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UNIVERSITY OF CAPE TOWN

FACULTY OF ENGINEERING AND THE BUILT ENVIRONMENT


DEPARTMENT OF CONSTRUCTION ECONOMICS & MANAGEMENT

Master of Science in Project Management

An Critical Review of the Effectiveness of the Procurement Systems Used on


Donor-Funded Construction Projects in Zambia

Keeta L. S. Shisholeka

Field of Interest: Procurement Process Management

November, 2008

A research report submitted in partial fulfillment of the requirements for the degree of Master
of Science in Project Management
Master Thesis in Project Management University of Cape Town

Acknowledgements

It is with great honour that I take this rare opportunity to extend my sincere gratitude to my
supervisor, Professor Paul Andrew Bowen, head of the Department of Construction
Economics & Management, for guiding and supporting me selflessly, let alone dragging me,
through the years until the accomplishment of my studies.
I am especially indebted to Mrs. Mareldia Fagodien, who has tolerated me over the years and
assisted whenever she could in order to make it as manageable as possible to study at UCT.
I extend my best wishes to my dear elder brother Collins Sitali who escorted me all the way
through the thickets of Cape Town.
To my lectures Mark Massyn, Dr. David Root and Ian Jay who assisted whenever I beckoned
them, I respectfully offer thanks.
To the team at the Disaster Management & Mitigation Unit, I am thankful for the time allowed
for me to travel to UCT so frequently.
Master Thesis in Project Management University of Cape Town

Dedication

I dedicate this dissertation to you my dear wife Mweembe and my son Tende who
invoked the willpower in me to complete my Master Thesis, each time I reflected upon
you...

I love you both!


Master Thesis in Project Management University of Cape Town

Table of Contents

SECTION PAGE

CHAPTER 1. BACKGROUND TO THE STUDY................................................................................................... 1 


1.1  Introduction ......................................................................................................... 1 
1.1.1  Procurement Management ...........................................................................1 
1.1.2  Donor-Funded Procurement in Zambia .......................................................3 
1.1.3  Procurement Systems ...................................................................................4 
1.1.4  World Bank Guidelines & Procedures .........................................................4 
1.1.5  Procurement Performance and Effectiveness ..............................................7 
1.2  Statement of the Problem .................................................................................. 11 
1.3  The Research Questions .................................................................................... 11 
1.4  Hypothesis of the Study .................................................................................... 12 
1.5  Research Objectives .......................................................................................... 12 
1.6  Overall Aim of the Study .................................................................................. 12 
1.7  Limitations of the Study.................................................................................... 13 
1.8  Research Methodology ..................................................................................... 13 
1.9  Structure of the Thesis ...................................................................................... 14 
CHAPTER 2. PUBLIC PROCUREMENT............................................................................................................. 16 
2.1  Introduction ....................................................................................................... 16 
2.2  Procurement Management on Donor-Funded Projects ..................................... 17 
2.3  Use of Country Systems and Local Ownership ................................................ 19 
2.4  Performance of Donor-Funded Projects ........................................................... 20 
2.5  Project Management Factors............................................................................. 24 
2.6  Summary & Conclusions .................................................................................. 25 
CHAPTER 3. GUIDELINES FOR PUBLIC PROCUREMENT IN ZAMBIA .................................................. 26 
3.1  Introduction ....................................................................................................... 26 
3.2  Guidelines for Donor-Funded Procurement...................................................... 27 
3.2.1  World Bank Guidelines..............................................................................27 
3.2.2  European Development Fund Procurement Regulations ...........................29 
3.2.3  AfDB Procurement Regulations ................................................................32 
3.2.4  KfW Procurement Guidelines ....................................................................32 
3.2.5  NDF General Procurement Guidelines ......................................................33 
3.3  Sector Wide Approaches................................................................................... 34 
3.4  Summary & Conclusions .................................................................................. 36 
Master Thesis in Project Management University of Cape Town

CHAPTER 4. RESEARCH METHOD ................................................................................................................... 37 


4.1  Introduction ....................................................................................................... 37 
4.2  Critical Review of a Survey-Based Approach .................................................. 38 
4.2.1  The Surveys ...............................................................................................38 
4.2.2  Limitations of the Survey-Based Approach ...............................................43 
4.2.3  Justification of Survey-Based Approach ...................................................45 
4.3  Design of the Survey Instrument ...................................................................... 48 
4.3.1  Design Considerations ...............................................................................48 
4.3.2  Justification of the Survey Questions ........................................................49 
4.3.3  Structure of the Questionnaire ...................................................................51 
4.4  Conclusions ....................................................................................................... 52 
CHAPTER 5.  OPINION SURVEY ADMINISTRATION, DATA ANALYSIS & INTERPRETATION . 53 
5.1  Introduction ....................................................................................................... 53 
5.2  Survey Administration ...................................................................................... 53 
5.2.1  Sample Targeting .......................................................................................53 
5.2.2  The Actual Sample.....................................................................................54 
5.2.3  Challenges Encountered.............................................................................55 
5.3  Data Presentation & Analysis ........................................................................... 56 
5.3.1  Demographics ............................................................................................57 
5.4  Findings............................................................................................................. 60 
5.4.1  General Presentation ..................................................................................60 
5.4.2  Occupational Details ..................................................................................60 
5.4.3  Views on Donor-Funded Procurement ......................................................62 
5.4.4  Tenets of Public Procurement ....................................................................68 
5.5  Conclusions ....................................................................................................... 69 
CHAPTER 6.  CONCLUSIONS AND RECOMMENDATIONS.................................................................... 71 
6.1  Introduction ....................................................................................................... 71 
6.2  Findings of the Research Questions .................................................................. 72 
6.3  Conclusions ....................................................................................................... 74 
6.4  Recommendations ............................................................................................. 74 
6.5  Achievement of the Research Aims and Objectives ......................................... 75 
Master Thesis in Project Management University of Cape Town

