5181550188

SCHOOL OF BUSINESS

DEPARTMENT OF ACCOUNTING
INDEX NUMBER 5181550188

LECTURER NAME : MR EVANS KYEREMEH

COURSE TITLE : INTRO. TO PROCUREMENT MANAGEMENT

COURSES CODE : BBA 245

ACCOUNTING GROU : 2

INDEX NUMBE : 5181550188

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QUESTION 1
(1)

From my point of view and understanding, the buyer at BennyQueen limited, Nick Coffie is

not practicing ethical in his attitude towards Eva Holding Tech. Nick coffie was compelling

Eva Holding Tech to discontinue using BennyQueen’s competitor equipment and replace them

with BennyQueens limited equipment which is unethical. Nick was giving an exchange offer

to Eva to either get the contract or use the product of the competition. the choice of product is

up to the instincts and taste of the buyer or user but it cannot be compelled to changing Eva

Holding Tech equipment. I also realized Nick was abusively using large buying power to

restrict competitive market opportunities. This is a restricting competition from the other

company whose equipment are used at Eva Holding Tech. I think Nick should rather focus on

the capabilities, expertise in fulfilling the procurement requirement. It is unethical behavior

because we know ethical behavior implies exemplary approach to all procurement processes

that cannot be questioned or criticized and it is the basis on which most of the procurement

related principles, such as professionalism, fairness, integrity and transparency are based. some

unethical behavior that was found in the case was; clever practice intended to take undue

advantage of others and conflicts of interest by Nick Coffie at BennyQueen. The type of

behavior in the case can be termed as Reciprocity. It is referring to purchase arrangement where

it requires one party to comply with the other pf the first party needs a contract or agreement

or kind of business.

(2)

Eva should reconsider her proposal to BennyQueen and she should not accept their

counterproposal. It is clear that this company is acting unethically in this situation and if Eva

Holding Tech involves themselves with BennyQueen they may encounter other problems in

regards to ethics in the future. Eva should continue to look for other buyers.
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QUESTION 2

1. Build Virtuous Supplier Relationships

One of the main components of being a procurement professional is being surrounded by a

group of trustworthy suppliers. Building and maintaining good supplier relationships

streamlines the procurement process and eliminates the need to start from scratch on every bid

request. It takes a lot of time while building and maintaining the relationships with the

suppliers. An upbeat and satisfied supplier is itself an asset to the organization. If you are

familiar with the supplier for a long period of time, it will be easy for you to determine their

negotiation pattern and supplier behavior. This makes it easy for you as a procurement

professional to deal with him. Although, there is always an option of on-boarding a new

Vendor. But, this process is time-consuming and would require you to invest your resources.

Hence, you shall maintain the professionalism while dealing with the vendors, ensure that they

are paid on time and often appreciate them for their skills and services.

2. Enhance your Network

Enhancing your network will give you an exposure to new ideas. Thus, you shall include and

consult the stakeholders from other teams while taking a charge of any project. With their

inputs, accomplishing the project will become simpler for you. Apart from that, the good

relationships you will form within the organization, plays a major role in building trust, giving

a boost to efficiency and in a quick workflow. Many Hands Make Light Work.

However, if there is no involvement from the other departments, then there is always an option

of growing your network through blogging, LinkedIn, reading blogs and connecting with the

people working and leading in your domain.

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3. Improving and Utilize your Analytical and Negotiation Skills

Managing the Vendors is an art of Procurement Officer. You are required to smoothly

communicate with your suppliers regarding the quality, technical specifications, negotiations

and delivery of the material to your premises. Therefore, you shall enhance your problem

solving, communication, analytical and negotiation skills in order to achieve maximum benefit

for your organization. In order to become a better procurement manager, you shall also

understand and respect the supplier’s point of view. This would help you in Supplier

Relationship Management (SRM) and Supplier Performance Management (SPM) over the time

frame.

4. Keep an Eye on Global Market Trends

Often, there are circumstances when the rates of the material which you are acquiring increases

in the market. The reasons for the increase in rates are dependent most of the times on global

and sometimes on the local market trends. Therefore, as a procurement professional, you must

always have an eye on the global trends and shall acquire the redundant material when it’s cost

in the market is low.

5. Think Carefully Before Making a Purchase

Procurement reduces costs while obtaining the items a company needs. Yet simply creating a

purchase order for every request that comes in doesn’t mean costs are actually being reduced,

in fact, often it means the opposite. Continually surveying what is being used and

communicating with whomever is using those products keeps the company running faster and

smarter. With contracts being such a huge part of the purchase process, it’s important to ensure

that a simple, comprehensive system is in place both to create and review orders.
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This helps the process move smoothly once a decision is made to purchase, and makes it easy

to review contracts and ensure all orders are up-to-date.

