Sie sind auf Seite 1von 20

EVALUATION OF FACTORS INFLUENCING EFFECTIVE PROCUREMENT MANAGEMENT SYSTEM OF PUBLIC SECTOR ORGANISATIONS. Dr.T.Velnampy, Senior Lecturer, Dept of Commerce, University of Jaffna:

Email:tvnampy@yahoo.co.in, K.Kamalarupan, MBA, SLAcS, Zonal Education office, Jaffna.

ABSTRACT

The purpose of this study was to find out the factors influencing performance of procurement management system of public sector organization in the North and East Province.

The construction works and supplies are inferior in quality and taken longest time for completion. In viewing the procurement management system, decision making, awarding tenders to the appropriate contractors or institutions pose complexity.

The extent of the research is North East Province administration areas. Mainly concern the Provincial Department of Building, Irrigation and road development. 158 sampling element and 270 sampling units were identified to study the existing procurement management system. Fifty percent of sampling units were selected to distribute the questionnaires. The questions are Financial, Human Resource, Technology related. These three variables will be categorized into two factors which are organizational related factors and industry related factors.

In view the results of this study, the public sector procurement management was ineffective in the selected region. While comparing these two factors, the industry factors were mostly influenced for ineffective procurement in the public sectors. Hence the public sector should be reengineering on the aspect of procurement management.

Procurement is a highly skilled profession. Hence, both the public and private sectors managers to be focuses on people, the knowledge, skills and capabilities they need implement procurement for innovation and ensure that these are required level of achievement. The public procurement officials should be familiar with relevant technology trends, markets and supply capabilities. The financial management system should be developed by using electronic information system to streamline the existing system.

This report is helpful that emerging good practice in government sector official in procurement for innovation. The successful of procurement activates depend on both supply and demand side capabilities.

1

1.

INTRODUCTION

1.1 PROCUREMENT MANAGEMENT

Procurement management is a process to purchase or acquire the products, services such as simple office items to sophisticated high-tech equipment from outside the organization to perform the work. The performing organization can be either the buyer or seller of the product, service, or results under a contract.(University of Missouri Procurement service, 2004).

1.2 EFFECTIVE PROCUREMENT MANAGEMENT

Though the Tender procedure adopted at present is comprehensive; it has not prevented the occurrence of irregularities. Due to its complexity, the finalization of tender has taken unusually long periods (Procurement guideline, 1997). It is observed that our procedure takes the longest time in this region. While comparing the private sector organization, Public Sector officers are very reluctant to take a fruitful decision in this context. Hence it is vital to study the present procurement management system in the public organization.

1.3 EXISTING PROCUREMENT MANAGEMENT SYSTEM

The procurement management system functioning in Sri Lanka dates back to 60 years. During 1960, this system was known as tender procedures or purchasing procedures. The General Treasury of Sri Lanka released its Financial Regulations in 1966 on behalf of the Government. It included a chapter on acquiring goods and services and construction works for public sector organization. It has been revised in 1992. These revisions cannot be protecting the corruption and bribes. Hence A new guide line was issued by the General Treasury in 1996 and revised in 1997. At present an executive board has been established to revise this guideline called “National Procurement Agency”.

2. STATEMENT OF PROBLEM

The procurement function of goods, works and services has been delayed according to the Procurement guideline, (President of Sri Lanka, 2006).The Government procurement process is to minimize delays and to obtain financially the most advantageous and qualitatively the best services, (Daya Liyanage, 2006). The registration of suppliers will be mitigating interruption and unnecessary delay in procurement, Procurement Management Department, Florida. The bidding process is encounter the delivery delays and failure to provide the supplies where and when they are needed, (Iinternational Labour Organization (ILO) and World Bank).

2

A research is needed in Procurement Management because of several deficiencies observed in the

Procurement Management system existing in the Public Sector Organizations. Wherever the

construction work or purchasing is done, it was not completely accepted by the client or requirement is

not satisfactorily competed. Hence the beneficiaries make repeated requests. The fund used also does

not being in best product or service due to lack of knowledge, lack of present technology development

and inadequate capacity of the public sector staff etc.

