
accountability on procurement performance in public universities in Kenya was
significant because it had a p-value which was commensurate with the standard
range. Therefore, the study concluded that there is significant influence of
transparency and accountability on procurement performance in public universities in
Kenya.
The study found that public universities always file and secure all the records used in
procurement process to ensure smooth audit trail and the professional probity makes
the universities to be exonerated of any wrongdoing every time an audit trail is
conducted. Equally, the universities normally provide vast documentary evidence of
all procurement transactions during internal and external of audits and also provide
all the required records to the constituted oversight bodies for auditing on
procurement related activities. Further, the study revealed that the universities have
ease on access of information on contractual activities through well-structured
records management system and provide accurate information to internal and
external auditors and any other investigative authorities. The universities also
authenticate the information of the procurement records before handing over to the
parties concerned for audit review. From regression results the study found that a
unit increase in contract records management would lead to increase in procurement
performance by a positive factor. Further, the study found that the influence of
contract records management on procurement performance in public universities in
Kenya was significant because it had a p-value which is less than the standard
indicator and therefore the null hypothesis was rejected. The study concluded that
there is significant influence of contract records management on procurement
performance in public universities in Kenya.
145
5.2.5 To examine the Moderating Influence of Legal Compliance on the
relationship between Contract Management and Procurement Performance in
Public Universities in Kenya
The study established that legal compliance influences the relationship between
contract management and procurement performance in public universities in Kenya.
For instance, the respondents had the view that public universities continuously
comply with PPADA 2015 and the compliance score on contractual obligations is in
tandem with the public procurement regulatory authority. Further, the respondents
had a strong conviction that compliance score of PPADA, 2015 depends primarily on
the inherent culture of the universities on procurement and in the realm of
procurement process the universities adhere to professional fidelity on contractual
responsibilities as a way of complying with the PPADA, 2015. Also the respondent
had a believe that legal compliance is based on procurement standards set by the
public procurement regulatory bodies and the conduct of executives in procurement
process forms the basis of legal compliance. Further, the study denoted that certain
legal compliance framework assists all the executes who are involved on
procurement process to confidently manage their obligations effectively.
The moderating role of legal compliance had slight influence on the relationship
between contract management and procurement performance in public universities in
Kenya. This implied that there is no significant difference on the coefficients of
parameters after being moderated by the legal compliance. Therefore, the study
concluded that legal compliance has moderating influence on the relationship
between contract management on procurement performance in public universities in
Kenya.
5.3. Conclusions
The general objective of the study was to assess the influence of contract
management on procurement performance in public universities in Kenya. The
specific objectives included the influence of buyer supplier collaboration,
procurement risk management, transparency and accountability contract records
management and moderating influence of legal compliance on the relationship
146
between contract management and procurement performance in public universities in
Kenya.
The general findings from the regression analysis is that the buyer supplier
collaboration positively influences procurement performance, the relationship is
strong at 95% confidence levels that implies that the stronger the relationship
between buyer supplier collaboration, the higher the procurement performance. Thus,
the general conclusion of the analysis is that stronger buyer supplier collaboration,
positively influence the procurement performance. Therefore, public universities in
Kenya should aim to establish a good working collaboration with their suppliers or
contractors for better contract and procurement processes since close mutual
relationship adds significant value to each of the transacting organizations.
147
central pillar of any procurement system. Without transparent and accountable
systems public universities cannot serve the stakeholders diligently and therefore, the
vast resources channeled through public procurement systems run the danger of
increased corruption and misuse of funds. Even in a system with low levels of
corruption an oversight can help to identify inefficiencies, thereby increasing
procurement efficiency and effectiveness and ultimately improvement of the general
procurement performance.
