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, ( S t e p he n Ca n n o n , 2 0 06 ) .

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
projects 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 bidders 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. 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

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 S t e p h e n C a n no n ( 2 0 0 6 ) , Rosa Wilkinson
(2005), George Belev. (2004), and Robert B.Birminghan,. (1995).

Y=A+BX1+BX2

Effective
Procurement
Management

Organizational related
factors

Industry related
factors

Finance

Finance

Human
Resource

Human
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

Effective

Organizational

1. Finance

Procurement

related factors

2. Human Resource

Management

Measurement
Questionnaires

3. Technical
Industry

related 1. Finance

factors

Questionnaires

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.

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 Cronbachs 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 crowbachs 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
No. of respondent
Number of respondent
Percentage

Low

Average

High

Total

102

110

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

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
Procurement

Low
No.

Type of sector
Organizational sector
Industry sector
Total

Average
%

No.

High

No.

Total
%

No.

53

88.33%

11.67%

60

100%

49

98%

2%

50

100%

102 92.73%

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
Effective
procurement
management
Organizational
related factors
Industry related
factors

Minimum

Maximum

Mean

Std. Deviation

C.V

60

1.725

5.000

3.48792

0.826411

0.683

60

1.300

2.725

1.87750

0.315480

0.100

50

1.525

2.475

1.91800

0.226725

0.051

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
Factors

Mean

SD

Industry
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
*Significance at the 0.01 levels

5.769

0.248

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
Effective procurement
management

Organizational related factors

.544**

Industry related factors

.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
Organizational related
.763**
.765**
factors
** Correlation is significant at the 0.01 level (2-tailed).

Technical
.739**

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
Industry related factors

Finance

Human resource

.524**

.485**

Technical
.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+ bx1 +bx2
Y= Effective procurement management (Dependant Variable)
x1= Organizational related factors (Independent Variable)
x2= 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

Details regarding
predictor variables

Unstandardize
d Coefficients

Variable

B
Multiple R= 0.889
R square=0.791
Adjusted R Square
=0.782
Std. Error of the
Estimate=0.257660
F Value=88.816
Significant=0.000

Standardized
Coefficients

Std.
Error

Sig.

Beta

(Constant)

0.220

0.314

0.700

0.487

Organizational
related factors

0.998

0.153

0.603

6.543

0.000

Industry related
factors

0.874

0.224

0.359

3.901

0.000

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+0.99X1+0.87X2
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.

Details regarding
predictor variables

Unstandardized
Coefficients

Variable

B
Multiple R= 0.923

Standardized
Coefficients

Std. Error

Sig.

Beta

(Constant)

0.481

0.355

1.355

0.181

Finance

0.939

0.122

0.425

7.671

0.000

Human
resource

1.000

0.156

0.425

6.424

0.000

Significant=0.000
Sig =0.01 level

Technical

0.844

0.253

0.234

.330

0.002

R square=0.853
Adjusted R Square
=0.845
Std. Error of the
Estimate=0.437802
F Value=108.059

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+0.94x1+1X2+0.84X3
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.

Details regarding
predictor variables

Variable

Unstandardized
Coefficients
Std.
Error

B
Multiple R= 0.714

Standardized
Coefficients

Sig.

Beta

(Constant)

1.736

0.561

3.095

0.003

Finance

0.889

0.221

0.460

4.015

0.000

Human
resource

0.799

0.228

0.412

3.501

0.001

Significant=0.000
Sig =0.01 level

Technical

0.294

0.278

0.136

1.058

0.295

R square=0.509
Adjusted R Square =0.477
Std. Error of the
Estimate=0.449188
F Value=15.921

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+0.89x1+0.80X2+0.30X3
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
Between Groups
Within Groups
Total

Sum of Squares
26.862
13.432
40.294

df
31
28
59

Mean Square
.867
.480

F
1.806

Sig.
.049

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.

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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.

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04

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