Strategic Procurement Practices and the Performance of Devolved Systems of Governance in Kenya

Abstract

Organizations have worked to reduce costs in order to increase profits and gain a competitive advantage. This is accomplished through strategic procurement practices, which help an organization gain a competitive advantage by contributing to the organization's strategic goals and its ability to significantly increase performance and productivity. The goal of this research was to look at the impact of strategic procurement practices on the functioning of Kenya's devolved government, problems have arisen by failure of the counties to observe strategic procurement practices in Kenya, for instance there was a clear indication that Devolved Systems of Governance do not adhere to strategic procurement practices, as was seen in Bomet county that there was poor contract management after the devolved system failed to inspect the bridge construction that costed a lot of tax-payers money and yet the bridge was substandard, the bridge that was supposed to cost Kshs.2.4 million, ended up costing Kshs 6.4million, this lead to high level of customer dissatisfaction, since the public felt that they were not getting value for their money . The study took place in the 10 counties namely Garissa, Kisii, Nyamira, Narok, Marsabit, Murang‘a, Bomet, Nairobi, Kiambu and Homa Bay. The study adopted mixed research design, both cross sectional and longitudinal design. A sample size of 186 people constituting respondent from procurement and finance was selected from all the counties, the study used stratified random sampling. The survey included both open ended and closed-ended questions. Pilot testing was carried out to establish the instrument's reliability and validity. Statistical Packages for Social Science were used to conduct the analysis. Multiple regression analysis and conventional F tests were used to evaluate hypotheses, allowing all variables to be examined concurrently rather than individually. Strategic supplier relationships, strategic e-procurement practices, strategic negotiation practices, and strategic contract management were all found to be significant predictors of Devolved Systems of Governance performance, with strategic negotiation practice being the most significant of the four. Furthermore, the research found that the Devolved Systems of Governance lacks specific performance criteria and measurements for diverse stakeholders in county government, particularly during contract award. As a proactive way of improving the performance of Devolved systems, supply chain managers and finance managers should adopt and embrace strategic supplier relationship practice, strategic e procurement practice, strategic negotiation practice, and strategic contract management, according to the study. The report also suggests that devolved systems of governance collaborate on product development with suppliers and include suppliers directly or indirectly in strategic planning. Similarly, the study recommends that the Devolved Systems of Governance strategically employ the best negotiation strategies for a variety of reasons, including obtaining fair prices for specified item quality, agreeing on delivery dates, deciding on packaging, packing, and mode of transportation, and agreeing on payment terms, among others