THE IMPACT OF PUBLIC PROCUREMENT PRACTICE ON THE PERFORMANCE OF CONSTRUCTION PROJECTS IN BENUE STATE

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

CHAPTER ONE

INTRODUCTION

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5       Research question

1.6        Significance of the study

1.7        Scope and limitation of the study

1.8       Definition of terms

1.9       Organization of the study

CHAPTER TWO

LITERATURE REVIEW

2.1   theoretical review

2.2   Conceptual review

2.3   empirical review

CHAPETR THREE

RESEARCH METHODOLOGY

3.1        sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5         Area of the study

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1    Introductions

4.2    Data analysis

CHAPTER FIVE

5.1    Introduction

5.2    Summary

5.3    Conclusion

5.4    Recommendation

Appendix

 

 

 

 

 

 

Abstract

Procurement is the process undergo by a procuring entity in the exercise of acquisition of works, goods and services required by the procuring entity. Looking at it from a business angle, the most important benefits of an effective procurement of works, goods and services are financial and economic optimisation. The government’s aim in procurement of works, goods and services is to satisfy the public through provision of infrastructure, improve the welfare of the members of the public, and win their trust in this exercise. It is in this wise that the Federal Government of Nigeria is committed to spend N1.3 trillion annually on infrastructure. With the large allocation of resources to capital expenditure in her annual budget, especially on provision of physical infrastructure, Nigeria still languish in infrastructure deficit. In the public procurement system in Nigeria has over the years been abused leading to cost inflation, delay in project delivery, poor quality of work, and project abandonment. The aim of this study is to examine the impact of the due process policy on construction projects delivery in Nigeria. Data were collected using a structured questionnaire distributed to 300 staff of public procurement department randomly selected across constructing, consulting and public organizations operating in Benue state, Nigeria. Data were analyzed using descriptive statistics. The result shows that due process policy has a very positive impact in Niger’s procurement terrain. Adherence to due process proceedings had highest impact on cost savings, prequalification of contractors and detailed project design, quality of project delivery, and project duration. The study serve as a feedback to the construction stakeholders in Nigeria and contains useable information for optimizing the existing due process mechanism to enhance not only probity, accountability, transparency and competition in public contract awards, but also the policy’s resultant effects on quality of executed projects, delivery-on-budget and time considerations.

 

