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EFFECT OF PUBLIC PROCUREMENT ON

ORGANIZATIONAL PERFOPRMANCE
(SUMAL FOODS, OLUYOLE, IBADAN AS A CASE STUDY)

PREPARED BY

OLADIPUIPO KAYODE

BEING A RESEARCH PROJECT


DIPSON KAYUS RESOURCES CENTRE, IBADAN, OYO STATE,
NIGERIA
08058573347; 07063796484

OCTOBER, 2015
ABSTRACT

The purpose of the study is to examine effect of public procurement on


organizational performance. The research as reviewed the contributions
of some authors on the research topic. This made up the literature
review. The researcher also selected Sumal Foods, Oluyole, Ibadan as a
case study. The sampled size used by the researcher for the study was
60. She also distributed 60 questionnaires to the company and the 60
questionnaires were properly filled and returned for the data analysis.
After the analysis, the researcher found out that Sumal Foods has a
well established policy and procedures on Public Procurement. The use
of professionals in the area of procurement procedures improves
operational efficiencies in Sumal Foods. Sumal Foods has formal
strategic ways of evaluating and sourcing for suppliers. Sumal Foods
makes use of purchasing order for procurement of Goods. Sumal Foods
provides adequate finance for Procurement department. Procurement
department of Sumal Foods has for long been overshadowed with
inefficiency and corruption. Sumal Foods has sound Procurement
policies and practices in place regulating institutions procurement
procedures. Sub-standard materials are seriously affecting the Sumal
Foods productivity. Procurement procedures in Sumal Foods, has for
long been overshadowed with inefficiency and corruption. Procurement
procedures demands high quality governance in terms of transparency
and accountability. Based on the findin it was recommended that

TABLE OF CONTENTS
Title page

Approval page

ii

Dedication

iii

Acknowledgement

iv

Abstract

Table of Contents

vi

List of Tables

viii

CHAPTER ONE
1.0

Introduction

1.1

Background of the Study

1.2

Statement of the Problem

1.3

Purpose of the Study

1.4

Significance of the Study

1.5

Research Questions

1.6

Scope and Limitation of the Study

1.7

Definition of Terms/Concepts

1.8

Historical Background of Sumal Foods

1.9

Organizational Structure of Sumal Foods

10

CHAPTER TWO
2.0

Literature Review

11

2.1

The Concept of Public Procurement

11

2.2

Fundamental Principles of Public Procurement

13

2.3

Deficiencies in the Nigeria Procurement Procedures

16

2.4

Challenges of Sustaining Reforms in Public Procurement Process

17

and procedures
2.5

Management of Public Procurement Procedure in a Government

18

Institution
2.6

The Operational Efficiency of Procurement Procedures

26

2.7

Reform and Public Procurement Procedures

30

2.8

Implementation of Public Procurement

33

References

36

CHAPTER THREE
3.0

Research Methodology

38

3.1

Research Design

38

3.2

Area of Study

38

3.3

Sample Frame

38

3.4

Sample Size

39

3.5

Instruments for Data Collection

39

3.6

Method of Data Collection

39

3.7

Method of Data Analysis

40

CHAPTER FOUR
4.0

Presentation, Analysis and Interpretation of Data

41

CHAPTER FIVE
5.0

Summary of Findings, Conclusion and Recommendations

59

5.1

Summary of Findings

59

5.2

Conclusion

60

5.3

Recommendations

61

Bibliography

63

Appendix

65

List of Tables
Table 1: Analysis of Questionnaire Administered and Returned

41

Table 2: Analysis of Responses on Sex

42

Table 3: Analysis of responses on Age Distribution

43

Table 4: Analysis f responses on Marital Status

43

Table 5: Analysis of responses on Educational Background

44

Table 6: Analysis of responses on Length of Services

45

Table 7: Analysis of responses on Position Held

45

Table 8: Analysis of responses on whether Sumal Foods has a policy and


procedures for evaluating and sourcing for suppliers

46

Table 9: Analysis of responses on whether the use of professionals in


the area of procurement procedures improve operational efficiencies
in Sumal Foods

47

Table 10: Analysis of responses on whether Sumal Foods has formal


strategic ways of evaluating and sourcing for suppliers.

48

Table 11: Analysis of responses on whether Sumal Foods makes


use of purchasing order for procurement of Goods.

48

Table 12: Analysis of responses on whether Sumal Foods provides


adequate finance for Procurement department.

49

Table 13: Analysis of responses whether Procurement department


of Sumal Foods has for long been overshadowed with
inefficiency and corruption

50

Table 14: Analysis of responses on whether Sumal Foods,


has sound Procurement policies and practices

in place regulating organizations procurement


procedures.

50

Table 15: Analysis of responses on whether Sub-standard materials


are seriously affecting the Sumal Foods productivity

51

Table 16: Analysis of responses on Professional Buyers should be


appointed as procurer in organizations in Nigeria..

52

Table 17: Analysis of responses on whether Public Procurement has


significant impact on Organisation Performance

52

Table 18: Analysis of responses on whether Procurement procedures


demands high quality governance in terms of transparency
and accountability.

53

Table 19: Analysis of responses on whether Proper audit and


internal control system will reduce the various
problems of finance in Sumal Foods.

53

Table 20: Analysis of responses on whether Accountability is put in


place to curb fraud and misappropriation of funds in
Sumal Foods.

54

Table 21: Analysis of responses on whether Special laws and regulation


are put in place to curb fraud and misappropriation
of funds Sumal Foods.

55

Table 22: Analysis of responses on whether The adoption of


Information Communication Technology enhances
Procurement process in Sumal Foods.

55

Table 23: Analysis of responses on whether Recruitment and


` retention of unqualified purchasing personnel will
contribute to the down fall of public sector
procurement procedures.

56

CHAPTER ONE
1.0

INTRODUCTION

1.1

BACKGROUND OF THE STUDY


Edler & Georghiou, (2010) defined procurement as the process of

acquiring

resources

from

outside

suppliers.

In

this

sense,

procurement activities are very critical to all organizational units from


households to firms, organizations, and the government. From the
functional viewpoint, procurement is an indispensable activity and its
successful achievement is essential to any organization. In the private
sector, procurement is considered as a profit center to maximize the
firms profit in saving material cost. However, there is a major
distinction in public procurement as it draws its funds from tax
revenue (Edler & Georghiou, 2010; Ladan 2011). Hence, unlike
procurement in the private sector, governmental procurement should

reflect public concerns as well as efficiency. Nevertheless, both are


quite similar in many ways such as cost savings, quality assurance,
supplier relationship, procurement ethics, supply market analysis,
green procurement and so on (Uyarra, 2010).
Procurement encompasses the whole process of acquiring
property and/or services. It begins when an agency has identified a
need

and

decided

on

its

procurement

requirement.

Public

Procurement continues through the processes of risk assessment,


seeking and evaluating alternative solutions, contract award, delivery
of and payment for the property and/or services and, where relevant,
the ongoing management of a contract and consideration of options
related to the contract. Public Procurement also extends to the
ultimate disposal of property at the end of its useful life (Jones, 2010).
Sound public procurement policies and practices are among the
essential elements of good governance. Uyarra, (2010) notes the
irregular procurement activities in public institutions provide the
biggest loophole through which public resources are misappropriated.
According Uyarra, (2010), the basic principles of good public

procurement

practice

include

accountability,

where

effective

mechanisms must be in place in order to enable procuring entities


spend the limited resources carefully, knowing clearly that they are
accountable to members of the public; competitive supply, which
requires the procurement be carried out by competition unless there
are convincing reasons for single sourcing; and consistency, which
emphasizes the equal treatment of all bidders irrespective of race,
nationality or political affiliation .

1.2

STATEMENT OF THE PROBLEM


The Nigerian public procurement practice has been known to be

unprofessional, inefficient and ineffective. The guidelines of these


circulars on public procurement practice were grossly inadequate and
created rooms for malpractices and high level corruption in contract
management.