CHAPTER 1. BACKGROUND TO THE STUDY

1.1 INTRODUCTION

1.1.1 Procurement Management

Project Management is defined in the Guide to the Project Management Body of


Knowledge (PMBoK) as “…the application of knowledge, skills, tools and techniques to
project activities in order to meet stakeholder’s needs and expectations from a project”
(PMI, 2000:6). In this case, a project manager should do whatever it takes within his or
her means, resources and constraints to meet the needs and expectations of the
stakeholders. One of the knowledge areas covered in the PMBoK perceived as being
key to project management success is Project Procurement Management. From the
perspective of Burke (1999), project procurement management deals with the
acquisition of goods and services required to perform the project’s scope of work. This
implies that procurement managers are dealing with an already defined scope of work
and therefore the assumption is that the major project deliverables have at some stage
already been sub-divided into smaller parts that are more manageable. The PMBoK
goes further to state that project procurement management “…includes the processes
required to acquire goods and services, to attain project scope, from outside the
performing organisation” (PMI, 2000:147). The PMI (2000) refers to the term
processes and includes the phrase from outside to emphasise the fact that processes are
involved and whatever goods and services are procured they are not already under the
umbrella and control of the performing organisation. The goods and services are
sourced through various activities and processes from outside the organisation that is
carrying out the project.

According to Pooler and Pooler (1997), a number of historic factors have created new
interest in purchasing and supply management which has evolved from either
manufacturing or management, and has gained its independence as an expanded
financial contributor to organisational success. In the quest to derive better value from
available funds, public projects are governed by strict statutory and regulatory
provisions that are intended to reduce the risk of favouritism and undue influence and to

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reassure taxpayers that there is accountability in the way public funds are disbursed
(Heisse, 2002). Pooler and Pooler (1997) advocate that for any function to succeed, it
must establish clear measurable objectives and work diligently to achieve these
objectives, while Heisse (2002) argues that historically public projects used traditional
design-bid-build procurement methods that required separate contracts awarded to the
lowest responsive bidders, which did not allow the government to evaluate contractor
bids based on factors other than price. Because purchasing takes up a large share of an
organisation’s revenue, to maximise its contribution to an organisations overall
performance, purchasing must establish two overarching objectives (Pooler and Pooler,
1997):

1. to ensure economy in the procurement of goods, supplies and services; and


2. to contribute to overall performance by efficiently controlling the flow of funds
passing through the organisation.

Construction procurement involving public funds can deliver considerable gains in


efficiency through the effective delivery of best-value procurement
(http://www.ccinw.com/procurement), because best-value procurement generally permits

flexibility not offered by traditional competitive bidding (Heisse, 2002). According to


the U.S. Environmental Protection Agency (1999) best-value procurement is defined as
competitive, negotiated procurement in which the purchaser reserves the right to select
the most advantageous offer by evaluating and comparing other factors considered
relevant in addition to cost or price enabling the purchaser to purchase technical
superiority even if it means paying a premium price (http://www.doi.gov/pam/diapr1999-
5.pdf). A premium is the difference between the price of the lowest priced proposal and
the one which offers the best value. Pooler and Pooler (1997) have underpinned the
above overarching objectives of purchasing with some specific goals, such as, getting
the best buy in terms of suitable quality at minimal cost; paying reasonably low prices
through negotiating and executing all organisational commitments; developing
satisfactory sources of supply and maintaining good relationships with them; securing
optimal supplier performance; locating new and better materials and products; keeping
inventories as low as is consistent with organisational needs; carrying out programmes
to continually reduce costs of purchases; developing effective controls and procedures;
and, keeping acquisition costs at a minimum compatible with optimal performance.
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1.1.2 Donor-Funded Procurement in Zambia

The Government of the Republic of Zambia relies heavily on foreign donor support to
finance its annual budgets. Capital expenditure continues to be largely financed from
external resources through grants and loans, accounting for 69.6% of total capital
expenditure in the 2006 national budget (Ministry of Finance and National Planning,
2006-2008 Medium Term Expenditure Framework and the 2006 National Budget). It is
clear from the 2006 national budget address, that most of the donor support is
channelled towards capital expenditure such as road construction and rehabilitation,
construction of schools and health centres, rural electrification and land development.

In the 2003 national budget, 83% of capital expenditure was financed by external donor
support. Of the total capital expenditure, 7% went towards financial restructuring,
contingent liabilities, fertiliser price support and imports of maize reserves. This meant
that 93% of the capital expenditure budget actually went to infrastructure projects, of
which 89% was donor-funded. In 2004 external donor support to capital programmes
rose to 88%. Of the total capital expenditure in 2004, 6% went towards financial
restructuring, contingent liabilities, fertiliser price support and imports of maize
reserves, meaning that only 94% of the capital expenditure budget actually went to
infrastructure projects. Of this 94% was donor-funded (Zambia National Budget
Address, 2004).

External donor support in the 2005 national budget was 78% of total capital
expenditure. Of this 15% went towards financial restructuring, contingent liabilities,
fertiliser price support and imports of maize reserves, leaving only 85% of the capital
expenditure budget actually going towards the financing of infrastructure projects.
Despite this drop in financing of infrastructure projects, the donor-funded portion
remained quite high at 92% (Zambia National Budget Address, 2005). These figures
reflect an average of 92% over the last five years, which is a very significant portion of
total capital expenditure on infrastructure projects.

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1.1.3 Procurement Systems

This study centres around procurement systems used on donor-funded construction


projects in Zambia. An overview of procurement management systems used generally is
given below to provide an understanding of some schools of thought in procurement
management. It is imperative to note that most of these schools of thought have looked
at the same processes from different perspectives and seem to have merely classified the
same processes differently. The overall processes from initiation of the procurement
management functions to finalisation of the contracts basically remain the same (Baily,
1978).

Baily (1978) explains that purchasing and supply planning is part of the responsibility of
purchasing management, although it is sometimes assisted by full-time research or
personnel in other departments who provide supporting technical information.
According to Baily (1978), this information may be solicited through two approaches.
Firstly, through the individual approach, by giving a project to an individual buyer who
is expected to complete an investigation and put forward recommendations by a specific
date. Secondly, this may be done through a collective approach, which focuses the
attention of all buyers on one problem at a time. In this case particular aspects may be
assigned to individuals, but the whole department is expected to concentrate on the
general problem. Information obtained in both ways is used as an input to the
procurement planning.

