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97 | P a g e
Tallam and Kibet (2018) www.oircjournals.org
International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
98 | P a g e
Tallam and Kibet (2018) www.oircjournals.org
International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
a view to avoiding or minimizing excess votes in in both public and private organizations are endemic
the entities’ budgets and to ensure that procurements in any contractual relationship due to lack of
do not proceed unless there are funds to pay for transparency and poor record keeping. Successful
them. This implies that all procurement plans must contract management and completion is often
be well integrated into the budget process based on defined, as procurement of the right item, in the right
the indicative budget as appropriate and in quantity, for the right price, at the right time, with
compliance with the procurement law. the right quality, from the right source (Thai, 2005).
Globally, today governments all over the world have Prager (1994) contends that proper and effective
received a great deal of attention as providers of management and monitoring of contracts helps
essential services such as health, education, defense improve the quality of goods and services and
and security, and infrastructure (OECD, 2000). So reduces procurement cost thus achieving three broad
as to be able to meet the demand of all these services, goals: quality products and services, timely delivery
governments procure goods, works and services of products and services, and cost effectiveness
from supply markets. That means public sector (within budget).
procurement has both economic and political Currently, Kenya loses billions of taxpayers’ money
implications. There is no doubt amongst policy to improper procurement process, specifically poor
makers, managers, professionals and academicians contract management practices. This commonly
about the role of public sector procurement in happens in the country’s state corporations due to
facilitating government operations towards issues, such as, corruption, litigations, contract
economic growth, poverty reduction and good cancellations and substandard service or product
governance through provision of quality services to delivery. This calls for the pressing need to make
the citizens. The performance of public procurement appropriate policies and decisions to save the
markets has significant implications for the situation. Since the state requires to realize its value
effectiveness of governance in both developed and for money in the process of the serving its people,
developing countries. There are strategic decisions every state corporation is required to account for its
to be made that will affect the nature of contract expenses (Contract Monitoring Kenya Network,
management role. For example, one might contract 2012). Therefore, contract management is a valuable
out a whole requirement leaving one a relatively step in public procurement as it ensures that service
straightforward contract management task (OECD, or products delivery is undertaken as per the
2005). contractual terms and conditions.
In Africa, South Africa in particular, the Common
Market for East and Southern Africa Statement of the Problem
(COMESA,2011) guidelines observes that neither In County Governments, every year a major portion
the COMESA Procurement Directive, nor the of budget allocation is given for procurement of
UNCITRAL Model Law, specifically address the goods and services for various kinds of projects to
subject of contract management. Despite the be done. However in some organizations,
importance of contract management researchers are procurement has not been done the right way.
unable to empirically and systematically pinpoint Proponents argue that contracting can reduce costs
the determinants and constraints by using objective and improve flexibility and customer satisfaction.
‘hard data’ (Jiang & Qureshi, 2006). In several Critics point to a growing number of failed
countries, few articles have rigorously analyzed and contracts, arguing there are numerous pitfalls
empirically tested the factors that actually affect a associated with contracting. The problem arisen due
government agency’s decision to manage contracts. to poor contract management leading to failure to
Within the relatively scarce empirical evidence on procure the right quality goods, in the right time at
contracting decisions and management (Boyne, the right price. It was reported that 80 to 90% of the
1998; Ferris & Graddy, 1986), there is yet little goods are not managed properly. Therefore there
information on the effectiveness of contract was loss of government money which is not properly
management specific to public procurement. addressed and many projects are not completed
In East Africa, Uganda for example, contract (Kakwezi & Nyeko, 2010).
management has become a megatrend in many Despite efforts by public organizations being
public entities especially as result of social transparent and accountable on what they procure,
accountability and increased demand of service the issue of poor performance is still felt. The county
delivery by citizens (World Bank Institute, 2011; governments still lose billions of taxpayers’ money
Schiel, 2007; Swinnery & Netssins, 2007). to improper procurement process, specifically poor
However, Dew (2008); Thai (2005) and Bolton contract management practices.
