EVALUATION OF TENDERING SYSTEM IN PUBLIC SECTOR PROCUREMENT

1.0 Introduction

1.1 Background Of The Study

Several factors have made the subject of public procurement prominent in recent years among government policy makers, academic and business community, bilateral donor agencies and international financing institutions, such as the World Bank are paying increasing attention to the implementation as distinct from the preparation of projects funded by them, and have come to identify economic and efficient procurement as indispensable to successful project implied tation.

Developing countries especially in Africa come to recognize the economic development programmes and projects have to be managed more efficiently and that efficiency gains cannot be had without improved procurement of the goods services which needs to be acquired in the development process. The dictionary of purchasing and supply management defines “tendering” in public sector procurement as offer from tenderness without callous, usually in scaled enveloped delivered by a time and data specified in the invitation of tendering for supply of goods and services. In simple term, “public procurement” is defined as the acquisition of goods and services by government and their subsidiary agencies such as parastatas. “Tendering and public sector” is usually required when an organization or a firm needed supply of certain goods such as furniture, generating set, caterpillars, vehicles, drugs, medical equipment, and computers etc.

Tendering is widely used in public sector to ensure observance of the principles of public accountability. It may also be used by private sector organization more especially in respect of construction and services contract to obtain prices and terms of the contract. According to Kempton and Jessup (1989) such tenders are opened only at time and data specified by the tender panel of qualified persons who record the necessary details, the essence of this research is to examine the use of effective bidding in public sector procurement.

1.2 Statement Of Problems

The problems of tending system and its implications on public sector procurement has been identified by in many as not only enormous but complex now that is seriously needed on the part of our various government to provide more services with little funds and issue of corruption in our “public life” some of the problem are

• A great number of problems have been dividing the sector tendering which has great affection in the quality of contract entered by the public sector organization. The entire contract system has gone sour as a result of mal-management, corruption, mal-application of rules and regulation set to be adhering to in contracting for goods and services.
• The negligent on the part of the various part authorities to ensure a uniform codes standard of practice and professional ethics of conducts all has made a complete to our public sector tendering.
• The out data nature of our financial regulation which guide the operations public procurement as well as public sector tendering in the greatest problems of our public sector tendering and therefore has serious implication on the efficiency and effectiveness of public sector contract management and administration
• Tendering system in public sector procurement usually ends with the lowest price bidder getting the award of the purchasing firm’s gains a population for negotiation with the lowest after bids are opened. This will make the future bidders not to offer their best price initially believing that they do better in any subsequent negotiation. They will adopt a system of submitting a bid low enough to allow them to be included in any negotiations. But their initial bid will not be as low as when it is anticipated that the award be made to be the lowest bidder without further negotiation. Public sector tends to put great pressure on suppliers to reduce their cost to be able to bid low but profitable prices. This cost pressure may result sacrifice in product quality development effects and other vital services.

1.3 Objectives of the Study

In most public establishment, there is a wide misunderstanding of tendering system as a tool for public sector procurement.

1. To examine the use of tendering in improving the efficiency and effectiveness of public sector procurement.
2. To find out the reason why there is misunderstanding of public sector procurement.
3. To examine the procedures and process of tendering and contract awards and the skills of officers involved in public tendering and contract management.

1.4 Significance of the Study

The significance of this research work is to help the research or show to know the significance of the study to discover whether there will need for effective and efficient use of tendering in public procurement in the ministry. If the end of this work, the ministry will be able and capable of ensuring that there is effective and efficient use of tendering in public sector procurement ministry.

1. This research work be beneficial to the ministry of works, the researcher himself and also to the public and private organization under study.
2. It creates opportunity for unknown contractor or supplier to become known especially when it is successful.
3. It makes public accountability possible.
4. The research work allows keen competition which may produce cheaper tender figure.
5. It is an opportunity to get genuine tenderers who are actually interested in the project.

