PROJECT PROPOSAL:

FACTORS AFFECTING PROCURE OF CONSULTANCY

SERVICES IN PUBLIC INSTITUTIONS IN KENYA.
(CASE STUDY OF KENYATTA NATIONAL HOSPITAL)

CHAPTER 1: INTRODUCTION
Tendering is an invitation to bidders without agreement usually in sealed envelopes to be
delivered at a specified time and date for the supply of goods and services. It is sought from a
group of suppliers broad enough to ensure competitive pricing. The method by which successful
supplier is identified is called open tendering or competitive bidding.
1.0: Background of the study
Tendering embrace various types among them are Open tendering which is also referred to as
public bidding, the formal, public, and competitive procedure during which offers are
requested, received and evaluated for goods or services and after which the related contract is
awarded to the bidder that complies with the conditions specified in the notice of invitation. It
involves a series of stages, acts or steps that must follow rules prescribed in the bidding
documents.
Selective Tendering is another method similar to open/public tendering, except that the
invitations to bid are not issued to the public in general but only to firms selected by the
procuring agency. In general, the same procedures are used as for competitive bidding. It may
include a prequalification, this is a step in the bidding process in which the agency first selects
the firms to whom invitations to bid will later be issued.
For this system to be effective, a technical specification has to be done which lays down the
characteristics of goods to be procured or their related processes and production methods, or the
characteristics of services to be procured or their related operating methods, including the
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applicable administrative provisions, and a requirement relating to conformity assessment

procedures that an entity prescribes. A technical specification may also include or deal
exclusively with terminology, symbols, packaging, marking or labelling requirements, as they
apply to a good, process, service or production or operating method. (Lyson 2006)

1.1 STATEMENT OF THE PROBLEM

There has been increasing need for use of tendering system in the Public sector as an effective
procurement process, though poor implementation of the system may yield some drawbacks.
Other factors that can affect the system include; inefficiency in the execution of the tendering
system, slow tender appraisals, evaluation, adjudication, communication, lack of qualified and
experienced staff. Dobler (1996).
However, observations reveal that, tendering system has been neglected by most public
institutions who have replaced it with quotations, which have been controlled by employees who
have vested interests in the procurements. They inflate prices or influence sources of
procurements and are not conversant with the system. The process of procurement in public
organisation is absolutely questionable.
The loss of huge amounts of funds in the public sector and collapse of most crucial projects is
attributed to poor tendering systems, hence a research study on effectiveness of tendering system
in public organization. Oakland (1983)
Similarly, strengthening the procurement capacity in the public sector directly increases
profitability and competitiveness in the marketplace. This study provides senior executives with
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the necessary skills to implement the most up-to-date and effective procurement tendering
strategies and policies to suit their organizational needs.
To achieve top-class tendering and contract management, procurement professionals must
develop a strong range of skills and competencies. The standards to which tenders,
specifications, evaluation criteria and contracts are written and managed dictate the success of an
organizations procurement processes.
This study aimed to develop the skills required to achieve optimal tendering results and to
optimize interaction with end-users and other stakeholders to ensure the procurement function is
fully effective.
Successful procurement of services or works, ensuring completion of the project on time, to
specification, within budget and without dispute, takes a skilled professional. This study provide
participants with the knowledge required to understand the issues and problems that surround
public organizations and effective tendering and contracting, and equip them with skills and
techniques to overcome these challenges. It also examined the management of risk and explores
strategies for resolving claims and settling disputes.

1.2 OBJECTIVES OF THE STUDY:

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1.2.1 GENERAL OBJECTIVE.

To find out factors affecting tendering system in an organization

1.2.2 SPECIFIC OBJECTIVES:

a) To assess the effect of procurement need on the efficiency of open tendering in organizational
performance.
b) To assess the effect of technical specification of bids on the efficiency of open tendering
c) To identify the effects of evaluation criteria used on the efficiency of open tendering in the
organizational performance
d) To identify the effects of award of tenders in public organisations.
1.3 RESEARCH QUESTIONS.
a) How does the procurement need affect the efficiency of open tendering in an organizational
performance?
b) How does the technical specification of bids affect the efficiency of open tendering of an
organization?
c) How do the bids evaluation criteria affects the efficiency of open tendering in an
organizational performance?