The moderating role of legal compliance had a slight influence on the relationship
between contract management and procurement performance in public universities in
Kenya. In reference to the study findings, it can be concluded that, within the realm
of public entities strong legal governance helps procurement professionals to comply
with the stipulated guidelines an attribute that paves way to consistent procurement
performance. The legal compliance on procurement performance is underlined under
148
the threshold of full compliance, partial compliance and non-compliance of PPADA,
2015. However, from the findings of the study, it can be concluded that full
compliance or non-compliance of legal requirements on procurement performance
does not apply in practical sense. More particularly, legal discourse in procurement
processes is a herculean task in public universities and it is simply a matter of what
extent compliance score is achieved hence implying that partial compliance is the
resultant phenomenon.
From the basis of the explanatory variables of the study, contract management
practices had a moderate influence on procurement performance in public
universities in Kenya at 95% confidence levels. Thus, the general conclusion of the
analysis is that contract management practices moderately influences procurement
performance. In regard to the findings of the study it can be concluded that cost
effectiveness, synergy oriented mechanism, consistent customer satisfaction index,
internal customer complaints review and procurement agility are yardstick of
evaluating procurement performance in public universities in Kenya.
5.4. Recommendations
This study was premised on assessing the specific objectives that included the
influence of buyer supplier collaboration, procurement risk management,
transparency and accountability, contract records management and moderating
influence of legal compliance on the relationship between contract management and
procurement performance in public universities in Kenya.
149
measures of success, obtaining regular feedback and implementing corrective action
plans to improve performance.
150
maintain complete procurement file. Further, public universities management staff
should develop and make use of quotation and tender registers and more importantly
submit statutory reports to PPRA as prescribed.
The study’s general objective was to assess the influence of contract management on
procurement performance in public universities in Kenya. The respondents
comprised the implementers of contract management that included procurement
officers, finance officers, legal officers and registrars-administration and planning. It
could be imperative for a similar study to be undertaken but respondents to be
sampled from signatories of procurement contracts in public universities who
include: Vice chancellors (accounting officers), chief procurement officers, chief
legal officers and deputy vice chancellor finance planning and development. The
151
underpinning proposition is to provide an unequivocal ground for triangulation in
regard to the researcher’s topical issue.
The specific objectives of this study focused on the following building blocks of
contract management: influence of buyer supplier collaboration, procurement risk
management, transparency and accountability and contract records management on
procurement performance. The results of the explanatory variables accounts to
74.1% of variations on procurement performance at 5% significance level. This
revelation means that other factors not studied in this research contribute 25.9% of
procurement performance in public universities in Kenya. Therefore, there is need
for further studies on other facets of contract management on procurement
performance in institutions of higher learning in Kenya. Further studies could focus
on other sectors of the economy in line with contract management and procurement
performance. The prime topical issues could comprise: influence of contract
management on procurement performance in county governments in Kenya and
effect of contract management on procurement performance in state corporations in
Kenya.
152
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APPENDICES
Dear Sir/Madam,
Attached find the request letter for data collection from department of Procurement
and Logistics-JKUAT, Research Authorization letter and Research License from
National Commission for Science, Technology and Innovation.
Yours faithfully,
168
Appendix II: Letter of Introduction
Date………………………………………………………………
To…………………………………………………………………
Dear Sir/Madam,
Yours faithfully.
169
Appendix III: Questionnaire
This questionnaire seeks to collect data from public universities with the explicit goal
of examining ‘‘Influence of Contract Management on Procurement Performance
in Public Universities in Kenya’’. To achieve this objective, relevant questions
have been provided to gather data for analysis. Kindly spare some time to provide the
requested information as accurately as possible. Data obtained will be treated with
utmost confidentiality and the identity of the respondents will be kept anonymous.
Your cooperation in data collection exercise is highly appreciated.
Respondents Details:
6. How many years have you been involved in contractual activities in procurement
process?.....................................................................................................................
170
SECTION B: CONTRACT MANAGEMENT
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
………………
10. What are the causes of contract variations in a procurement process in your
institution?.................................................................................................................
...................................................................................................................................
...................................................................................................................................
...............
11. Does your institution appoint contract implementation team especially when
handling complex and specialized procurement contracts? Kindly
explain……………………………….......................................................................
...................................................................................................................................
...................................................................................................................................