Considering that several systems are used during procurement management, some
scholars have described the various processes involved in relation to the area of
application and the applicable stage during the overall procurement function (Chapman,
1997). Chapman (1997) emphasizes acquisition management and contract
administration, both functions of the procurement manager, as methods for reducing
project cost, schedule, and quality risks.

1.1.4 World Bank Guidelines & Procedures

The World Bank has well-established guidelines and procedures which are followed to
enable implementing agencies to carry out any procurement funded by the World Bank

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(Bank-Financed Procurement Manual, May 2004). Other donors use similar guidelines
and procedures for procurement and it is easy to note that some of them seem to have
adopted the World Bank guidelines and procedures with some modifications meant to
address particular unique circumstances within their own organisations or economic
groupings. It can be observed from projects funded by several bilateral donors and/or
multi-lateral agencies, that if the World Bank is involved to a significant extent the
partners will most probably apply World Bank guidelines and procedures, so that they
can exploit the systems the Bank already has in place locally and internationally
(PEMFA Secretariat, Public Expenditure Management and Financial Accountability
Reform Programme, Procurement Guidelines; March 2005:8).

According to the World Bank’s Operational Manual, OP.11.00 (July 2001, Revised
December 2004:4), the Articles of Agreement, which are an integral part of all World
Bank Loan Agreements, “…establish the Bank's fiduciary responsibility to ensure that
the proceeds of its loans are used only for specified purposes, with due attention to
economy and efficiency and without regard to political and other non-economic
influences or considerations”. Due to these requirements, the Bank has established
procurement rules to be followed by borrowers for the procurement of goods, works and
services required for the projects financed by the World Bank, and the World Bank has
gone further by putting in place procedures for review of the procurement decisions
made by borrowers, before and after these decisions have been made. Note here that
whether the decision is reviewed before or after it has been made depends on the
estimated value of the contract to be entered into as a result of the procurement decision.

The rules that apply to the procurement of all goods, works, and services on World
Bank funded projects are detailed in the Bank’s Procurement Guidelines; and those that
apply to the selection and employment of consultant services are detailed in the Bank’s
Consultant Guidelines. According to the World Bank’s Operational Manual, these
Guidelines have been endorsed by the Bank's Executive Directors and are incorporated
by reference in the particular Loan Agreement in the manner specified in the Project
Appraisal Document (PAD) for a particular project. These are the guidelines that are
binding on the borrower in respect of all procurements performed under a particular
project.

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Additional instructions and guidance material on procurement are provided in the Bank-
Financed Procurement Manual (July, 2001) and the Consulting Services Manual
(March, 2002), which are revised from time to time. The World Bank considers the
underlying principles of donor-funded procurement as being: ensuring economy and
efficiency in the procurement of goods, works, and services; giving eligible bidders
from developed and developing countries a fair opportunity to compete for award of
contracts; encouraging the development of domestic industries in developing countries,
i.e. contracting, manufacturing, and consulting industries; and providing for
transparency in the procurement process (World Bank, 2001).

The World Bank’s Procurement Manual constitutes the Bank’s policies on procurement
and is intended to provide advice and assist both Bank staff and implementing agencies
in borrower countries to carry out their procurement responsibilities (World Bank,
2001). This manual also helps Bank staff to advise implementing agencies on how to
handle their responsibilities when carrying out procurement using Bank financing and
explains in more detail how specific aspects of procurement should be handled
consistent with Bank Guidelines and Bank procedures.

The Bank-Financed Procurement Manual begins with a review of some policy and
institutional aspects of procurement that have broad applicability and about which
questions arise most frequently, while subsequent chapters deal with specific
procurement topics, taking them generally and in the chronological order in which they
occur, from the initial analysis of a Borrower’s procurement systems and capacity,
through the procurement planning stages and into project implementation and contract
administration (http://wbln0018.worldbank.org/institutional/manuals/opmanual.nsf). The
implications of different financing arrangements, particular kinds of procurement, i.e.
textbooks, pharmaceuticals, pesticides, commodities, information technology, etc are
covered as a variety of special situational examples in the final chapter of the
Procurement Manual. Where necessary, topics are cross-referenced to other relevant
sections of the Operational Manual and the Procurement Guidelines to enable a clearer
understanding of the topics in issue
(http://wbln0018.worldbank.org/institutional/manuals/opmanual.nsf). In a quest to keep this

Manual relevant and useful to its users, the World Bank continues to review and update
this document on a regular basis.

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With an average of 83% of capital expenditure over the last five years having been
funded by the donor community and 70% of the 2006 capital expenditure budget being
funded by the donor community (Ministry of Finance and National Planning, 2006-2008
Medium Term Expenditure Framework and the 2006 National Budget), it follows that
the significance of how efficient and effective the procurement systems used are, is
cardinal to ensuring value-for-money. As noted by Chapman (1997), effectively and
efficiently applied, acquisition management and contract administration, which are both
functions of a procurement manager and his or her team, are proven methods for
reducing project cost, schedule, and quality risks, thereby obviously increasing value-
for-money obtained from limited resources.

1.1.5 Procurement Performance and Effectiveness

Performance in general is defined as the degree to which the outputs or outcomes of a


set of activities meet specified standards or goals (Knevett, 1998). Erridge (1995)
observes that value-for-money is often identified as the overriding goal in the public
sector. Value-for-money in this case is further described as the delivery of public
services of the requisite standard at the lowest cost to the taxpayer, while ensuring
minimum quality requirements are met. Therefore, as emphasised by Knevett (1998),
public sector procurement must be measured against established standards to ensure
continuous improvement in the performance of delivery of public services. Erridge
(1995) further identifies purchasing goals as the five ‘rights’: the Right Material, of the
Right Quality, to the Right Place, at the Right Time, and for the Right Cost. These are
the parameters that can be measured to determine the effectiveness of purchasing
systems and activities (Erridge, 1995).

