EFFECTS OF CONTRACT MANAGEMENT ON SUPPLY CHAIN

PERFORMANCE, A CASE STUDY OF MOMBASA COUNTY

BY

BRIDGID OTEBA

INDEX NO.1061220168

A RESEARCH PROJECT SUBMITTED TO THE KENYA NATIONAL

EXAMINATION COUNCIL IN PARTIAL FULFILMENT OF THE
REQUIREMENT FOR AWARD OF DIPLOMA IN SUPPLY CHAIN
MANAGEMENT IN KENYA COAST NATIONAL POLYTECHNIC

NOVEMBER,2022
 DECLARATION
This project is my original work and has not been presented for examination in any college or
university

Signature: …………………………… Date……………….

Brigid Oteba

Approved by the supervisor Mr. Charles Nthiwa.

This research has been submitted for examination with my approval as the supervisor.

Signature: …………………………… Date………………

Mr. Charles Nthiwa

Kenya Coast National Polytechnic

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 DEDICATION
I dedicate this research project to my family for their encouragement, my lecturers and friends who
have supported me continuously throughout my education journey, it has been a great motivation in
life as well.

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 ACKNOWLEDGEMENT

Special thanks to my supervisor Mr. Charles Nthiwa for guidance, advice and encouragement he
showed me in the course of preparing this project.

Special acknowledgement to my family members Pascal Oloo and Everlyn Oteba for their financial
support and my friends for their continued support they gave me in the course of writing this
project.

TABLE OF CONTENTS

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DECLARATION............................................................................................................................................ii
DEDICATION...............................................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................................iv
LIST OF ABBREVIATION..........................................................................................................................vii
ABSTRACT.................................................................................................................................................viii
CHAPTER ONE..............................................................................................................................................1
Introduction.....................................................................................................................................................1
1.1 Background of the study............................................................................................................................1
1.2 Statement of the problem...........................................................................................................................2
1.3 Objective of the study................................................................................................................................3
1.4 Research questions....................................................................................................................................3
1.5 Scope of the study.....................................................................................................................................3
1.6 Significance of the study...........................................................................................................................4
1.7 Limitation of the study...............................................................................................................................4
CHAPTER TWO.............................................................................................................................................5
LITERATURE REVIEW................................................................................................................................5
Introduction.....................................................................................................................................................5
2.1 Literature Review......................................................................................................................................5
2.1.1 Stakeholder’s theory...............................................................................................................................5
2.1.2 Theory of constraints..............................................................................................................................5
2.1.3 Principal Agent Theory...........................................................................................................................6
2.1.4 Contract Theory......................................................................................................................................6
2.2 Conceptual Framework..............................................................................................................................7
2.3 The Empirical Review...............................................................................................................................9
2.4 Critique of The Literature Review.............................................................................................................9
2.5 Summary and Gaps..................................................................................................................................10
2.5.1 Research gaps.......................................................................................................................................10
2.5.2 Summary gaps......................................................................................................................................10
CHAPTER THREE.......................................................................................................................................11
RESEARCH METHODOLOGY...................................................................................................................11
3.1 Introduction.............................................................................................................................................11
3.2 Research Design......................................................................................................................................11
3.3 Target Population....................................................................................................................................11
3.4 Sampling Size Design..............................................................................................................................12

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3.5 Study Instrument.....................................................................................................................................13
3.5.1 Reliability Validity test.........................................................................................................................13
3.5.2 Validity of Instruments.........................................................................................................................13
3.6 Data Collection........................................................................................................................................14
3.6.1 Primary Data.........................................................................................................................................14
3.6.2 Secondary Data.....................................................................................................................................14
3.7 Data Analysis...........................................................................................................................................15
CHAPTER FOUR.........................................................................................................................................16
ANALYSIS PRESENTATION AND INTERPRETATION.........................................................................16
4.1 Introduction...........................................................................................................................................16
4.2 Response rate and validity.......................................................................................................................16
4.2.1 Table.................................................................................................................................................16
4.2.2 Tabulation of the responded gender......................................................................................................16
4.2.3 Level of Education................................................................................................................................17
4.2.4 Working Experience.............................................................................................................................17
4.2.5 Respondents position in the company...................................................................................................17
4.3 Pilot test result.........................................................................................................................................18
4.4 Analysis of study variables......................................................................................................................18
4.5.1 Post contract appraisal..........................................................................................................................18
4.5.2 Contract closure....................................................................................................................................18
4.5.3 Contract Administration.......................................................................................................................19
4.5.4 Dependent variable supply chain performance.....................................................................................19
CHAPTER FIVE...........................................................................................................................................20
DISCUSSION OF SUMMARY CONCLUSION AND RECOMMENDATION..........................................20
5.0 introduction.............................................................................................................................................20
5.1 summary of the findings..........................................................................................................................20
5.2 Recommendation.....................................................................................................................................20
5.3 Conclusions.............................................................................................................................................21
5.4 Areas for further research........................................................................................................................22
REFERENCES..............................................................................................................................................23
APPENDDIX 1.............................................................................................................................................24
APPENDIX II................................................................................................................................................25