QUESTION 3

In Ghana, public procurement is one of the most controversial issues because it has both

economic, social and governance implications. Ghana decided to fundamentally reform its

procurement system to ensure efficient, fair and transparent public procurement. It was

intended to promote the use of public procurement as a tool for national development. Ghana‟s

effort to reform its procurement system is part of the Government‟s effort to operationalize its

concept of good governance. According to Anvuur and Kumaraswamy (2006), the public

procurement reform programme is part of a wider reform agenda targeted at improving public

financial management. The objectives of the procurement reform proposals are to: promote

national development; enhance harmony with other local and international laws; foster

competition, efficiency, transparency and accountability; facilitate ease of procurement

administration; and, ensure value for money (Ministry of Finance, 2001). Annual savings of

about US$150 million are envisaged through better management of government-financed

procurement alone (World Bank, 2003). A key deliverable of the procurement reform was a

draft Public Procurement Bill, which was enacted into law by Parliament of Ghana in 2003.

Harmonize public procurement processes in the public service:

Harmonizing the public procurement processes in the public service is a key objective of public

procurement in Ghana. The PPA, 2003 (Act 663) establishes the Procurement Structures in

respect of the Public Procurement Board and provides the administration and institutional

arrangement for procurement in respect of Tender Committees, Tender Evaluating Panels and

Tender Review Boards. Each of these structures has its designated function to ensure the
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smooth flow of the procurement processes. Methods and procedures of procurements of all

public goods and services and/or contracts have been enshrined in PPA, 2003 (Act 663) to

ensure that harmonization and transparency in the public procurement process is achieved. The

object of the Board is to harmonize the processes of public procurement in the public service

to secure a judicious, economic and efficient use of state resources in public procurement and

ensure that public procurement is carried out in a fair, transparent and non-discriminatory

manner (Section 2, Act 663) (The Public Procurement Oversight Group, 2002).

Ensure Value for money (VFM): VFM) is the most important principle of procurement

(Raymond, 2008) and most important objective achieved by Ghana procurement reforms.

According to Bauld and McGuinness (2006), VFM in the public sector involves consideration

of the contribution to be made to advance government policies and priorities while achieving

the best return and performance for the money being spent. Cummings and Qiao (2003)

indicated that in order to obtain VFM, sometimes the government is at liberty to consider other

criteria than the lowest price; for example technical capabilities, qualifications of key

personnel, and past performance records in awarding contracts to potential suppliers. Palmer

and Butt (1985) identified barriers such as weak governing bodies, politics, tradition and lack

of education and training programmes which need to be conquered so as to achieve VFM.

Ghana procurement reforms help to achieve this objective.

Ensure public procurement is fair, transparent and non-discriminatory.

Another key objective of the public procurement reforms in Ghana is, it has ensure that public

procurement is fair, transparent and non-discriminatory. Public procurement is the acquisition

of goods, works and services at the best possible total cost of ownership, in the right quantity
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and quality, at the right time, in the right place for the direct benefit or use of governments,

corporations, or individuals, generally via a contract (PPA Module, 2007). And so, to achieve

the objective of ensuring that public procurement is fair, transparent and non-discriminatory,

the PPA, 2003 (Act 663) establishes the Procurement Structures in respect of the Public

Procurement Board and provides the administration and institutional arrangement for

procurement in respect of Tender Committees, Tender Evaluating Panels and Tender Review

Boards. Going through this institutional arrangements and procedures of the public

procurement ensure that contractors/suppliers are treated fairly in a non-discriminatory

manner, thereby ensuring better achievement of transparency in the public procurement. For

instance, the PPA, 2003 (Act 663), unless otherwise, prescribes the use of competitive

tendering to ensure that all qualify potential suppliers or contractors can bid for government

contracts without any discrimination.

Accountability, Fairness and Efficiency in Public Procurement

Accountability, fairness and efficiency are three cardinal pillars that procurement reforms seek

to achieve in that a very fair and accountable procurement system helps in the efficient

utilization of the state resources judiciously. Procurement practitioners need to be very fair in

their day-to-day dealings with their suppliers and potential bidders and the public at large in

order to earn the trust of the various actors within the procurement system. Accountability

refers to the process of holding an individual or an organization fully responsible for actions

and functions they are engaged in and over which they have authority to exercise those

functions. The benefits of accountability and fairness are as follows: the strengthening of the

perception of transparency and fairness; the reduction of the incidence of corruption; the

development of mutual trust and the fact that procedures are adhered to for example in all stages

of the tendering process. An efficient public procurement system has the benefit of being
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operated in a very timely manner with little or no bureaucracy and thereby helping to instill

and underpin the trustworthiness of the procurement system.

Reducing Corruption

Corruption in public procurement is a big problem for developing countries because it leads to

a significant waste of public funds. The public procurement process can provide opportunities

for corrupt officials to engage into illegal practices (Trepte, 2005). According to Arrowsmith

et al. (2000) corruption in public procurement can cover various types of practice and can

involve various forms of collusion between government and bidders. For instance, the

procurement entity may award contracts on the basis of bribes rather than on the basis of the

best quality and price of the products; contracts may be awarded to firms in which one has a

personal interest; and contracts may be awarded to political supporters amongst others.

Corruption can occur in the execution as well as award of contracts in which officials can

collude with bidders to allow them to claim extra payments for non-existent work (Arrowsmith

et al., 2000). The procurement planning and the delivery phase are particularly exposed to

corruption and the need to be carefully monitored (OECD, 2006). The reforms has enable

government to reduce corruption in Ghana procurement.

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