1.4 JUSTIFICATION OF THE STUDY.

The purpose of this study was to come up with effective tendering methods and policies aimed at
providing participants and senior executives with knowledge and skills of tendering required to
suite their organizational needs and recommend necessary techniques to handle issues and
problems of procuring goods/ services through tendering.
1.5THE SCOPE OF THE STUDY
The research was conducted in procurement and HR department at Kenya power and lighting
Company located in Thika
1.6 LIMITATION OF THE STUDY
The research experienced some limitations which caused delay in achieving the objectives as
stated in the research. Some of these limitations include the scope of the study. The study was
conducted in one among the public organizations in Kenya, and such findings did not reflect the
performance in other organizations. The short duration of time and limited funds used in the
research also affected the study. Other issues include access to information especially due to poor
filling system.

CHAPTER 2: LITERATURE REVIEW

2.0 INTRODUCTION
This chapter generally covers what various scholars on the topic under study have already
established. The relevance and importance of the topic will be illustrated in this area as portrayed
by available literature and other materials in relation to the area under study.
2.1 CONCEPTUAL FRAMEWORK.
The key variables which will be measured in regard to researchers study will encompass the
independent and dependent variables. These variables will measure in regard to the ratings on the
percentage number of respondents. To this extent the measurement of the distinct variables will
be based on ordinal scale whereby the findings of each variable were evaluated according to the
percentage number of respondents hence this approach will give the researcher a basis to
quantify and justify the authenticity of the data that would support the empirical findings of the
study. The researcher will use conceptual model indicated below to explain broadly the key
elements of tendering system and how they influence the public procurement.

Figure 2.1: Conceptual Framework

Procurement
need
Technical
specs of bids
Evaluation
criteria
bids

Tender system

Award of
Tender
Process and
procedures
involved

Independent Variables Dependent Variable

2.1.1. Independent variables
The independent variables under this study entailed; identification of need for procurement,
technical specifications, the evaluation criteria, availability of funds, process followed, award of
contract and contract management. Not all purchases calls for the need to tender. Some purchases
are preferred to certain suppliers due to the nature of their availability or direct purchase system
can be used rather than tendering.

Need for procurement; before deciding on which method to use for procurement, the procuring
entity must identify the need and assess it if it warrants tendering. This is because tendering is
involved in terms of time and labour involved and should only be used if necessary.
According to Parsons (1993), the procurement need requires a clear strategy which is so
involving and drafting such strategy affects both the decision and the performance of the
organization.
According to the researcher, the procurement need varies in terms of urgency and necessity of
the products in different departments and this may bring about strain of finances hence
interfering with the normal performance of the organization.
Technical specification; According to Crosby Phillip (1984),the finalproduct procured by
tender system heavy depends on how accurate specifications were done before commencing the
purchase. For effective results, the technical team came up with clear description of the items or
works to be done. General and specific conditions and terms should clearly outline, conflict
resolution methods will also be highlighted.
According to the researcher, tender specification should be drawn up in a manner which meets
the procurement principle of maintaining open and fair competition. Tender specification when
prepared and adopted with a view to or with the effect to creating obstacles to competitors it
destroys the brand name and image of the organization.
Evaluation criteria: according to Anderson and Narus (1980), unduly restrictive evaluation
criteria creates entry barrier to potential bidders which brings about non-transparent and noncompetitive aspect.
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According to the researcher, the tender committee must evaluate the tenders against the technical
specification laid down in the tender documents to determine whether they are fully conforming.
Award of tender: according to Kotzap (2007), the tender is awarded to higher responsive bidder
who meets the specifications needed.
According to the researcher, the highest responsive bidder is awarded the contract and invited to
sign the contract on a specified date.
Process and procedure: According to World Bank (1995),the Act requires that before any
purchases are affected there must be some funds to meet the needs. A system will only be
effective when all the process and procedures involved are followed.
2 .1.2 Dependent variable:
From the study, the independent variables affect immensely the dependent variable which is the
tender system used. In this case the efficiency of tendering system largely depends on the degree
of accuracy of the independent variables and the tendering processes followed.