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 LIST OF ABBREVIATION
FAR : Federal Acquisition Regulation

ICT : Information Communication Technology

SPSS : Statistical Package and Social Science

CPIF : Cost Price Incentive Fee

FFPC : Firm Fixed Price Contract

FPI : Fixed Price Incentive

FPEAC : Fixed Price Economic Adjustment Contract

CRC : Cost Reimbursement Contract

CPFF : Cost Price Fixed Fee

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 ABSTRACT

The main purpose of this study is to examine the effects of contract management on supply chain
performance in Mombasa County. Specifically, the study assessed the impact and examined the
effect of contract management on supply chain performance. The study was conducted using
descriptive survey design and targeted 246 senior County officials attached to procurement,
administration, health and finance departments in various sub counties of Mombasa County.
(Mombasa County public service commission 2022) out of which a sample size of 132 respondents
were drawn and selected using stratified random sampling methods. Questionnaires were used to
collect data after pilot testing them in public procurement County. The questionnaires were also
pretested to ensure content validity and for reliability at the recommended Cronbach Alpha of 07
the data was analyzed using both descriptive and inferential statistical methods, the findings
revealed that contract management had a significant effect on the supply chain performance in
Mombasa County. This implied that improving contract management would significantly influence
the performance of the supply chain to the procurement facilities in Mombasa County. The study
recommended that procurement facilities revise their contracting policies and procedures and
communicate them to suppliers so as to draw contracts for certain levels on contracts exceeding a
specified amount of money.

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 CHAPTER ONE
Introduction

This chapter covers the background of the study, statement of the problem, objectives of the study,
research questions, and significance of the study and the scope of the study.

1.1 Background of the study

Rapid innovation, increasing customers demand, globalization and obsolescence of products are
promoting an increasing number of firms to concentrate on their supply chain to remain
competitive success depends upon performance improvement at the supply chain level. Ability to
innovate and improve lies within the relationship forged among the business partners who are chain
members.

Procurement planning can be an important tool for achieving high supply chain performance in the
public sectors when well designated and implemented. Advanced planning will result in cost
saving, more efficient business operations and therefore increase profitability.

Procurement planning is one of the most important steps in the public procurement cycle. The
procurement plan is expected to list all the requirements that are under the responsibility of a
particular procure entity and that are expected to be procured over a period of time. There are
instances where some items that are below a certain monetary threshold are not listed in the
procurement plan, however effort should be made to have everything that a particular procurement
entity is responsible for procuring listed on the procurement plan of that procurement entity. The
procurement plan is not only useful for determining what need to be procured and by when, but it’s
also for determining the need for additional manpower to support the preparation of specification
and bid document, requesting, receiving and evaluating offers, contract negotiation and award,
contract administration given the number of procurement requirements within a certain period of
time.

Supply chain management has been termed as crucial function in many organizations whether in
the service or production industry. This is because every organization aims at satisfying their
customers whether internal or external which in turn lead to improve performance. Supply chain
governance has changed the way public sector operates. This is a result of integration which

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enhances coordination of demand in order to satisfy customer needs; supply chain governance not
only helps organizations to streamline and manage supplier quality and supplier performance but
also enables them to identify, mitigate and manage supplier risks for key procurement and
manufacturing processes.

Mombasa County is one of the 47 counties set up by constitution of Kenya 2010 that came into
being in March 2013 when power was decentralized from the center (Nairobi) to the 47 counties.
The County is one of the largest County in Kenya with a population estimated at 213,116 the
County has been characterized with a myriad of procurement tender of the year which has seen the
national government, County government and other Non-government organization allocating funds
towards better tender supply for example the County has witnessed one of the highest level of
corruption, high level prevalence and efforts have been put in place to alter the situation
irrespective of the efforts by the government and other development partners. Little has been
achieved further in the walls of devolved government system. The County is yet to achieve much
with respect to supply chain performance which has been greatly attributed to poor procurement
planning. This has further led to deteriorating supply standards in the County as funds which have
been allocated for tender improvement program have failed to yield any formidable results.
Therefore, with the increased demand for better services in public sector there are need to
effectively manage the public supply chain.

