Abstract:
The purpose of this study was to assess the contribution of contractual agreement on performance of the procurement
in selected university campuses in Nakuru County. The target population of the study comprised of 400 employees
and sample size comprised of 80 employees. These employees were drawn from departments related to procurement
functions. Data was analyzed using descriptive statistics such as frequency, percentages and inferential statistics;
Pearson Chi-square test. The results shows contractual agreement was evident in almost all campuses surveyed (96%)
but a significant section of the respondents could not tell exactly the kind of procurement contractual relationships
(38%). Most respondents agree that contractual agreements contribute to positive trust among partners (53.3%). The
null hypothesis postulated was rejected and concluded that contractual agreement contribute positively towards
supplier loyalty and commitment (P=0.001). These contractual agreements however dot not always comes with
affirmative benefits but sometimes with shortcomings such as the amount of time and effort involved in building this
trust. It also results in that higher switching costs if problems were to arise with the supplier and there is a sharing of
proprietary information, strategy, planning, and goals. Contractual relationships between the university and source
partners must be supported from the entire organization. More importantly, for a procurement organization to operate
both efficiently and effectively in such a complex environment communication strategy need to be created and
suitable contractual agreement determined prior and fostered throughout the organization.