CHAPTER 3: RESEARCH METHODOLOGY

3.0 INTRODUCTION

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This chapter discusses the research design, sample design and population of study. It also previews the Sampling techniques, data collection procedures, and analysis.
3.1 RESEARCH DESIGN.
The study adopted a descriptive design which involved a survey that was carried out through a
semi structured questionnaire. The survey was administered through personal interviews by the
researcher to collect data.
3.2 TARGET POPULATION AND SAMPLE SIZE:
Target population is a universal set of the study of all members of real or hypothetical set of
people, events or objects to which an investigator wishes to generalize the results.
The target population was 60 while the sampling unit was 30

respondents from both

departments. Information was captured from employees working directly in procurement

department, in the store, user departments, administration Suppliers and Accounts.

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Table 3.0: sample distribution of the study.

CATEGORY

TARGET POPULATION

SAMPLE SIZE

Procurement department

28

14

User department

Stores department

16

Finance department

10

Total

60

30

3.3 SAMPLE FRAMEWORK

Sampling is the process by which a relatively small number of individual, object or event is
selected and analysed in order to find out something about the entire population from which was
selected. A sample is a small proportion of targeted population selected using some systematic
form. The researcher used probability sample design this is because she wanted to give each unit
of the population equal chance of being selected.

3.4 DATA COLLECTION METHODS

The data was collected using the survey methods which involve systematic collection of data
through a structured questionnaire that was administered through personal interviews.
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Data was collected both through primary and secondary sources. Secondary sources involved
review of written literature and primary data involved personal interviews.
3.4.1 PILOT TESTING
This is a method that is used to test the design/ methods/ instruments prior to carrying out the
research. A pilot study was conducted before the researcher engaged in the actual research; the
Questionnaire was tested for reliability of the data to be collected and it also allowed necessary
corrections to be done. Pilot testing was done by senior procurement officials to ascertain its
viability.
3.5 DATA ANALYSIS AND PRESENTATION:
Data obtained through the questionnaire was analysed using descriptive statistics. The Findings
was analysed using percentages, charts and graphs.

CHAPTER 4: RESEARCH FINDINGS AND DISCUSSION

4.0 Introduction

13

The data collected was analysed both quantitatively and qualitatively, guided by the objectives of
the study. This chapter simplifies, organizes and summarizes data, interprets and communicates
results in a clear and straight forward way.
4.1 Response Rate
Table 4.1 Analysis on Response Rate

Category

Numberof
questionnaires

Number of

Response Rate

questionnaires

issued

returned

Respondents

30

27

90%

Total

30

27

90%

Table 4.1 show that the response was 90% .This was a good response.
4.2 Quantitative Analysis of Data
Quantitative data analysis refers to a scientific method of investigation based on the use of
numerical data. The dominant methodology of quantitative research is to describe, predict and
explain the phenomenon. This can be achieved through collecting of numerical data on the
observable behaviour of events and people and subjecting such data to statistical analysis.
4.2.1Gender of the Respondents.
Figure 4.1 Analyses on Gender
14

60

50

Percentag
e

40

30

20

10

0
Male

Female
Gender

Figure 4.1 analyses indicate that out of 30 respondents 18 were men who represented 60 %
while 12 were women who represented 40%. Although the number of male is bit higher as
compared to female, gender balance is evident as male were at 60% while female take 40%. This
shows that there is a fair representation of gender amongst the respondents.

4.2.2 Age of respondents

The research had requested the respondent to indicate their age. This was because of the view
that age influences the level of skills and relevant experience.

