Procurement Ethics and Quality of Goods Procured in Uganda

MAKERERE UNIVERSITY PROCUREMENT ETHICS AND QUALITY OF PRODUCTS PROCURED IN THE PUBLIC SECTOR (A CASE STUDY OF THE MINISTRY OF WORKS AND TRANSPORT) BY KIYO MWENDA MUCHIRI 07/K/3250/EXT SUPERVISOR MR ANTHONY TIBAINGANA A RESEARCH REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF BACHELOR OF COMMERCE OF MAKERERE UNIVERSITY. JULY 2011 DECLARATION
I Kiyo Mwenda Muchiri, do hereby declare that procurement ethics and quality of products procured in the public sector is entirely my own original work ,except where acknowledged,and that it has not been submitted before to any other institution of higher learning for the award of degree. Signed………………………………… Date……………………………………………. Name:Mr Kiyo Mwenda Muchiri APPROVAL This research report has been submitted for examination with my approval as the candidate’s university supervisor. Signed………………………………………
Date……………………………………………… Name:Mr Anthony Tibaingana DEDICATION This research work is dedicated to my dear mother MERCY MUTHONI MUCHIRI for the continued love support and motivation may God bless you very much. ACKNOWLEDGMENTS I would like to acknowledge the contribution provided by the individuals and insituition mentioned below. First and foremost i would like to recognise the constant support and contribution provided by supervisor Mr Antony Tibaingana. Special acknowledgement goes to my loving aunt Nelly Karimi for her continued moral support love and care.

Special thanks goes to the staff of ministry of works and transport and amproc international for their contribution to the completion of this work. My sincere gratitudes also goes to collegues George,Nelson,Kibet,Dickson. Omar,Oscar and Nyambati who i have shared my time of study with for their support throughout the course of my study. TABLE OF CONTENTS CONTENTPAGE DECLARATIONi APPROVALii DEDICATIONiii ACKNOWLEDGMENTSiv TABLE OF CONTENTSv LIST OF TABLESix LIST OF FIGURESx ACRONYMSxi ABSTRACTxii CHAPTER ONE1 1. 1Background of the Study1 1. 2 Statement of the Problem3 1. 3 Purpose of the Study4 . 4 Objectives of the Study4 1. 5 Research Question4 1. 6Scope of the Study4 1. 6. 1Time Scope5 1. 6. 2Subject Scope5 1. 6. 3Geographical Scope5 1. 7Significance of the Study5 CHAPTER TWO6 LITERATURE REVIEW6 Introduction:6 2. 1Ethics6 2. 1. 1Procurement Ethics6 2. 2How Ethics is ensured in Public Procurement6 2. 3Ethical Issues in Procurement. 8 2. 3. 1Corruption8 2. 3. 2Conflict of Interest11 2. 3. 3Donor Interest12 2. 3. 4Delayment of Funds13 2. 4 Quality13 2. 4. 1Quality of Products13 2. 4. 2Determinants of Quality14 2. 4. 3Public Procurement and Effective Quality Products and Service
Delivery. 15 2. 5Public Procurement16 2. 5. 1Procurement in the Ministry of Work and Transport17 2. 5. 2Procurement Cycle in the Ministry of Works and Transport18 2. 5. 3Procurement Methods Followed in the Ministry of Works and Transport19 2. 6Effects of Unethical Procurement20 2. 7Conclusion:21 CHAPTER THREE22 Introduction:22 3. 1Research Design22 3. 2 Survey Population22 3. 3 Sampling Design22 3. 3. 1Sampling Size22 3. 4Source of Data23 3. 4. 1Primary Data23 3. 4. 2Secondary Data23 3. 5Data Collection Methods23 3. 5. 1Observation23 3. 5. 2Survey24 3. Data Collection Instrument24 3. 6. 1Questionnaire24 3. 6. 2Documentary review24 3. 6. 3Interview guide,24 3. 7Data Processing Analysis and Presentation24 3. 7. 1Data processing. The researcher after gathering the data then edit code classify and tabulate the data. 24 3. 7. 2Data analysis. 24 Data presentation. 24 CHAPTER FOUR25 PRESENTATION OF FINDINGS, DISCUSSION AND INTERPRETATION25 Introduction:25 4. 1Demographic Characteristics of Respondents25 4. 2Findings on how products are purchased in the organization27 4. 3 Findings on causes of unethical practice in procurement31 4. Findings on the relationship between ethics and quality of goods procured33 4. 5Ethics in the Organization38 CHAPTER FIVE39 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS39 Introduction:39 5. 2Summary of findings39 5. 2. 1Findings on the procurement procedure followed under the Ministry of Works and Transport. 39 5. 2. 2Findings on the causes of unethical conduct in procurement in the ministry of Work and Transport. 39 5. 2. 3 Findings on what is the relationship between procurement ethics and quality of product procured. 39 5. 3Conclusions:40 5. 4Recommendation:40 5. 5Areas for further research40
REFRENCES41 APPENDICES42 APPENDIX ( i)Questionnaire42 APPENDIX (ii)Interview guide47 LIST OF TABLES TABLEPAGE Table 1: Showing Sample Size23 Table 2: Showing response rate of respondents25 Table 3: Showing the age of the respondents25 Table 4: Showing the Level of Education26 Table 5: Showing Marital status27 Table 6: Showing how long one has worked for the Organization27 Table 7: showing whether purchase requisition are handled on time28 Table 8: Showing whether procedures followed helps in procuring quality products29 Table 9: Showing whether products procured are of quality30
Table 10: showing whether weak enforcement measure of procurement law contributes to unethical practice31 Table 11: Showing whether moral degradation in the society is a cause of unethical conducts32 Table 12: Showing whether unethical practice of bidder contributes to unethical conduct by staff33 Table 13: showing whether the organization code of ethics contributes to quality products being procured35 Table 14: showing whether suppliers meet organization specification of quality products36 Table 15: showing whether unethical practice staff has resulted in procurement poor quality products. 36
LIST OF CHARTS FIGURE. PAGE Chart 1: Showing gender of the respondents26 Chart 2: Findings if purchase requisition used are from the user unit28 Chart 3: Showing whether PPDA procedure is followed29 Chart 4:: Showing relationship between ethics and procurement30 Chart 5: Showing how low pay has contributed to unethical practices…………………………. 32 Chart 6: Findings if there is relationship between ethics and quality of goods procured33 Chart 7: showing whether organization have a mean of checking unethical practice of employees. 36 ACRONYMS PPDA Public Procurement and Disposal of Public assets Authority
IGGInspector General of Government CHOGMCommonwealth Heads of Government Meeting PDEProcurement and Disposal Entitity SPSSStatistical Package for Social Sciences MOWTMinistry of Works and Transport ISOInternational Standards Organisation ABSTRACT The principle objective of carrying out this study was to assess the impact of procurement ethics on the quality of products procured in the public sector a case study of the ministry of works and trasport,and to come up with particular issues that need to be addressed in order to improve their effectviness and efficiency in their procurement activities.