1.5 Research Questions

Based on the project topic and objectives of the research, the following questions were developed by the researcher:

• Does tendering have a role to play in improving the efficiency and effectiveness of public sector procurement?
• What qualifies a bidder to be invited to bid?
• Have there been instances where the lowest bidder is not offered the job?
• Can the current tendering process or procedures as used by the public sector organization eliminate corruption and build accountability and transparently in the public sector?
• Is the officer handling tendering in the public sector qualified?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: Tendering is not an effective tool in public sector procurement
• H1: Tendering is an effective tool in public sector procurement

Hypothesis Two

• H0: There is no effective method the ministry adopt other than public procurement
• H1: There is an effective method the ministry adopt other than public procurement

1.7 Scope of the Study

This study has been limited to the public sector organization.

Tendering system has play many role in the management and administration of public sector contract, this study would have covered all the ministries departments, Agencies, Boards even the Local government areas in this country but the researchers after due consideration of various variables and implication decides to concentrate on the study of the implication of effectiveness and efficient tendering in the administration and management of contract in the ministry of works and housing, Owerri, Imo state.

In doing this the researcher concentrate on must of the department and units that have one or other things to do with the subject matter of the study. These department or units includes administration, engineering, planning, finance of these areas well give a great incipit as what takes place in other ministries, departments, boards, agencies etc.

1.8 Limitations of the Study

In the process of conducting this study the researcher has confronted with the various problems among them are:

1. It was not easy for the researcher who had to combine attending lectures in other activities in school with the various visits to the ministry during this research work. This is no small way limit the level of investigation the research intended to carry out
2. Yet another limitation faced by the researcher was financial constraints. This made it impossible for the researcher to make the entire necessary visit in order to obtain the right quality of information the researcher of this nature requires.
3. Lastly, many officials’ changes with the management and administration of tendering system in public sector contract were not keen to give out much needed information by way of document and forms which were classified by the government.

1.9 Definition Of Terms

Bid:

A quotation for a price or other condition for contracts whether for payment or acceptance.

Lead Time:

This is the interval between when a need is perceived and the fulfillment or satisfaction of that need

Tender:

It is the procedure through potential supplier are invited through newspaper and other chosen media advertising to make a firm and unrequited offer of the price And terms which on acceptance, shall be the basis of the subsequent contract in competition with others.

Competitive Bidding:

This is one of the methods by which the right price can be obtained.

Quotation:

A formal statement prepared by a contractor/supplier to his customer that includes cost estimates specification and other key information about an agreement between the two parties.

Government:

An institution with power to govern and direct the affairs of a state

Evaluation:

The process of finding out and deciding the amount and value of something

Negotiation:

It is the seeking agreement between the purchaser and the contractor/supplier on mutually acceptance terms and conditions prior to conclude a contract.

Analysis:

It is the process of braking components into separate parts or units in order to examine each unit and constitute critically.

Certificate:

Act of licensing by a document formally testing the fulfillment of conditions

Procedure:

The act of system or pattern or performing a work, service, supplier etc

Performance Bonds:

This is an undertaking or security to perform a contract as required and failure to perform as required the client will be compensated by the supplier or contractor.

Specification:

This is the description of any objective materials or process in sufficient details required of a job/suppliers or contract which the contractor or a supplier must comply with. It is what the supplier must supply to the buyer as describable by the buyer.

Sourcing:

This is a process and procedure used by the buyers to survey, evaluate and determine which supplier that can meet with the best requirement of the organization.

Sourcing Policy:

These are policies developed to guide the purchasing functions in respect of who may be the major sources of the organizational suppliers.

Quality:

Quality is the fatality of features and characteristics of a product or a serves that bears in the ability to satisfy a stated or implied needs.

Price:

This is the amount of money for which a thing is offered, sold or bought.

Price Analysis:

This is the examination of the seller’s price without examination elements of the cost and profit elements that make up the price.

Fair Prices:

Fair prices are the lowest price that makes it possible for a continuous supply of the right quality materials by the suppliers where and when needed.

chooseive Tender:

Here a method of only competent supplier on the approval list of supplier are invited by the buying firm to tender.

Forward Buying:

This is a buying practice which embraces the buying of materials in quantity more that is currently required.

Standardization:

It is an agreement on definite sizes, design, quality and the like.

Contract:

It is an agreement between two or more persons which is intended by them to have legal consequences.

Pricing:

This is the process of determining he price.

Order:

This is an instruction to a manufacturer or trader to supply something.