1.2 Statement of the problem

The contract management is a critical component of procurement process of public bodies.

Contract management enhances the procurement process in diverse ways including anticipating
future needs of users, reacting to arising challenges and achievement of product and service quality.
Other aspects include lead times in service delivery, budget considerations in procurement,
optimization of the efficiency, effectiveness and economy of service in contracture relationship,
balancing costs against risks and actively management the relationship between procurement
parties. The mismanagement of procurement contracts continues to occur despite the enactment of
the Public Procurement Assets and Disposal Act PPADA (2015) and the Regulations 2006 as well
as creation of public procurement Regulatory Authority (PPRA) meant to promote effectiveness in
public procurement and contract management.

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New regulatory requirements, globalization increase in contract volumes and complexity have
resulted in an increasing recognition of importance and benefits of effective contract management.
Contract management in public procurement has significant implication for service delivery. Any
challenges accruing from this function pose several challenges yet contract management offers an
important framework for ensuring the success of any procurement undertaking. With this
knowledge gap, this study therefore sought to investigate the influence of contract management
practices on supply chain performance specifically looking at Mombasa County.

1.3 Objective of the study

The general objective of this study was to determine the influence of contract management
practices on supply chain performance in Mombasa County. The specific objectives were:

i. To determine the extent to which relationship management influence supply chain

performance in Mombasa County.
ii. To assess the influence of contract administration on supply chain performance in Mombasa
County. iii. To examine the influence of post contract appraisal on supply chain performance
in Mombasa County.

1.4 Research questions

i. How can contract management process be improved and relationships in supply chain
performance information.
ii. How to meet the contractual items agreed upon in the contract post appraisal.

iii. To find out the extent to which contract manager affect supply chain performance.

1.5 Scope of the study

The study was carried out from May to November 2022 in Mombasa County. The specific
variables of the study include relationship management, contract administration, post contract
appraisal, contract closure and supply chain performance. The study sought to establish how the
above variables influence the performance of procurement officers, need to be in consideration
with performance of the contract, to provide better geographical image of the County by making
agreement successful with supplier and others. The study findings are based on the last season of
the year where it took approximately one year.
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1.6 Significance of the study

First the proposed study could help the Ministry of Education, Mining, Energy and
Industrialization both at the County levels and the national level to better understand the current
situation and accordingly make changes to address the factors that contribute to economic
development among the youths. This also can be coupled with strategies of minimizing the effects
of the environmental degradation in Kenya like many other developing countries faced with the
social problem of high rates of unemployment. To make matters worse the percentage of poor
tender application increases yearly despite the efforts to eradicate the problem failure to solve this
problem not only threatens the life of individuals but also the economic and social development of
the country as a whole.

Finally, the research is expected to contribute a lot to the body of knowledge in the area of trade,
industrialization and mining industry, future researchers, learners and scholars will be able to get
firsthand information that shall enrich their knowledge.

1.7 Limitation of the study

Lack of co-operation

The research may find hard time to cooperate with the other staffs who are supposed to help in
research and some questions to be answered.

Lack of enough time

Some research needed more time for better research and also time allocated may be not enough.

Finance

The research had insufficient funds to buy or purchase the required equipment and also same part
of welfare like transportation and food.

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 CHAPTER TWO

LITERATURE REVIEW

Introduction

This chapter reviews thematically the relevant literature guided by the research objectives. The
chapter outlines the contract management on supply chain performance, literature under the various
subtopics as guided by the two objectives and a conceptual framework has been included to show
the relationship between independent and dependent variables.

2.1 Literature Review

This research will be anchored by the following theories:

2.1.1 Stakeholder’s theory

Stakeholders theory originated by Freeman (2015) is defined as any group or individual who can
affect or affected by the achievement of the organization’s objectives, unlike agency theory in
which the managers are working and serving for the shareholders, stakeholders theorists suggest
that managers in organizations have a network of relationship to serve that include the suppliers,
employees and business partners. According to freeman (2016) each stakeholder is given an
important say in making important decisions. Business and executives who manage them should
create value for customers, suppliers, communities and financiers (Stieb 2016) the stakeholder
argues about the importance of firm paying special attention to the various stakeholder groups that
are deemed to have a stake in the operations of an organization. The representation of all
stakeholder groups on boards is therefore necessary for effective supply chain performance
(Gibson, 2015). The model depicts the stakeholders in a typical large corporation. The stakes of
each are reciprocal since each can affect the other in terms of harms and benefits as well as rights
and duties (Freeman 2017) owners have financial stake in the corporation and expect returns.