There are various methods of measuring procurement performance. Van Weele (1994)
quotes Hayes and Renard (1962), who suggested that management’s expectations of the
purchasing operations have a significant influence on the methods and techniques that
are used in its assessment. This hinges on how management looks upon the role and
importance of the purchasing function. Erridge (1995) notes that, whilst levels of
professionalism in purchasing have improved considerably in recent years, and its

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contribution to overall organisational performance is increasingly being recognised, a


problem still remains with the way purchasing is viewed both inside and outside
organisations. Therefore, it is vital to continue marketing the purchasing function both
inside and outside the organisation.

Companies that invest in performance management out-perform other companies in


multiple financial measures – total shareholder return, return on equity, return on assets,
and cash flow return on investment, and multiple productivity measures – sales per
employee, income per employee and real growth in sales (Stimson, 2002). According to
Stimson (2002), considering that a large percentage of Cost of Goods Sold (COGS) is
purchased materials, procurement can have a large impact on overall performence. For
example, for a company with 55% COGS in purchased materials, a 1% reduction in
COGS delivers the same margin lift as 12-18% sales growth
(http://www.ism.ws/ResourceArticles/Proceedings/2002/StimsonGB.pdf.). This highlights the
importance with which procurement performance should be addressed and how
effective good procurement practices can be in adding value to the delivery of public
services.

Erridge (1995) emphasises that it is, however, critical to ensure that the right parameter
is being measured in the right manner. This involves identifying criteria against which
performance can be assessed and monitored, which most often involves: economy,
which relates purely to inputs; efficiency, which is the ratio of inputs or processes to
outputs, i.e. profitability and productivity; and effectiveness, which is the achievement
of overall goals, and could therefore have sub-criteria such as excellence, quality,
ethicality and innovation (Erridge, 1995).

Scott (2005) notes that legislative requirements in most states in the United States of
America require that highway construction contracts be awarded using a low-bid
system. Under a similar system in Zambia, contractors submit bids based on plans and
specifications prepared by engineering firms hired by Government agencies and usually
the contractor submitting the lowest evaluated bid is awarded the construction contract.
Walker and Hampson (2003) argue that open or pre-qualified tender competition almost
always results in the acceptance of the ‘cheapest’ fixed price for specified work. In most
cases, experience levels of the contractor, quality issues, and other criteria are not taken
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into consideration in awarding these contracts using these systems (Scott, 2005). The
low-bid system makes no allowances for awarding construction contracts to the best-
performing contractors who deliver the highest quality projects. Objective elements,
including contractor experience with similar projects, completion within schedule,
compliance with material and workmanship requirements, timeliness and accuracy of
submittals, and record of safety are not factored into the procurement process (Scott,
2005).

A major disadvantage of the competitive tendering process is that the contractor is


removed from the design development stage and thus much management and
constructability information is lost (Walker and Hampson, 2003; McGeorge and Palmer,
1997; Francis and Sidwell, 1996). These elements not only affect the ultimate
performance and overall cost of the completed facility, but also contribute to the
efficient execution of the work. Efficiency is very important to contracting authorities
that are interested in a high level of public acceptance (Scott 2005). According to the
World Bank (Bank-Financed Procurement Manual, July 2001), the best public
procurement is simple and swift and should aim at producing positive results without
protracted delays. In addition, efficiency implies practicality, especially in terms of
compatibility with the administrative resources and professional capabilities of the
purchasing entity and its procurement personnel (Bank-Financed Procurement Manual,
July 2001-Edited January 29, 2003: Foreword). Scott (2005) concurs by recognising
that, because of constrained staffing and budgets, it is not possible for state agencies to
"inspect" quality into the work, therefore, a procurement process is needed that
considers value-related elements in awarding contracts.

Many procurement specialists on donor-funded projects in Zambia today are faced with
the task of advising implementing agencies on matters that affect the number of bidders
who participate in the tendering process. Carr (2005) suggests that an appropriate
question may be whether restriction of bidder participation actually negatively impacts
on project costs through limited competition, and to what degree? The World Bank
allows Limited International Bidding through direct invitation as an option generally
where there is a limited number of possible suppliers or where contract values are very
small (Bank-Financed Procurement Manual, July 2001-Edited January 29, 2003:109).
In most circumstances a prequalification process aimed at screening potential bidders
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has to be used to ensure that only contractors and suppliers who have the required
experience, technical expertise and financial resources bid for a contract, This process is
commonly used only for large civil works, turnkey plants, build operate and transfer
contracts, some special goods and complex information technology systems (Bank-
Financed Procurement Manual, July 2001-Edited January 29, 2003:120). On the other
hand, Carr (2005) argues that there is little published evidence and analysis on bid
competition impacting on cost-effectiveness, although there are numerous reports that
argue on assumptions and bias that the impact of reduced competition on project bid
prices is a rise in bid prices.

Scott (2005) proposes that under a "best-value" selection process, the low-bid concept
can be modified by adding quality issues to the bid evaluation process. The low-bid
concept would still be a part of this selection process, but it would be weighted with
other elements to determine a best-value that reflects quality, as well as cost issues.
Best-value should include a full analysis of existing performance, and take into
stakeholders’ views and lessons learnt from other public services providers about
alternative approaches to traditional procurement methods
(http://www.scotland.gov.uk/pages/copyright.aspx). While it is argued that removing the

contractor from the design development stage is a major disadvantage of the traditional
competitive tendering process (Walker and Hampson, 2003), more recent developments
suggest that public-private partnerships (PPPs) are a form of procurement that makes all
stakeholders become partners in the success of public projects, hence creating a sense of
ownership (Her Majesty’s Stationery Office, 2000).