The study used cross section design where data was gathered just once over a period of time in the ministry of works and transport ranging from the period (2000-2010). The research used descriptive research design which describes the phenomenon it was undertaken in order to ascertain and be able to describe the characteristics of variables of interest. The study used a sample size of 37 respondents who were purposively selected. Self administered questionnaires and interview guides were the main instruments of study and data was analyzed using frequencies, percentages and charts using Microsoft excel.
Findings on procurement ethics was that there some ethical issues that arise such as bribery, nepotism, tribalism, leaking of confidential information, pressure from those in authority above, awarding of contracts to those who are not the best evaluated bidders, conflict of interest, lack of transparency and single sourcing, embezzlement of funds and also harassment this was attributed to greed and low pay offered to the employees. Findings on quality of products procured were that when the PPDA procurement procedures are followed majority of the employees were of the view that it contribute to procurement of quality products.
Recommendation on the issue of ethics and quality is that procurement officers should always be sensitized on the importance of ethics and the society as whole needs to be educated on the importance of ethics to reduce on the unethical practices by bidder CHAPTER ONE 1. 1Background of the Study According to (Kenneth Lyson 2007) procurement ethics is the principle conduct governing an individual or group concern to what is right or wrong.
Ethics is about fairness deciding what is right or wrong defining practices and rules which underpin responsible conduct between individuals and group it is a sense of upright both of conviction and action. (International standards organization 8402) defines the fundamental terms relating to quality concepts, it states that quality is the totality of features and characteristics of a product that bears on the ability to satisfy stated or implied needs and they go ahead to give the dimensions of quality as performance, reliability serviceability conformance durability aesthetics and perceived quality.
According to research done by (Edgar Agbar and Niegel shipman 2006) titled public procurement reform in developing countries: the Ugandan experience, procurement in Uganda consists 70% of the national budget and yet according to the inspector general of government 90% of complaints about corruption in the office are procurement related, and according to the (African pear report 2006) pubic sector losses 268. 6 million dollars directly due to unethical practices.
In 2005 procurement audit carried out by the public procurement and disposal authority in Uganda out of the 322 contracts audited only 7 of the contract were clean that is only 2% of the contract reviewed. According to the (parliamentary accounts committee report on commonwealth heads of government meeting 2009) focusing on ministry of works and transport most of the products procured by the ministry were not of the right quality. For example over one billion shillings were lost due to purchasing of poor construction materials like asphalt, sand, stones, steel which were not of the right quantity and quality.
This was attributed to the lapse in the procurement ethics and procedures. The auditor general also pointed on the poor quality of the roads and wanted the contracts for construction of those roads terminated and government money refunded or contractors make good of there works, because most of the roads constructed or reconstructed had potholes or ripped and some stretches of the roads poorly done and not of the recommended design and in some cases the roads were designed and not constructed at all for example the Manyago road (62kms) the Najjanamkumbi-Makindye road 1. km designed by MBW consulting engineers. According to the parliamentary accounts committee on commonwealth heads of government meeting 2009) the ministry of works and transport was responsible for procuring vehicles for transport. The vehicles were to include executive vehicles for the majesty and other heads of government, police vehicle and motor cycles, ambulances command and patrol vehicles at cost Shillings 20 billion.
This was supposed to be done through a competitive process and the last two best evaluated bids were by spear motors and motor care Uganda limited, spear motors had the best bid but the ministry decide to use direct sourcing and the contract was awarded to motor care Uganda limited owned by 56 percentages by a cabinet minister Hon. Kuteesa.
The company claimed to be importing BMW’S from Germany but they were importing them from Austria and Denmark the initials cost was 38,000 euro’s for a brand new BMW from Germany but the ministry of work and transport spent over 47,000 euro’s for second hand BMWs from Austria and Denmark which did not conform to the standards set by the procurement entity under the ministry. They were 204 BMWs but it is believed that 174 of he BMW’s were not of the required standard.