In viewing the procurement management system, decision making and awarding tenders to the

appropriate contractors or institutions pose complexity and it leads to delayed in completion. Several

construction works such as building construction, road construction, tank maintenance, purchasing

office equipment and vehicles and service contract such as security service, cleaning service, laundry

service and maintenance service have not been properly done according to the requirement of the

stakeholders. The out put of procurement agreement is inferior in quality. Hence, we can identify the

problem question is, Why procurement activities are delayed? and why procurement of good, service, or

civil works are inferior in quality?

3. LITURATURE SURVEY

Procurement management includes the processes to purchase or acquire the products, services, or results

needed from outside the organization to perform the work. Procurement management also includes

administering any contract issued by an outside organization (The Buyer) that is acquiring the

organization from the performing organization (the seller), and administering contractual obligations

placed on the organization by the contract. (George Belev, et al., 2004).

The effective procurement management should be Acknowledge complexity, Find the right skills &

organize the work, Develop a sound strategy, Manage timetable effectively, Follow sound bid

evaluation method and develop a smart, fair contract. Effective procurement requires organized

teamwork: authorities, responsibilities, schedule, and resources. (Eduardo Talero, 2004).

The term public procurement refers to the purchasing by governments and local authorities of the works,

goods and services they need to operate - ranging from simple office items to sophisticated high-tech

equipment. (Public Procurement Research Group).

The stakeholders are unable to get benefit by the hospital construction procurement due to inadequate

staff of the region, (Auditor General Report ,2006).Three X-ray plants have been purchased for

Valachenai hospital which not used and not maintained last three years due to shortage of technician,

(Auditor General Report, 2006). The 42 computers are not used and laid in the stores more than one

year in order to non availability of computer technician, (Provincial audit report, 2006). The

3

Government Accountability Office (GAO) concluded that the government lacks a strategy for preventing waste and duplication in managing its stockpile of the existing anthrax vaccine, which could result in annual $100 million losses as stored vaccine lots expire, (Center for Infectious Disease Research & Policy, 2006).

The 52 percent allocation has not been utilized by a project due to the fund not released by the government and scarcity of material in the region, (Monitoring and Evaluation report of NECORD, 2006). The 43 percent allocation has not been used for the development in order to inadequate fund released by treasury, scarcity of professional staff and material and shortage of construction industry, (Administration report of Provincial Treasury, 2005).

With the day-to-day transaction traffic delegated, the focus will be on training and education, performance measurement, dispute resolution, system oversight, streamlining of the acquisition and business process, and embedding the best of supply chain management techniques in statewide policy and process. Some of this cannot be done well, or done at all, without incorporating procurement reform into Government law to institutionalize change, (Rosa Wilkinson, 2005).

In many cases, increased costs and delays in project implementation can be attributed to lack of familiarity with the procurement procedures of the funding agencies combined with inadequate command of the essential day-by-day “business skills” needed to manage international procurement operations, (ILO and WB).

At each of the procurement process, failure can almost be built in if there is insufficient attention paid to the process. It helps to consider each stage of the process and to analyse the possible causes of failure as a first step to taking preventative action, ( Stephen Cannon , 2006).

Project performance has traditionally been measured with respect to cost and time, and widely accepted tools such as C/SCSC (Cost/ Schedule Control Systems Criteria), have been designed to monitor a project’s progress and performance in these two areas. The success of government sponsored projects cannot, however, be measured by these two criteria alone, (Mark Seely,P.Eng et al.,1997).

When the tender board takes a decision to award a tender, the following factors of, non availability of contractors, inadequate qualification of bidders such as financial position, non availability of equipment, non availability of technical staff and the bills of quantity rate not munching the bidder’s rate etc affect the decision. When we have found out the bottleneck in the procurement management, the main factors of production and the socio cultural environment have to be analyzed. Absence of knowledge of

4

Procurement Management, Time duration, Suppliers/ Contractors, availability of funds and availability of technologies are the main bottleneck of an effective Procurement Management. (Pilots survey 2006).

The significant of this research is lack of studies in this field of procurement management in Sri Lanka, help to investigate and identify the most relevant factors of procurement management and findings may be beneficial to the policy makers to assist and identify any shortcomings and to formulate policies. Therefore it makes necessary to do a research in the procurement management in the public sector.