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Table 4.2 Analysis on Age

Age

Frequency

Percent

20-25

15

50

26-35

20

36-45

20

45& above

Total

30

100

Table 4.2 shows that 70% of the respondents contacted are between 20 to 36 years, only 30% of
the respondent is above 36 years. This is a very productive age and thus has a very positive effect
on organizational performance. Only 20% are above 45Years and therefore at retirement age
bracket. This is healthy as when they retire a good number of experienced staff will be left
behind to train the new staff.

4.2.3 Academic Qualifications

The research wanted to establish the levels of academic qualifications with a view to linking the
same to application of open tender process. The respondent were as indicated in table 4.3 below
Table 4.3 Analysis on Academic Qualification
Academic

Frequency

Percent
16

Qualification
Masters Degree

Bachelor Degree

30

Diploma

12

40

Sec sch Cert

10

Others

17

Total

30

100

Table 4.3 shows that only 33% of the respondents have attained Degrees and above, this is a very
small number as compared to 50% of the respondent who have college and secondary
certificates. 17% of the respondent has qualifications below secondary school certificate. This
demonstrates a capacity deficit in terms of academic qualifications.
4.2.4 Experience in procurement function
The research sought responses on whether the respondents have had previous exposure in
procurement functions before they joined the university procurement department. This was to
gauge the level of acquired skills relevant to tendering.
Figure 4.2 Analysis on Experience in procurement function

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39%
Yes
No
61%

Figure 4.2 indicate that 61% of the respondent had previous relevant experience in procurement
undertaking. However a significant 39% indicated no such experience.
4.2.5 Effects of procurement need
The research sought responses on whether the procurement need affects the open tendering. This
was to gauge the effects on organization performance. The response were as indicated in figure
4.3
Figure 4.3 Analysis on the effects of procurement need in organizational performance

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44%
Yes
No
56%

Figure 4.3 indicate that 56% of the respondents agreed that procurement need affects open
tendering in an organizational performance while 44% did not
4.2.6 Procurement Method Commonly Used
The research wanted to establish which method of procurement is commonly used in the
organization. The responses are indicated in figure 4.4

Figure 4.4Analysis on Procurement method commonly use

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60

50

Percentag
e

40

30

20

10

0
Open Tender

Direct
Procurement

Restricted
Tender

Request for
Quotations

Procurement Method

Figure 4.4 indicate that 50% of respondents indicated that procurements are through open
tendering followed by quotations at 33%, 11% as direct procurement and 6% as restricted tender.
4.2.7 Do you think technical specifications affect open tendering process?
The research wanted to find out whether specifications are a challenge to open tendering process.
These responses were tabulated as indicated in figure 4.5

Figure 4.5Analysis on whether technical specifications affect open tendering process

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80%
70%

percentage

60%
50%
40%
30%
20%
10%
0%
Yes

No
Response

figure 4.5, 73% of the respondent believe that specifications affect open tendering process while
only 27% feel that it does not affect in any way.
4.2.9 Pre-Bid Meetings in open tender process
The research wanted to establish whether suppliers are invited for pre-bid meetings, the
responses were tabulated in table 4.4

Table 4.4 Analysis on Pre-Bid Meetings in open tender process

Pre-bit meetings

Frequency

Percentage

Yes

10

33
21

No

20

67

Total

30

100

Table 4.4 shows that only 33% of the open tenders carried out in the study period carried out
pre-bid meetings. The other 67% of the open tenders did not have pre-bid meetings.
4.2.10 Corruption and its effects on open tendering process
The research wanted to establish whether corruption affects open tendering process if any at
all. The responses were analysed as shown
Table 4.5 Analysis on effect of corruption to open tendering process

Respondents

Frequency

Percentage

Yes

30

100%

No

0%

Total

30

100%

From Table 4.5, 100% of the respondents agreed corruption greatly affects open tendering
process.
4.2.11Do you think organisational policy affects open tendering process?
Table 4.6 Analysis on effects of organisational policy to open tendering process

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Do you think organisation

Policy affects open
tendering process?