Also Toyota (u) limited was given a direct contract to supply ambulances at a cost shillings 2,893,469, 700 billion. The ambulances were supposed to be 23 and all of ambulances did not conform to the set standard of quality and specification. They lacked oxygen cylinders, hooks, drug cabinets, emergency lights. Although the manufacturers acknowledged these defects and the low quality of the ambulances nothing was done to rectify the situation. The committee also found out that only 21 of 23 ambulances were delivered. 1. 2 Statement of the Problem
The lack of procurement planning, corruption and conflict of interest and political interference has led to procurement of poor quality products in the ministry of works and transport for example minister for works Hon Byabagambi outside of the commonwealth heads of government budget he directed the consultant engineers (M/s Multiplan) to carry out additional works which were not well stated outside the law in total disregard for the law this variation led to a loss of shillings 1. 7billion. This was flouting of the public procurement and disposal authority law.
The procurement system in Uganda varies in major way due to the fact that most projects are donor funded institutions like the world bank, international monetary fund and the European union and thus there is no consistency in the ministry of works and transport for a certain procurement system and creating loopholes for unethical staff to embezzle money through means like defining specification to fit single contractors, substituting specified goods with inferior goods selective release of information to favor contractors, charge for skills below those specified which is causing poor quality being procured. . 3 Purpose of the Study The study is carried out in order to establish the relationship between procurement ethics and quality of products procured. 1. 4 Objectives of the Study (i) To establish procurement procedure used/ followed under the ministry of works and transport. ii) To identify the cause of unethical conduct by procurement personnel in ministry of works and transport. iii) To assess the relationship between procurement ethics and quality of product procured. 1. 5 Research Question i) How are procurement procedures followed under the ministry of works and transport? i) What are the causes of un-ethical conduct in procurement in the ministry of works and transport? iii) What is the relationship between procurement ethics and quality of products procured? 1. 6Scope of the Study The scope include three major areas that is; 1. 6. 1Time Scope: The research will be done between January to June 2011 and the research intends to concentrate on the literature published between 2000-2010 in order to identify the variable problems. 1. 6. 2Subject Scope: The study shall be done in the ministry of works and transport and shall concentrate within Kampala city.
The people to be interviewed in the study are the employees of the ministry under the procurement department. The contextual scope of this study will focus on the impact of procurement ethics on quality of products procured. 1. 6. 3Geographical Scope: The study will be carried out in the ministry of Works and Transport in Kampala district plot 4/6 Entebbe Uganda. 18 Significance of the Study The research will be significance in the following ways: • The study will help improve my skills and knowledge as a researcher in doing research. The study will also help improve the ministry of Works and Transport in appreciating procurement ethics and thus improving quality of product and services offered by the ministry. • The research will also contribute knowledge as literature review to researchers interested in the same area of research. CHAPTER TWO LITERATURE REVIEW Introduction: This chapter deals with review of the related literature on the study of the variables specifically procurement ethics and quality of products procured in the public sector in Uganda. . 1Ethics Moral principles that govern a person’s behavior or the conducting of an activity, It can also be described as the branch of knowledge that deals with moral principle (oxford dictionary 2001). Ethics can also be described as principle of conduct governing an individual or a profession. (Webster’s third new international dictionary) (According to Kenneth Lyson 2006) Ethics is the principle of conduct governing an individual or groups, concern for what is right or wrong, good or bad. 2. 1. Procurement Ethics The main principle of procurement ethics are impartiality or objectivity, openness and full disclosure, confidentiality, due diligence, competence and duty of care, fidelity professional responsibility, avoiding potential or apparent conflict of interest. These can be characterized by accountability, responsiveness, professionalism, transparency, open competition, confidentiality, non discrimination and fair play. (Kenneth Lyson 2006). 2. 2How Ethics is ensured in Public Procurement
Ethics in the ministry of works and transport has been ensured through a put in place code of ethical conduct in business which must be signed by employees which is listed below 1. Employees shall not use their authority for personal gain and shall seek to uphold and uphold reputation of the Ugandan government. 2. Employees shall reveal any personal interest that may impinge or might be deemed by others to impinge on employee’s business dealing. 3. (i) Employee’s shall respect the confidentiality of information received in the course of business dealing and shall never use such information for personal gain. ii) Information given by employees in the course of business dealing shall be true and fair and not designed to mislead. 4. Employees shall avoid any business arrangement that might prevent effective operation of fair competitive. 5. Employees shall not accept business gifts from current or potential government suppliers. 6. Employees shall refrain from any business hospitality that might be viewed by others as having an influence in making a government business decision. public procurement and disposal of public asset authority act 2003) Also there deterrent measures put in place by the (public procurement and disposal authority act 2003)to ensure ethics are maintained in the government ministries like ministry of works and transport where in section 95 a list of offences are listed like colluding to commit fraudulent or corrupt act, exerting undue influence on any officer or employee, refusal to answer summons and on conviction one is liable to a fine of 250 currency point and each currency is worth 20,000 Uganda shillings or to a term of imprisonment not exceeding 3 years or both. . 3Ethical Issues in Procurement. 2. 3. 1Corruption One of the major factors that affect quality of products procured in the public sector is corruption; few activities create greater temptation or offer more opportunities for corruption than the public sector procurement. Hardly a day will pass by without another major scandalous public procurement activity in the papers (Pope 2000).
For example in the ministry of works and transport out of the 91 billion offered for construction of roads during the common wealth heads of government meeting 21 billion was lost due to corruption by the officers in the ministry (Parliamentary accounts committee report 2009). The main purpose of the procurement procedure is to ensure openness to all stakeholders involved in the procurement exercises. (Robert 1988) argues that corruption can be equated to the formulae = (M + D – A) where corruption equals to monopoly, discretion minus accountability. J M Ntayi 2009) on the other hand notes that corruption in least developed countries occurs when there is motive and opportunity, corruption is a crime of opportunity, the opportunity being institution inefficiencies. Corruption procurement is “grand” and at alarming levels, the integrity and ethics of procurement staff and those helping out with technical activities is highly questioned since they do not seem to adhere to any code of ethical conduct to guide there ethical responsibilities.