The Institute for Public-Private Partnerships (2007) defines PPP as a partnership


between government and an appropriately qualified private sector entity/group of
entities, entered into for the purpose of financing, designing, constructing and/or
operating infrastructure or services that would normally have been provided through
traditional public channels. In a similar vein, PPPs are defined by the World Bank
(2004) as the combination of public needs with private capability and resources to create
a market opportunity through which the public benefits by their needs being met and the
private sector benefits by making a profit. According to Smith (2004), growing
dissatisfaction with the traditional delivery process of public infrastructure and services
in the late 80’s gave rise to alternative delivery systems such as Build-Operate-Transfer
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(BOT), Build-Own-Operate-Transfer (BOOT) and Design-Build-Finance-Own-Operate-


Transfer (DBFOOT). These are some forms of project financing, where a private entity
receives a franchise from the public sector to finance, design, construct, and operate a
facility for a specified period, after which ownership is transferred back to the public
sector, enabling the private entity to recover its investment, and operating and
maintenance expenses (http://en.wikipedia.org/wiki/Build-Operate-Transfer). Such delivery
systems are options of private financing initiatives (PFIs) that should be available to
public sector decision-makers as they decide how best to procure infrastructure projects
and provide public services (Smith, 2004).

This study looks at procurement management in general and therefore incorporates how
economy and efficiency are taken into consideration, but it focuses on the effectiveness
of the procurement systems and selection criteria used in particular.

1.2 STATEMENT OF THE PROBLEM

The problem to be addressed may be stated as:


There is growing concern that donor-funded construction projects in Zambia do not
achieve project objectives in an economic and efficient manner. In addition, measures
that have been taken to improve the performance of these projects in the recent past
through the use of more effective procurement systems do not seem to have delivered
any tangible results.

1.3 THE RESEARCH QUESTIONS

An examination of the project procurement management systems employed on donor-


funded construction projects raises questions about whether the procurement systems
that are put in place by the donors and have to be used by the project implementing
agencies, adequately respond to the requirements of performance and effectiveness. This
raises the following questions:

i. Do the procurement systems used on donor-funded construction projects in


Zambia deliver best value-for-money in terms of meeting quality requirements,
as well as adhering to time and cost constraints?;

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ii. Should the procurement systems used be agreed upon mutually from the onset of
the projects or be agreed upon as the project is being implemented?; and
iii. Do the procurement systems used create any unintended consequences that have
a negative impact on overall project performance?

1.4 HYPOTHESIS OF THE STUDY

The hypothesis to be tested in this study may be stated as:


The procurement systems used on donor-funded construction projects in Zambia do not
deliver best value-for-money in terms of meeting quality requirements, as well as
adhering to time and cost constraints, mainly because they are not agreed upon mutually
at the onset of the projects and amending or changing the systems during project
implementation is almost impossible, thereby causing unintended consequences that
have a negative impact on overall project performance.

1.5 RESEARCH OBJECTIVES

The objectives of the study are to:

a. Determine whether procurement systems on donor-funded construction projects


contribute to failure in economic and efficient attainment of project deliverables;
b. Determine the underlying reasons why procurement systems on donor-funded
construction projects continue to contribute to such failure; and
c. Provide insight on the areas surrounding procurement systems that need to be
focused on to improve overall project performance on the donor-funded project
portfolio in Zambia and see whether a “best-value” selection process can be
incorporated.

1.6 OVERALL AIM OF THE STUDY

The aim of this study is to highlight the shortcomings and areas of concern relating to
donor-funded procurement of public infrastructure in Zambia that can be addressed
locally by implementing government agencies and central government, and provide
insight to the donor community about the reasons for some of the inefficiencies and
ineffectiveness of current procurement systems used and emphasise the need for

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continued and consistent improvement of procurement performance in a bid to


contribute to improvement in overall project performance.

1.7 LIMITATIONS OF THE STUDY

The study will be restricted to projects that have been implemented and completed over
the last ten to twelve years and will focus on large scale projects that had performed
several procurement activities mainly involving the procurement of infrastructure and
related services.

The reasons for this are that since 1991 when a multi-party political system was re-
introduced in Zambia, a lot of donors began to support the Zambian economy.
Following the planning stages, and signing of bilateral and multi-lateral agreements, the
implementation of infrastructure projects commenced two to three years later. In
addition, the need to make an assessment of overall project performance requires that
only completed projects are included in the study. Furthermore, it is prudent to compare
performance on donor-funded projects that have been implemented under similar
economic, social and political conditions.

1.8 RESEARCH METHODOLOGY

This research is in the form of a study that will employ an investigative approach. It
shall rely on qualitative research methods by gathering information from projects that
have already been completed and analysing this information. The research will also
employ a cross sectional approach by assessing performance on projects implemented in
different sectors of the economy over the same period, rather than assessing projects in
the same sector over an extended period. There will be a review of relevant literature on
overall performance of projects within the limitations outlined herein. Having reviewed
the overall performance from internal completion reports (ICRs), an investigation into
the performance of procurement management and the systems used shall be conducted.
In addition, a questionnaire targeted at procurement personnel, from both the public and
private sectors, who were involved in the implementation of projects, shall be designed
and used to capture information on what specific problems may have impact on
efficiency and effectiveness in procurement management as well as overall project

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performance. This information shall provide a basis for further analysis of the
environment within which the projects are implemented and the relationship between
procurement systems put in place, procurement regulations and guidelines used, and
overall project performance shall be highlighted.

The study will entail:

a. Conducting a detailed literature review of public sector procurement systems


generally and how current trends compare and contrast with traditional systems;
b. Providing an overview of the procurement systems put in place and the
procurement regulations and guidelines used on donor-funded projects;
c. Analysing the questionnaire results and views of procurement practitioners and
other professionals involved in the implementation of donor-funded projects;
and
d. Determining the relationship between the procurement systems in place,
regulations and guidelines used, and the effectiveness of the procurement
management in achievement of overall project objectives.

1.9 STRUCTURE OF THE THESIS

This thesis comprises five chapters.

Chapter 1 will provide background information to the study followed by brief sections
pertaining to the research problem, research questions, hypothesis, objectives of the
research, the overarching, limitations and the methodology.