The researchers interest was arose as a result of ineffective


procurement officers especially in government parastatal across the
nation. This has been a threat on procurement activities in
government institutions thereby making them perform below standard
and expectation.
1.3

PURPOSE OF THE STUDY

The aim of the study is to investigate on the effect of public


procurement on organizational performance. Other objectives of the
study are to:
a. Evaluate the roles and responsibilities of public procurement
b. Evaluate the constraint imposed on public procurement system
c. Investigate

the

impacts

of

public

procurement

on

the

organizational profitability
d. Investigate the ways of managing public procurement to enhance
organizational performance

1.4

SIGNIFICANCE OF THE STUDY

The effect of public procurement on organizational performance


is very important to every organization because it enables government
to procure materials from the appropriate suppliers at a minimum
cost and.
It will contribute to the improvement on public procurement
procedures in business organizationl.
It will provide the government more openness, availability and
accessibility of procurement information to the public that increases
the flow of public information, increase trust and satisfaction, and
better accountability.
And finally, it will be useful to improve the practice of
procurement in Sumal food, Ibadan.

1.5

RESEARCH QUESTIONS
Three research questions raised for this research work are:

1. What are the roles of public procurement on the organizational


performance?

2. What are the impacts of public procurement on the organizational


profitability?
3. What are the ways of managing public procurement to enhance
organizational performance?
1.6

SCOPE AND LIMITATIONS TO THE STUDY


The study will focuses on the effect of public procurement on

organizational performance, using Sumal Food, Ibadan as a case


study. Also, only those that can read and write will be considered,
other minority that cannot read will not be concerned.
The researcher will encounter problems while conducting the
research work. Some of it is that the respondents might refuse to
grant the researcher all the required attention needed to gather
enough data for the study due to security reasons. Other forms of
limitations are:
- Time constraint is one of the factors that might hinder the
completion of this research work. The time given for the completion of
the project may be very short, so the researcher will have to make use
of the available data.

- Lastly, lack of adequate finance is another issue that may limits how
widespread the data can be collected, as more data would have been
necessary to have a better assessment of respondents.
1.7

DEFINITION OF TERMS/CONCEPTS
In this make-up, there are some technical and registered terms

used in the construction of the project and the terms are defined in
this outline below.
Procurement:- This is the term originated by the armed forces, it
includes the whole process of obtaining goods, services or required
resources.
Public:- This could be describe as member of the community in
general
Public Buyer:- This is the person who is responsible for buying their
goods or services needed for an operation to be enjoyed by the
members of the community in general.
Researcher:- This can be referred to the person conducting the
interview or investing the fact, which concern the topic.

Accountability:- This is known as an act of explaining in clean and


clear details about. a particular issue.
Efficiency:- It means producing results with little waste of effort.
Transparency:- This is the ability to see through easily

1.8

HISTORICAL BACKGROUND OF SUMAL FOODS LTD,

IBADAN

In 1981 SUMAL FOODS Ltd. was founded by Mr Souhail Joseph


Nassar. In the same year SUMAL FOODS started with the production
of Twist Bubble gum. Robot chewing gum followed shortly afterwards.
In 1989 Mr Souhail Joseph Nassar and Mr Nouhad Joseph Nassar
collaborated together and started VITAL FOODS Ltd, producing
toffees, lollipops, candies, cough drops with different varieties.
In 1993 SUMAL Extension started producing new bubble gum
products such as Chiclets, Super ball and Jumbo balls with different

colors and flavors. In 1997 Mr. Souhail Joseph Nassar and Mr.
Nouhad Joseph Nassar started YaleFoods producing Biscuits. In 2009
Yale Foods Ltd. started Wafer biscuit production line.
In 2011 Yale Foods Ltd started with a completely new product concept,
introducing YALE BREAD to the Nigerian market.
Company Profile

SUMALFOODS Ltd. is a name entirely synonymous with quality


and is highly committed to maintaining its moral beliefs. The business
is known for the high quality biscuits, chewing gum, and toffees it
manufactures under the SUMALFOODS group; as well as for a
number of leading companies under their own names YALEFOODS
and VITALFOODS. Well known products include Digestive, Malted
Milk, Robot gum, Drops, and etc.
Enjoyed across Nigeria, SUMALFOODS products are also
exported to neighboring countries. The Company buys the very best
raw materials available in the market and then processes them
through the most effective machinery. We employ a high quality

workforce, which is supported by our commitment to training and


development.
Mission and Vision

Mission

To become a pioneer and distinctive company in manufacturing


and marketing bakeries, sweets, and toffee worldwide by fulfilling
customers expectations
Vision

We seek to produce and sell a unique collection of high-quality


biscuits, sweets, and toffee confectionery worldwide. We desire to have
competitive prices by using modern technology and distinctive
professionals. We are committed to preserving and developing our staff
in order to reach overall satisfaction and to contribute to local societys
development.
Values

Our values serve as a compass for our actions and describe how
we behave in the world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it's up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well

1.9

ORGANISATIONAL STRUCTURE SUMAL FOODS LTD, IBADAN

Board of
Director
Managing
Director
General
Manager
Financial

General
Manager
Personnel

General
Manager
Production

General
Manager
Marketing

Account
Department/Wages
and Salaries
Department

HRM Department

Ware/Store/Mate
rial house
Department

Sales
Research&
Design Advert
Department

HAPTER TWO

General
Manager
Purchasing and
Supply
Purchasing and
Supply
Department

2.0

LITERATURE REVIEW

2.1

THE CONCEPT OF PUBLIC PROCUREMENT


Okoduwa (2011) posits that procurement is an important part of

efficient management and supply and is critical for all levels of


institutions. An effective procurement process ensures the availability
of the right materials in the right quantities, available at the right
time, for the right patient and at reasonable prices, and at
recognizable standards of quality. Procurement is not simply the act of
buying but encompasses a complex range of operational, business,
information technology, safety and risk management, and legal
systems, all designed to address an institutions needs (Jacob 2011).
Specifically,

management

of

government

public

procurement

determine, accredit, and monitor appropriate supply sources; evaluate


suppliers performance; choose a buying strategy or approach; monitor
material delivery; assess quality and use outcomes; and evaluate new
products and the drug market. Successful procurement is also a
collaborative process, involving people with skills in purchasing,

finance, and management specialties, quality control, and even the


end user: the students (Okoduwa 2011).

One of the basic rules of procurement is that in the end, it is


important to think in terms of the total cost of ownership (Fayomi,
(2013). This includes not only the purchase price, but also time and
resources that are expended in the pursuit of the ownership. By
understanding the steps involved with procurement, it is possible to
get a better understanding of the real cost involved with attaining any
good or service (Gikonyo 2014). Many public procurement activities
suffer from neglect, lack of direction, poor co-ordination, lack of open
competition and transparency, differing levels of corruption and most
importantly not having a cadre of trained and qualified procurement
specialists, who are competent to conduct and manage such
procurements, in a professional, timely and cost effective manner
(Bamisile, 2012). Inflexible and bureaucratic systems of procurement
contribute to unacceptable contract delays, increased costs, the
potential for manipulation of contract awards and lack of fair
competition, all of which create the perception in the population at

large, that public expenditure is slow, ineffective, expensive and often


corrupt.
Gikonyo (2014) opined that Information is critical to an effective
and efficient public procurement process, on the other hand financing
is the engine that drives it. Public procurement has, for long, been
overshadowed

with

inefficiency,

corruption

and

disregard

of

fundamental "value for money" considerations. This has adversely


impacted the rate and quality of progress in realizing the objectives of
national

development,

especially

in

developing

and

transition

countries. Transparent management is another concept, which is


closely related to accountability and Nigeria leaves a lot to be desired
in this facet. The idea behind transparency is that by actively
disclosing information on how decisions are made, as well as
measures of performance, we can improve public deliberation,
reinforce accountability and inform citizen choice (John and Hildah
2010) In addition, transparency helps to document and disseminate
information on the scope and consequences of corruption, information
which can help build support for anti-corruption programmes and
target enforcement efforts (Shirley 2012).

2.2

FUNDAMENTAL PRINCIPLES OF PUBLIC PROCUREMENT


As stipulated in the Part IV Subsection 16 of 2007 Procurement

Act, all public procurement shall be conducted (Fayomi, 2013):


1. By open competition
2. In a manner which is transparent, timely, equitable for ensuring
accountability and conformity with the act.
3. With the aim of achieving value for money and fitness for purpose.
4. In a manner which promotes competition, economy and efficiency.
5. In accordance with the procedures and timeline laid down in the
procurement act.
All bidders for public procurement shall possess the following:
i. Professional and technical qualifications to carry out particular
procurements.
ii. Financial capability

iii. Equipment and other relevant infrastructure iv. Shall have


adequate personnel to perform the obligations of the procurements
contracts.
v. Possess legal capacity to enter into the procurement contract.
The 12 guiding principles which govern the administration of
public procurement as provided in constructed procurement guide
2008 are as follows:1. Accountability: effective mechanisms must be in place in order to
enable departmental Accounting Officers and their equivalents in
other public bodies to discharge their personal responsibility on issues
of procurement risk and expenditure (Fayomi, 2013).
2. Competitive Supply: procurement should be carried out by
competition unless there are convincing reasons to the contrary.
3. Consistency: suppliers should, all other things being equal, be
able to expect the same general procurement policy across the public
sector.