                                        CHAPTER ONE

                                        INTRODUCTION

1.1 Background of the study

It is no news that government all over the world has a common purpose which is to care for its citizens. This purpose has been seen by many to constitute the sine-quanon for the existence of any government. However the achievement of this objective has been bedeviled by corruptions and irregularities in the activities and business of government (Nwafor, 2013). In order to restore the lost confidence of the citizens on the activities and process of government, policies and enactments such as the Public Procurement Act 2007 was established to curb the excesses in government activities and business with a view to ensuring proper regulation in the procurement process. Also government must ensure transparency and accountability in its dealings both in business transaction and non-business activities (Adewole, 2014). Public procurement procedures provide a crucial function in the public sector, because the significant portion of public spending occurs through the public procurement process. Public procurement refers to the acquisition of goods, services and works by a procuring entity using public funds (World Bank, 1995a).For example, in stationery items, infrastructures construction works, cleaning works, transport services and consultancy services. Worldwide, public procurement has become an issue of public attention and debate, and has been subjected to reforms, restructuring, rules and regulations. According to Roodhooft and Abbeele (2006), public bodies have always been big purchasers, dealing with huge budgets. Mahmood, (2010) also reiterated that public procurement represents 18.42% of the world GDP. Many countries both in developed and least developed countries have instituted procurement reforms involving laws and regulations. The major obstacle however, has been inadequate regulatory compliance. De Boer and Telgen (1998) confirm that non-compliance problem affects not only the third world countries but also countries in the European Union. This position is further supported by Gelderman, et al., (2006) who contend that compliance in public procurement is still a major issue. Hui, et al., (2011) while analyzing procurement issues in Malaysia established that procurement officers were blamed for malpractice and noncompliance to the procurement policies and procedures. Citing Gelderman, et al., (2006) stipulate that compliance occurs when the target performs a requested action, but is apathetic about it, rather than enthusiastic, and puts in only a minimal or average effort. However, as an organizational outcome, compliance has traditionally been understood as conformity or obedience to regulations and legislation (Snell, 2004) cited in Lisa (2010). In developing countries, public procurement is increasingly recognized as essential in service delivery (Basheka & Bisangabasaija, 2010), and it accounts for a high proportion of total expenditure. For instance, public procurement accounts for 60% in Kenya (Akech, 2005), 58% in Angola, 40% in Malawi and 70% of Uganda‟s public spending (Wittig, 1999; Gov. of Uganda, 2006) as cited in Basheka and Bisangabasaija. Moreover, in most developed countries, public procurement takes place within a framework of international obligations, such as World trade organization’s Agreement on Government Procurement Directives made under regional agreements such as the European Union or the North Free Trade Agreement. In Benue state, use of the Public Procurement act, has been adapted in order to improve a national public procurement system with respects to international standards. As most developing countries prefer the flexibility that comes with receiving development aid through budget support, they have an incentive to reform their public procurement and financial management systems (Baily, 2005). This is the case for the government of Benue state whose public procurement was recently decentralized to local governments in order to meet the above mentioned requirements. New ambitious undertaken by donors and developing countries to speed up the process of fulfilling the Paris Declaration‟s pledges. It is against this background that the Benue state Procurement process had to undergo radical reforms in order to comply with these principles so as to make a profitable use of donor funds in a more effective and transparent manner (Alexis, 2013). The goal of any procurement, whether public or private, is to award timely and cost-effective contracts to qualified contractors, suppliers and service providers for the provision of goods, works and services to support national and local government, and public services operations, in accordance with principles and procedures established in the public procurement rules (Lynch, 2018).  This goal cannot be achieved without effective contract administration. According to Lynch (2018), “The goal of contract administration is to ensure proper mechanisms are in place to monitor and evaluate contractors, suppliers and service providers’ performance in the fulfilment of their contractual obligations, and to ensure appropriate actions are taken to promptly remedy any deficiency observed in contract execution or the contract scope, and terms and conditions”. Monitoring and control is part of contract administration. There have been deficiencies in public procurement contract administration in Nigeria over time. This led to the establishment of Bureau of Public Procurement (BPP) by Public Procurement Act 2007. The objectives of establishing the BPP are to: harmonise existing government policies and practices on public procurement and ensure probity, accountability and transparency in the procurement process; establish pricing standards and benchmarks; ensure the application of fair, competitive, transparent, value-for-money standards and practices for the procurement and disposal of public asset and attain transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system (Public Procurement Act, 2007).

A past Director-General of the Bureau of Public Procurement (BPP), Mr Emeka Ezeh, stated that the bureau has saved the nation about N658billion on public procurement between 2009 and 2014 (Daily Post, 2016). But the Presidential Project Assessment Committee (PPAC) in its report submitted in 2011 to the Presidency, alluded that our public procurement practices have failed. The committee blamed the failure on corruption, inadequate budgetary provision, poor project conceptualization and institutional mediocrity (Idonor, 2011). Successive administrations in Nigeria compete to beat the record of each other through provision of infrastructure in which, in most cases, they embark on roads that lead to nowhere.

El’Rufai (2012) stated that “The government must curb the temptations or pressures to embark on new projects when so many remain uncompleted or abandoned”. According to Oyedele (2017), “Abandoned projects are projects that are taking more than average time of completion to complete due to cash flow problems, scarce materials, technical hitch and managerial challenges. They also include completed projects which have been left unattended to”. Any project that has gulped funding and cannot meet the purpose for which it was embarked on after its estimated time of delivery is an abandoned project.

