THE IMPACT OF THE APPLICATION OF TENDERING AND COMPETITIVE BIDDING IN CONTRACT ADMINISTRATION IN THE PUBLIC SECTOR  (CASE STUDY OF MINISTRY OF WORKS IMO STATE)

ABSTRACT

This study sought to investigate the factors influencing effectiveness in the tendering process in the Public sector of the Ministry of Works, Imo State Nigeria. The study is specifically focused on the Nigeria Urban Roads Authority, Nigeria Highway Roads Authority, and Nigeria Rural Roads Authority in the Ministry of Works, Imo State. The tendering process has been a serious issue of late and if not well managed it will be very costly to the Government. Tendering is the function that costs an organization a great deal of money and this has to be performed correctly to maximize effectiveness and minimize costs. Most organizations’ executive management has realized that managing Tenders must emerge as a critical core competency if organizations are to increase revenue. Procurement plays a very vital role in Economical growth and Development of any country if well managed.

The Study aimed at achieving the following specific objectives in the Public sector in Nyeri County Main: To establish how duration is taken, Ethical practices, training of employees, record management, and ICT use influence the effectiveness of the tendering process in the central region in Nyeri county. The study was confined to Road Construction Industry since the study is wide assuming that the respondents were willing to Co-operate, be honest, and freely participate, provided accurate responses to the items in the data collection Instruments and the sample size chosen is adequate to draw a valid conclusion. The researcher adopted a descriptive survey research design using both qualitative and quantitative research paradigms. The Data Collection Instrument was a questionnaire that was self-administered with the help of research assistants. The collected data was analyzed using descriptive statistics and inferential statistics namely Pearson Product Moment Correlation and T-test and presented by the use of tables.

The study findings indicated that there was a practice of favoritism, tribalism, and nepotism in the tendering process in the public sector in Nyeri County. The lack of a strong procurement profession and inadequate training of staff has led to failure to employ good practices in procurement, creating inefficiencies and high costs in the tendering process in the county. Some of the recommendations to the management of the Ministry of Works are that All the employees involved in the tendering process should advance their education level especially those with o-level and Diplomas as their highest educational qualification. The Ministry of Works heads should ensure this is done to improve effectiveness and efficiency in the tendering process, the Government should also improve Staff remuneration, particularly those involved in tendering process since they handle large sums of tenders to avoid being corrupt, the authorities should ensure that procurement policies and regulations are adhered to, should train all the procurement staff to provide them with skills and knowledge of procurement process. All payments for the sale of tender documents should also be done online. This will improve the effectiveness of the tendering process.

The researcher suggests that further research be done on: The impact of ethical practices in the tendering process and how it affects the Nigerian economy in other counties, similar study may also be carried out in other counties to establish whether the findings are similar to those generalized in this study and Investigate on other factors that influence effectiveness in the tendering process in Nigeria.

CHAPTER ONE

INTRODUCTION

1.1       Background to the study

Public Procurement often constitutes the largest domestic market in developing countries. Depending on how it is managed, the public procurement system can thus contribute to the economic development of these countries (PPOA, 2012). Indeed, public procurement is the principal means through which governments meet developmental needs such as the provision of physical infrastructure and the supply of essential medicines (PPOA, 2010). Again, many governments use Public Procurement to support the development of domestic industries, overcome regional economic imbalances, and support minority or disadvantaged communities. Because the deployment of the Public Procurement System to pursue these developmental goals entails the governmental exercise of enormous discretion, Public Procurement is often an extremely controversial subject matter (World Bank Group, 2007).

The Public Procurement Tendering System in Nigeria has evolved from a crude system with no regulations to an orderly legally regulated Procurement System. The Government’s Procurement System was originally contained in the Supplies Manual of 1978, which was supplemented by circulars that were issued from time to time by the Treasury (Nigerian Government, 2010). The Director of Government Supply Services was responsible for ensuring the proper observance of the provisions of the Manual (Nigerian Government, 2004). The Manual created various tender boards for the adjudication of tenders and their awards. The Authority shall issue guidelines on the format of procurement documents to be adopted for approvals and the documentation of the procurement procedure (PPOA, 2012).

A review of the country’s public procurement tendering systems was undertaken in 1999 and established that: There was no uniform procurement tendering system for the public sector as a whole, It did not have sanctions or penalties against persons who breached the regulations in the Supplies Manual, other than internal disciplinary action. Consequently, the application of the rules was not strict and many of the norms were not followed, the Supplies Manual did not cover procurement of works, and the dispute settlement mechanisms relating to the award procedures as set out in the Manual were weak and unreliable for ensuring fairness and transparency, Records of procurement transactions in many cases were found to be inaccurate or incomplete or absent, which led to suspicions of dishonest dealings at the tender boards (Nigerian Government, 2010).

The systems had other institutional weaknesses that not only undermined their capacity for carrying out their mandates effectively but also led to a Public perception that the Public sector was not getting maximum value for money spent on procurement (Nigerian Government, 2010). Given the above shortcomings, it was found necessary to have a law to govern the Procurement tendering system in the Public sector and to establish the necessary institutions to ensure that all procurement entities observe the provisions of the law to attain the objectives of an open tender system in the sector (World Bank Group, 2008).

Consequently the establishment of the Exchequer and Audit (Public Procurement) Regulations

2001 which created the Public Procurement Directorate (PPD) and the Public Procurement

Complaints, Review, and Appeals Board (PPCRAB).

