Public Procurement Implementation and Operational Performance of Service State Corporations in Kenya

Abstract

In many economies around the world, procurement represents between 18%-42% of public spending. However, weaknesses in execution, compliance, monitoring, and lack of enforcement of existing regulations leads to poor procurement management by state agencies. Public procurement implementation is one of the most powerful and fastest ways to reduce operational costs and to systematically evaluate procurement procedures to determine whether specified criteria are met. This study establishes the influence of Public procurement implementation on operational performance of service state corporations in Kenya. The relationship between the four variables (ethical procurement practices, Tender Evaluation Process, Procurement records management and Supplier appraisal practices) represent a clear research gap. Regulatory framework was used in the study as a moderator. The study uses; Deontological Theory of Ethics, Transaction cost Theory, Records Continuum Model and Stakeholder Theory to give more insight into the study. Survey research design was adopted by the study to enable the researcher obtain data about process, situations or views at one point in time through questionnaires. Target population for this study comprised of Audit, ICT and Procurement Managers respectively of the 132 Service State Corporations in Kenya as listed in the Report of The Presidential Taskforce on Parastatals Reforms 2013. Since the study population was not homogenous, stratified sampling method was adopted to obtain a sample size. Primary data was collected through administering of questionnaires to the staff of service state corporations. The study used Cronbach alpha coefficient to determine reliability of the instrument in this study and analysis of data was done using SPSS version 21 since it allowed data sets to be loaded more easily making it user friendly. Data analysis was conducted using descriptive statistics and inferential statistics. The study findings revealed that Ethical procurement practices, Tender Evaluation Process, Procurement records management and Supplier appraisal practices have significant influence on operational performance of service state corporations in Kenya. The study also found out that regulatory framework has a significant moderating effect on the relationship between public procurement implementation and operational performance of service state corporations in Kenya by 67.4%. The study recommends that in order to achieve performance, service state corporations should strengthen their internal ethical code of conduct to provide guidance to the agency values and cultural substance and set boundaries as to what is right and wrong in a given situation, to practice fair competition, maintain records in accordance with ISO 15489, continuously carry out supplier appraisal and strictly adhere to laid down procurement rules and regulations. .