Frequency

Percent

Yes

27

90

No

10

Total

30

100

From table 4.6, 90% of the respondents strongly believe that organisational policies affect the
open tendering. Only 10% of the respondents said that it does not affect.
4.2.12 Do you think procurement ethics affect open tendering process
Figure 4.6 Analysis on effect of procurement ethics to open tendering process

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6%

Yes
No

94%

Figure 4.6 show that 94% ethics does affect open tendering process while only 6% of the
respondents said that procurement ethics does not affect open tendering process
4.2.13 Does individual interests affect open tendering process?
Figure 4.7Analysis on whether individual interest affects open tendering process

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80%
70%

Percentage

60%
50%
40%
30%
20%
10%
0%
Yes

No
Response

From figure 4.7, 80% of the respondent strongly believe that individual interest affects open
tendering process while the remaining 20% feel that it does not.
4.3 Qualitative Analysis
Qualitative data refers to non-numerical data that has not been quantified. Qualitative data
analysis helps to understand what is necessary in order to analyse data meaningfully. Qualitative
data is associated with concepts as characterized by their richness and fullness based on your
opportunity to explore your subject. Wittig (2002)
The respondent gave other challenges facing open tendering process in public organizations.
These included continuous training of employees in procurement line for better understanding of
procedures, Public Procurement Act 2005 Regulations 2006 not being availed to procurement

25

staff which would act as a guide in decisions pertaining procurement method to be used and
Procurement Audits are not being carried out.
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
In this chapter, the summary and the conclusions of the study are discussed. Recommendations
for improvement of open tender system are also discussed.
5.1 Summary
The research established that the system had the following effect on key aspects of procurement:
Seventy two percent (73%) of the respondents agreed that specification affect open tendering
process while 27% did not agree. Corruption was cited as major factor with 100%of the
population agreeing that this was a challenge to the open tendering process and that it affect the
bidding process thus locking out potential bidders who are not willing to participate in the
dealings. Another 89% of the population strongly agreed that the organizational policy is a major
challenge to the process since the policies are rigid and very bureaucratic that making the process
unnecessarily complex while 11% felt that organizational policy has no effect on open tendering
process. Ethics was also cited a challenge to open tendering process. Ninety four percent (94%) of
the population agreed that lack of ethics affect open tender and only 6% thought otherwise.
5.2 Answers to research questions
1. Does the procurement need affect the efficiency of open tendering?

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Procurement need affects the efficiency of open tendering as suggested by 56% of the sample
population

2. To what extent technical specifications affect open tendering process?

Specifications posed as a challenge to open tendering process. This was shown by 73% of the
population supporting the idea that specifications were a challenge while 27% did not agree that
specifications affect open tendering process.

Corruption was cited as major factor with 100%of the population agreeing that this was a
challenge to the open tendering process and that it affect the bidding process thus locking out
potential bidders who are not willing to participate in the dealings
3. In what ways do policies affect open tendering process?
Another 90% of the population strongly agreed that the organizational policy is a major
challenge to the process since the policies are rigid and very bureaucratic that making the process
unnecessarily complex while 10% felt that organizational policy has no effect on open tendering
process
4. How

do ethics affect open tendering process?

Ethics was also cited a challenge to open tendering process. Ninety four percent (94%) of the
population agreed that lack of ethics affect open tender process and only 6% thought otherwise
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5.3 Conclusions
Open tendering procurement method is the most common in public procurement and has helped
to achieve some of the objectives of the laws of Kenya governing public procurement, but it
faces a number of challenges that have prevented it from reaching its full potential. The
processes has helped to improve the quality of purchases, reduces lead times, reduces rejection of
goods delivered, improves supplier satisfaction, improves no customer satisfaction due to timely
delivery and improve transparency and accountability. However, these challenges affect the
efficiency and effectiveness of the method.
The result of study shows that specifications helps users to understand their needs and also
communicates to the suppliers on what to supply. 72% of the population supported the idea that
specifications were a challenge to open tendering process, this is because the finalproduct of
items procured by open tender process heavily depends on how accurate specifications were
done before commencing the purchase.

Corruption was cited as major factor with 100%of the population agreeing that this was a
challenge to the open tendering process and that it affect the bidding process thus locking out
potential bidders who are not willing to participate in the dealings.