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2.1.2 Theory of constraints

Ochieng (2016) theorized that the theory of constraints (TOC) is a philosophy of management and
improvement originally developed by Eliyahu M. Goidratt and introduced in his book. The goal, it
is based on the fact that, like a chain with its weakest link in any complex system at any point in
time there is most often only on aspect of that system that is limiting the ability to achieve more of
its goals. For the system to attain any significant improvement that constraint must be identified
and the whole system must be managed with it in mind.

In borrowing this concept procurement seek to identify the constraints in the contract management
that emanates from poor contract administration and monitoring then work collectively to eliminate
the constraint thus improving the achievement of the goals and objectives of the contract. The TOC
thinking process taken as a whole provides an integrated problem saving methodology that address
not only the construction of solutions but also the need for communication and collaboration that
successful implementation of supply chain function requires.

2.1.3 Principal Agent Theory

Agency theory was expounded by Aichian and Demsetz (1972) and further development by Jensen
and Meckling (1976). The theory defines the relationship between principals such as shareholders
and agents or company executives and managers, in this theory shareholders who are owners of the
company hire agents to perform work. This theory relates to independent variables on post contract
appraisal where the principal delegates the running of the business to the managers who are the
shareholder’s agents (Clarke, 2004).

Encapsulates the idea that public sectors performance can be improved if incentive based contracts
between different actors are implemented. Principals will be more likely to achieve their desired
outcomes, while agents will have clarity around work programs and goals. Agency theory and
public administration and policy since its emergence in 1970s. It was particularly instrumental in
many high incomes developed countries through the 1980s and 1990s, with often radical public
sector reforms resulting its legacy has endured with many public sectors.

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2.1.4 Contract Theory

In economics, the contract theory studies how economy actors can and do contract. Contractual
arrangements generally in the presence of asymmetric information because of its connection with
both agency and incentives, contract theory is often categorized within a field known as law and
economics. One prominent application of it, is the design of optimal schemes of managerial
compensation (latfont, Martimort, 2012). A standard practice in the micro economics of contract
theory is to represent the behaviors of a decision maker under certain numeral utility structures and
then apply an optimization algorithm to identify optimal decisions. Such procedure has been used
in the contract theory framework to several typical situations labeled moral hazards, adverse
selection and signaling the spirit of this model lies in finding theoretical ways to motivate agent to
take appropriate actions.

2.2 Conceptual Framework

The fundamental purpose of contract and supplier management is to ensure that suppliers meet
their contractual obligations and that the contract requirements are successfully delivered. This
includes meeting any special contract performance conditions, indicated in the competition
documentation and related to the contract subject matter which may coverer economic, innovation
related, environmental, social or employment-related conditions (Wan, 2014). It is therefore
essential that anyone engaged in managing suppliers reads and fully understand contract terms and
conditions otherwise they are at a permanent disadvantage should any issue arise (Langat 2012, It
is essential that the organization’s contract management/contract management officer is reduction
Vs. product enhancement).

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8
 Relationship Management

 Contract information
 Contract participation
 Feedback on contracts
 Commitment

Contract Administration

 Contract planning
 Contract controlling
 Contract monitoring
Supply Chain Performance

 Lead time
 Customer satisfaction
Post Contract Appraisal  Delivery defect rate

 Audits
 Report
 Shared monitoring

Contract Closure

 Dispute resolution
 Contract certification
 Contract termination
Independent variable Dependent Variable

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2.3 The Empirical Review

A study by Masaba Moses(2015) on contracting and procurement performance of state owned

enterprises in Uganda established that there existed a strong positive relationship between
contracting and procurement performance. The study also found that contracting predicted
procurement performance of up to nearly 60% variance for every unit percentage positive change.
In addition, procurement performance was related to contract objective ability to contract and
procure. This result suggests that good contracting process have higher procurement performance
levels and vice versa. This implies that state owned enterprises with a good procurement
performance are associated with good contracting systems. It is therefore evident from the findings
that if state owned enterprises are to improve on their procurement performance attention should be
devoted towards strengthening the contracting process.

Wanyonyi and Muturi (2015) in their study found that the main areas that were observed to be the
key contributors to staff competence included training of new employees in the procurement
department enhancing team work of procurement staff acquaintance of the Procurement Act by the
procurement team and employing qualified and competent personnel in procurement department
among others.

Parastatals in Kenya highlights some of the factors that contribute to inefficiency in public
procurement corruption, delayed payments, poor planning, statutory amendments, low public
participation negatively affects public procurement in the County.