4.

Effectiveness:

public bodies should meet the commercial,

regulatory and socioeconomic goals of government in a balanced


manner appropriate to the procurement requirement.
5. Efficiency: procurement processes should be carried out as cost
effectively as possible (Fayomi, 2013).
6. Fair-dealing: suppliers should be treated fairly and without unfair
discrimination, including protection of commercial confidentiality
where required. Public bodies should not impose unnecessary
burdens or constraints on suppliers or potential suppliers.
7. Integration: in line with the Executives policy on joined-up
government, procurement policy should pay due regard to the
Executives other economic and social policies, rather than cut across
them.
8. Integrity: there should be no corruption or collusion with
suppliers or others.
9. Informed decision-making: public bodies need to base decisions
on accurate information and to monitor requirements to ensure that
they are being met.

10. Legality: public bodies must conform to regulating bodies and


other legal requirements.
11. Responsiveness: public bodies should endeavour to meet the
aspirations, expectations and needs of the community served by the
procurement.
12. Transparency: public bodies should ensure that there is
openness and clarity on procurement policy and its delivery (Fayomi,
2013).

2.3

DEFICIENCIES

IN

THE

NIGERIA

PROCUREMENT

PROCEDURES

Procedure was haphazard, no observance of extant rules and


guidelines by ineffective Tender Boards (Shirley 2012)

High cost of government purchases.

Application

of

selective

tendering

rather

than

competitive

tendering.

Low capacity and credibility in the handling of contracts.

Out of 4072 contract valued at N639.6 billion only about 1% or 40


contracts were exposed to open competition.

In the selective tendering, officials determine who to invite. No


prequalification.

Most Ministries did not keep register of contractors.

Limited use of Audit market survey and prices from Federal


Ministry of Works and Bureau of Statistics and adverts from
Dailies.

Rarely do Tender Boards and Procurement Officials negotiate


downwards.

2.4

Patronage of ghost companies (Shirley, 2012).


CHALLENGES

OF

SUSTAINING

REFORMS

IN

PUBLIC

PROCUREMENT PROCESS AND PROCEDURES

Lack of sufficient Guide and Uniformity in Public Procurement


Process.

How far can the advert in Government magazine go?

How far do circulars go?

Observance of standards in advertisement.

Public reluctance at participating in public bidding where there is


no adequate measurable pre-determined yardstick to determine
lowest evaluated bid.

Over-centralization of Due Process activities.

Low-level involvement of National Planning Commission in Due


Process Certification.

Extent of Economic Liberalization / Competition.

Due regard for law and order

Protection of property rights

Sanctity of contracts

Respect for freedom and human rights

Low cost of business operation

Avoidance of delay in Budget Process and in passage of


Appropriation Bill.

Openness in budget preparation, execution and reporting to


ensure wider coverage and maximum comprehensiveness and
accessibility.

Effect of fund sufficiency in timely completion of work


Indifference of the BMPI to schedule of payment.

Societal

values

and

individual attitude

to

accountability

attitudinal change required

Relevance of Good Governance.

Peaceful environment

Political stability

Strong judiciary for fair arbitration

Free flow of information

Government by representation

2.5

MANAGEMENT OF PUBLIC PROCUREMENT PROCEDURE TO


ENHANCE ORGANIZATIONAL PERFORMANCE
Public procurement procedures demand high quality public

governance in terms of transparency and accountability as well as


effective management that can deliver optimum risk management and
value-for-money outcomes (Shirley 2012). It also demands coherence
with other public policy environments, especially business policy
because of its significance in the economy (Musa and Nwaorgu 2014)
even though these various operational elements often fail to come
together into a coherent policy or politically sensitive management

framework. Within the management environment, control, risk


mitigation and transparency objectives are often the focus of centrally
mandated regulatory compliance frameworks while management
performance in terms of value outcomes is often pursued through
devolved decision-making and deregulation. In what follows we seek to
develop each of these factors as a foundation for a framework within
which

they

can

be

more

meaningfully

ordered,

related

and

understood. All of these elements make up the procurement


environment and need to be accounted for in any useful framework if
it is to reconcile the activities of procurement managers with the
demands of their executives, the agendas of the politicians and the
expectations of the business sector, the media and the community
(Musa and Nwaorgu 2014).
Procurement Management Objectives
Many jurisdictions worldwide have, implicitly or explicitly, similar
management objectives for public procurement. Common policies are
widespread between jurisdictions, notwithstanding the great variances
in methodologies and operational practice. For example, in a collective

action by the forum for Asia-Pacific Economic Cooperation (APEC)


countries,

their

Government

Procurement

Experts

Group

has

developed a set of non-binding principles that included transparency,


value for money, open and effective competition, fair dealing,
accountability and due process (Beverlyne, Robert, Charles, Obura,
Thairu 2012). Individual member countries decide on the applicability
of individual elements to them, taking into account the specific
characteristics of their economies and the costs and benefits of
adopting specific measures. Such common policies are generally
constructed from the following elemental objectives:

Public confidence underpinned by attributes of accountability,


transparency, equity and fair dealing in relation to procurement
processes;

Efficiency and effectiveness in the use of public monies to


achieve value for money and efficiency of delivery of procurement
outcomes; and

Policy compliance and consistency of both the processes and


outcomes of procurement in relation to other policy objectives and

expectations of the public sector such as environmental issues,


training

and

apprenticeships,

international

obligations

and

especially business and regional employment impacts.


These objectives are unsurprising and are consistent with
generic public management. They simply say that the management of
public procurement needs to be in accordance with community
standards, and effective, efficient and consistent with the broader
roles of government. However, while they seem simple, experience is
that translating them into operational reality involves issues and
policies that are frequently in conflict if not mutually incompatible
(George and Brian 2010).
Broadly, three approaches, sometimes in various degrees of
combination, are employed to deliver these objectives. The following
discussion includes each of these approaches, generally defined in
terms of their focus on regulation, management and centralisation of
public procurement (George and Brian 2010).
Regulation and Compliance

According to George and Brian (2010), In jurisdictions where the


dominant political concern has been the principles of transparency,
equity and fair dealing (public confidence), management of public
procurement

through

an

extensive

regulatory

framework

often

constitutes the status quo. This framework reflects a traditional


approach to public procurement and for many other government
functions perceived as basic processing by relying heavily on
regulation as the primary means of control of administrative process
and

implementation

of

policy.

Regulations

control

the

micro-

management steps throughout the procurement process.


A highly regulated procurement environment is designed to
minimize discretion in circumstances considered to be at high risk
from undue influence. A highly prescriptive approach may also seem
appropriate in jurisdictions where officials have minimal procurement
skills, and which are striving to ensure transparency or prevent or
overcome corruption: the regulated approach is almost universal in,
but not exclusive to, developing countries. An attempt to standardise
procurement regulations is the Model Law on Procurement of Goods,

Construction

and

Services

developed

by

the

United

Nations

Commission on International Trade Law (Shirley 2012) through its


Working Group on the New International Economic Order.
A highly regulated management environment is also often a
means of political risk minimization (Gikonyo 2014) in developed
countries. In these cases, the focus is on compliance with the
prescribed process as a means of elimination or avoidance of risk.
Assessment of procurement management performance is defined in
terms of compliance with the set rules. Examples of regulated
environments are diverse and include Canada, the USA, Brazil and
Thailand. Many of the US state and local entities also undertake their
procurement in a regulated environment, under the provisions of the
Model Procurement Code (MCP) for State and Local Governments,
developed by the American Bar Association (Gikonyo 2014).
The penalty for a highly prescribed framework is its lack of
flexibility in managing agency needs, placing it immediately in tension
with performance and efficiency. The detailed codification of process is
designed to eliminate scope for partiality in outcomes and protect

governments from scandal and corruption (often with limited success),


but in doing so also tends to eliminate all but the most mechanical
aspects of this activity (Bamisile, 2012). Regulated frameworks are
procedurally

costly

and,

while

readily

prescribed

for

simple

procurement, are slow to adapt to changes that require the reengineering of process, or the development of increasingly complex
procurement associated with sophisticated supply chains. Microregulation of the process also has the unintended consequence of
eroding the skill requirements of procurement officials, thereby
undermining professionalism in this activity. Procurement training in
this context consists of learning the rules. This lack of professionalism
can, in turn, be expected to increase the need for further regulation of
process as well as reduce value-for-money in procurement which
requires extensive management skills. This erodes accountability
except in terms of compliance.
Significantly, the transparency goal of this regulatory model can
also be self-defeating: the daunting volume of regulations acts to

obfuscate

transparency

by

making

the

processes

difficult

for

stakeholders such as business to comprehend (Bamisile, 2012).