According to (Wade 1995) corruption may increase transaction cost by 50%. A purchaser who wants violate the law has a couple of opportunities in his possession through which he can manipulate the process in a desired direction, these include arranging the composition of a tended in such a way that one may avoid the application of tendering procedures above the threshold and instead use simplified procedures including designing the technical specification or terms of reference to favor a certain product or service or to exclude potential bidders.
Others are including the award criteria in tender evaluation which are completely irrelevant to the actual procurement and evidently discriminatory towards certain suppliers. Manipulation of the process can include using non- open tendering procedures such as restricted procedure or direct procurement , designing contract arrangement with obvious ambition to favor a certain suppliers, accepting false information and misleading documentation from bidders and manipulation of the decision making process (Westring and jadoun 2001).
The (World Bank report 2000) rates public procurement as an area of government activity in which the risk of corruption are very high. The World Bank further asserts that to offer total solutions which would continue to deliver advantages and to be responsible to the future needs of clients the key strength lie in the skills and professionalism of staff. This requires the ability to gain a close understanding of the clients business through training and capacity building.
It should be noted that corruption in procurement is not exclusive domain of the buyer who controls the purse strings but the supplier or contractor who makes an unsolidated offer can easily initiate it, corruption in procurement also takes form of tailoring specification to favor particular supplier restricting information about contracting opportunities and creating situations of emergencies and urgency so as to use single source bidding simultaneously supplier can corrupt the procurement process by colluding to fix bid prices offering bribes and interfering in the evaluation process and thus affecting quality of goods, works and supplies procured ( Pope 2000). The most frequent source of corruption public procurement takes the form of commissions paid or purchased items to officials in the procurement process.
This practice threatens sound decision making by those involved in the procurement process for the higher commissions the better the opportunities of purchasing from the firm and thus affecting quality of goods, works and supplies (Vinold journal of trade 2001). The recipients of clandestine money in the case of government contracts are not only public officials but also members of parliament, political parties and their office bearer. The national laws allow such contributions provided the payment are disclosed and are made without expectation of favors, in practice however the business firms making such payments try to obtain assurances from the recipient that they would helped by persuading the government the take decisions that would benefit there companies (Vinold journal of world trade, 2001).
The (Inspector general of government report 2005) further shows that there has been persistent flouting of the laid down procedures and guidelines by procuring entities. This has resulted into colossal loss of high sums of public funds and the procurement of goods, works and supplies that barely meet their intended objectives. 2. 3. 2Conflict of Interest (According to Pope 2000) conflict of interest in procurement is the order of the day. This arises when people in the public sector are influenced by personal and financial consideration when doing their jobs thereby influencing their decisions. Decisions are made for the wrong reasons in favor of people to whom they are close thus impairing the objectivity and independence of their judgments on quality specifications.
In procurement when handling a tender, all conflict should be noted recorded and the official involved should then exclude themselves from further involvement in the tender awarding decisions. (Pope 2000) further asserts that the procurement process should have clearly stated and well understood policies and procedures as well as written codes of conduct to deal with actual, potential and perceived conflict of interest. He is of the view that if a relative is unquestionably the best evaluated bidder they shall be awarded the tender if the correct procedure is followed. In the ministry of works and transport there is a precision for directing sourcing to favor one company supplying every time there is a conflict of interest either among the officers involved in procurement or when there is olitical pressure coming from above for example the ministry in 2007 opted to lease vehicles at a cost of 4. 17 billion shillings from motor care Uganda limited for use for a short period of times rather than buying vehicles from motor spears at a cost of shillings 6 billion of which the vehicles would have been completely purchased by the ministry this was a result of cabinet ministers interest in the purchase of the goods (Parliamentary account committee report 2009) Leakage of information during the tendering process is a serious ethical procurement issue. This is where some officers leak information to their preferred bidder in advance of the advertisement and afford them an advantage in the preparation of bids. Celentani and Ganuza 1989) consider a procurement problem when potential bidder have private information about their production cost since the procurement agent is also in charge of verifying delivered quality in exchange for a bribe, they argue that the agent can allow an arbitrary firm to be awarded the realization of the project and to produce a quality level lower than announced. According to (Strombom 2001) government procurement contracts for construction project such as airports deems and highways generate immense opportunities for bribes, kickbacks and other payoffs and this is the reason for the below par works done by the firms awarded the contracts. 2. 3. 3Donor Interest
Donor interest sometimes hinders the best practices in procurement, in cases where donor favor firms from their own countries of origin even though there are other firms that can offer superior quality products. In cases of big construction and other contracts even after tenders are issued, pressure is applied by foreign government at a high political level for the contracts to be awarded to their companies it is common to hold out a promise for additional provisions of financial aid if the contract is awarded to them (Vinold journal of world trade, 2001). Procuring can conclude with contractors by omitting required advertisement or calling for bids with shortened bids submission periods.
Splitting of contracts can be done to avoid exceeding threshold set by the tender boards. 2. 3. 4Delayment of Funds The ( Inspector general of government report 2002) stipulates that the lack of funds on a timely basis from ministry of finance planning and economic development has also led to procurement malpractices procuring entities claim they cannot advertise tender when they are not sure of the availability of funds from the ministry of finance, planning and economic development so when the funds are received later procurement procedures are not followed in the acquisition of goods, works and services resulting in low quality of goods works and services purchased.