(2006) observe that contract management challenges
99 | P a g e
Tallam and Kibet (2018) www.oircjournals.org
International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
Numerous studies have been done on contract overemphasis on the existence of collaborative
management but little has been done in Kenya and relationships and social control mechanisms and
specifically in County Governments of Kenya. is a reflection of the observation that, even where a
Outside Kenya, Holtand Graves (2001) conducted a written contract exists, frequently companies seek
study on benchmarking UK public procurement to avoid the use of legal action against their
performance, Bassioni, Price and Hassan (2004) suppliers and or customers. Yet, empirical
dwelt on the performance measurement in investigations reveal the existence of detailed
construction industry. Moreover, Jeanette (2008) contracts that firms use to manage their firm
conducted a study on the benchmarking and its relationships. Indeed, empirical research into
importance on procurement performance. It is manufacturer retailer networks as well as into
therefore against this problem and gap that the study manufacturer to manufacturer relationships shows
seeks to assess contract management practices and that companies attempt to simplify and facilitate
procurement performance in County Governments the complex process of a business interaction by
of Kenya, a case of Elgeyo Marakwet County. embracing a new form of contract described as
umbrella agreements. It informs the study variables
Research Objective of monitoring intensity practice and risk
To determine the effect of monitoring intensity on management practices as it emphasizes on planning
procurement performance of Elgeyo Marakwet and the management of contracts in organizations.
County, Kenya. Macneil’s theoretical criticism of this view of
Research Hypothesis contract is that it does not take into account the
H01. There is no significant effect of monitoring co-operative, relational phenomena to which he
intensity on procurement performance Elgeyo draws the attention. As well as taking up the
Marakwet, County. social philosophical issues involved in this, he
Literature Review makes this point in respect of many contract
Theoretical Review doctrines, such as the regulation of penalty
The study was guided by relational contract theory. clauses (1981b) and (other) standard terms
Relational Contract Theory (Macneil, 1984), the adjustment of formally strict
Relational Contracts Theory is a theory mainly liabilities (Macneil 1983b) and the nature of
developed by Ian MacNeil in U.S.A. in 1980. breach. The last of these is particularly instructive,
According to relational contracts theory, relations for it does not turn on any welfares considerations
are governed by a set of common characteristics but solely on “economic efficiency.”
(norms) that play an important role, regarding the
content of the relation, the formation of parties’ Effect of Monitoring Intensity and Procurement
obligations and the actual operation of the contracts. Performance
These norms are based on a set of internal values and Brown and Hyer (2010), describe monitoring as the
the broad context social and economic factors, tracking aimed at identifying variances from the
related to the relation. According to MacNeil, there original plan using simple checklist to sophisticated
are ten norms common for all kinds of contracts: role dashboard style approaches. According to Meredith
integrity, reciprocity, implementation of planning, and Mantel (2012), cost (budget) and scope
effectuation of consent, flexibility, and contractual (performance) and time (schedule), are important
solidarity, the ‘linking norms’ (restitution, reliance things to be considered during planning, and should
and expectation interests), creation and restraint of therefore be monitored and controlled effectively.