Managerialism and Performance
Bamisile, (2012) opined that social and economic pressures at
both domestic and global levels have required governments to seek
better performance from their public sectors. Successive waves of
management and financial reforms have, inter alia, focused on
improving public procurement efficiency, effectiveness and outcomes.
Many of these reform initiatives have featured managerialism and a
general shift towards devolution and decentralization. Usually, this
shift away from the centre has been attributed to a need to respond
more effectively to the sensitivities of the client or the community; or
to engage more fully the capabilities of all of the human resources at
the disposal of the organisation or the public sector. The management
of public procurement has been subjected to the same reform
pressures.

For

example,

this

statement

Governments procurement reforms:

from

the

Australian

In

seeking

improvements

to

the

accountability

and

administration of the procurement function, the Government expects


departments and agencies to exploit fully procurements potential to
add value to program delivery, contain and reduce costs in real terms
and contribute to the achievement of broader policy objectives,
particularly for industry development (George McIntosh and Brian
Sloan 2010).
The requirement for procurement to deliver higher performance
in terms of improved value-for-money and fit-for-purpose outcomes has
led to the development of more complex supply chains (e.g. through
outsourcing and partnering arrangements) to deliver comprehensive
service solutions, requiring more sophisticated relationships with
suppliers. These more complex supply chains represent a move away
from simple competitive markets and require a deeper understanding
of industry structures and capabilities. These higher value supply
chains also require more extensive management skills to develop and
maintain (e.g. Bamisile, A.,(2012). Some characteristics of this
evolution are presented in table below

TABLE 1
The Changing Nature of Public Procurement

Source: (Bamisile, 2012)


To be able to manage these more complex relationships and
outcomes, management of public procurement has faced increasing
pressure for devolution from centralized control to line agencies.
Accompanying this devolution has sometimes been an assignment of
greater flexibility, or varying degrees of deregulation within a broader
governance framework and with more highly skilled managers. A
lesser reliance on regulated prescription of the process of procurement
has also given rise to the need for more coherent management tools

and policies (which are not always provided) to manage stakeholder


interests and risks (Bamisile, 2012).

2.6

THE OPERATIONAL EFFICIENCY OF PUBLIC PROCUREMENT


PROCEDURES
Fayomi

(2013)

claimed

that

the

significance

of

public

procurement is the operational efficiency of the process as it relates


both to government and to business. Efficiency of process is a
concurrent consideration regardless of whether procurement is
defined as a regulated process or managerial task. The efficiency
equation is important in this discussion because it introduces
complications

to

the

tension

between

centralisation

and

decentralization of management of the framework. The efficiency of


procurement processes and some of the approaches intended to
deliver value-for-money outcomes are not neutral to the degree of

centralisation or devolution. Indeed, the sources of efficiency available


to

best-practice procurement are

multiple. The

efficiency and

effectiveness of procurement are often sensitive to scale and


coordination and involve both public administrative processes and
industry structural and transactional issues. In this way, efficiency
overlaps with the concept of value-for-money outcomes.
Even in highly competitive markets, price can be negotiable in
terms of volume and time undertakings provided to suppliers often
at little or no risk to buyers. Thus, additional to the low credit risk
represented by government, the level of supplier risk can almost
always be decreased through agency demand aggregation giving
greater certainty and volume to suppliers with the associated savings
available to be passed on. These benefits sometimes become evident
through, for example, outsourcing service arrangements such as for IT
networks and services. An example of enhanced coordination and
aggregation in IT acquisitions is the opening up in early 2003 of the
US General Services Administration IT schedule to allow access by
state

and

local governments, thereby

expanding the

potential

customer base for federal IT contracts, with benefits for both buyers
and suppliers (Gikonyo, 2014).
These factors militate against optimum efficiency outcomes
being consistent with complete devolution of contracting for many
simple goods and services as well as for more complex services such
as IT systems and networks and telecommunications arrangements.
These considerations explain the hybrid management systems of some
governments such as Singapore (Gikonyo , 2014), while others employ
consortia approaches.
A

second

avenue

for

efficiency

relates

to

the

costs

of

transactions. Transaction costs are greater in the public sector


because

of

the

generally

more

demanding

requirements

of

transparency (Jacob 2011). Also, the great majority of transactions are


small purchases, typically a few hundred dollars or less, such that the
cost of transaction processing becomes a large or even a dominant
proportion of the purchase. The significance of transaction costs can
be gauged by the cost of processing of a simple procurement
commonly estimated at between US$75 US$100 and the reality that

generally about 70% of public sector procurement transactions are


less than US$500 (Gikonyo , 2014).
A third avenue for efficiency savings emerges through redefining
the outcome requirements themselves and represents an overlap
between efficiency and performance (Jacob 2011). This category of
opportunity requires significant management data as well as strategic
agency management with a strong interagency coordination of
efficiency goals. Here, public administration challenges the existing
and often traditional modes of business and administration and seeks
new solutions. For example, an administration with 10,000 IT seats
may seek to use this buying power to negotiate a better licensing deal
with its desktop systems, or it may consider alternative solutions
altogether such as outsourcing of all or part of the function, use of a
shared service centre, or a total re-engineering of the relationship with
its clients and stakeholders, such that much of the processing is done
outside the organisation as has occurred with e-tax in the taxation
industry in Australia (Shirley 2012). The first option represents an

example of aggregate buying while the latter ones are examples of more
strategic approaches.
All of these issues and options are further complicated by the
structure

of

public

procurement

which

in

most

countries

is

dichotomised between low value, high volume procurement (such as


office supplies) and high value, low volume procurement such as
major capital works. Most transactions in every jurisdiction will be of
low value and high volume, including most office supplies for example,
although most expenditure will be involved with high value, low
volume exercises. Small transactions (for less than $US5000) will
usually be undertaken though a simplified quoting system or even
straight off a pre-existing contract. For higher value procurement
(typically above $US25000-100,000) a public bidding or tendering
process is usually the standard methodology. These larger complex
exercises require high levels of expertise relating to not only contract
specification

and

risk

management,

but

also

in

the

relationship and performance management (Gikonyo , 2014).


2.7

EFFECT OF REFORM ON PUBLIC PROCUREMENT

ongoing

PROCEDURES

Fayomi, (2013) posits that Public procurement and public


administration more generally, have been the focus of successive
waves of management reform worldwide, stretching across a third of a
century. These reforms have included managerialism, outsourcing,
corporatisation, centralisation and devolution, and have been driven
by an imperative to improve the performance and cost-effectiveness of
the public service. These reforms have frequently been confronted by
apparent tensions between the basic qualities of public governance,
such as accountability and transparency versus outcomes and
performance (Fayomi, 2013).
Operational failures of procurement governance are attributed by
pro-regulators to weaknesses in the professionalism of practitioners
rather than to any inherent weaknesses in the regulations as such;
while pro-management advocates also attribute failure to professional
weaknesses but identify the causes with the regulatory regime itself
which tends to reduce the role of management of everything other
than mechanical compliance (Shirley 2012). In both cases the broader

