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EVALUATION OF THE USE OF TENDERS IN A PUBLIC SECTOR PROCUREMENT

ABSTRACT

The subject matter of this study is to carefully evaluate the use of tenders in the public sector procurement.  In a bid for better understanding of public procurement as to the Nigerian content backed by the Nigerian procurement Act of 2007. This research work will be focusing on the Bureau for public procurement (BPP) Lion building Enugu as a public sector as a case study. This research work will also take a close look at the various terms that are associated with public procurement. The objectives of this study is to closely examine the evaluation of the use of tenders and  tendering in improving efficiency and effectiveness in the public sector, public sector contract management and public sector administration. In other to attain to the set objectives of this study, research questions were carefully constructed to enable the researcher collect relevant data/information on the subject matter. Attempts were also made to review related literature and opinions of professionals, experts and consultants especially on the following areas. Meaning of tenders and tendering, evaluation of tenders and tender in the public sector purchasing, tendering documents, pre-qualification for tenders and tenders board. During the field work, all collected data will be presented, analyzed and discussions were held on some of the findings and conclusion was made. Based on the conclusions recommendations were made in assisting the development of the public sector tendering and if carefully followed it will ensure accountability and also reduce the rate of frequent abandonment of contracts after contractors has been fully mobilized.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Tender to a layman means many things such as to pamper a child, something that is young and so on. But in this context, tender is defined as “An offer made in writing by one party to another to execute certain supply contract/commodity slated at a stated cost”. Tendering is the process of making an offer, bid or proposal or expressing interest in response to an invitation or request for tender.

The dictionary of purchasing and supply management defines tender and tendering as offers from without callous, usually in sealed envelope, delivered by a time and date specified in the invitation to tendering from supply of goods and services. Uzor (2004:440) in CIPS, tendering can be defined as the public release by an organization of the requirements of goods or services for a project in order to allow formal bids to be made to supply the goods or services. Lyson (1996) also defined tendering as a purchase procedure whereby potential suppliers are invited to make a form and unequivocal offer of the price and terms which on acceptance shall be the basis of the subsequent contract. Chilaka o. and Amanze c. defines tender as an offer to sell at the right price indicated and can be converted into a contract by acceptance in the form of a buyers order.

        Tender as an offer to sell at the price indicate and can be converted into a contract by accepting the offer in the form of a buyers order.

        Perhaps, tendering is the very first opportunity for the buyers to have a full detail of the supplier and for the suppliers to improve their services level is the most important element. The public sector management has in their part made numerous contributions to effective and efficient management of contract in the public sector. Several restrictions has been made to see that tenders and tendering are dully observed. For instance, no contract work involving construction shall be considered by tenders board unless for the reasons as:

(a)        The land has been acquired and the topography map on soil tested except where it has been approved by the Architect and it is not necessary. The document relating to the land, the survey map, the soil, test report or certificate of example by the architect should then pay off contract document to be presented to the board. See newly reviewed financial regulations (2000)

i.             Architect design

ii.            Structure design

iii.          Mechanical design

iv.          Bill of qualities

Furthermore, in chapter 32 of financial regulation (2000) the conditions governing the local purchase of stores are set out and subject to those condition all local purchases of stores etc and all work and service costing over N500,000 must be obtained by contract after public tender. It must be recorded that tendering has been misused, mis-managed or even mis-understood.

This single cause of poor contract collection of mobilization fees is carefully considered. The essence of this research therefore is to examine on evaluation of the use of effective an efficient tendering in improving public sector contract management and administration.

1.2    STATEMENT OF THE STUDY

(a)    A greater number of problem have bedeviled public sector tender which has had great affection on public sector procurement. The quality of contract entered by the public sector organization. The entire contract system has gone sour as a result of mis-management, corruption, misapplication of rule and regulation set to be adhered to in contracting for goods and services.

(b)    Another problem facing public sector tendering is the issue of Nigeria factor where the nation suffer while the individual grows, selfishness, political consideration, godfatherism, embezzlement of public fund, contract abandonment, etc.. all these have in no small measure affected the quality of tendering which in turn affect the quality of public sector.

(c)    The out date nature of our financial or stores regulation which guides the operations of public procurement as well as public sector tendering gin the greatest problem of our public sector tendering and therefore has serious implication on the efficiency and effectiveness of public sector contract management and administration.

1.3    OBJECTIVES OF THE STUDY   

(a)    To examine an evaluation of the use of tender or tendering in improving efficiency and effectiveness of public sector contract management and administration.

(b)    To examine the reasons behind the failure of public sectors tender as well as public sector contract and those of the private sector organization.