Entities usually cite cash flow constraint and therefore end up splitting amount which would require different methods of purchasing, contract for such suppliers are usually renewed extended for much longer period these unethical practices are the reason why the government keeps on procuring low quality goods which do not meet their objectives as a result of lack of competition in the tendering process. 2. 4 Quality (International standard organization) ISO defines quality as the totality of feature and characteristics of a product that bears on the ability to satisfy stated or implied needs and they go ahead to give dimensions of quality as performance, reliability serviceability conformance durability aesthetics and perceives quality. 2. 4. 1Quality of Products (According to Garvin 2007) quality of a product procured can be seen through five approaches which are as follows: Transcendent approach; quality is absolute and universally recognizable. The oncept is closely related to comparison of product attributes and characteristics. Product based approach; quality is a precise and measurable variable in this approach difference in quality reflects difference in quality of some product characteristics. User based approach; quality is defined in terms of fitness for use or how well the product fulfills its intended functions. Manufacturing based approach; quality is conformance to specification that is targets and tolerance determined by product designers. Value based approach; quality is determined in terms of cost and prices, here a quality products one that provides performance at an acceptable price or conformance to an acceptable cost.
Quality is therefore determined by balancing technical consideration such as fitness for use performance safety and reliability with economic factors including price and availability it is therefore the optimum quality for the application that should be sought rather than the highest quality. Quality of goods procured can be determined by if they meet technical specification, delivery, environmentally sound, quality assurance, and accuracy of documentation speed of response and customer service. 2. 4. 2Determinants of Quality According to (Kelly and Male 2003) the following are the determinants of quality in purchasing Customer satisfaction; another benchmark for quality is the ability to meet customer expectation or even exceeds them. Conformance to specification; a product is be deemed to have high quality if it conform the specification spelt like design, size, color, weight.
Product attributes: This is what leads to certain dimension of qualities for example performance, features, reliability, serviceability, durability safety and aesthetics. Budget cost; a product is deemed to be of quality if it is within cost and its performance is at an acceptable cost. Timing; product quality can also be determined by the time which it is delivered on, is it at the right time that was specified or has the product delivery been delayed. Leadership; how is the executive team and all the managers inspiring and ensuring total quality for continuous improvement in the organization. Goals/policy; how the companies goals and policies reflect the principle of total quality of products. 2. 4. Public Procurement and Effective Quality Products and Service Delivery. Effective procurement practices are defined as those systems offering a high level transparency, accountability and value for money. (Ministry of defense procurement handout, 2004). The principle aim of procurement should be to obtain goods and services of the right quality in the right quantity from the right source, delivered to the right place and at the least cost and price (Lyson 2000 Telgen 2007). Successful and efficient procurement practices are those that meet the need of customer’s achieve optimum condition and value in regard to allocating of scarce tax payers resources (J. M Ntayi 2009).
The practice needs a labor force with effective management skills that develop clear and professional specifications with full knowledge of a competitive process negotiation and monitoring skill. (Hunja Steane et al 2003) continues to say that procurement system implemented with sound management practices in place ensure successful quality and service delivery to stakeholders. The sound practices demand that those responsible for implementing procurement should ensure that the objectives are clear and that quality is sustained (Walker and Sidwell 1996) continues to say performance quality should not be measure on the basis of time and cost only but also quality of product and services as well as other relevant measures.
According to research done assessing competitive procurement procedures, findings indicate that it is a fact that competition in public procurement does improve efficiency and effectiveness. Competition is the tenet of a free market economy and it is the basis for cost effective purchasing quality and timeliness. It keeps providers on their toes it is an incentive for innovation improvement in quality and reduction in cost in improves proper allocation of government resources, high quality and timely procurement and budgetary saving. (Lemke 2003) 2. 5Public Procurement Acquisition by purchase, rental, lease, hire purchase, license, tenancy franchise or any other contractual means of goods or services by the government. (Telgen 1998). 2. 5. 1Procurement in the Ministry of Work and Transport
Public procurement is a powerful instrument for the transformation and realization of social economic goals and open and competitive public procurement and contracting procedure begins with the government description of its requirement and initiation of suppliers to indicate their interest in the contract and there professional capacity to fulfill it. (Sigma policy brief 2000). The government identifies potential suppliers and invites them to submit bids. The process must ensure that supplier can infarct meet the specification of product quality, delivery dates and continuity. After the bidding phase most procurement system require a public declaration of competitors names and bid price of the successful bidder (Sigma policy brief 2000). The procurement cycle is often high complex process.