Chapter 2 will give a review of literature on public procurement systems in general,


procurement regulations and guidelines, and performance of donor-funded projects from
the perspective of procurement management. It will examine their intended purpose and
the rationale on how they ought to impact on project performance and achievement of
overall project objectives.

Chapter 3 will discuss the salient areas of procurement guidelines and/or regulations of
five donor institutions/countries that provide most of the funding for infrastructure

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development and rehabilitation in Zambia with a focus on the application of their


procedures and the management systems put in place to administer procurement.

Chapter 4 will outline the research methodology in detail and the research procedures in
line with questionnaire administration ethics and practices. The research questions will
be explored further with a direct focus on the questionnaire results. The data collected
shall be analysed and interpreted in relation to the respondents’ actual views on project
performance and achievement of project objectives.

Chapter 5 will comprise the conclusion for the study and suggestions and
recommendations for more economic and efficient procurement management, focused
on project performance. It will highlight the underlying reasons why procurement
systems in place and regulations and guidelines used on donor-funded projects continue
to contribute to failure to meet project objectives. The chapter will also provide insight
on the areas that need to be focused upon to improve the effectiveness of procurement
systems used on donor-funded projects in Zambia.

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CHAPTER 2. PUBLIC PROCUREMENT

2.1 INTRODUCTION

It is evident that, for rapidly growing urban populations, central governments in most
developing countries are unable to undertake infrastructure development whose "cost-
to-carry" initially will exceed tax revenues generated by new residents and businesses
(Utt, 1999), using financing generated from domestic resources. This has led to the
unavoidable reliance on donor aid obtained through bilateral and multilateral
agreements, in order to try and keep up with the ever growing demand for public
infrastructure and social services (Hansen, 2004). The Law Encyclopedia (2008) defines
public as the whole body politic, or the aggregate of the citizens of a nation, state, or
municipality; the community at large; the people (http://www.answers.com/public). Barrons
Business Forum (2007) defines procurement as the acquisition of goods, services and/or
infrastructure at the best possible total cost of ownership in the right quantity and
quality, at the right time, in the right place for the direct benefit or use of governments,
corporations or individuals, generally via a contract (http://www.answers.com/procurement). In
this context public procurement can therefore be defined as the acquisition of goods,
services and/or infrastructure by national, state, provincial or municipal governments on
behalf of the whole body politic or all citizens.

This chapter provides a critical review of literature on public procurement management


and the effectiveness of using country systems in procurement procedures for donor-
funded construction projects. It also reviews literature on the performance of donor-
funded projects from the perspective of procurement management. In addition, the
chapter provides an insight into recent developments in the management strategies and
interventions applied by multilateral and bilateral donors and whether or not these
strategies and interventions actually have an impact on value-for-money realised from
the use of limited donor resources. According to Lancaster (1999) the organisation and
management of donor aid and the dependence of developing countries on that aid is
particularly important in analysing the issue of the effectiveness of donor aid in
developing countries. Good overall programme management, realised by effective
project management, is also said to be essential to successful and sustained development
programmes in developing countries (White, 1996).

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This literature review draws on studies and reviews carried out by some scholars and
stakeholders interested in the implementation of donor-funded projects and the
organisations involved in implementation and monitoring of donor-funded projects. The
purpose of this review is to bring to the fore the similarities and differences between the
experiences in different countries in order to highlight the notable shortcomings and
areas of concern related to the implementation of donor-funded construction projects in
developing countries.

2.2 PROCUREMENT MANAGEMENT ON DONOR-FUNDED PROJECTS

The overall objective of a public sector employer or client when planning and initiating
a construction project is to provide a sound finished project at a minimum price and
with low maintenance requirements (Ogunlana and Sysavath, 2003). Some of the
pitfalls in trying to manage projects effectively and maximise project performance are
problems associated with the misunderstanding of contract documents, especially
general and special conditions that have an impact on performance during project
implementation. Enshassi (1999) emphasises that cultural variations and differences in
value systems present problems to foreign professionals working away from home on
donor-funded projects. It is quite evident that conditions of contract affect expeditious
implementation, and levels of economy and efficiency in the construction industry.
Tutesigensi and Moodley (1999) found that the positive contribution of conditions of
contract to expeditious implementation, and economy and efficiency in the industry, can
degenerate into a dysfunctional situation when there is either lack of considerable
understanding of the conditions of contract by at least one of the parties to the contract,
or lack of trust and confidence in the conditions of contract by one or both of the parties.
Many standard contracts used on donor-funded projects are drawn from ‘imported’
templates and they originate from a variety of sources, designed for different social,
cultural, political, legal and economic backgrounds. Tutesigensi and Moodley (1999)
argue that the use of these ‘imported’ conditions of contract leaves several parts of the
overall contract agreement clearly missing and other parts not applicable, resulting in a
less than optimal achievement in project implementation. These are issues that can only
be effectively addressed during the early stages in the procurement process, i.e. during
project design and procurement planning.

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Rwelamila (2000) observes that the dominant traditional construction procurement


system used in the Southern African Development Community (SADC) public
construction sector is used as a ‘default system’, which is now considered inappropriate
as a construction procurement system. The default traditional construction procurement
system is said to provide a poor and adversarial relationship management basis that is
incapable of dealing with sustainability parameters, making it difficult to deliver any
substantial cost and quality benefits (Walker et al, 2000). Rwelamila (2000) further
concludes that the construction procurement systems purported to be used in the SADC
public construction sector differs significantly from that recommended in the theory,
resulting in insignificant focus on the main stakeholders, construction environment and
its sustainability. The traditional construction procurement system management
structure and its respective contract arrangements are used merely because clients and
their consultants do not consider it beneficial to select an appropriate procurement
system for each project (http://www.ogc.gov.uk/sdtoolkit/reference).