2.4 Critique of The Literature Review

In the study of effect of contract management in Mombasa County, John and Peterson (2016)
emphatically examined relationship between staff competence top management support and
budgeting procedure and independent variables and dependent variable, the findings of the study
indicates positive relationship between the variables on the contrary, Nzau and Njeru (2014)
analyzed the factors or effects of contract management of public purchase in Mombasa County by
examining staff competence.

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Contract management is grouped broadly in to delivery management, relationship management and
contract administration. Delivery management may include checking the nature quantity and
quality of goods supplied, James Biutt (2014) on delivery and also when appropriate at the
manufacturer works are carried out including conformity with design and drawings quality of
workmanship and material service performed.

Relationship management seeks to keep the relationship between the economic operators and the
contracting authority open and constructive with the aim of resolving or erasing the tension and
identification of potential problems at an early stage while also identifying opportunities for
improvement. Relationship must be wholly professional throughout and must include professional
approach to managing issues and disputes.

Contract management covers the formal governance of the contract and any permitted changes to
documentation during the life of the contract. Arrow Smith (2011) the area of contract management
ensures that the every aspects of making the contact run effectively and efficiently are taken care
of.

2.5 Summary and Gaps

2.5.1 Research gaps

In a study undertaken by Nzau and Njeru (2014) on effects of contract management on supply
chain performance of Mombasa County by empirically examining relationship management as
independent variable and supply chain performance as dependent variable. Sharme (2013) on
leadership management, it was observed that the commitment from both top management parties
was inadequate and the study faced to capture contract management internally and externally
organizational performance. Survey on chief executive officer was responsible for driving
development and execution of contract.

It’s evident that the main focus of research has so far be on contract management and how it affects
the supply chain performance of Mombasa County the contract is specifically on agreement within
organization in the County level.

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2.5.2 Summary gaps

The chapter has described theories which guided the study. These theories include: stakeholders’
theory, theory of constrains, principal agent theory and contract theory.

CHAPTER THREE
RESEARCH METHODOLOGY

3.1 Introduction

The chapter explains in details the methodology of the study including the research design, target
population sampling size sampling techniques and procedure of data collection the procedure and
methodology adopted in the study to validate the outcome of the research are explained it also
provides the description of the validity and reliability issues as well as ethical consideration of
the research.

3.2 Research Design

Tromp (2015) research design is the outline plan or scheme that is being used to generate
answers to the research problem; it is basically the plan and structure of investigation. The study
used to descriptive research sought to establish factors associated with certain occurrence
outcome conditions or type of behavior, descriptive survey research was adopted for this study,
descriptive research design is a scientific method of investigation in which data is collected and
analysed in order to describe the current conditions, terms or relationships concerning certain
specific, Kothari (2015).

The findings of Creswell(2016) observed that descriptive research design is used when data is
collected to describe person, organization setting or phenomena, the casual relationship exist
when changes in one variable cause change in the either, descriptive design use a planned design
for analyzing, Mugenda and Mugenda(2016).Descriptive survey is a method of collecting
information by interviewing or administering questionnaire to sample of individual,
Orogho(2017).Research design is a guideline of how one goes about answering the research
questions that clearly define purpose and her consistence between the research questions and
proposed research method, Sekarani(2015)

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3.3 Target Population

Research defines target population as a set of item that are to be included in the study in the case
of county government function have been devolved into department at sub county government.
Mombasa County has a work force of 4100 employees in seven departments according to the
county government records as at august 2015, however the total number of employees directly
involved in financial and procurement related aspects total to 80 as detailed in table 1 below. The
study targeted the directors, senior managers, middle level manager and support staff form
Mombasa County who are directly related to financial aspect of the government. It was expected
that employees working in finance and procurement department were the ideal respondent in
order to obtain the relevant insight that could here to answer the study question according to the
following number of employees.

Sample size of study

Category Study Population Sample size Sample

Directors 8 100% 8

Senior managers 12 100% 12

Middle level manager 15 100% 15

Support staff 25 100% 25

Total population 60 100% 80

Table 3.3

Source Author: 2021

3.4 Sampling Size Design

Sampling is the process by which relatively small number of individual object or even is
selected and analyzed in order to find something about the entire population from which was
selected Kothari (2017) a sample is small proportion of selected using some systematic form,

13
 the research use the sample size of the 80 according to Krejcie and Morgan (2016) sample size
is an estimation methods provided a given number of population (N) And its sample size(S).