There is a series of closely interrelated activities between the initial identification of needs and the final delivery of quality product and services which requires coordination and quality control to achieve the best value. However this can be undermined by unethical practices by the officers in the procuring entity. (Westing and jadoun 1996) Effective procurement is considered to be a key strategic management tool in driving down cost and improving operational efficiency while ineffective procurement wastes money resources and time (Westing and Jadoun 1996). 2. 5. 2Procurement Cycle in the Ministry of Works and Transport The following are the procurement procedures that are followed in the ministry of works and transport as per the guidelines issued by the (public procurement and disposal of public assets authority 2003). ) Procurement plan and budget: this procedure is undertaken by the user department, procurement unit, board/ council and the accounting officer. b) Procurement requisition: This is the responsibility of the user department c) Confirmation of available funds; the accounting officer is the one to undertake the function. d) Review of specification, procurement methods; potential supply market procurement method evaluation criteria and potential supply market. This is the duty of the procurement unit and the user department. e) Procurement methods approval; is the responsibilities of the contracts committee. f) Preparation of bidding documents; this roles is played by the procurement unit. ) Approval of bidding documents ;This role is played by the contracts committee h) Advertisement and invitation of bids; the advertisement is done by the procurement unit and it should be in a newspaper of wide circulation. i) Receipt and opening of bids this is the procedure is undertaken by the procurement unit but it must be done in front of bidders. j) Evaluation of bids; the evaluation of bids is the role of the procurement unit and the user department which will provide technical inputs. k) Review of evaluation report ;this is the responsibility of the contracts committee l) Award of contract; this is the responsibility of the contracts committee.. ) Signing of contract, communication of awards, administrative review; this is the work of the accounting officer he does this on behalf of all the members of procuring disposing entity. n) Contract management and monitoring; the responsibilities of contract management and monitoring fall to the user department and procurement unit the user department shall report any departure from the contract by bidders. o) Contract performance evaluation and report; the duties will be performed by the user department and the procurement unit. 2. 5. 3Procurement Methods Followed in the Ministry of Works and Transport The following are some of the methods of procurement that are used in the ministry of works and transport to ensure quality products are purchased
Open domestic bidding; this method is open to participation on equal terms by all providers through advertisement of procurement or disposal opportunity. Open international bidding; this method is open to participation on equal terms by all providers through advertisement of the procurement disposal activity and which specifically seeks to attract foreign providers. Restricted domestic bidding; is the procurement or disposal method where bids are obtained by direct invitation without open advertisement. Restricted international bidding; is the procurement or disposal procedure where bids are obtained by direct invitation without open advertisement and the invited bidders include foreign providers.
Quotations and proposals are simplified procurement and disposal method which compare price quotation obtained from a number of providers. Direct procurement is a sole source procurement disposal method which shall be used for very low value requirement. Micro procurement this method is used for very low value procurement requirement. The above methods are recommended by the (public procurement and disposal authority act 2003). According to J M Ntayi (2009) the continuing preference by the ministry of works and transport for direct procurement and micro procurement has hindered competition and thus affecting quality of products and resulting in increased cost. 2. 6Effects of Unethical Procurement According to the parliamentary account committee on common wealth heads of government meeting report 2009)The following are some of the effects of unethical procurement – Poor quality of materials purchased. – There will be inflated prices. – Loss of government funds. – Slows down economic in economic development of a country. 2. 7Conclusion: In conclusion, the ministry of works and transport is falling behind in implementing effective procurement of quality product as a result of increasing discriminatory and non transparent means of procurement that do not favor accountability this was highlighted in the research by (Edgar Agbar and Niegel shipman 2006) titled public procurement reforms in developing countries.
According to them public procurement and disposal of public assets authority act (PPDA ACT 2003) gives the organization the mandate for the following functions advisory, data management, capacity building and audit function so as to improve good governance fight corruption and promote economic development and thus make key changes in procurement in Uganda and thus helping improve government function in the statutory bodies, central government and local government, However the organization is not autonomous enough to ensure implementation.. CHAPTER THREE Introduction: This chapter discusses how the study will be carried out. It discusses the research design the sampling design, sources of the data, data collection methods, tools, data processing, analysis, and presentation. 3. 1 Research Design The design used will be cross section study where data will be gathered just once over a period of time in the ministry of works and transport ranging from the period (2000-2010).
The research will use descriptive research design which describes the phenomenon it will be undertaken in order to ascertain and be able to describe the characteristics of variables of interest. The research sought to explain the relationship between procurement ethics and quality of products procured in the ministry of works and transport. 3. 2 Survey Population The survey population will include the management and employees of the purchasing function and firms offering technical expertise to the purchasing function, the survey population were of 60 people. 3. 3 Sampling Design Purposive and simple random sampling without replacement will be used. 3. 3. Sampling Size The sample size using the krejcie and Morgan (1970) method will be of 37 members, where the sample will be from the ministry of works and transport and consultant firms offering technical expertise. Table 1: Showing Sample Size |Sample group |Sample size | |Procurement office |25 | |Technical experts |12 | |Total |37 | Source: primary data. 3. Source of Data 3. 4. 1Primary Data Primary data will be obtained from the ministry of works and transport through the use of interviews and questionnaires. 3. 4. 2Secondary Data Secondary data will be obtained from the already existing information both internal sources which are found within the organization and external sources were collected from publication and journals. 3. 5Data Collection Methods 3. 5. 1Observation The researcher intends to use none controlled non participant observation where the researcher will not participate and will watch everything from a distance while watching the researcher will be noting down the phenomenon. 3. 5. 2Survey
