Procurement methods and operational performance of state corporations in Kenya

Abstract

Procurement methods strive to achieve multiple interests and objectives while at the same time enhancing operational performance. Procurement has an overall objective of minimizing inventory levels held while at the same time meeting the needs of the firm. Operational performance on the other hand aims at making inventory readily available to improve firm`s operational performance. Firms embrace procurement methods that enhance efficiency and operational performance with the overall aim of getting the most value for money. In the recent past, there has been growing focus on the operational performance of state corporations. State corporations are increasingly faced with the challenge to do things efficiently but with fewer resources while at the same time improving service delivery to the citizens. There is increasing need for State Corporations to devote more resources to the delivery of services and streamline their operational performance. In pursuing these objectives, state corporations are faced with enormous operational challenges. The most common challenges include inefficiencies in their operations, huge losses, budgetary burdens and provision of poor services to the citizenry. This study sought to establish procurement methods used by state corporations in Kenya and ascertain if there was a functional relationship between the procurement methods and operational performance of the state corporations in Kenya. The research study involved a descriptive research design of cross sectional type where a sample of state corporations was selected across the ten sectors of the economy in Kenya. A total of 32 state corporations were selected for the study, each organization selected was given one questionnaire with targeted questions aimed at meeting the objectives of the study. To enhance consistency in the results, a standard questionnaire was developed with open ended questions addressing the twin objectives of the study. Quantitative data collected was analyzed by use of descriptive statistics to generate percentages, means, standard deviations and frequencies. This was done by tallying up responses, computing percentages of variations in response as well as describing and interpreting the data in line with the study objectives and assumptions. Tables and other graphical presentations as appropriate were used to present the data collected for ease of understanding and analysis. Data was also analyzed using Statistical Package for Social Scientists (SPSS). A regression was done and the results obtained interpreted. The study established that the procurement methods used by state corporations to a large extent are price based and hence may not necessarily guarantee the best value for money. Best value procurement methods such as negotiated procurement were used but to a small extent. Subjective and qualitative procurement methods such as specialized task, community participation and Force account were least used by the state corporations in Kenya and most of these were unknown by the state corporations. The study concluded that there is a relationship between the procurement methods and operational performance of state corporations. The relationship varied between procuring for services, works and goods. With the impact on efficiency in procuring of services being greater that works and goods.