Purpose of sampling is to drawn conclusion from as ample based on selected features and
attributes that represents the whole population, the sampling strategy used in this study is non
profitability purposive sampling strategy which ensured that the key respondent participated in the
study. Researcher observes the factors that influence sample representation, sample processing size
and participation response, Mugenda and Mugenda (2016)in a study on research method
quantitative and qualitative approach asserts that sampling is that part of statistical practice
concerned with selection observation to yield knowledge and possible statistical influence
Sekaram(2015) in his finding or research method of business as kill building approach observes the
characteristics of sample as reflection of this population from which is drawn according to
Mugenda and Mugenda (2016).

A researcher would have to use 30% of the total target of the population as a sample size for it to
be accepted as good representative sample for the study all the respondent has sufficient knowledge
on the effect of procurement contract could influence organization performance, Yamane (2010)
has a simplified formula for calculations sample size at 95% confidence level as p=0.5 especially
huge population

N= N (1+n (e2))

N=80(1+80) (0.1)
There sample
size=60

3.5 Study Instrument

3.5.1 Reliability Validity test

Reliability of an instrument is the measure of the degree to which a research instrument yields
consistent results or data after `repeated trials, Cooper(2016) to test the reliability of the question
are as a research instrument ,a test retest technique was employed in which question are was
administered the test was repeated after two weeks the aims at establishing the extent to which
the question are elicited the same response every time if administered, the researcher

14
 accommodated comments of those informers who involved in pre-testing so as to modify the
instruments

3.5.2 Validity of Instruments

Validity of the study refers to the quality and instruments of the study are accurate, correct true
meaningful and right, Kothari (2017) to ensure validity of date of the research for every item that
was written, the next crucial step was to subject question are to validation process, this is an
extremely important excursive that cannot be skipped in the development of an instruments,
Kaiser-olkin (KMO) used to measure validity of data was collected

3.6 Data Collection

The questionnaire was administered to the respondent using a drop and pick later method the
respondent was informed that the objectives of the survey was to gather information about the
effect of procurement contract, according to white (2018) research instrument include
questionnaire, interview schedule observation and focus group discussion in this study a set of
structure questionnaire was developed and distributed to respondents in collecting the required
data

3.6.1 Primary Data

Primary data are those data which are conducted afresh for the first time, this happens to be
original its information are gathered directly from respondent, it involves creating new data
primary data maybe gathered through questionnaire, interview, observation and experimental
studies Kothari (2014) such data as provided by the subject in the sample through the schedule
interaction using well prepared tools

Questionnaire

This is a popular method of data collection particularly in the case of big enquiries; it’s adopted by
private public organization and even government; this method was sending to the person
concerned.

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3.6.2 Secondary Data
The secondary data in this study was obtained through reports from Mombasa County
management, different publication by the company’s website, internet search method and
documentary analysis method

Document
review

This was a used to collect secondary data from the relevant document by sources including
reports, journals, and internet, from Mombasa County

3.7 Data Analysis

Data analysis is a process of assembling or reconstructing the data in a meaningful or
comprehensive fashion it’s the process of examining the collected raw data detect error and
correct them Wanyonyi(2017) before data analysis is conducted all data received from
correspondence were checked for completeness and where data is a missing, specific respondents
for questionnaire used as a sort to provide missing data also data cleaning and cording was
conducted for each questionnaire ,thereafter data analysis took place using statistical package for
social sciences (SPSS) tool in order to come up with frequency and percentages and the
relationship between the variables that established and tested using person correlation

Category Frequency Percentage

Response 60 60
Non-response 20 40
Total 80 100

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 CHAPTER FOUR
ANALYSIS PRESENTATION AND INTERPRETATION
4.1 Introduction
The chapter provides the results and interrelationship and discussion of the findings and
discussions of the findings obtained from the field the background information of the responded
and also analyses of data on effects of contract management on supply chain performance

4.2 Response rate and validity

This section shows demographic characteristics of the respondents who were involved in the
study number [80] respondents were involved in the study based on four aspects age, gender,
Education levels and working experience

In the response of questionnaires were obtained while 40% of the questionnaires were not
returned the table 4.1 was adopted to help in summarization of the response for established
returned and non- returned questionnaires the study 70 out of 80 returned and non- returned the
questionnaire while filled in making the response of 88% the average rate was made really after
the researcher made follow up and visit to the respondent to fill the return of questionnaire

4.2.1 Table
Category Frequency Percentage
Response 60 60
Non response 20 40
Total 80 100

4.2.2 Tabulation of the responded gender

Gender Frequency Percentage
Male 48 70%a
Female 12 30%
Total 60 100

According to table 4.2.2 shows that out of the respondents who participated in the study of 70%
were male while 30% were female the analysis clearly shows that the organization had a higher
number of male compared to female number in Mombasa County. It indicates that work which is
17
done in Mombasa County are cumbersome as it needs a lot of consultation this implies work that
favors male more than female