By considering the above survey and reports, the delay and obtained inferior quality of out put are the major problem in procurement management. The above survey pointed out the unskilled professional staff, inadequate fund, non availability of technician and improper need assessment are the factors leads to delay of procurement and obtained inferior quality of output. Here we identified that the procurement activities in the North and East provinces also delay and obtained inferior quality of supply or construction or service. Therefore a research in procurement management in North and East province public sector organization is most important to accelerate the development effect in the region.

4. OBJECTIVES OF THE STUDY

The following objectives are formulated to find out the level of effective procurement management in the public sector organizations.

To study the significance relationship between the organizational related factors and the industry related factors in evaluating the procurement management in the public sector organizations.

To study the organizational factors affecting procurement management system at present in the Public Sector Organizations.

To study the industry factors influencing the procurement management system at present in the Public Sector Organizations.

To find out strategies and to enhance the existing procurement management of the Public Sector Organizations.

5

5.

ORGANIZATIONAL PROFILE

The present research study covers only North East Province administration areas. Eight District come under the North East Provincial preview which are Jaffna , Kilinochchi , Millaithivu , Vavunuya , Mannar , Trincomalee , Battcoloa and Amparai. Under the North East Province the research covers only the Provincial Department of Building, Provincial Department of Roads and Provincial Department of Irrigation. The same each Department has Regional and District offices. The major duties of the above three Department is procuring goods, service and works for the public benefits

6. SAMPLING FRAME WORK AND METHODOLOGY

The stratified random sampling method was used in the survey. The population was defined in terms of Element (Government Department and Contractors), Sampling unit (Executive Officers), and Extent (North East Province).

According to the registered suppliers schedule and the Administration report of North East Provincial Council, 158 sampling element and 270 sampling units were identified to study the existing procurement management system of the North East Province. The population consists of the executive officers of the selected department who are Engineers, Accountants and Administrative officers in the eight Districts. Fifty percent of each sampling units and each district were considered to deliver the questionnaire.

More than 65 questionnaires with 40 questions were issued to each sector. The questions were based on Financial, Human Resource, and Technology. These three variables will be categorized into two factors which are organizational related factors and construction industry/suppliers related factors. The questionnaires were forwarded by post or by hand to the appropriate authorities.

Research questionnaires are selected based on the sample question listed in the book of “A Guide to the Project Management Body of Knowledge, Chapter 12 (1996 & 2000 edition)” and a questionnaires released to study the procurement constrain in the North and East Province by Project Management Unit of Sri Lanka of Japan Bank for International Cooperation(JIBC). The reliability test has been done to test the validity of statements/questions delivered to the respondent for this study.

The score for any individual would fall between 40 and 200. If the score happens to be above 147, it shows the procurement management to be effective of the public sector organization. If the score happens to be between 94 to 146, it shows the procurement management to be Average effective. If the

6

outcome of the questionnaire will be below 93, procurement management of the organization to be in effective (low effective).

7. CONCEPTUAL FRAME WORK

The research model shows that effective procurement management depends on the organizational related factors and industry related factors. Here we have identified the Public Sector Department are the organization sector and supply and construction entities (Private sector) are Industry sector. The two major variables identified according to the report of Stephen Cannon (2006), Rosa Wilkinson (2005), George Belev. (2004), and Robert B.Birminghan,. (1995).

Effective

Procurement

Management

=

Y=A+B X1 +B X2

Organizational related factors Industry related factors + = = Finance Finance + + Human Human
Organizational related
factors
Industry related
factors
+
=
=
Finance
Finance
+
+
Human
Human
Resource
Resource
+
+
Technical
Technical

Figure 7.1 Conceptual frame work

X variables are known as independent variables which is organization related factors and industrial related factors. The Y variable is dependant variable which is Effective procurement management.

8. OPERATIONALIZATION OF THE RESEARCH

The operation of this research is revealed by concept, variables, indicators and measurement. The concept of the research is effective procurement management. The variables are the organizational related factors and industry related factors which include finance, human resource and technical aspects.