political context and policy roles are frequently not acknowledged at


all. Governments have responded to many of the issues with cyclical
reforms of regulation and management and sometimes centralisation
to deliver the corresponding expectations ofthe day in terms of
compliance and performance respectively. Some reforms have revealed
a lack of understanding of the basic elements of procurement. Wellplanned public procurement, especially aggregated buying, can
frequently outperform the spot and auction markets, yet some
governments have devolved away this option (for example the
Australian Government) while some others may be building unrealistic
expectations around the new capacity for online auctions which
potentially disaggregate buying and forgo returns to scale. The drivers
of these responses have been such as to generate predictions that they
condemn public procurement to never ending cycles of reform, as
illustrated that swing between rigid regulations of micro-processes
through to the deferment to performance management (Gikonyo 2014).
Requirements for greater performance produce a refocusing of
procurement management away from accountability for compliance

through rule-bound codified processes (Bamisile, 2012) towards


accountability for outcomes. In turn, inevitable failures in due process
produce a return to regulation for compliance. A degree of polarisation
can be observed worldwide between jurisdictions governed by
compliance and those by value-for-money or performance. Within a
performance model for public procurement, the role of regulation is
primarily to establish management principles and objectives rather
than to micro-manage the processes.
This substantially political tension between compliance and
performance

and

the

relationships

with

centralisation

versus

devolution lies at the heart of the debate around the reform of public
procurement, as it has done over its history (e.g. Bamisile, 2012).
Piecemeal government reforms will often seem clumsy, but at least
some of the responsibility for this lies with management itself.
Management often exacerbates the problem by narrowly defining the
scope of procurement such that it cannot be expected to encompass
many higher level demands including often legitimate political agenda
(Bamisile, 2012).

2.8

IMPLEMENTATION OF PUBLIC PROCUREMENT


Procurement encompasses the whole process of acquiring

property and/or services. It begins when an agency has identified a


need and decided on its procurement requirement. Procurement
continues through the processes of risk assessment, seeking and
evaluating alternative solutions, contract award, delivery of and
payment for the property and/or services and, where relevant, the
ongoing management of a contract and consideration of options
related to the contract. Procurement also extends to the ultimate
disposal of property at the end of its useful life (Gikonyo, 2014). Sound
public procurement policies and practices are among the essential
elements of good governance.
Gikonyo, (2014) notes the irregular procurement activities in
public institutions provide the biggest loophole through which public
resources are misappropriated. According to Bamisile,(2012), the
basic principles of good procurement practice include accountability,
where effective mechanisms must be in place in order to enable
procuring entities spend the limited resources carefully, knowing

clearly that they are accountable to members of the public;


competitive supply, which requires the procurement be carried out by
competition unless there are convincing reasons for single sourcing;
and consistency, which emphasizes the equal treatment of all bidders
irrespective of race, nationality or political affiliation.
The process should also uphold integrity by ensuring that there
are no malpractices; informed decision-making, which requires public
bodies to base decisions on accurate information and ensure that
requirements are being met. More still, the Procurement practice
should be responsive to aspirations, expectations and needs of the
target society. Finally, there is need for transparency to enhance
openness and clarity on procurement policy and its delivery (Okoduwa
2011).
George and Brian (2010) contend that very little research has so
far

been

conducted

on

organizational

misbehaviors

and

non-

compliance in purchasing and supply management. This is surprising


given that public procurement has been employed as a vital
instrument for achieving economic, social and other objectives

(Okoduwa

2011),

and

is

regrettably

an

area

vulnerable

to

mismanagement and corruption. Besides, most of the studies on


public procurement compliance have been conducted outside Uganda
and mostly in the developed world.
In Uganda, a wave of procurement reforms that begun in 1997,
culminated into the enactment of the Public Procurement and
Disposal of Public Assets (PPDA) Act 2003, and regulations 2003.
Unfortunately, many central government ministries and agencies have
since then not followed prescribed practices (George and Brian 2010).
The procurement audits carried out by the PPDA have revealed that
out of 322 contracts audited at the end of 2005, only 7 (2%) were
assessed as compliant. Other successive audit checks reveal that
compliance in public procurement in Uganda is still inadequate.
Beverlyne,

Robert, Charles, Obura, Thairu (2012) stipulate that

compliance occurs when the target performs a requested action, but is


apathetic about it, rather than enthusiastic, and puts in only a
minimal or average effort. However, as an organizational outcome,
compliance has traditionally been understood as conformity or
obedience to regulations and legislation.

According to George and Brian (2010), public bodies have always


been big purchasers, dealing with huge budgets. Gikonyo (2014) also
reiterated that public procurement represents 18.42% of the world
GDP. In developing countries, public procurement is increasingly
recognized as essential in service delivery, and it accounts for a high
proportion of total expenditure.

REFERENCES
Okoduwa Rasheedat A.(2011). Aspects Of Corrupt Practices In Public
Sector Procurement. A Paper Presented At a 2-dayWorkshop on
Public Sector Procurement and Financial Management. Held At
the

Public Service Institute of Nigeria, Dutsen-Alhaji, Abuja. Pp. 2-

17
Jacob Ola Alla (2011): Procurement law in Nigeria, Challenge for
attainment of its Objectives. Journal of Procurement
Management.
USA Pp 1-20
Fayomi, Ikeoluwapo Omolara (2013). Public procurement and due
process policy in Nigeria: Thrust, prospects and challenges. Peak
Journal of Social Sciences and Humanities Vol.1 (4), pp. 39-45,
December, 2013
Gikonyo Peter Kiama (2014).
Public

Factors Affecting Implementation of

Procurement Act in SACCO Societies in Kenya. International


Journal of Academic Research in Business and Social Sciences
February 2014, Vol.
4, No. 2
John Karanja Ngugi and Hildah W. Mugo(2010). Internal Factors
Affecting Procurement Process of Supplies In The Public Sector;
A
Survey Of Kenya Government Ministries. Journal of Public
Procurement,Vol.1 No.1, pp.9-50.
Shirley Gayle-Sinclair (2012). Public Procurement And International
Trade
Agreements:
Smaller
Developing
Economy
Considerations From A
Caricom Perspective. International
Public Procurement Conference
Proceedings 21-23 September
Bamisile, A.,(2012) Procurement Management in Business Org.
Ethiopian
Journal of Environmental Studies and Management EJESM
Vol. 5 no.4 (Suppl.1)
Musa Success Jibrin, Success Blessing Ejura and Nwaorgu Innocent
Augustine (2014). The Public Procurement Reforms in Nigeria:
Implementation and Compliance Challenges. Journal of Asian
Business Strategy

Beverlyne Awinja. Ingari, Robert Kisavi Mule, Charles Omondi


Ondoro,
Obura John Mark, Thairu Stella Njeri (2012). Procurement
Best Practices, A Potential Solution to Kenyas Supermarket
Performance Problem. Business and Management Review Vol.
2(5) pp. 48 60 July
George McIntosh and Brian Sloan (2010). The Potential Impact of
Electronic Procurement And Global Sourcing Within The Uk
Construction Industry. School of the Built Environment, Napier

University, 10 Colinton Road, Edinburgh, Scotland EH10 5DT,


UK.
232-240

CHAPTER THREE
3.0

Research Methodology
This chapter contains explicit step by step procedures on what

will be done by the researcher and how it will be carried out. It is the
blue print for the study. This chapter states the source of the data,
methods of data and types of data collection instruments and
analysis, sampling procedure and design as well as the basic
approach applied in this work.
3.1

Research Design
The survey research design will be used in this study. It involves

a self-designed questionnaire in collecting data from the respondents.


This is chosen in order to make reference to phenomena as they exist

in real life and it is relatively economical in terms of time and


resources.
3.2

Area Of Study
The study will focus only on the aspect of the effects of sourcing

decision on material availability in a manufacturing company,


strategies for proper sourcing decision implementation so on.
3.3

Sample Frame
The sample frame of this study will be the entire staff members

i.e total population of the Sumal Foods, Ring-Road, Ibadan, Oyo State,
Nigeria and this is about 150 staffs.

3.4

Sample Size
The sample size that will be used from the population of the

study is 80 staff; this will represent the total population of the study
i.e. 80% of the total population which can be express as 250x32 = 60
staffs
100
3.5

Instruments for Data Collection

Primary and secondary sources of data will be used for this


research work.
3.5.1 Primary Data:
Primary source of data will be through the use of questionnaire
and they will be closed- ended questions. The questionnaire will be in
two parts. Part A will deals with the Bio-data of the respondents,
while part B will deals with data concerning the research
hypotheses.
3.5.2 Secondary Data
Secondary source of data will be various textbooks, journals and
internet materials which will enable the researcher to get acquainted
with the some empirically verified views of some authorities on the
research problem.
3.6

Method of Data Collection


The main instrument to be used for this study will be structured

assessment

questionnaire

with

closed

ended

questions.