4.2.3 Level of Education

Level of Education Frequency Percentage
Masters 12 20
Degree 22 40
Diploma 15 23.3
Certificate 11 16.7
Total 60 100

Table 4.2.3 indicates that the majority of the respondents have degrees level of Education with
40% it shows that the organization has more skilled personnel 20% of the respondent they have
masters level of Education 23.3 of the respondent said to have diploma level of Education
16.7% said to have certificate level of Education it indicates that the organization requires
more employees who are more skilled in order to perform their work in Mombasa county and its
more technical because the level of respondents at degree is very high

4.2.4 Working Experience

Year Frequency Percentage
Below 5 8 11
5- 10 15 24
11-15 12 35
16-20 15 19
Above 20 10 11
TOTAL 60 100

4.2.5 Respondents position in the company

The study sought to establish designation of the respondent who participated in survey the
respondents were requested to indicate the position they held in respective departments 30%
indicated they were Top management position 40% indicated they were middle management
level and 30% indicated operational management all position in contract management were

18
covered in the study and therefore the information provided by respondents were adequate for
research

Table showing various positions in the company

Categories Frequency Percentage

Top management 15 20
Middle management 25 60
Operational management 20 20
TOTAL 60 100

4.3 Pilot test result

Pilot test is a distinct preliminary investigation conducted before embarking on the main study
(Mugenda 2015) Before the actual data is collected. I carried out the pilot study with a quarter 0f
60 therefore sample size of 15 respondents with homogeneous characteristics respondents were
involved in the study the reason behind the pilot test was to assess the clarity of the questionnaire
items removed or modified to improve the quality of research instruments

4.4 Analysis of study variables

This talks on how various variables affects contract management in certain ways this was
analyzed using both independent and dependent variables

4.5.1 Post contract appraisal

The study sought to find out the effects of post contract appraisal on supply chain performance of
Mombasa County the study found that contract reports affects customer satisfaction in the
organization, the study implications that is that contract audit contract reports and shared benefits
affects supply chain performance with an equivalent magnitude. The findings also implicated
that proper contract audits are important for deliveries of the right quality goods, service and
works and ensures customer satisfaction. The findings are tandem (2015) who did a study on
contract audit and found out that there is a relationship between proper contract audits and
customer satisfaction while managing contracts hence for proper contract auditing need to be
carried out

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4.5.2 Contract closure
Study sought to find out respondent agreement with the statement relating to effect of contract
closure on supply chain performance. from the study findings majority of the respondents agreed
that dispute resolution affect procurement cycle time in the organization contract closure should
involve controlling and certifying that all activities of evaluation of successful contract
execution; ensuring the achievement of expected results; and termination of contract effectively

4.5.3 Contract Administration

The sought to determine the effect of contract administration on supply chain performance in
Mombasa County. Majority of the respondents agreed that contract planning affect procurement
cycle in the organization. Proper contract planning affects supply chain performance and is
important in reduction of procurement cycle times. The finding concurs with Njeru (2015) who
concluded that there existed a strong relationship between contract planning and supply chain
performance hence study concludes that the presence of procurement portfolio, efficient logistics
management and adherence to procurement plans affect supply chain performance

4.5.4 Dependent variable supply chain performance

The study sought to examine the respondent’s percentage measurement of procurement function
in relation to contract practices within the firm over a period of five years with the variable
concerning contract management and supply chain performance within the firms. the study
findings indicated that majority of the respondents are indifferent about customer satisfaction. It
is clear that in the year’s contract success rates are fluctuating and improving which shows a
positive improvement the findings concur with Gupta(2016) who revealed that poor contract
management causes substantial loss of savings and customer satisfaction

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 CHAPTER FIVE
DISCUSSION OF SUMMARY CONCLUSION AND RECOMMENDATION
5.0 introduction
This chapter presents the summary of the findings from the study obtained conclusions and
recommendation of the all study

5.1 summary of the findings

The chapter has analyzed data interpreted it and discussed the findings in relation to research
questions and specific objectives tables and figures were used to present findings. The data was
analyzed using inferential and descriptive analysis.