The five management activities that contribute to improving the management capacities
of developing country institutions and individual managers are leadership, project and
programme design, organizational and institutional structures, management support
systems, and relations within the project environment (White, 1996). From the previous
chapter it has been acknowledged that project procurement management has evolved
over the years to be recognised as one of the key project management functions that
contribute to the successful delivery of projects. Project success is focused on the
acquisition and delivery of services, goods and works where and when they are most
required at an optimum price and this is the core function of a procurement management
team. On donor-funded construction projects studies have shown that contractual
practices and procurement management are key elements that lead to disputes, contract
termination, completion delays and cost overruns (Ogunlana and Sysavath, 2003;
Kumaraswamy, 1997). Inappropriate work packaging has also contributed considerably
to problems that emerge during the post contract period on large construction projects
(Kumaraswamy, 1997). These are all tenets of procurement management and the
consequence of lack of due consideration during the preparation of tender documents in
the early stages of the procurement process.

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Many problems arise in the course of project implementation due to unclear roles and
responsibilities within contract management teams (http://www.ogc.gov.uk/sdtoolkit/reference).
Lines of communication are not usually defined properly
(http://www.ogc.gov.uk/sdtoolkit/reference) and the design teams are usually not aware of the
strengths and weaknesses of the contractors who shall undertake the works (Materu,
2002). Public procurement systems in developing countries and subsequent contracting
procedures often fail to ensure fair, competitive business practices that take into account
the social and economic background in the contractual arrangement (Ogunlana and
Sysavath, 2003), hence they do not exploit the specialized expertise and experience of
the domestic contractors available in the economy. Contracts are often awarded much
later than planned, are one-sided, expressing the rights of the employer and the
obligations of the contractor without adequate compensation to the latter if the employer
defaults (Department for International Development [DFID], 2006). Such procedures and
rules lead to delayed payments and fail to compensate the contractor for escalation in
costs due to delay on the part of the employer. Contractual difficulties, as well as cost
and time overruns, can frequently be traced to the procurement systems and procedures
followed. According to Ogunlana and Sysavath (2003), contract documents are often
excessively complex for the works to be carried out and sometimes inhibit participation
in tenders by domestic contractors.

2.3 USE OF COUNTRY SYSTEMS AND LOCAL OWNERSHIP

Materu (2002) cited stringent conditions for pre-qualification and tendering, lack of
transparency in the procurement of public works, and lack of affirmative policies for the
promotion of local contractors as contributing factors to the lack of effectiveness and
mediocre performance of donor-funded projects, even resulting in unfair competition
and corruption. For donor-funded projects in the construction sector that are normally
focused on infrastructure development and maintenance, procurement management is
essential to timely completion, which may sometimes involve several procurement
processes in order to deliver complex construction projects
(http://www4.trb.org/trb/crp.nsf/All+Projects/NCHRP). Construction delay has become quite
endemic in Nigeria, where client-related delay is significant and it has been established
that acceleration of site activities coupled with improved clients' project management

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procedures should moderate the adverse effect of construction delays (Aibinu and
Jagboro, 2002). The project management procedures alluded to here are mainly the
procurement guidelines and systems, including standard contract documentation
imposed by bilateral and multilateral donor agencies. The Paris Declaration on aid
effectiveness lends favour to the Nigerian situation from another angle by amplifying
the need for the use of reliable country systems for procurement and financial
management (DFID, 2006) in order to achieve more effectiveness on donor-funded
projects. DFID (2006), Crown Agents (1998), and World Bank (1996) all emphasise
that strengthening capacity by preferably using both government owned and led
initiatives through programmes coordinated with other donors, using common
arrangements and procedures, would lead to improvements in effectiveness. This would
definitely require harmonised procurement management systems and procedures with
enhanced local ownership (Dickinson et al, 2007).

A question needs to be addressed: Is embracing the issue of ‘partnership’ and ‘local


ownership’ at policy level, as propagated over the last thirty odd years, adding any value
to the performance of donor-funded projects? Despite much donor rhetoric, for quite a
while now, on the need for recipient ownership of development programmes and the
building of new forms of donor-recipient partnership, aid-supported programmes are
still basically donor-driven (Helleiner, 2000). The concept of a genuine partnership in
development lacks credibility, because there has never been a real sense of equality
between donors and recipients (Patel, 1971) and if donors believed in local ownership
participation they would seek channels and methods of cooperation that avoid stifling or
attempting to substitute local initiative (OCED, 1996). Aid relationships have been
difficult to change in low-income countries and focusing on other factors that contribute
to the effectiveness and overall performance of donor-funded projects may be the key to
successful implementation in future.

2.4 PERFORMANCE OF DONOR-FUNDED PROJECTS

Over the last thirty years or so African leaders have been concerned about the visible
stagnation in economic growth across the continent and through the Organisation for
African Unity, the Economic Commission for Africa and the World Bank, the leaders

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instigated a rollout of analyses and reports that addressed what measures should be
taken in order to try and address what was coined the African problem (Browne, 1988).
By the mid-nineties these reports brought many analysts and policymakers to the
realisation that a new kind of partnership between rich nations and poor countries was
required in aid relationships, which were characterised by donor-driven aid programmes
and had limited local ownership (Helleiner, 2000). This, he suggested, was in order to
ensure that donor aid programmes were more effective in delivering accelerated
development. Browne (1988) points out that policy reform, which had been the keynote
of the initial analysis of the Organisation of African Unity, remained the focus
throughout the series of reports. Despite these reports and the reform programmes that
have since been implemented and continue to be implemented in developing countries
through the New Aid Partnerships and Local Ownership, little has been realised in terms
of improved performance of the programmes on the ground (DFID, 2006). The African
problem, characteristics of which are also evident in other developing countries around
the world, still continues to haunt the international community and adversely affects
global economic development (Browne, 1988). It has been argued by Helleiner (2000)
that, if the overall policies of how donor aid works are inappropriate, it is unlikely to
have much positive effect on the economies of developing countries and that unless
sound policies are domestically supported, they are unlikely to be sustainable.