7

Each question is considered as an indicator. The Table 8. 1 shows the operationalaization of the research.

The impact of each factor was analyzed by using the five point scale method. According to the measurement, the study expresses which question / statement are highly contributive to effective procurement and which question / statement lead to ineffective procurement.

Table 8.1 Operationalaization of the research

Concept

Variable

Indicators

Measurement

Effective

Organizational

1. Finance

Questionnaires

Procurement

related factors

2. Human Resource

Management

3. Technical

 

Industry

related

1. Finance

Questionnaires

factors

2. Human Resource

3. Technical

9. HYPOTHESES

The following statement considered as hypothesis in the study are

Effective procurement management, organizational related factors and industry related factors are significantly correlated

Lack of technological awareness of the public sector executive officers and the supplying entities are affecting the efficiency of the procurement management in public sector organizations.

There is a significance differences between the organizational related factors and the industry related factors in evaluating the procurement management in the public sector organizations.

Industry related factors have a higher impact on effective procurement management rather than the organizational related factors.

8

10. RESPONDENTS PROFILE

The respondents selected from organizational sector entities and industry sector entities in the North and East province. The executive personnel are identified from both the sectors. The 270 respondents were identified from North and East Provinces and then 68 and 67 respondents were randomly selected from organizational and industry sector respectively. Altogether 135 questionnaires were distributed among the respondents. From this population 110 respondents that are 60 from organizational sector and 50 from industry sector were responded properly.

10.1 RELIABILITY TEST

The Cronbach’s alpha analyzed is used to test the reliability of questionnaires delivered to the respondents of organizational and industry sector for obtained their views and opinion of the statement. The result of crowbach’s alpha of both sectors is 0.79 and 0.73 respectively. According to this result, it shows the questions/statements issued to the respondent are more reliable for this measurement of effective procurement management of public sector organization by considering both the public and private sectors entities.

10.2 MEASUREMENT OF PROCUREMENT MANAGEMENT

The forty statements were given to measure the perceived level of procurement management both the sector in the questionnaire with the five point likert scale, ranging from disagree at all to highly agreed. The total score of respondent of each sector (Organizational and industry sector) can be in the range of 40 to 200. Thus the level of procurement is divided in to three groups viz 40 to 93 - low, 94 to 146 - average and the above 147 are effective level of procurement management. The Number of respondents in respect of level of procurement is shown in Table 10.1.

Table 10.1- Levels of effective procurement management

Level of procurement
Level of
procurement

Low

Average

High

Total

No. of respondent

Number of respondent

102

8

-

110

Percentage

92.73

7.27

-

100%

The Table 10.1 shows the level of effective procurement management in public sector organization in both the North and East Provinces. Accordingly most of the respondents (92.73) fall under the lower

9

level component of effective procurement management. This is higher than that in average level of

procurement management and no one in to the component of high level

Then the level of procurement management is measured in sector based which is organizational sector

and industry sector. The organizational sector includes public sector organizations which are

Department of building, Department of road development and Department of irrigation in the North and

East Provinces. The industry sector includes the supplies and the contractors who are involved in

procurement activities in the North and East Provinces.

The levels of effective procurement management in both the organizational and industry sector are

reported in the Table 10.2. It is evident that there is no respondent in to the category of high level of

procurement management in both the sectors. Most of the respondents in industry sector constituting 98

percentages are in to the low level of component of effective procurement management which is higher

than for organizational sector. The least number of respondents (2%) in industry sector is in to the

average level procurement management which is less than that in organizational sector.

Table 10.2- Level of effective procurement management by sector Level of Low Average High Total
Table 10.2- Level of effective procurement management by sector
Level of
Low
Average
High
Total
Procurement
No.
% No.
% No.
% No.
%
Type of sector
Organizational sector
53
88.33%
7
11.67%
- 60
- 100%
Industry sector
49
98%
1
2%
- 50
- 100%
Total
102
92.73%
8
7.27%
- 110
- 100%

10.3 DESCRIPTIVE ANALYSIS

The conceptual model includes effective procurement management as dependent variable and the

organizational related factors and the industry related factors as independent variables. Mean, Standard

deviation and Coefficient of variance of the dependent and the independent variables are shown in Table

10.3.