The main purpose of this study was to examine the effect of contract management on supply
chain performance specifically the study examine and identifies process followed to award
contracts in Mombasa county in the findings of the study it was found out of 100% of the
responded agreed that contract management should be carried out in Mombasa county and there
were 80% respondents who were involved in the study based on focus age, gender, Education
level and working experience the study followed descriptive research design targeting Mombasa
county officials with aid of 10 researchers Top management the researcher targeted 60
respondents 30 middle managers and 20 operation managers using structural questionnaires A
drop and pick late technique was employed

5.2 Recommendation
This study recommended that contract management in Mombasa county should maintain the
spirit of good relationship. Good attitude between the suppliers and buyers is essential in
enhancing supply chain performance of a firm mutual process should also be created between the
parties in the organization to enhance smoothness of the operational activities and entire
performance of a procurement function
Contract management needs proper outline procedures for contract administration the study
found out that most of the counties do not bother following up with contractors to ensure contract
is fulfilling its mandate, to them once a contractor is awarded the contract is then left as
contractors’ obligation to ensure contract is fulfilled this needs most attention to save on
contracts that are failing to, mature within this firms

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Study recommended that contract management that contract management should be put in place
post contract activities and mechanism to ensure that future contract are successful suppliers and
contractors need to be evaluated based on their performance for future contracts and this would
provide an environment for creating buyer supplier relationship with mutual understanding
towards beneficial outcomes
Study recommended that dispute resolution mechanism should be implemented to reduce
procurement cycle time mechanism will be used in resolving dispute that arises and thus
enhancing the efficiently and effectiveness of the organization operational activities firms should
review their dispute resolution mechanism and put in place those that would be time efficient to
avoid time wastages

5.3 Conclusions
From the findings it’s clear that relationship management affect supply chain performance more
specifically mutual processes between suppliers and buyers’ relationship management is strongly
affected by mutual processes which in turns affects supply chain performance in terms of
achieving their objectives especially on reduction of supplier defect rate
Contract administration affects supply chain performance with more emphasis on contract
planning and contract monitoring its clear from the findings that proper contract planning affect
supply chain performance and is important in reduction of procurement cycles time the study
findings indicated that post contractual appraisal affect supply chain performance with
equivalent magnitude
The study concluded that all the four variables significantly and positively affects supply chain
performance relationship management is the most important in supply chain management
performance followed by contract administration then post contract appraisal and the least is
contract closure the study further concluded that proper contract management is essential in
ensuring that all parties to the contract fully meet their respective obligation as efficiently and
effectively as possible delivering the business operational outputs required from the contract and
providing value for money customer satisfaction and reducing cycle time post contract activities
led to more efficient and effective management of the supplier base this in competitiveness the
study found out that most firms does not engage in proper post contract activities after delivery
of the contract.

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5.4 Areas for further research
Further research should include other sectors to ascertain the effect of contract management
practices on supply chain performance additionally contract management practices should be
compared in different sectors such as public non profit and profit making organization

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 REFERENCES
Korir l ( 2015) effect of buyer supplier relationship on procurement performance Evident in
Kenyan supermarket.
Kothari(2015)Research Methodology for business studies
Kabega,C,Kule W.j Mbera (2016)effect of procurement practices on performance of public
projects
DanielB(2015)Cooperative sourcing simulation studies and empirical data on outsourcing
Amemba ,C,Nyaboke G and Mburu N(2015)challenges affecting public procurement
performance processin kenya
Masaba moses (2015)contracting and procurement performance
Aberdeen group (2015)strategy and research
Mugenda and Mugenda (2016)qualitative approaches Nairobi Kenya
Kavua and Ngugi(2015)determinant of procurement performance

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APPENDDIX 1
BRIDGID OTEBA
P.O BOX
MOMBASA
THE MANAGER
MOMBASA COUNTY
P.O BOX
MOMBASA

Dear sir Madam

RE; REQUEST TO CONDUCT RESEARCHIN YOUR ORGANIZATION

I am a student from Kenya coast National polytechnic undertaking Diploma in supply chain
management and I would wish to carry research on effects of contract management on supply
chain performance.

Therefore I request to be granted permission to carry out the study from the department in your
organization and all information collected will be of accuracy and treated with confidentiality its
only for academic purpose and therefore I request you to help me meet the research requirements

Yours faithfully
Bridgid oteba
Kenya coast

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APPENDIX II
QUESTIONNAIRE

Kindly tick [ ] where appropriate.

Section A: General information

1. Gender

Male [ ]

Female [ ]

2. Age

25 -40 [ ]

41-60 [ ]

3. Level of education

Diploma [ ]

Degree [ ]

Masters [ ]

Section B Contract administration

Indicate whether you strongly agree or strongly disagree that training and development
influence the performance of Mombasa Cement.

Strongly agree [ ]

Strongly disagree [ ]

Section C post contract Appraisal

Indicate whether you strongly agree or strongly disagree that recruitment and selection
influence the performance of Mombasa Cement.

Strongly agree [ ]

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