AN APPRAISAL OF IMPACT OF COMPETITIVE BIDDING IN THE PROCUREMENT SYSTEM OF IBADAN ELECTRICITY DISTRIBUTION COMPANY, RINGROAD, IBADAN
BY KAYODE OLADIPUPO OLAYEMI PROJECT ANALYST IN IBADAN 08058573347, 07063796484
September, 2014
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1.1 INTRODUCTION A competitive bid process is mostly used in the procurement of goods and services. The process entails submitting a sealed envelope detailing the price and terms of an offer. The recipient of the offer then selects the competitive bidder that has delivered the lowest price or best terms. While not practiced regularly, a competitive bid process can be done with a company sale whereby the investment company would skip the traditional process, and immediately solicit letters of intent (LOI) be delivered confidentially from all potential buyers by a certain date. Companies undertaking a competitive bid process usually command valuation premiums over their peers. They typically operate in an industry where they have developed a significant competitive advantage and operate as a price leader. Buyers seldom like to get involved in a competitive bid process, unless the target company clearly provides post-transaction advantages that can be readily quantified and pose little risk to be realized.
1.2 STATEMENT OF THE PROBLEM The mischief in the law and practice led to the enactment of the public procurement Act 2007 was the lack of value for money-economy, as efficient and effectiveness of public procurements were poor. Government enterprise is seen as the easiest source of wealth through inordinate contracting, embezzlement, and government was not accountable to Nigerians. The following are seen as the problems that necessitated this study. i. That the financial outlay on public procurement is higher than the value of the electricity distribution or supplied in Nigeria ii. That there is transparent corruption in public procurement process of government enterprises, most especially in Electricity Distribution Company of Nigeria. iii. The acts of corruption have negative effects on the entire government enterprises. Based on this aforementioned, the researcher deems-it-fit to carry out an appraisal 3
of the impact of competitive bidding in the procurement system of Ibadan Electricity Distribution Company (IEDC).
1.3 PURPOSE OF THE STUDY The aim of the study is to carry out an appraisal of the impact of competitive bidding in the procurement system. Specific objectives of the study are to: Examine the forms of corruption in Nigerian Procurement system investigate on the impact of competitive bidding on the procurement system of Nigeria examine anti- competitive practice :bid rigging examine ways curbing corruption on Nigerian procurement system examine ways of preventing bid ridding in Nigeria procurement system
1.4 SCOPE AND LIMITATIONS The study will focus on the Inventory management as a determinant of customer service, using Ibadan Electricity Distribution Company, 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, he may be faced with hostility from the respondents. The respondents might refuse to grant the researcher all the require 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. 4
- 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. 1.5 SIGNIFICANCE OF THE STUDY An appraisal of the impact of competitive bidding in the procurement system is a very important to government enterprises because it ensures that materials and equipments are available at the right time and place, for the work to be done very profitably. It will enable the purchasing and supply students to have a vast knowledge on the significant impact of proper management of the inventory in an organization. Create more awareness of the importance of competitive bidding on Nigerian Procurement system and economic development. Encourage more attention to be paid to the use of competitive bidding for procurement system and legislations in Nigeria Establish also the need for practicing professionals to improve on and bring their services closer to the people Educate the masses on the ills of corruption to the Nations growth. (5) Furnish the policy makers the suggested practical ways of curbing Corruption in the procurement process.
1.6 RESEARCH QUESTIONS 1. Does competitive bidding has negative impact on procurement system? 2. What are the barriers to effective competitive bidding o procurement system? 3. What are the ways of curbing corruption in procurement system? CHAPTER TWO LITERATURE REVIEW 5
The Concept of Competitive bidding Advantages and disadvantages of competitive biding The forms of corruption in Nigerian Procurement system The impact of competitive bidding on the procurement system of Nigeria Anti- competitive practice :bid rigging Ways curbing corruption on Nigerian procurement system Ways of preventing bid ridding in Nigeria procurement system
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 impact of competitive bidding in the 6
procurement system, the barriers to effective competitive bidding, strategies for proper implementation of supply chain management so on. 3.3 SAMPLE FRAME The sample frame of this study will be the entire staff members i.e total population of the Ibadan Electricity Distribution Company, 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 60 staff; this will represent the total population of the study i.e. 40% of the total population which can be express as 150x40 = 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 7
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 Ibadan Electricity Distribution Company, 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. Sixty questionnaires will be served and hopefully expected to be fully recovered and then administer. 3.7 METHOD OF DATA ANALYSIS This research study will make use of descriptive research survey to generate primary data for the research topic. The data collected will be analyzed through the use of simple percentage, tables, and descriptive analysis. CHAPTER FOUR 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. CHAPTER FIVE The concluding part of the research work will be chapter five where in a null shell the summary, the conclusion and the recommendations will be discussed.