Table 10.3 - Descriptive Statistics of effective procurement management

 

Variable

N

Minimum

Maximum

Mean

Std. Deviation

C.V

Effective

           

procurement

60

1.725

5.000

3.48792

0.826411

0.683

management

Organizational

           

60

1.300

2.725

1.87750

0.315480

0.100

related factors

           

Industry related

           

50

1.525

2.475

1.91800

0.226725

0.051

factors

           
 

10

According to the Table 10.3, mean score of the organizational sector respondent is 1.87 and the industry sector respondent is 1.92. The total mean score is 3.48. By evaluating the descriptive statistical, the organization sector mean value is less than the industry sector mean value. Hence the organizational sector is led to influence the level of procurement management exist in the public sector organization. The survey indicates that the existing procurement management of the public sector is not satisfactory accordance with the overall mean score.

The standard deviation of the opinion score is 0.83; it is slightly unfavorable for the procurement performance. In view of the independent variable, the standard deviation of the organizational sector is 0.32. It is lower than the industry sector that in 0.23, It is also unsatisfactory level of procurement in public sector organization.

10.4. T TEST

In this study we considered that there is a significant different between the organizational related factor and the industry related factor to measure the effectiveness of the procurement management in the public sector organizations. It is shown in the Table 10.4 below.

Table 10.4 t test for finance, human resource and technical factors

 

Organization

Industry

   

Factors

Mean

SD

Mean

SD

MD

t-value

Finance

1.806

0.5498

1.919

0.3212

0.113

3.810

Human resource

1.855

0.4728

1.973

0.3205

0.118

5.209

Technical

1.894

0.3084

1.877

0.2866

0.017

27.294*

Overall mean score

5.555

 

5.769

 

0.248

 

*Significance at the 0.01 levels

From the above Table, t- value of technical factor is significant at 0.01 level that in 27.29. Therefore, there are significant differences observed between the variables of technical aspects in both the organizational and industry factors. The overall mean value of the industry sector is higher than (5.77) the organizational sector mean value (5.55).

By evaluating the t- value of finance, human resource and technical factors under organizational and industry sector, the technical factor has greater impact on the procurement management of public sector organization. Hence the hypothesis “Lack of technological awareness of the public sector executive

11

officers and the supplying entities are affected the efficiency of the procurement management in public

sector organizations” is accepted.

10.5 RELATIONSHIP BETWEEN VARIABLES

The interrelationship of the effective procurement management is measured with the variable of

organizational related factors and industry related factors. Interrelationship of the two variables can be

measured by calculating co- efficient of co-relation. The coefficient of co-relation was used to find out

the relationship between industry related factors and organizational related factors of overall effective

procurement management.

The co-efficient of co-relation value between the variable of effective procurement management and

organizational related factors and effective procurement management and industry related factors are

0.54 and 0.77 respectively which are significant at 0.01 levels. This indicates that there is a positive

relationship between effective procurement management and organizational and industry factors.

Hence the hypothesis is accepted.

Table 10.5 - Multiple Co-relations matrix for effective procurement management

Variable

Organizational related factors

Industry related factors

Effective procurement management

   

.544**

.775**

** Co-relation is significant at the 0.01 level (2-tailed).

The value of r is 0.54 indicates that the movements of the two variables are very similar to each other

and there is a high degree of positive relationship between them. If the organizational related factors are

increased, the effectiveness of procurement management will increase. In contrast if the organizational

related factors are decreased, the effectiveness of procurement management will decrease in public

sector organizations.