(c)    To examine the impact of poorly managed tendering on the public sector contract administration and management.

(d)    To examine the impact of political corrupt godfatherism and Nigeria factor in public tendering in the public sector.

(e)    To suggest ways of improving public contract management through efficient and effective tender.

(f)     To examine the procedure and processes of tendering and contract award and the skills needed of officers involved in public tender and contract management.

(g)    To suggest ways of improving public sector tender, attain better ways of contacting for goods and services that will benefit the tax payers, the government and the service providers.

1.4    RELEVANCE TO THE STUDY

        An evaluation of the use of tenders in public sector procurement cannot be overstated. This has become more important these days where replacement costs are usually higher than the initial estimated cost.

        When the need to reach the rural areas through development project that touch the lives of the rural masses has increased.

        Thus, the study is relevant in the following ways:

1.   This study if relevant because it will help the researcher in acquiring skills and experience in conducting practical investigation on important issues especially on tenders and tendering and other related matter in the public and private sector in the future.

2.   The study will give the researcher an insight on how tender and public sector contract are administered and managed.

3.   This research work is also very essential to the researcher as it is one of the important requirement for the awards of the higher national diploma in purchasing and supply management.

4.   When this study is completed, it will provide useful information to the public sector organization that is involved in one form of contract administration and management.

5.   This study when completed will not only provide new and indepth insight as per the weakness and current tendering and contract practices and procedures. This research work will expose the weakness of the system but will also be helpful to the system, the organizations, both private and public sector and to the other student who may be interested in further research into public sector tendering and contract management and administration.

1.5    RESEARCH QUESTION 

In order to collect all the relevant information on the subject matter of this research work the following questions were developed by the researcher.

1.   Does tender have a role to play in improving the efficiency and effectiveness of public sector?

2.   Can the current tendering sector organize, eliminate corruption and build accountability and transparency in public sector?

3.   Are the officers handling tender in the public sector qualified? 

4.   Are the composition of tenders board in the state in-line with the provision of the financial regulation (2000)?

5.   What is the factor responsible for poor tender management in the public sector?

1.6    RESEARCH HYPOTHESIS

        The following hypothesis will be listed in the course of the study.

HO:   Tender has a role to play in improving the efficiency and effectiveness of the public sector.

HI:    Tender has a role to play improving the efficiency and effectiveness of the public sector.

HO:   Current process or procedures as used by the public sector organization help to eliminate corruption and build transparency and accountability.

H1:    Current process or procedures as used by the public sector organization help to eliminate corruption and build transparency and accountability.

1.7    THE SCOPE OF THE STUDY

This study has been limited to the public sector organization and has not crossed borders of the other sectors of the economy as to allow for more detailed investigation into the impact of tendering on public sector contract management and administration in Nigeria. For proper understanding of the impact of tendering in the management and administration of the public sector contract, this study would have covered all the ministries department, agencies, board, even the local government areas in the country, but the researcher after due consideration of various variables and implication decided to concentrate on the study of the implications of efficient and effectiveness of tender in the administration and management of contract in the Bureau for public procurement Enugu, Enugu state. In doing this, the researcher concerted on most of the department and units that have one or other things that has to do with the subject matter of this study. These departments or units include administration, engineering, planning, finance of these areas will give a great insight as to what takes place in other ministries, departments, boards, agencies etc.

        1.8 DEFINITION OF TERMS

1      Tender: Offer to supply goods and services stating a price at which offer is made in response to an invitation to submit such an offer in competition with others.   

2      Quotation: This is a formal statement prepared by contractor or supplier to his customer includes cost estimates specification and other key information about an agreement between two parties.

3      Government: An institution that is vested with the power to govern and direct affairs of the state.

4      Evaluation: The process of finding out and deciding the amount and value of something.

5      Negotiation: Seeking agreement between the purchaser and the contractor or supplier in the form of a dialogue in order to reach an acceptable terms and conditions prior to concluding a contract.

6      Analysis: The process of breaking components into separated parts or unites in other to examine each unit and constitute critically.

7      Certificate: Act of licensing by a document formally testing the fulfillment of condition.

8      Procedures: A way or system or the pattern of performing a task, work or service etc.

9      Performance: This is an undertaken to perform a contract as required and failure to perform as required the client will be compensated by the supplier or contractor.

10     Specification: This is a detailed requirement of a job/supplies/contract which the contractor or the supplier must comply with. It is what the supplier must supply to the buyer as described by the buyer.

11     Standardization: This is the process of developing and implementing technical standards in other to meet the quality of the commodity and services both for the buyer and the seller.

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