The

questionnaire will be designed carefully in line with the relevant issue


or problem to be raised in the research. Thereafter, it will be given to

my supervisor for better modification before the distribution among


the staff members of Sumal Foods, Ring-Road, Ibadan, Oyo State, and
this will take me two week because of the delay one might encounter
from some of staffs of the institution and the time to administer the
questionnaires filled. Eighty questionnaires will be served and
hopefully expected to be fully recovered and then administer.
3.7

Method of Data Analysis


The data collected will be analyzed through the use of simple

percentage, tables, descriptive analysis and Chi-square formula. The


Chi-square formula is as follows:
Formula: x2 = (F0 - Fe)2
Fe
Where

x2 = Chi-square
Fo = Frequency Observed
Fe = Frequency Expected
The operational assumption of 5% level of significance will be

utilized. The method will be use in chapter four (4), which follows suit
to the hypothesis formulated in chapter one.
i) Reject the null hypothesis if the calculated value is greater than the
table value and accept the alternative hypothesis.
ii) Accept the null hypothesis if the calculated value is lower than the
table value and reject the alternative hypothesis

CHAPTER FOUR
4.0

PRESENTATION AND ANALYSIS OF DATA

4.1

INTRODUCTION
This chapter deals with the presentation and analysis of data

collected during the research work conducted. The effort here is to


present the data collected from the different respondents in a more
meaningful ways to the readers. Hence, each response is presented in
percentage in relation to the general or overall responses received in
each particular case. This was done to raise comparison among the
variables involved and the guard the heart of the researcher into
proper findings.
4.2

QUESTIONNAIRE RESULTS
As formerly stated in chapter three, the questionnaires sent to

the staff of Sumal Foods, Oluyole Ibadan were all collected back with
the following statistics of respondents.
Table 1: Questionnaire Administered and Returned
Number
of Number
of Percentage
Questionnaires
Responses Received of Responses
Distributed

60

60

100%

Source: Field Survey, 2015

The table one above shows that 60 questionnaires were


distributed among the sampled staff of Sumal Foods. However, the
responses receive was 60 respondents representing 100% of the total
questionnaires distributed.
Table 2: Personal Data of the Respondent on Sex
Variables
Numbers of the responses Percentage
received
Male

38

Female
22
Total
60
Source: Field Survey, 2015

63
37
100

From the above table, 38 respondents which represent 63% of


the total population are male, while 22 respondents which represent
37% of the total population are female.
It can therefore be deduced that male respondents are more
than female respondents.

Table 3: Age Distribution of the Respondents


Variables
Numbers of the responses
Percentage
Received
21-30yrs

30

50

31-40yrs

25

42

41yrs & above


5
Total
60
Source: Field Survey, 2015

8
100

From the above table, 30 respondents which represent 50% of


the total population were between the age range of 21-30yrs, 25
respondents which represent 42% of the total population were
between 31-40yrs, while the remaining 5 respondents which represent
8% of the total population were between the age range of 41yrs &
above.
It can therefore be deduced that respondents within the age of
21-30yrs responded more to the questionnaire compare to others.
Table 4: Marital Status of the Respondents
Variables
Numbers of the responses
Percentage
Received
Single

24

40

Married

36

60

Divorced
Total
60
Source: Field Survey, 2015

100

From the above table, 24 respondents which represent 40% of


the total population are single, while 36 respondents which represent
60% of the total population are married.
It can therefore be deduced that married respondents are more
than single respondents.

Table 5: Educational Background of the Respondents


Variables
Numbers of the responses
Percentage
Received
ND

20

33

HND/BSc

28

47

12
60

20
100

Professional
Total
Source: Field Survey, 2015

From the above table, 20 respondents which represent 33% of


the total population are ND holders, 28 respondents which represent
47% of the total population were HND/BSc holders, while the
remaining

12

respondents

which

represent

20%

of

the

total

population are also having professional certificates.


It can therefore be deduced that majority of the respondents who
filled the questionnaires are HND/BSc holders.

Table 6: Length of Services


Variables
Numbers of the responses

Percentage

Received
1-4yrs

13

22

5-10yrs

35

11 & above
12
Total
60
Source: Field Survey, 2015

58
20
100

From the above table, 13 respondents which represent 22% of


the total population have serve the organization between 1-4yrs, 35
respondents which represent 58% of the total population have served
the organization between 5-10yrs, while the remaining 12 respondents
which represent 20% of the total population

have also serve the

organization for more than 10 years.


It can therefore be deduced that majority of the respondents who
filled the questionnaires have served the organization between 510yrs.
Table 7: Position Held
Variables
Numbers of the responses

Percentage

Received
Junior Staff

20

33

Senior Staff

36

60

Management
4
Total
60
Source: Field Survey, 2015

7
100

From the above table, 20 respondents which represent 33% of


the total population hold a junior position in Sumal Food, Oluyole
Ibadan, 36 respondents which represent 60% of the total population
hold senior staff position, while the remaining 4 respondents which
represent 7% of the total population also hold a position of
management.
It can therefore be deduced that majority of the respondents who
filled the questionnaires are staff members who are holding a position
of senior staff.
SECTION B
4.3

DATA ANALYSIS AND INTERPRETATION

Table 8: Question 7: Sumal Foods, has a well established policy and


procedures on Procurement
Variables
Numbers of the responses
Received
Percentage
Strongly Agree
37
62
Agree
23
38
Undecided
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015

From the above table, 37 respondents which represent 62% of


the total population strongly agreed that Sumal Foods has a well
established policy and procedures on Procurement, 23 respondents
which represent 38% of the total population support the opinion.
It can therefore be deduced that Sumal Foods, has a well
established policy and procedures on Procurement
Table 9: Question 8: The use of professionals in the area of
procurement procedures improves operational efficiencies in Sumal
Foods.
Variables
Numbers of the
Percentage
responses Received
Strongly Agree
35
58
Agree
13
22
Undecided
Disagree
12
20
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 35 respondents which represent 58% of
the total population strongly agreed that the use of professionals in
the area of procurement procedures improve operational efficiencies in
Sumal Foods, 13 respondents which represent 22% of the total
population support the opinion, while the remaining 12 respondents
which represent 20% of the total population disagreed.

It can therefore be deduced that the use of professionals in the


area of procurement procedures improve operational efficiencies in
Sumal Foods.

Table 10: Question 9: Sumal Foods has formal strategic ways of


evaluating and sourcing for suppliers.
Variables
Numbers of the responses Percentage
Received
Strongly Agree
30
50
Agree
30
50
Undecided
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 30 respondents which represent 50% of
the total population strongly agreed that Sumal Foods has formal
strategic ways of evaluating and sourcing for suppliers, while the
remaining

30

respondents

which

population support the opinion.

represent

50%

of

the

total

It can therefore be deduced that Sumal Foods has formal


strategic ways of evaluating and sourcing for suppliers.
Table 11: Question 10: Sumal Foods makes use of purchasing order
for procurement of Goods.
Variables
Numbers of the responses Percentage
Received
Strongly Agree
Agree
40
67
Undecided
Disagree
20
33
Strongly Disagree
Total
60
100
Source: Field Survey, 2015

From the above table, 40 respondents which represent 67% of


the total population agreed that Sumal Foods makes use of
purchasing order for procurement of Goods, while the remaining 20
respondents which represent 33% of the total population disagreed.
It can therefore be deduced that Sumal Foods makes use of
purchasing order for procurement of Goods.
Table 12: Question 11: Sumal Foods provides adequate finance for
Procurement department.
Variables
Numbers of the responses Percentage
Received
Strongly Agree
20
33
Agree
40
67

Undecided
Disagree
Strongly Disagree
Total
Source: Field Survey, 2015

60

100

From the above table, 20 respondents which represent 33% of


the total population strongly agreed that Sumal Foods provides
adequate finance for Procurement department, while the remaining 40
respondents which represent 67% of the total population support the
opinion.
It can therefore be deduced that Sumal Foods provides adequate
finance for Procurement department.