The co-efficient of correlation value between the variable of organizational related factor and finance,

organizational related factor and human resource and organizational related factor and technical related

factors are 0.76, 0.76 and 0.73 respectively which are significant at 0.01 levels. This indicates that

there is a positive relationship between organizational related factor and the three variables. It is shown

in the Table 10.6

12

Table 10.6 - Multiple Correlations matrix for Organizational related factors

Variable

Finance

Human resource

Technical

Organizational related factors

     

.763**

.765**

.739**

     

** Correlation is significant at the 0.01 level (2-tailed).

In view of the co-efficient of correlation value between the variable of industry related factor and

finance, human resource and technical related factors are 0.52, 0.45 and0.50 respectively which are

significant at 0.01 levels. This indicates that there is a positive relationship between industries related

factors and the three variables. It is reported in the Table 10.7

Table 10.7 - Multiple Correlations matrix for industry related factors

Variable

Finance

Human resource

Technical

Industry related factors

.524**

.485**

.504**

** Correlation is significant at the 0.01 level (2-tailed).

10.6 THE IMPACT OF EFFECTIVE PROCUREMENT MANAGEMENT AND RELATED

VARIABLES

Under this section, we try to find out the impact of effective procurement management on organizational

related factors and industry related factors. Thus the following equations are formulated to find out the

significant effect of independent variable on dependent variables. Hence the regression equation is

Y =a+ bx 1 + bx 2

Y= Effective procurement management (Dependant Variable)

x 1 = Organizational related factors (Independent Variable)

x 2= Industry related factors (Independent Variable)

The Table 9.8 shows the organizational and industry factors contributes significantly to effective

procurement management at 79%. The remaining 21% can be contributed by other factors. It may be

developed the information system of the organizational sector or maintain good relationship of the other

sectors such as other Government Department and Private Sectors. The need assessment and

requirement for procurement may be considered as an important factor to the public sector procurement

management.

13

Table 10.8 Multiple regressions for organizational and industry sector on the variable of effective

procurement management

   

Unstandardize

Standardized

   

Details regarding predictor variables

Variable

d Coefficients

Coefficients

t

Sig.

 

Std.

 
 

B

Error

Beta

Multiple R= 0.889

           

R

square=0.791

(Constant)

0.220

0.314

-

0.700

0.487

Adjusted R Square

           

=0.782

Organizational

0.998

0.153

0.603

6.543

0.000

Std. Error of the

related factors

Estimate=0.257660

         

F

Value=88.816

           

Significant=0.000

Industry related

0.874

0.224

0.359

3.901

0.000

factors

Sig =0.01 level

         

Source:- Survey Data

Hence the variable considered for this study is highly influence the public sector procurement

management. Therefore the under mentioned regression equation is formulated.

Y= 0.22+0.99X 1 +0.87X 2

In this equation if organizational sector performance increases by 1 unit the overall performance will

increase by 0.99. The same way if the industry sector performance increases by 1 unit, the overall

performance will increase by 0.87.

By considering the linier regression we have to find out the impact of procurement management on both

the organizational and industry sectors. The above equation says the linier relationship between the

variable and the significant effect of independent variable on dependent variable. Therefore the

organizational sector influences a grater impact on the effective procurement of public sector

organizations.

The hypothesis, “Industrial related factors have a higher impact on effective procurement management

rather than the organizational related factors” is rejected.

In the second model, the organizational related factors depend on the finance, human resource and

technical aspect of an organization. These three variables are independent variable.

14

Table 10.9 multiple regression for organizational sector on the variable of Finance, Human resource

and technical factors.

   

Unstandardized

Standardized

   
 

Details regarding predictor variables

Variable

Coefficients

Coefficients

t

Sig.

B

Std. Error

Beta

Multiple R= 0.923

           

R

square=0.853

(Constant)

0.481

0.355

-

1.355

0.181

Adjusted R Square

           

=0.845

0.939

0.122

0.425

7.671

0.000

Std. Error of the

Finance

Estimate=0.437802

         

F

Value=108.059

           
 

Human

1.000

0.156

0.425

6.424

0.000

Significant=0.000

resource

Sig =0.01 level

Technical

0.844

0.253

0.234

.330

0.002

From the above Table, we can observe that financial, human resource and technical factors are

contributed significantly to the organizational sector. The variable considered for this study is

contributed 85% for organizational sector procurement management. The remaining 15% is influenced

by other factors. It may be depend on Government policy or political interferences.

To assess the impact of the three variables on the contribution of organizational sector procurement

management level the following statistical equation is formed.