The Public Procurement and Disposal Act, 2005 was enacted and it become operational on 1st

January 2007 with the gazettement of the Public Procurement and Disposal Regulations, 2006 (PPOA, 2009). The Public Procurement and Disposal Act, of 2005 created the Public

Procurement Oversight Authority (PPOA), the Public Procurement Advisory Board (PPAB), and the continuance of the Public Procurement Complaints, Review and Appeals Board as the Public Procurement Administrative Review Board (PPARB) (PPOA, 2006).

It is also important to note that, in the past, the quality of service delivery in Public entities was wanting. According to the World Bank Group’s (2007) country assessment report, the quality of service in the Nigeria Public Sector was very low before 2003 due to inadequate accountability and responsibility, as well as poor governance. Poor management of the public assets led to an almost total collapse of infrastructure, a decline in productivity, and an increase in poverty (close to 56 % of the population were living with incomes of less than US$2 per day) (Nigeria National Bureau of Statistics, 2010).

Some public servants would also not attend to their duties diligently and it was common to find members of the public waiting to be served while there was no one in the office. The poor service delivery was also due to unclear direction and non-existent strategic plans. Where plans were present, there was no effective implementation and monitoring system. The lack of accountability was caused by an organizational culture characterized by negative values among staff (Republic of Nigeria, 2003a; 2004; 2006). There was relatively low discipline in management and some of the enterprises that were previously successful went into liquidation such as, for example, the Nigeria National Assurance and the Nigeria Taxis Company, KENATCO (Republic of Nigeria, 2005). This was a time that the government needed a turnaround not only to Municipal Councils but the whole system of government. According to Akech (2011) more coordinated planning, implementation, and close monitoring of government tendering were necessary.

1.2       Statement of the Problem

The overall research problem addressed in this study is that despite an increase in knowledge of the tendering processes in public entities according to the Public Procurement and Disposal Act

(2005), very little has been done to analyze the factors influencing the tendering process in the Public sector in terms of Tribalism, politics, nepotism, delays, inefficiency, fairness, competitiveness, accessibility, transparency, openness, integrity, and profitability.

Although in 2003, the Nigerian Government began implementing reforms to address inefficiency in the use of Public resources and weak institutions of governance. The reforms included the development of anti-corruption strategies to facilitate the fight against corruption and the enactment of the Public Officer Ethics Act 2003, the Ant-Corruption and Economic Crime Act, the Financial Management Act 2004, and the Public Procurement and Disposal Act 2005. The aim was to make the procurement process more transparent, ensure accountability and reduce the wastage of public resources among others. Currently, there are weak oversight institutions, a lack of transparency, poor linkages between procurements and expenditures, delays and inefficiencies, poor records management, bureaucracy, rampant corruption, and Political interests. A bottom-up approach to the development of institutional mechanisms for holding to account the domestic implementation of international regulatory decision-making is also missing hence the need to investigate the factors that influence the Tendering processes in the Public Sector the Case of the Ministry of Works, Imo State Nigeria and provide suggestions to improve the tendering process.

1.3       Purpose of the study

The purpose of the study was to investigate the factors influencing the effectiveness of the tendering process in the Ministry of Works, Imo State, Nigeria.

1.4       Objectives of the study

This study was guided by the following objectives:

• To establish the extent to which duration was taken in tendering influence the effectiveness of tendering Process in the Public Sector in the Ministry of Works, Imo State
• To examine the extent to which ethical practices influence the effectiveness of the tendering process in the Public Sector in the Ministry of Works, Imo State
• To establish how training of employees influences the effectiveness of the tendering process in the Public Sector Ministry of Works, Imo State.
• To examine the extent to which record management influences the effectiveness of the tendering process in Public Procurement in the Ministry of Works, Imo State
• To determine the extent to which ICT usage in tendering influences the effectiveness of the tendering process in the Public Sector in the Ministry of Works, Imo State.

1.5       Research Questions

The study sought to answer the following questions:-

• To what the extent does duration taken in tendering influence the effectiveness of tendering Process in the Public Sector in the Ministry of Works, Imo State?
• Do ethical practices influence the effectiveness of the tendering process in the Public sector in the Ministry of Works, Imo State?
• How does the training of employees influence the effectiveness of tendering Process in

Public Sector Ministry of Works, Imo State?

• What is the extent to which record management influences the effectiveness of the tendering process in Public Procurement in the Ministry of Works, Imo State?
• Does ICT usage in tendering influence the effectiveness of the tendering process in Public

Sector in Ministry of Works, Imo State?

1.6 Hypotheses of the Study

The study sought to test the following hypotheses:-

1. Ho Duration taken in tendering does not significantly influence the effectiveness of the tendering process
2. Ho Ethical practices do not significantly influence effectiveness in tendering process
3. Ho ICT usage in tendering does not significantly influence effectiveness in tendering process

1.7      Significance of the Study

The findings of the research will greatly benefit the management in PPOA, KISM, EAPSEA, KURA, Kerra, and KeNHA and the Nigerian Government as it will provide part of the evidence to assist in the revision of Procurement policies in favor of the Procurement Profession regarding the tendering processes in Public Sector

The research will also add value to the body of knowledge and understanding of the tendering process in public entities. This will be beneficial to researchers who may want to research more in this area.

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