...............
171
12. What is the role of contract implementation team especially when handling
complex and specialized procurement contracts?....................................................
……………………………………………………………………………………
……………………………………………………………………………………
…………
13. What are the remedial actions you apply against the suppliers who fails to
comply with terms and conditions of the contract?………………….
……………………………………………………………………………………
……………………………………………………………………………………
…………
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
………………
172
b)We believe that a full commitment on transactional
activities leads to buyer supplier collaboration
173
works
174
are not successful within a reasonable time frame
18. Please indicate the extent to which contract records management influence
procurement performance in your institution. Kindly record your answers by ticking
in the spaces provided, where: 5=Strongly Agree (SA), 4= Agree (A), 3=Neutral (N),
2=Disagree (D), 1=Strongly Disagree (SD).
175
audits
19. Please indicate the extent to which legal compliance influence procurement
performance in your institution. Kindly record your answers by ticking in the spaces
provided, where: 5=Strongly Agree (SA), 4= Agree (A), 3=Neutral (N), 2=Disagree
(D), 1=Strongly Disagree (SD).
Legal Compliance SA A N D SD
176
d)In the realm of procurement process, we adhere to
professional fidelity on contractual responsibilities as a way
of complying with the PPADA, 2015
Procurement Performance SA A N D SD
177
e)We always respond to our internal customers complaints
as a way of sustaining and enhancing customer satisfaction
178
Appendix IV: Interview Guide
Introduction:
i) Name………………………………………………………………… (Optional).
ii) Designation………………………………………………………………………....
iii) Department………………………………………………………………………...
ii) What is your view on the statement that contract management influences
procurement performance in public universities in Kenya?
i) What are the common procurement risks that your institution faces during contract
management?
ii) What are the mitigation measures that your institution has put in place to curb the
escalation of risks on contractual activities?
179
c) Transparency and Accountability
i) How do you ensure transparency and accountability in your institution prior and
during contract implementation?
ii) Are there staffs in your institution who have been seizured for disciplinary matters
on grounds of flouting contract and procurement management guidelines?
ii) Do you provide fully procurement records on contract and procurement activities
to internal and external auditors for audit review?
e) Legal Compliance
i) How often does the internal and external auditors declare unqualified opinion on
contract and procurement activities during the audit reviews?
ii) What are the corrective actions does your institution embrace in order to ensure
marginal cases of qualified opinion on matters of contract management on
procurement performance?
f) Procurement Performance
ii) What is the blueprint of ensuring internal and external customer satisfaction in
your institution?
180
Appendix V: Secondary Data Collection Form
181
(d) 2014/2015
(e) 2013/2014
182
Appendix VI: Analysis of Data Tables
ANOVAa
Model Sum of Squares Df Mean Square F Sig.
1 Regression 582.547 4 145.637 17.814 0.000b
Residual 203.616 99 8.175
Total 786.163 103
a. Dependent Variable: Procurement Performance
b. Predictors: (Constant), Buyer Supplier Collaboration, Procurement Risk Management,
Transparency and Accountability and Contract Records Management
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 5.198 4.392 1.183 0.240
Buyer Supplier Collaboration 0.434 0.119 0.342 3.662 0.000
Procurement Risk Management 0.199 0.104 0.173 1.915 0.048
Transparency and Accountability 0.126 0.114 0.098 1.099 0.044
Contract Records Management 0.355 0.125 0.268 2.854 0.005
a. Dependent Variable: Procurement Performance
183
Appendix VII: List of Public Universities in Kenya
1 Chuka University
3 Egerton University
4 Garissa University
7 Karatina University
8 Kenyatta University
9 Kibabii University
10 Kirinyaga University
11 Kisii University
12 Laikipia University
14 Machakos University
15 Maseno University
184
16 Masinde Muliro University of Science and Technology
18 Moi University
21 Pwani University
22 Rongo University
28 University of Eldoret
29 University of Embu
30 University of Kabianga
31 University of Nairobi
185
1 Alupe University College
186