Y= 0.48+0.94x 1 +1X 2 +0.84X 3

Here when the organizational sector performance increases by 01unit the finance factor will increase by

0.94. Likewise if the organizational sector performance increased by 01the human resources factor will

increased by 01 and the organizational sector performance is increased by 01 the technical factor will

increased by 0.84. Hence the human resource factor has grater impact on the level of procurement

management in the organizational sector.

In the second model, the industry related factors depend on the finance, human resource and technical

aspect of an organization. These three variables are independent variable.

15

Table 10.10 Multiple regression for organizational sector on the variable of Finance, Human resource

and Technical factors.

   

Unstandardized

Standardized

   
 

Details regarding predictor variables

Variable

Coefficients

Coefficients

t

Sig.

 

Std.

 
 

B

Error

Beta

Multiple R= 0.714

           

R

square=0.509

(Constant)

1.736

0.561

-

3.095

0.003

Adjusted R Square =0.477

           

Std. Error of the

Finance

0.889

0.221

0.460

4.015

0.000

Estimate=0.449188

F

Value=15.921

           
 

Human

0.799

0.228

0.412

3.501

0.001

Significant=0.000

resource

Sig =0.01 level

Technical

0.294

0.278

0.136

1.058

0.295

The industry sector and the variables contribute significantly to the effective procurement level. These

three variable influences by 51% on industry sector procurement management level. Hence the

remaining 49% is influenced by other reason.

To assess the impact of the three variables on the contribution of industry sector procurement

management level, the following statistical equation is formed.

Y= 1.74+0.89x 1 +0.80X 2 +0.30X 3

Here when the industry sector performance increase by 01 unit the finance factor will increase by 0.89.

Likewise if the industry sector performance increase by 01 unit the human resources factor will increase

by 0.80 and the industry sector performance is increased by 01 the technical factor will increase by 0.30.

Hence the financial factor has grater impact on the level of procurement management in the

organizational sector.

10.7 SIGNIFICANT DIFFERENCES ON THE EFFECTIVE PROCUREMENT

MANAGEMENT AMONG THE VARIABLE OF ORGANIZATION RELATED FACTORS

AND INDUSTRY RELATED FACTORS.

The ANOVA test was used to assess the significant differences between different groups of both the

sectors on the variable of effective procurement management. It is illustrated in the Table 10.11.

16

Table 10.11 ANOVA Test for organizational factors and industry factors on the variable of effective procurement

Variables

Sum of Squares

df

Mean Square

F

Sig.

Between Groups

26.862

31

.867

1.806

.049

Within Groups

13.432

28

.480

   

Total

40.294

59

     

The above Table shows, the F- value of 1.806 which is insignificant at 0.049 levels. Hence there is

significant differences observed with the organizational related factors and industry related factors on

the variables of effective procurement management.

By testing the hypothesis, the hypothesis is accepted as a result of significant differences observed with

the organizational related factors and industry related factors on the variable of effective procurement

management.

11. CONCLUSIONS

The procurement for public sector can take place at national, regional or sub national levels of

government. In assessing tender with innovative content, the use of Most Economically Advantages

Tender (MEAT) criteria allows combinations of whole life costs and quality to be assessed, increasing

the chance of selecting an innovative outcome. The recommendation we have made provide important

steps to the pathway for the future. This report will also be helpful to emerging good practice in

government sector official in procurement for innovation. The success of procurement activities depend

on both supply and demand side capabilities.

12. RECOMMENDATIONS AND SUGGESTIONS

Procurement is a highly skilled profession that requires well trained people. Both the public and private

sectors need people who can manage the supply of strategic goods or works to their organization and

administration. The core sector of managers shall focus on people, the knowledge, skills and

capabilities that they need to implement in procurement for innovation and ensure that there are

required levels of achievement. The appropriate authorities should design and offer to stakeholders a

cycle of seminars for procurement officials on procurement practice, to stimulate Research and

Development and innovation.

17

The existing policy and practice for procurement should be carefully evaluated and the results of that evaluation fed back into improved approaches. It is important that the evaluation considers the full range of costs and benefits. The ongoing review and evaluation of procurement activities are part of the practice of any procurement body. Hence the procurement management should develop a close monitoring mechanism for a successful procurement project.