This will be done through collecting information about the variables that is procurement ethics and the quality of products procured in the ministry of works and transport and technical experts in the sample. 3. 6Data Collection Instrument 3. 6. 1Questionnaire Semi structured questionnaires will be distributed to respondents who will be given time to answer them and return them for solving and analyzing by the researcher. 3. 6. 2Documentary review Secondary data will be obtained from reading already existing notes and taking notes of materials that is related to the research and a conclusion was reached from them. 3. 6. 3Interview guide, Informal interviews will be conducted using open ended questions the interview guide will help the researcher to carry out dialogue that is meaningful. 3. Data Processing Analysis and Presentation 3. 7. 1Data processing. The researchers after gathering the data will edit code classify and tabulate the data. 3. 7. 2Data analysis. The researcher will use computer programs like Microsoft excel and (SPSS) statistical package for social sciences. This will result in computation of certain measures finding the relationships transforming and modeling data in order to highlight useful information. 3. 7. 3 Data presentation. The researcher will put the results of the research into graphs charts and tables into visual way of looking of data. CHAPTER FOUR PRESENTATION OF FINDINGS, DISCUSSION AND INTERPRETATION Introduction:
This chapter presents analysis done in relation to the study objectives and research questions in chapter one, of this report under the topic procurement ethics and quality of products procured in the public sector case study of ministry of public works and transport. 4. 1Demographic Characteristics of Respondents Table 2: Showing response rate of respondents |Response |Frequency |Percentage (%) | |Actual response |33 |89. 2 | |Non response |4 |10. 8 | |Total questionnaires issued |37 |100 | Source primary data: Table 2: According to Table 2 above it shows that out of the questionnaires issued the number of response was 89. % which is a good response rate which one can depend on to make conclusion and recommendation and the non response was 10. 8% Table 3: Showing the age of the respondents |Age |Frequency |Percentage (%) | |20-29 |13 |39. 4 | |30-39 |8 |24. 2 | |40-49 |6 |18. 2 | |50 and above |6 |18. 2 | |Total |23 |100 | Source: primary data
Most respondents were in the age group 20-29 comprising 39. 4 % followed by age bracket 30-39 with 24. 2% with the age bracket 40-49 and 50 and above both comprising 18. 2% this implies that most of the employees are aged 40 years and below. Chart 1: Showing gender of the respondents [pic] Source: primary data According to chart 1 above most of the respondents were male comprising 57. 5% and only 42. 5% of the respondents were female this implies more males are employed than females. Table 4: Showing the Level of Education |Level of education |Frequency |Percentage (%) | |Certificate |3 |9. | |Diploma |9 |27. 3 | |Degree |14 |42. 4 | |Post graduate |6 |18. 2 | |Others |1 |3 | |Total |33 |100 | Source: primary data From table 4 above the level of education was found to be as follows those holding a certificate in procurement were 9. 1%, 27. % of the respondents were diploma holders while majority of the respondents were degree holders 42. 4% with 18. 2% being post graduates while 3% were holding other qualification Table 5: Showing Marital status |Marital status |Frequency |Percentage (%) | |Single |14 |42. 5 | |Married |18 |54. 5 | |Widowed or divorced |1 |3. 0 | |Total |33 |100. 0 | Source: primary data From the above table 42. % of the respondents were single while 54. 5% are married with 3% being widowed or divorced this shows that most employees working for the organization are married. Table 6: Showing how long one has worked for the Organization |Number of years worked |Frequency |Percentage (%) | |Below 5 years |14 |42. 4 | |Between 5 and 10 years |11 |33. 3 | |Between 11 and 15 years |5 |15. 2 | |Above 15 years |3 |9. | |Total |33 |100. 0 | Source: primary data From the above table showing the number of years the respondents has worked for the organization 42. 4% have worked there for below 5 years, 33. 3% have worked for the organization between 5 and 10 years and 15. 2% have worked for the ministry between 11 and 15 years while 9. 1 % of the respondents have worked for the organization above 15 years. 62 Findings on how products are purchased in the organization Chart 2: Findings if purchase requisition used are from the user unit [pic] Source: Primary data From chart 2 above it indicates that 36. % of the respondents strongly agreed that purchase requisition from user units are used, 45. 5%agree that purchase requisition from user units are used while 6. 1% are not sure with 12. 1% disagreeing that requisition from user units are used while none of the respondents disagreed this means that purchase requisitions are used. Table 7: showing whether purchase requisition are handled on time |Response |Frequency |Percentage (%) | |Strongly agree |2 |6. 1 | |Agree |13 |39. | |Not sure |8 |24. 2 | |Disagree |7 |21. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: primary data From table 7 above 6. 1% strongly agree there is handling of requisition on time while 39. 4% agree that requisitions are handled on time 24. 2% are not sure whether requisition are handled on time while 21. 2 disagrees with 9. strongly disagreeing this means that purchase requisitions are not handled on time Chart 3: Showing whether PPDA procedure is followed [pic] Source primary data From chart 3 above 21. 2% strongly agree that PPDA procedure are followed 42. 4% agree that PPDA procedures are followed 12. 7 % are not sure whether PPDA procedure is adhered to with 21. 2% disagreeing that PPDA procedures are followed while 30% strongly disagreeing with the statement this implies that PPDA procedure are followed Table 8: Showing whether procedures followed helps in procuring quality products |Response |Frequency |Percentage (%) | |Strongly agree |11 |33. | |Agree |15 |45. 4 | |Not sure |6 |18. 2 | |Disagree |1 |9. 1 | |Strongly disagree |0 |0 | |Total |33 |100 | Source: primary data According to table 8 above 33. 3 % of the respondents strongly agree that procurement procedure followed result in procuring of quality goods with 45. 4% agreeing also, 18. % of the respondents are not sure whether the procedures followed results in procuring quality goods while 9. 1 % disagree with none of the respondents strongly disagreeing this implies that the procedure followed results in procuring quality products. Table 9: Showing whether products procured are of quality |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |13 |39. 3 | |Not sure |6 |18. | |Disagree |4 |18. 2 | |Strongly disagree |1 |3. 0 | |Total |33 |100 | Source: primary data From the findings in table 9 above27. 3% of the respondents strongly agree that products procured are of quality,39. 3% also agree that the products procured are of quality while 18. 2% are not sure 12. 7% of the respondents disagree goods procured are of quality while 3. 0% strongly disagree.