Table 13: Question 12: Procurement department of Sumal Foods has


for long been overshadowed with inefficiency and corruption.
Variables
Numbers of the
Percentage
responses Received
Strongly Agree
45
75
Agree
15
25
Undecided
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015

From the above table, 45 respondents which represent 75% of


the total population believed that Procurement department of Sumal
Foods has for long been overshadowed with

inefficiency and

corruption, 15 respondents which represent 25% of the total


population support the assertion.
It can therefore be deduced that Procurement department of
Sumal Foods has for long been overshadowed with inefficiency and
corruption.
Table 14: Question 13: Sumal Foods, has sound Procurement policies
and practices in place regulating organizations procurement
procedures.
Variables
Numbers of the responses
Percentage
Received
Strongly Agree
40
66
Agree
10
17
Undecided
10
17
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 40 respondents which represent 66% of
the

total

population

believed

that

Sumal

Foods,

has

sound

Procurement policies and practices in place regulating institutions


procurement procedures, 10 respondents which represent 17% of the

total population support the opinion, while the remaining 10


respondents which represent 17% of the total respondents were
undecided.
It can therefore be deduced that Sumal Foods, has sound
Procurement policies and practices in place regulating organizations
procurement procedures.
Table 15: Question 14: Sub-standard materials are seriously affecting
the Sumal Foods productivity
Variables
Numbers of the responses Percentage
Received
Strongly Agree
50
83
Agree
10
17
Undecided
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 50 respondents which represent 83% of
the total population believed that Sub-standard materials are
seriously affecting the Sumal Foods productivity, while the remaining
10 respondents which represent 17% of the total population support
the assertion.

It can therefore be deduced that Sub-standard materials are


seriously affecting the Sumal Foods productivity.

Table 16: Question 15: Professional Buyers should be appointed as


procurer in organizations in Nigeria.
Variables
Numbers of the responses Percentage
Received
Strongly Agree
Agree
37
62
Undecided
Disagree
23
38
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 37 respondents which represent 62% of
the total population believed that Professional Buyers should be
appointed as procurer in organizations in Nigeria, while the remaining
23 respondents which represent 38% of the total population
disagreed.
It can therefore be deduced that Professional Buyers should be
appointed as procurer in organizations in Nigeria.
Table 17: Question 16: Public Procurement has significant impact on
Organisation Performance
Variables
Numbers of the responses
Percentage

Received
Strongly Agree
Agree
Undecided
Disagree
Strongly Disagree
Total
Source: Field Survey, 2015

60
60

100
100

From the above table, 60 respondents which represent all of the


total population agreed that procurement procedures in Sumal Foods,
has for long been overshadowed with inefficiency and corruption. It
can therefore be deduced that procurement procedures in Sumal
Foods, has for long been overshadowed with inefficiency and
corruption.
Table 18: Question 17: Procurement procedures demands high
quality governance in terms of transparency and accountability.
Variables
Numbers of the
Percentage
responses Received
Strongly Agree
20
33
Agree
40
67
Undecided
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 20 respondents which represent 33% of
the total population strongly agreed that Procurement procedures

demands high quality governance in terms of transparency and


accountability, while the remaining 40 respondents which represent
67% of the total population support the opinion. It can therefore be
deduced

that

Procurement

procedures

demands

high

quality

governance in terms of transparency and accountability.


Table 19: Question 18: Proper audit and internal control system will
reduce the various problems of finance in Sumal Foods.
Variables
Numbers of the
responses Received
Percentage
Strongly Agree
32
53
Agree
18
30
Undecided
Disagree
10
17
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, it can be seen that 32 respondents which
represent 53% of the total population strongly agreed that Proper
audit and internal control system will reduce the various problems of
finance in Sumal Foods of finance in the research SUMAL FOODS. 18
respondents which represent 30% of the total respondents support
the opinion, while the remaining 10(17%) disagreed.

It can therefore be deduced that Proper audit and internal


control system will reduce the various problems of finance in Sumal
Foods.
Table 20: Question 19: Accountability is put in place to curb fraud
and misappropriation of funds in Sumal Foods.
Variables
Numbers of the responses
Received
Percentage
Strongly Agree
Agree
60
100
Undecided
Disagree
Strongly
Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, it can be seen that 60 respondents the
total respondents agreed that the accountability is put in place to
curb fraud and misappropriation of funds in Sumal Foods.
It can therefore be deduced that accountability is put in place to
curb fraud and misappropriation of funds in Sumal Foods.

Table 21: Question 20: Special laws and regulation are put in place to
curb fraud and misappropriation of funds Sumal Foods.
Numbers of the responses

Variables
Received
Strongly Agree
Agree
50
Undecided
10
Disagree
Strongly
Disagree
Total
60
Source: Field Survey, 2015

Percentage
83
17
100

From the above table, it can be seen that 50 respondents which


represent that 83% of the total respondents agreed that Special laws
and regulation are put in place to curb fraud and misappropriation of
funds Sumal Foods, while the remaining 10(17%) which represent the
majority were undecided.
It can therefore be deduced that Special laws and regulation are
put in place to curb fraud and misappropriation of funds Sumal
Foods.
Table 22: Question 21: The adoption of Information Communication
Technology enhances Procurement process in Sumal Foods.
Variables
Strongly Agree
Agree
Undecided
Disagree
Strongly Disagree

Numbers of the responses


Received
20
40
-

Percentage
33
67
-

Total
60
Source: Field Survey, 2015

100

From the above table, it can be seen that 20 respondents which


represent 33% of the total respondents strongly agreed that the
adoption

of

Information

Communication

Technology

enhance

Procurement process in Sumal Foods, while the remaining 40(67%)


which represent the majority of the respondents support the opinion.
It can therefore be deduced that the adoption of Information
Communication Technology enhance Procurement process in Sumal
Foods.
Table 23: Question 22: Recruitment and retention of unqualified
purchasing personnel will contribute to the down fall of public sector
procurement procedures.
Variables
Numbers of the responses
Received
Percentage
Strongly Agree
28
47
Agree
24
40
Undecided
8
13
Disagree
Strongly Disagree
Total
60
100
Source: Field Survey, 2015
From the above table, 28 respondents which represent 47% of
the total population strongly agreed that Recruitment and retention of

unqualified purchasing personnel will contribute to the down fall of


public

sector

procurement

procedures.

24

respondents

which

represent 40% of the total population support the opinion while the
remaining 8 respondents which represent 13% of the total population
were undecided.
It can therefore be deduced that Recruitment and intention of
unqualified purchasing personnel will contribute to the down fall of
public sector procurement procedures.
4.4

TESTING OF HYPOTHESIS

Ho: Public Procurement has no significant impact on Organisation


Performance
Hi: Public Procurement has significant impact on Organisation
Performance
Testing Of Hypothesis Using Table 17: Question 16 In The
Questionnaire

Tool employed:
Formula: x2 = (Fo - Fe) 2
Fe
2
Where
x = Chi-square
Fo = Observed data
Fe = Expected data = Fo = 60 = 12
5
5

Table 22: Construct Chi-square Test


Responses
Strongly agreed
Agreed
Undecided
Disagreed
Strongly Disagreed
Total

Fo
60
60

Fe

Fo Fe

12
12
12
12
12
60

(Fo Fe)2

(Fo Fe)2

144
2500
144
144
144
-

Fe
12
208
12
12
12
256

-12
50
-12
-12
-12
-

Calculated Chi-square x2= 256


The degree of freedom is calculated as follows
Df = (R-1) (C-1)
(5-1) (2-1) = (4) (1) = 4
Where R = Row, C = Column
Df = 4
Df = 4 and 5% level of significance
(0.050) x2 = 9.49
Since 256 > 9.49 we reject the null hypothesis and concluded that
Public

Procurement

Performance

has

significant

impact

on

Organisation

CHAPTER FIVE
5.0

SUMMARY

OF

FINDINGS,

CONCLUSION

AND

RECOMMENDATIONS

5.1

SUMMARY OF FINDINGS
The findings revealed that Sumal Foods has a well established

policy and procedures on

Procurement. The use of professionals in

the area of procurement procedures improves operational efficiencies

in Sumal Foods. Sumal Foods has formal strategic ways of evaluating


and sourcing for suppliers. Sumal Foods makes use of purchasing
order for procurement of Goods. Sumal Foods provides adequate
finance for Procurement department. Procurement department of
Sumal Foods has for long been overshadowed with inefficiency and
corruption.
The findings revealed that Sumal Foods has sound Procurement
policies and practices in place regulating organizations procurement
procedures. Sub-standard materials are seriously affecting the Sumal
Foods productivity. Professional buyers should be appointed as
procurer in any government institutions in Nigeria. Procurement
procedures in Sumal Foods, has for long been overshadowed with
inefficiency and corruption. Procurement procedures demands high
quality governance in terms of transparency and accountability.
Proper audit and internal control system will reduce the various
problems of finance in Sumal Foods.
The findings also revealed that accountability is put in place to
curb fraud and misappropriation of funds in Sumal Foods. Special
laws

and

regulation

are

put

in

place

to

curb

fraud

and

misappropriation of funds Sumal Foods. The adoption of Information


Communication Technology enhance Procurement process in Sumal
Foods. Recruitment and retention of unqualified purchasing personnel
will

contribute

to

the

down

fall

of

organization

procurement

procedures.