1.2 STATEMENT OF THE PROBLEM

Procurement is part of the fiscal policies and programmes directed toward achieving effective and efficient public financial management and national development. As an economic instrument for guaranteeing national development, when well-planned and implemented procurement has the potential of contributing to the realization effective project implementation and completion because it ensures the public get the value for their money because they ensure accountability and transparency hence cost effective, timely and quality service delivery. The main objectives of Public Procurement act 2007, is to harmonize public procurement processes in the public service, secure judicious, economic and efficient use of state resources, ensures fair public procurement, transparent and non-discriminatory and to reduce or eliminate corruption in the procurement process (Public Procurement Act 2007). Generally, procurement in many developing countries like Nigeria has been identified with inherent weaknesses, making the system ineffective and non-responsive to strategic procurement needs of organizations and government alike. According to Hunja (2003), one consistent weakness in most developing countries is the lack of an entity within government that is charged with overall responsibility for formulation of procurement policy and to ensure that the system is functioning properly. Hunja (2003) further stated that over-duplication of procurement manuals leads to diverse interpretations and implementation of existing rules across various public agencies and even within some of the agencies, lack of oversight responsibilities for the proper functioning of the procurement system creates serious gap in the enforcement of rules. The procurement system invariably suffer various forms of malpractice and unethical conduct, including a high incidence of vested interest, interference and insider dealings and occasional cases of retrospective approval of contract awards. There was significant lack of professional knowledge and expertise in the purchasing and contracting function at all levels (Agaba and Shipman, 2012). Fayomi (2013) noted that countries all over the world are always besets with various political and socio-economic problems at one time or the other. Constant efforts are often being made by the various governments to find solutions to such problems. This is usually through administrative reforms, whereby a policy option is made to halt a named political, educational or socio-economic problem. He further stressed that the due process policy is a package of policy measures, and like any other policy, it has set goals, which it aimed at achieving. Thus, the institution of the reform measures presupposes the existence of some administrative deficiencies. The rectification of the flows in the administrative machinery depends on the satisfactory implementation of the reform goals (Fayomi, 2013).  Despite the important role played by the Procurement system, some government institutions in Benue state still practice lengthy bureaucratic procurement processes in acquiring goods and services, corruption and discriminatory awards of tenders hence has made some government projects to fail. Consequently, there is general presumption that public procurement act will enhance transparency and accountability in the execution of public contract. However, to the best of the researcher’s knowledge, no study has been conducted to examine the impact of public procurement practice on the performance of construction project in Benue state.

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to examine the impact of public procurement practice on the performance of construction projects in Benue state, but to aid the completion of the study, the researcher intend to achieve the following specific objectives;

1. i) To examine the impact of public procurement practice on construction project delivery in Benue state
2. ii) To ascertain if there is any significant relationship between public procurement act and construction project delivery in Benue state

iii) To examine the role of public procurement Act in ensuring transparency and accountability in construction project procurement process

1. iv) To examine the effect of public procurement practice on construction project completion in Benue state.

1.4 RESEARCH QUESTIONS

The following research questions were formulated by the researcher to aid the completion of the study

1. i) Does public procurement practice have any impact on construction project delivery in Benue state?
2. ii) Is there any significant relationship between public procurement act and construction project delivery in Benue state?

iii) Does public procurement Act play any role in ensuring transparency and accountability in construction project procurement process?

1. iv) Are they effect of public procurement practice on construction project completion in Benue state?

1.5 RESEARCH HYPOTHESES

The following null and alternate hypotheses were formulated by the researcher to aid the completion of the study;

H₀: There is no significant relationship between public procurement act and construction project delivery in Benue state

H₁: There is a significant relationship between public procurement act and construction project delivery in Benue state

H₀: public procurement Act does not play any role in ensuring transparency and accountability in construction project procurement process

H₂: public procurement Act does play a significant role in ensuring transparency and accountability in construction project procurement process

1.6 SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study, the findings and the policy recommendations of the study will aid the government ministry and procurement department to supervise and ensures strict compliance with the procurement act by contractors and other players in the construction contract.

This study will also be of relevance to construction companies as this study seek to explore the implication and impact of public procurement practice on construction project completion in Benue state. The study will also be useful to researchers who intend to embark on a study in a similar topic as the study will serve as a reference point to further research on the subject matter. Finally, the study will be beneficial to government agencies, ministries, parastatals, student, teachers academia’s and the general public as the study will contribute to the pool of existing literature on the subject matter and also add to knowledge

1.7 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the impact of public procurement practice on the performance of construction projects in Benue state. This study was delimited to Benue state bureau of public procurement Other factors that limited the scope of the study includes;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Finance: Limited Access to the required finance was a major constrain to the scope of the study as it become cumbersome to cover more grounds and to print more.

1.8 OPERATIONAL DEFINITION OF TERMS

Construction: Construction is the process of constructing a building or infrastructure. Construction differs from manufacturing in that manufacturing typically involves mass production of similar items without a designated purchaser, while construction typically takes place on location for a known client.

Contractor: is a person or firm that undertakes a contract to provide materials or labour to perform a service or do a job

Public procurement:  public procurement is the procurement of goods, services and construction on behalf of a public authority, such as a government agency. With 10 to 20% of GDP, government procurement accounts for a substantial part of the global economy.

Tender: The term ‘tender’ means an invitation to trade under the terms on offer. ‘Contract’ refers to any agreement entered into between the buyer and another party.

1.9 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

 

 

Reference

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