power, propriety of means and harmonization with Until the project is complete the cycle of planning,
the social matrix. There are also five norms monitoring and exercising control should be made a
(additional or the same as these of common routine. The organization structure should construct
contracts), responding in an intensive way to the process as an integral part ensuring that it does
contracts with a highly relational character than not cause any conflicts. The organization should
conventional contracts: role integrity, preservation clearly outline the aspects for monitoring and
of the relation (expansion of contractual solidarity), control bearing in consideration the scope,
harmonization of the relational conflict, boundaries, time and cost. During the life of a
supracontract norms and propriety of means. project the team in charge of monitoring should
This theory is applicable in the study variables as develop appropriate approach for monitoring the
contracts in the county government need integrity, Key Performance Indicators (KPI’s). According to
reciprocity, planning, flexibility among other norms Brown and Hyer (2010) the concept of project
to be successful, hence enhance procurement control is a combination of decisions, procedures,
performance. This may be a result of an decisions and actions included in coping with the
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International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
project variances. Project control therefore acts as a anticipated and would be costly.(iii) Pareto’s
guide to the firm and influences the decisions on principle; which states that 80% of project’s
when to make changes or focus on the project limitations and postponement are caused by 20% of
course. project actions. Red tape in organizations may lead
According to Brown and Hyer (2010) in their view to delays intake-off of projects. (iv) Increase of
to monitor and control contracts assert that several Commitment principle which holds that, people
issues interfere with project execution causing the persist in engaging in failing course of action even
actual/real performance to deviate from the at the state of fallacy intent. Therefore a procurement
budgeted performance. The issues are: (i) Scope service level agreement monitoring initiative can
Creep; which basically refers to a situation where the have a strong influence on decisions to escalate or
project grows beyond its initial size. This may be de-escalate commitment
caused by new government rates that will influence
way leaves causing the customers’ needs to inflate 2.4 Conceptual Framework
the budget (ii) Murphy’s Rule; which asserts that The study was guided by the following conceptual
you cannot be accurate and anticipate all risks. The framework. The dependent variable is procurement
government may decide to construct new roads performance while the independent variables are the
where already there is an existing fiber cableen contract management practices.
trenched; the relocation of such a network was not
returned for analysis. The returned 52 questionnaires Mugenda, 2013) and therefore a response rate of
accounted for 86.6% response rate. A response rate 86.6% was acceptable for data analysis. Table 4.1
of 70% and above is adequate (Mugenda and shows the response rate.
Reliability Test Results instruments. Data was subjected into cronbach alpha
Before the actual study, the researcher did a pilot test coefficient and the findings were generated in
to ascertain the reliability of the research relation to each variables (see Table 4.2).
Table 4.2 Reliability Statistics
Variable Cronbach Alpha Coefficient Test item
Monitoring intensity .866 5
Risk management .857 6
Evaluation .866 6
Dispute Resolution .734 7
According to the reliability statistics indicated the academic level and work experience. These
results shows that the research instrument is reliable. variables were considered to have an influence on
A Cronbach alpha coefficient of >0.7 is deemed the performance of procurement operations in
excellent reliability (Rousson, Gasser & Seifer, organizations.
2010).
Gender of the Respondents
Demographic Characteristics of the An inquiry was made on the gender of the
Respondents respondents. Table 4.3 showed that 55.8% (29) were
An inquiry was made on the ages of the female while 44.2% (23) were male. It was
demographics of the respondents, among the established that majority of the respondents were
demographic information sought were; gender, age, female as illustrated in Table 4.3
had a diploma level and the least of 3.8% (2) had a masters’ levels followed by degree level and
technical certificate. The study shows a high therefore they were learned and well versed on the
percentage of the respondents had completed their study. Table 4.5 illustrates the findings.
Work Experience of the Respondents who had worked for between 2 to 5 years and 11
The study sought to establish the level of work years and above respectively, the least 5.8% (3) had
experience of the respondents. The results showed worked for less than 1 year. The findings are
that majority 36.5% (19) of the respondents had illustrated in Table 4.6;
worked for 5 to 10 years, followed by 28.8% (15)
Table 4.6 Work Experience of the Respondents
Work experience Frequency Percentage
Less than a year 3 5.8
Between 2-5 years 15 28.8
Between 5-10 years 19 36.5
11 Years and above 15 28.8
Total 52 100
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International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
The responses on monitoring intensity revealed that duties to make sure that the contracts given out are
the contractors follow the standards required for the successful, this was spread at 3.9808.
