Supplier Evaluation Criteria and Procurement Performance in Parastatals in Kenya

Abstract

Selection and maintaining competent suppliers is very essential in procurement. However, many factors affect a firm's ability to choose the right supplier. However, less has been done to investigate the supplier evaluation criteria and the influence to the procurement performance in the Kenyan context. Therefore this study was undertaken with the main objective to assess the supplier selection and evaluation practices in Parastatals in Kenya. The study was guided by three specific objectives; to establish the criteria used for supplier evaluation in Parastatals in Kenya; to find out the challenges of implementing Supplier Evaluation in Parastatals in Kenya and to determine the relationship between Supplier Evaluation Criteria and procurement Performance in Parastatals in Kenya. It employed a descriptive research design. The target population for the study included all the 187 parastatals under the state corporations‟ act of Kenya as at September 2015. Out of these, a sample of 53 was selected to give response to the study. However, 3 of these did not respond to the study giving a response rate of 94%. Questionnaires were used to collect data which was analysis through SPSS software version 22. Findings revealed that Parastatals in Kenya base their selection on following criteria; quality of the supplier services during, financial position of the supplier, flexibility of the supplier, supplier efficiency in service delivery, supplier charges, constitution and the PPOA guidelines, information sharing between the organization and supplier, supplier technical capability, supplier profile, ability of the supplier to share confidential information, experience of the supplier in offering certain services/products as well as compliance with procurement procedures. However, the supplier evaluation in these organizations is faced by several challenges including corruption, incompetent procurement officers, inefficiencies in procurement processes, lack of incentives, pressure of implementing PPOA and PPDA guidelines, cost of implementing procurement systems as well as maintaining procurement system greatly affects supplier selection process. The study therefore recommended that the management and the supply chain management for the Parastatals in Kenya need to effectively evaluate the most effective evaluation criteria that would facilitate its procurement performance. There is need also to ensure that competent personnel are in place to manage supply chain processes in the organizations.