Assessment of Effectiveness of Annual Procurement Plan Preparation on Value for Money in Public Sector:

Abstract

The study intends to assess the effectiveness of annual procurement plan preparation on value for money in public sector; a case of Arusha Urban Water Supply and Sanitation Authority. Specifically, the study aimed to assess the effect of specifications, procurement schedule and procurement method on value for money in public sector in Tanzania. The study used Principal Agent Theory, the agent theory is related to this study in that, the Government (principal) and the private contractor, supplier or service provider (agent) can come into a mutual procurement contractual agreement during a procurement process and explaining the relationship between user departments (principal) and Procurement Management Unit (agent) with care taken on value for money. The research design used is explanatory which allows a detailed description and analysis of the variables under study; describing and presenting their characteristics and explaining their relationships without manipulation. The sample of the target population composed of 197 respondents who are employees of AUWSA. The study used questionnaires and interviews as the primary research instrument. The data was coded as per the objectives to give distinct differences and multivariate regression were done to look at the relationship of the variables. Presentation also was done through their calculated mean, frequency, mode and the correlation analysis of the data collected. The study concluded that, procurement planning variables which include; specifications, procurement scheduling and procurement method have got a positive significant relationship with value for money in public entities in Tanzania. Given the high percentage of respondents who said specifications and procurement scheduling are the most important variables affecting value for money in public organizations and the explanations provided on the value of procurement planning preparation, it is important to prioritize specifications and procurement scheduling because they provide clarity to product providers on the desired results from the commodity and helps the supplier to identify what is to be procured and the scope likely demands on supplies and the range of works, goods or services required and avoid unnecessary cost which will emanate as a result of failure to specify the requirements accordingly. Finally, the study recommends that, AUWSA Management should ensure employee empowerment on procurement process especially on how to prepare specification for various tenders. The empowerment of employees in preparation of specification will ensure specifications are prepared properly as an initial stage of quality control, thus by doing so, value for money in procurement process will be enhanced. Furthermore, AUWSA should ensure establishment of procurement standards in order to maintain their requirements. AUWSA Management should ensure capacity building programs including in house trainings are conducted frequently and ensure procurement stake holders are well exposed on how to prepare procurement schedules. Public procuring entities should ensure that they employ the most effective procurement methods that cost friendly for value for money to be realized.