5.2

CONCLUSION
Measuring and reporting the effectiveness of procurement is a

new challenge in the field of purchasing. In many organizations the


effects of purchasing have not been determined or evaluated. The
procurement effectiveness reporting tool will produce information on
the effects of procurement that can be then used in developing the
purchasing activities in an organization.
When measuring procurement effectiveness, its important to
include a wide range of different factors. Among these factors are the
strategic and financial influence, quality of people and skills level and
transactional versus value added activity. Other factors to consider are
integration with business operations, management of suppliers,
innovation and risk management (Duggan, 2010).

Depending on the role of the procurement function, the


effectiveness of procurement is determined. In the case of the role
being weak and non-participative, the effects stay quite low. On the
contrary when the procurement role is strong, the effectiveness
becomes higher and more visible (Duggan, 2010).

5.3

RECOMMENDATIONS
Based on the findings it was recommended that:

When assessing the effectiveness of the procurement function, one


of the first things Sumal Foods should do is to be accounted for its
strategic influence. This means the level of participation and
involvement from the procurement function to the strategic
decisions made in the organisation. Another factor to consider is
the financial influence the procurement function has towards the
organisation. This is determined by the amount of non-pay roll
spend and contract compliance. (Duggan, 2010).
The Key parameters for Sumal Foods should use in identifying the
quality of people and skills level are the development and training

programs organised for the procurement staff. Whether the


procurement function is transactional or value added activity will
affect the effectiveness of the procurement in Sumal Foods. This
includes all the different areas of procurement; operational, tactical
and strategic and how they account to the procurement processes
(Duggan, 2010).
The cooperation with Sumal Foods other functions and processes
as well as with stakeholders relates to how effective the work of the
procurement function is. How the supplier management is
organised in the organisation is a definite factor to take into
account.

The

processes

dealing

with

contracting

and

communication and cooperation with the suppliers are issues that


will directly have an impact on the effectiveness (Duggan, 2010).
When innovation has a strong role in the procurement function, the
effectiveness can be increased for example through innovative
product development with the supplier. Continuous identification of
risks and managing and controlling them and how well this
performed will influence the results of the effectiveness of Sumal
Foods(Duggan, 2010).

BIBLIOGRAPHY
Bamisile, A.,(2012) Procurement Management in Business Org.
Ethiopian
Journal of Environmental Studies and Management EJESM
Vol. 5 no.4 (Suppl.1)
Beverlyne Awinja. Ingari, Robert Kisavi Mule, Charles Omondi
Ondoro,
Obura John Mark, Thairu Stella Njeri (2012). Procurement
Best Practices, A Potential Solution to Kenyas Supermarket
Performance Problem. Business and Management Review Vol.
2(5) pp. 48 60 July
Duggan, B. (2010). Procurement has no part to play in corporate
strategy
Myth. Journal of TC Strategic and Management
Consultants.
Vol. 1 Pg
Fayomi, Ikeoluwapo Omolara (2013). Public procurement and due
process policy in Nigeria: Thrust, prospects and challenges. Peak
Journal of Social Sciences and Humanities Vol.1 (4), pp. 39-45,
December, 2013
George McIntosh and Brian Sloan (2010). The Potential Impact of
Electronic Procurement And Global Sourcing Within The Uk
Construction Industry. School of the Built Environment, Napier

University, 10 Colinton Road, Edinburgh, Scotland EH10 5DT,


UK.
232-240
Gikonyo Peter Kiama (2014). Factors Affecting Implementation of
Public
Procurement Act in SACCO Societies in Kenya. International
Journal of Academic Research in Business and Social Sciences
February 2014, Vol. 4, No. 2
John Karanja Ngugi and Hildah W. Mugo(2010). Internal Factors
Affecting Procurement Process of Supplies In The Public Sector; A
Survey Of Kenya Government Ministries. Journal of Public
Procurement,Vol.1 No.1, pp.9-50.
Jacob Ola Alla (2011): Procurement law in Nigeria, Challenge for
attainment of its Objectives. Journal of Procurement Management.
USA Pp 1-20
Johanna Mki (2012). Measuring the Effectiveness Of Public
Procurement. Journal of International Business HAMK University
of
Applied Sciences
Mathonsi, M.D. and Thwala, W.D. (2011): Factors influencing the
selection of procurement systems in the South African
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Musa Success Jibrin, Success Blessing Ejura and Nwaorgu Innocent
Augustine (2014). The Public Procurement Reforms in Nigeria:
Implementation and Compliance Challenges. Journal of Asian
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Okoduwa Rasheedat A.(2011). Aspects of Corrupt Practices In Public
Sector Procurement. A Paper Presented At a 2-dayWorkshop on
Public Sector Procurement and Financial Management. Held At the

Public Service Institute of Nigeria, Dutsen-Alhaji, Abuja. Pp. 217


Ogbadu, E.E. (2010). Profitability through effective procurement
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Peter-John, L., Detlef, S., Harald, D. and Martha, D.T. (2012).
Reinventing Procurement to Drive Growth and Profitability.
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Trade
Agreements:
Smaller
Developing
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Considerations From A
Caricom Perspective. International
Public Procurement Conference
Proceedings 21-23 September

APPENDIX
QUESTIONNAIRE
THE POLYTECHNIC, IBADAN
DEPARTMENT OF PURCHASING AND SUPPLY

Dear respondent,

I am an undergraduate student from the above named institution; I am to


undertake a research work on the topic The Effect of Public Procurement on
Organisation Performance (A Case Study of Sumal Food, Oluyole Ibadan), this is part
of the requirement for the award of Higher National Diploma (HND).
All information given shall be treated with utmost confidentiality.
Thanks for your co-operation,

Yours Faithfully,

SECTION A: DEMOGRAPHIC DATA


MARK () WHERE APPLICABLE
1. Sex:

Male

2. Age:

21-30yrs

3. Marital Status:

Single

4. Educational Ground:

Female
31-40yrs

41yrs above

Married
ND

HND/BSc

MSc/MA

Professional
5. Length of Service:

Below 5yrs

5-10 yrs

11yrs & Above

6. Position Held:

Management level

Senior

Junior

SECTION B
Please respond to each statement by ticking ( ) the appropriate box on the following
scale: SA =Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree

S/N
7.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

SA
Sumal Foods, has a well established policy and procedures on
Procurement
The use of professionals in the area of procurement procedures improve
operational efficiencies in Sumal Foods
Sumal Foods has formal strategic ways of evaluating and sourcing for
suppliers
Sumal Foods makes use of purchasing order for procurement of Goods
Sumal Foods provides adequate finance for Procurement department
Procurement department of Sumal Foods has for long been overshadowed
with inefficiency and corruption.
Sumal Foods, has sound Procurement policies and practices in place
regulating organizations procurement procedures
Sub-standard materials is seriously affecting the
Sumal Foods
productivity
professional buyers should be appointed as procurer in organizations in
Nigeria
Public Procurement
has significant impact on organisation
Performance
Procurement procedures demands high quality governance in terms of
transparency and accountability
Proper audit and internal control system will reduce the various problems
of finance in Sumal Foods
Accountability is put in place to curb fraud and misappropriation of funds
in Sumal Foods
Special laws and regulation are put in place to curb fraud and
misappropriation of funds Sumal Foods
The adoption of Information Communication Technology enhance
Procurement process in Sumal Foods
Recruitment and retention of unqualified purchasing personnel will
contribute to the down fall of organizations procurement procedures

SD