The financial management system of the institutions should adapt to the changing technologies such as computer aided accounting system, record management system, decision support system etc. These systems are integrated with electronic imaging or scanning. Hence the public sector organization should reengineer the financial management system by using electronic information system to streamline the existing system.

LIST OF REFERENCES

Auditor General’s Department. (2000 to 2006). Auditor General’s report.

Christine Harland, Louise Knight, Nigel Caldwell. (2006). International Research study of public procurement, Charted institute of purchasing and Supply (CIPS). University Of bath School of management: PP.01- 06. Viewed date 14.July, 2006<http://cips.org/>.

David Drabkin, Khi,V. Thai. (2003). US federal Government procurement, Structure, Process and current issues, The international purchasing and supply education and research Associations Comparative Public Procurement cases workshop, Badapest, Hungary: PP.02-28.

Eduardo Talero. (2004).Effective IFMIS Procurement and Management implementation workshop, Nairobi.

George Belev, Cynthia, A. Berg, Judith, A. Doll. (2004). A guide to the project management body of Knowledge, Third Edition, Project management institute, four campus boulevard, Newtown Square, Pennsylvania, USA:PP.269-297.

Harris, S. (2002). The e-buy dilemma. Governing. Retrieved April 8, 2002, < http:// www.governing. Com/archive/2002/ mar. Eeprocure.txt.>.

International Training Centre of the ILO and the World Bank. (2006). Equipment Procurement Management training, Italy.

18

International training center of the ILO- Turin. (2006). An integrated approach to the procurement of health sector goods, Italy.

Kai, V. Thai. (2006). Journal of public Procurement. Public Procurement research center, Florida:

Atlantic University: PP.01-02.

Mac Manus, S.A. (2002). Un`derstanding the incremental nature of e- procurement implementation at the state and local levels. Journal of Public Procurement 2(1), P.5-28

Mark Seely, P. Eng. And Quang Duong, Ph.D. (1997), Measuring Project Procurement Management in the public sector, Published: Public works and government service Canada.

Martin D. McCue. (1996). An Evaluation of Resource Sharing within Tricare’s Managed Care Support Contracts, Department of Systems Management: United States.

Michael Essig, Ulli Arnold. (2001) Electronic Procurement in Supply Chain Management. An Information Economics-Based Analysis of Electronic Markets. The Journal of Supply Chain Management 37 (4), 4349.University of Stuttgart in Stuttgart, Germany.

Monitoring & Evaluation report. (2006). North East Community Restoration Development Program (NECORD).

National procurement Agency. (2006). Procurement guide lines, Democratic Socials Republic of Sri Lanka: PP.02-96.

National procurement Agency. (2006). Procurement manual, Democratic Socials Republic of Sri Lanka: PP.02.84.

North East Province. (2005). Administration report of Provincial Treasury,

Provincial Public Administration. (2000 to 2005). Administration Report.

Provincial

Public

Administration.

April,2006<htpp://www.nepc.lk/default.asp>

(2006).

Viewed

Date:

04

Provincial Audit Department, North East Province, (2006). Provincial Audit Report.

19

Procurement Management Training programme, (2005). National Institute of Financial Management (NIFM), India.

Richard Pennington, Suzi Fulcher, Cliff McCus. (2005). Best practice in integration of procurement and financial management Data. Financial Procurement Data integration work Group, National Electronic Commerce Coordinating Council, USA: PP.01-07, 25-28. viewed date 16 June,2006 <http://cips.org/>

Robert B.Birminghan, (1995). Intellectual proparty right in soft ware acquired by DOD, Department of System management: United States.

Rosa Wilkinson, Yannis Caloghirou, Stephan Dalpe. (2005). Public procurement for research and innovation, Developing procurement practices favorable to R&D and innovation. UK: European Commission: PP.05-46.

Office of program policy analysis & government accountability report No. 06-35. (2006). Steps have been taken to enhance state acquisition management, but further improvement is needed. The Florida legislature: Viewed date 22.December, 2007< http://www.oppaga.state.fl.us>

Stephen Cannon. ( 2006). Procurement Management Journal Oct.

20

2006: UK.