Most employee’s think that me reason goods, being procured now are now are of quality is because of the PPDA procedure’s put in place this implies that products procured are of quality. 4. 3 Findings on causes of unethical practice in procurement Chart 4: Showing relationship between ethics and procurement [pic] Source: primary data The presentation from chart 4 above shows that there is a relationship between ethics and procurement because 91% of the respond agreed with the statement while 9% stated that there is no relationship, They gave the main reason being that that an ethical person is willing always to conducts himself in a moral way and this guides procurement. Ethics was defined by many as a discipline governing conduct in on organization.
Table 10: showing whether weak enforcement measure of procurement law contributes to unethical practice |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |14 |42. 4 | |Not sure |2 |6. 0 | |Disagree |4 |12. 1 | |Strongly disagree |4 |12. | |Total |33 |100 | Source: primary data According to the results of table 10 above 27. 3% of the respondents thought that weak enforcement measure of the law contributed to unethical practices with 42. 4% agreeing while 6. 0% were not sure 12. 1% disagreed and 12. 1% strongly disagreed this indicates that weak enforcement measures of the law contributes to unethical practices. Table 11: Showing whether moral degradation in the society is a cause of unethical conducts |Response |Frequency |Percentage (%) | |Strongly agree |8 |24. | |Agree |10 |30. 3 | |Not sure |7 |21. 2 | |Disagree |5 |15. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: primary data Results from table 11 above shows that 24. 2% of the population strongly agreed that moral degradation in the society causes unethical conduct with 30. % agreeing while 21. 2% were not sure with 21. 2 disagreeing that moral degradation in society causes unethical conduct and 9. 1% strongly disagreed this means that the respondents agree that moral degradation of the society contributes to unethical conduct. Chart 5: Showing how low pay has contributed to unethical practices. [pic] Source: primary data According to the presentation in chart 5 above, 45. 5% of the respondents agreed that low pay has contributed to unethical practices with 15. 1% not being sure and 9. 1% disagreeing non of the respondent strongly disagreed that low pay does not cause unethical practices this indicates that 90. % of the respondents agree that low pay contributes to unethical practices. Table 12: Showing whether unethical practice of bidder contributes to unethical conduct by staff |Response |Frequency |Percentage (%) | |Strongly agree |10 |30. 3 | |Agree |10 |30. 3 | |Not sure |4 |12. 1 | |Disagree |6 |18. | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: Primary data According to the results in table 12 above, 30. 3% of the respondents strongly agreed that unethical practice of bidder contributes to unethical practice of employees with 30. 3% also agreeing while 12. 1% were not sure. 18. 2% disagreed that unethical practice of leader contributes to unethical practice of employees while 9. 1% strongly disagreed this gives the implication that conduct of bidder can affect the conduct of procurement staff.
Some of unethical practices cited by the respondents include corruption, favoritism, fraud, extortion and sexual harassment, bribery with the respondents citing greed, low payment, and lack of effective reporting system as the main causes of unethical practices 4. 4Findings on the relationship between ethics and quality of goods procured Chart 6: Findings if there is relationship between ethics and quality of goods procured [pic] Source: Primary Data Most of the respondents from the findings of chart 6 above agreed that there is a relationship between ethics and quality of goods procured comprising 94% while 6% stated that there was no relationship. According to the respondents when one is ethical it results to award of bids to best evaluated bidders and that the procurement procedures will be adhered to resulting to procurement of quality goods
Table 13: showing whether the organization code of ethics contributes to quality products being procured |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |11 |33. 3 | |Not sure |6 |18. 2 | |Disagree |4 |12. 1 | |Strongly disagree |3 |9. | |Total |33 |100 | Source: primary data From table 13 above, 27. 3% strongly agree that the organization code of ethics contribute to quality products being produced with 33. 3% agreeing while 18. 2% of the respondents were not sure, 12. 1% of the respondents disagree that the organization code of ethics has contributed to procuring of quality products with 9. 1% strongly disagreeing this implies that organization code of ethics contributes to procurement of quality products. Table 14: showing whether suppliers meet organization specification of quality products Response |Frequency |Percentage (%) | |Strongly agree |7 |21. 2 | |Agree |14 |42. 4 | |Not sure |4 |12. 1 | |Disagree |5 |15. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source primary data
The results in table 14 show that 42. 4 % of the respondents agree that suppliers meet organization specification with 21. 2% strongly agreeing while 12. 1% are not sure. 15. 2% of the respondents disagree that suppliers meet organization specification with 9. 1% strongly disagreeing this indicates that suppliers meet specification Table 15: showing whether unethical practice staff has resulted in procurement poor quality products. |Response |Frequency |Percentage % | |Strongly agree |10 |30. | |Agree |14 |42. 4 | |Not sure |4 |12. 1 | |Disagree |3 |9. 1 | |Strongly disagree |2 |6. 1 | |Total |33 |100 | Source: primary data From table 15 above 30. % of the respondents strongly agreed that unethical practice of staff have resulted in procurement of poor quality products with 42. 4% agreeing while 12. 1% were not sure. 9. 1% of the respondents disagreed that unethical practice of employees does not lead to procurement of poor quality products with 9. 1 strongly disagreeing this means that unethical practice of staff contributes to procuring poor quality products. Chart 7: showing whether organization have a mean of checking unethical practice of employees. [pic] Source primary data: According to the presentation in chart 7 above 27. 3% of the respondents strongly agree that the organization has a means of checking unethical practice with 48. 5% agreeing, 6. % of the respondents are not sure. With 12. 1% of the respondents disagreeing that the organization has a means of checking unethical conduct of employees with 12. 1% strongly disagreeing this implies the organization has means of checking unethical practice of employees. 4. 5Ethics in the Organization An interview with the employees of the procurement Department in the Ministry of Works and Transport (MOWT) the researcher found out that the PPDA act and regulation section 49 and 87 respectively