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Ethics was also cited a challenge to open tendering process. Ninety four percent (94%) of the
population agreed that lack of ethics affect open tender and only 6% thought otherwise. this
suggests that if procurement officers involved in tendering process behaved ethically the process
would be a success, also public confidence would be restored as right procedures in evaluation
and award of tenders would be followed.

On organization policy 90% of the population strongly agreed that organizational policy is a
major challenge to open tendering process. This is because the policies are rigid and very
bureaucratic that making the process unnecessarily complex while 10% felt that organizational
policy has no effect on open tendering process
5.4 Recommendations
In this section the recommendations are based on the conclusion. Specifications help users to
understand their needs and also communicate to the suppliers on what to supply. This is because
the final product of items procured by open tender process or any other procurement method
heavily depends on accuracy of specifications. For effective results, Procurement department
should always involve technical experts and user departments in preparation of specifications of
the required equipments before preparation of bidding documents. These specifications should
be written in a manner that potential suppliers will understand. Where possible they should be
standardized for them to be used in future for a similar purchase. After advertising and selling the
bid documents to the suppliers they should be called for a pre- bid meeting for emphasis on
specifications required.

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Corruption was cited as major factor affecting open tendering process and that it affect the
bidding process thus locking out potential bidders who are not willing to participate in the
dealings. This results to the company being supplied with substandard goods as the bidders
awarded the supply are not qualified enough to deal with such items. The company should
always adhere to the thresholds set by Public Procurement Oversight Authority (PPOA) thus no
splitting of Procurements to avoid open tender process. Public officials should not be allowed to
participate in private enterprise as this leads to conflict of interest. Roles should also be separated
such that the person raising local purchase order is not the one to examine the document, this will
help in detecting any anomalies.
Ethics was also cited a challenge to open tendering process. Lack of Ethics during the open
tendering process hampers effective implementation of the process. Ethical obligations to the
buyer includes; equitable treatment to all suppliers during tendering, fair treatment to all
suppliers and to avoid favourism, protect vendors proprietary information such as design, pricing
structures to enhance the body of procurement professionals, all tender committee members
should uphold and practice the public procurement oversight authority standards and guidelines.
The Public Officers Ethics Act does provide a general Code of Ethics for Public Officials, this
Code does not include specific provisions for those officials involved in public financial
management, including procurement. The public procurement oversight authority should issue a
Code of Ethics for procurement officials which they should adhere to while carrying out
procurement activities.
Organizational policy was also seen to be a major challenge to the open tender process. This is
because the current policies are rigid and very bureaucratic thus making the process
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unnecessarily complex. Therefore there is need to review these policies and do amendments were
possible, this will result to policies that embrace open tendering process and through this the
universities will be able to trade with the right suppliers.

5.5 Areas for Further Research.

Further studies need to be done in both public and private companies country wide to ascertain
whether findings of this study are general to both manufacturing companies and in service
industries.

REFERENCES
Anderson C. and Narus A. (1984). Procurement and Marketing, New York, McGraw- Hill.
Crosby, Philip. (1989). lets talk quality. New York: McGraw-Hill.
Dobler, D.W, Burt, D, N. (1996).Purchasing and Supply Management; Text and Cases,6th Ed.
Singapore, The Mc Graw- Hill Companies, Inc.
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Kotzap Herbert etal.(2007). Managing the Global Supply Chain. Copenhagen, Business School
Press DK
Lysons, K. and Farrington, B. (2006). Purchasing and Supply Chain Management. London,
Pearson Education Limited.
Parsons W.J, (1982). Improving Purchasing Performance, London, Gower Publishing Co. Ltd.
Oakland, J.S. (1993), Total Quality Management: The Management of Change through Process
Improvement,
Wittig, W.A. (2002), Building Value through Public Procurement: A Focus on Africa, 30
March 2002
World Bank, (1995), Guidelines: Procurement under IBRD Loans and IDA Credits, World
Bank, Washington, D.C

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