Modelling of Factors Influencing Public Procurement Bid Disputes in Kenya

Abstract

Public procurement plays an important role in timely and quality service delivery for governments. While bid disputes offer justice to aggrieved bidders, they often disrupt public procurement processes. The frequency and time taken to resolve bid disputes is influenced by a myriad of factors. The purpose of this study was to examine factors influencing public procurement bid disputes and how they are interrelated. The objectives of the study were to analyse public procurement bid disputes in Kenya, establish factors influencing public procurement bid disputes, assess the efficacy of the public procurement bid dispute resolution mechanism and develop a public procurement bid dispute management model for Kenya based on the identified factors. The study adopted the pragmatism research philosophy which best supports mixed-methods research that this study used. All 923 bid dispute cases heard and determined by Public Procurement Administrative Review Board (PPARB), as traced to their conclusion in courts of law, between 2001 and 2020 were reviewed. Fourteen out of 30 sitting PPARB secretariat, review board members, bidders and heads of procurement from entities that had been involved in these disputes who had purposefully been sampled to participate in semi structured interviews agreed to the interviews. Content analysis was used to analyse secondary data while semi structured interviews, incorporating Methodology for Assessing Procurement Systems (MAPS), were used to collect primary data. Analysis of descriptive data and association testing was conducted. In addition, Interpretive Structural Modeling (ISM) and Matrice d’Impacts Croisés Multiplication Appliquée á un Classement (MICMAC) analysis were done to develop a data driven hierarchical structural framework of factors that influence public procurement bid disputes in Kenya. Overall, the public procurement bid dispute resolution mechanism in Kenya was found to be effective and efficient. However, shortcomings were noted concerning resourcing of PPARB, unaffordable filing fees and accessibility of comprehensive and clear information on filing procedures. Twenty-three factors that influence bid disputes in Kenya were analyzed through ISM, which led to development of a data driven hierarchical structural framework of the factors that influence public procurement bid disputes. Through MICMAC analysis, value of contracts, devolution of PPARB services, bidders’ past performance and regulatory changes (the independent enablers) were found to have high driving power and weak dependence and were therefore regarded as fundamental factors that influence public procurement bid disputes in Kenya. The study made contribution to body of knowledge regarding the application of ISM and MICMAC analysis in development of comprehensive framework for management of factors influencing public procurement bid disputes. Restrictions stemming from measures taken to mitigate the impact of COVID-19 pandemic negatively impacted this study where most respondents opted for email and telephone correspondences instead of face to face semi structured interviews. It is suggested that the data driven model advanced in this study be replicated in different contexts to help grow the model into a theory. The findings of the study were consistent with principal agent theory, stakeholder theory and theory of constraints and have offered propositions that could benefit policy makers and public procurement practitioners in the management of bid disputes in public procurement. The study recommended that policy review be initiated to allow for Alternative Dispute Resolution (ADR) in bid disputes as well as to facilitate access to justice by vulnerable litigants.