their methods of contracting where 57.7% agreed on The findings also indicated that funds allocated are
this and 28.5% strongly agreed giving an average well utilized for only the intended projects with
mean of 4.03. On the response that the contractors majority 48.1% of the respondents strongly agreeing
always do the right amount of work within the on this and 34.6% agreed. The mean was spread at
approximated time, the study established a high 4.1923. Further findings on the fact that formal
percentage of agreement on this 53.8% agreed while monthly inspections are being done on the projects
32.7% strongly agreed with a mean of 3.98. indicated a majority of the respondents being in
Further results showed that a majority 69.2% agreed agreement with this. This was denoted by 42.3%
and 7.7% strongly agreed that the contractors always strongly agreed while 40.4% agreed with a mean of
use the right amount of resources to complete the 4.1923.
projects assigned to them. The mean was labeled at Lastly, the findings showed that majority of 67.3%
3.6538. In addition, the study established that of the respondents and 19.2% agreed and strongly
majority of the respondents agreed 51.9%, 30.8% agreed respectively on the idea that the contractors
strongly agreed that the supervisors carry out their always comply with the service quality levels which
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International Journal of Scientific and Technological Research (IJSTER)
ISSN: 2617-6416 Vol. 1 (1) 97-108 November, 2018
www.oircjournals.org
Inferential Statistics
Correlation analysis was used to determine the relationship between variables, while regression analysis was
used to test the hypothesis of the study.
Correlation Analysis on Monitoring Intensity and Procurement Performance
This was done using Pearson correlation statistical analysis. The correlation was measured at 0.05 significant level
(2-tailed). The findings are shown in table 4.8.
This table provides the R and R2 values. The R value dependent variable, procurement performance, can
represents the simple correlation and is 0.923 (the be explained by the independent variable, contract
"R" Column), which indicates a high degree of management practices. In this case, it is 85.2%
correlation. The R2 value (the "R Square" column) which is very large.
indicates how much of the total variation in the
From the regression model computed in Table 4.11, was also run to determine the relationship between
the research hypotheses were tested using the the monitoring intensity and procurement
significance level of the coefficients. The research performance of the organization. The results
aimed to test the hypothesis with an aim of accepting established a positive but weak correlation between
or rejecting the relationship between contract the variables. The strength of association was weak.
management strategies and procurement Therefore, monitoring intensity alone could not be
performance. The research hypothesis for the study associated with high procurement performance of
included; the organization.
The regression results in this variable indicated that
There is no Significant Influence of Monitoring monitoring intensity does not have a direct effect on
Intensity on Procurement Performance. the procurement performance of the organization.
The regression results in Table 4.11 indicate that The study accepted the hypothesis. The findings
monitoring intensity does not have a direct effect on implied that concentrating on monitoring intensity
the procurement performance of the organization does not give the organizations any bases of
with a beta coefficient of -0.043 and significance of procurement performance.
(p=0.120). The study accepted the hypothesis. These
findings imply that concentrating on monitoring Conclusions
intensity does not give the organizations any bases The study concluded that monitoring intensity was a
of procurement performance. This may be true in factor that influences procurement performance in
that monitoring intensity should be incorporated organizations. However it was noted that other
with other factors so as to influence the performance factors were needed to support this practice. The
of procurement operations of an organization. county made sure that funds allocated are well
utilized for only the intended projects, they also did
Summary, Conclusions and Recommendations formal monthly inspections on the projects to ensure
Effects of Monitoring Intensity on Procurement progress and that the contractors followed the
Performance standards required for the their methods of
The first objective was to assess the effect of contracting.
monitoring intensity practice on procurement Recommendations
performance. The study found that the organization On monitoring intensity practice, it is recommended
was able to practice monitoring intensity with the that contractors should be allocated with the right
view to enhance procurement performance, for amount of resources to complete the projects
instance the organization made sure that funds assigned to them. On risk management practice, the
allocated are well utilized for only the intended study recommends that there should be regular
projects, they also did formal monthly inspections supply of material resources to be used in projects,
on the projects to ensure progress and that the this will allow them to manage the risks underway
contractors followed the standards required for the as they complete the projects.
their methods of contracting. Pearson's correlation
Reports. Florida, USA: CRC Press.
Chitkara V. (2015). Relationship between
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International Journal of Scientific and Technological Research (IJSTER)
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