Some scholars propagate that the effectiveness of donor aid programmes is hampered
more by lack of well articulated, coherent and coordinated support programmes that
exploit the comparative advantages of the various multilateral and bilateral donors
(Flaming et al., 2005) than by parameters surrounding project management factors.
Dochtermann (2007) highlights the critical need for a common language and
terminologies across institutions to help provide a common understanding of the
procedures that are to be followed while managing individual projects. This is quite
evident when the procurement regulations, guidelines and procedures used by the
bilateral and multilateral donors are discussed as a factor that affects the effectiveness of
interventions and overall project performance. In Nicaragua, for example, lack of focus
on monitoring operational efficiency and insufficient internal technical capacities in the
local donor agencies was cited as an impediment to aid effectiveness (Flaming et al.,
2005). In the Zambian case, this has become so prevalent that some implementing
agencies have advanced to a level of erudition that surpasses the technical capacity of
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many in-country donor agencies that are supervising the implementing agencies.
According to Helleiner (2000) expatriate expertise is frequently ill-informed, insensitive
to local realities, typically generates little domestic capacity-building and sometimes
serves donor rather than development interests, which is contrary to the overall
objectives of aid programmes. Delivery of best value-for-money does not necessarily
have to do with the lowest cost, but rather, the best balance of quality and whole-life
cost in order to meet specific user requirements
(http://www.ogc.gov.uk/sdtoolkit/reference/ogc_lirary).

Another negative donor performance indicator could be the percentage of its aid which
is spent upon donor-country tied technical assistance/financial cooperation. Although
there are a lot of “useful” expatriates and consultants working in developing countries,
the presumption must be that this is not generally now a wise use of limited donor
funds, particularly when the issue of technical assistance has not been initiated and
requested by the recipient country (Rwelamila 2000). Helleiner (2000) propagates that
good donor performance can be illustrated by a low percentage of donor funds devoted
to tied technical assistance. Therefore, one could consider a high percentage of donor
funds devoted to long-term capacity-building as a complement to this somewhat
“negative” indicator and thus is more of a positive indicator, although somewhat
subjective, hence more difficult to illustrate, quantify and determine.

Helleiner (2000) states that there are strong indications to suggest that one of the major
causes of poor performance of African construction industries in terms of cost, quality,
schedule and utility could be questionable procurement strategies, which by their nature
do not take on board all relevant factors, and lead to inconsistent and unpredictable
outcomes (http://www.ogc.gov.uk/sdtoolkit/reference). The emergence of ‘new’ approaches in
procurement are often proclaimed as the universal remedy for all previous problems and
the construction industries intelligentsia in African countries have a tendency of
accepting them without questioning the appropriateness of the procurement systems in
relation to their main stakeholders, environment and sustainability (Rwelamila, 1999).
To achieve the dramatic increases in efficiency and quality that are both possible and
necessary the public procurement fraternity needs to start questioning current and
emerging procurement approaches (Carr, 2005). Above all, the intelligentsia should
accept the reality that African construction industries problems need African solutions
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(Rwelamila, 1999) and not the ‘imported’ templates that originate from a variety of
sources designed for different social, cultural, political, legal and economic
backgrounds.

There is also the contributing factor of the continuing imbalance in aid relationships
between donor and recipient that manifests in many ways. According to White (1996),
an important and previously neglected dimension of the problem is the imbalance in
performance monitoring and evaluation between donors and recipients. Whereas the
behaviour and performance of recipient countries is measured and assessed in ever
increasing detail within the international community, the behaviour and performance of
their donor “partners” only seems to receive cosmetic attention, except at an aggregate
level which is of little operational usefulness to individual recipient countries (White,
1996). When it comes to performance monitoring and evaluation, as in so many other
spheres of international and/or global interaction, the powerful donors and other
international financial institutions, still call all the shots (Ngulube, 2004).

In a similar vein Helleiner (2000) raises the issue of tying of procurement to


conditionalities specified by the donors and stresses that this has long been recognised
as costly to recipients particularly when it relates both to procedures and procurement
sources. The extent to which donors are willing to coordinate their support and follow
national procurement systems, through contributions to sectoral or cross-sector basket
funds, wholly administered by recipients in accordance with objectives and priorities
agreed with the contributing donors (Helleiner, 2000), is a manifestation of how much
the donors are willing to integrate into national plans and priorities.

It is apparent that the effectiveness of donor aid can be addressed through the
procurement procedures and systems used during implementation of donor-funded
projects by ensuring that big public projects are packaged into lots which can be
managed by local contractors, procurement procedures are streamlined to make them
more transparent, and donors are persuaded to relax conditions to enable local
contractors to participate in their projects (Materu, 2002). Issues like local contractors
inability to fully understand contract documents, laxity in enforcement of contract
conditions by implementing agencies and misunderstanding of the roles of consultants

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(Ogunlana and Sysavath, 2003) should also be taken into account and addressed more
objectively.

2.5 PROJECT MANAGEMENT FACTORS

Based on lessons learnt during a study conducted in Kenya, Lesotho, Liberia, Niger,
Senegal, and Zaire1, White (1996) revealed that parameters surrounding project
management factors were key to successful development programmes. These included:

¾ leadership and management style vis-à-vis, relating to others, energising staff


and mobilising support both internally and externally;
¾ programme and project design encompassing policy mandates, project
objectives, discretion among managers and implementation;
¾ organizational and institutional structure, how the structure contributes to
service delivery and performance of activities both internally and externally;
¾ management procedures and support systems, considering whether the design of
internal procedures, financial management, information, monitoring and
evaluation, and personnel systems enhance efficiency and effectiveness; and
¾ relating to the environment or context, in order to understand both resources and
constraints, and take into account cultural sensitivity, local support and linkages
with beneficiaries.

Problems of poor management are often cited as responsible for programme failure
(White, 1996). The management factor in development programmes is, however, less
well appreciated and understood as are the project interventions that serve to strengthen
management capabilities. Donor aid programmes are implemented through specific
projects, which form the overall project portfolio under any aid programme. It follows,
therefore, that the successful implementation of the projects under the aid programme
should ensure overall achievement of programme objectives. This report refers to the
management factors concerning procedures, support systems and the environment in the
context of procurement management. Findings have shown that the efficiency and
effectiveness of procurement management systems used during the implementation of

1
Now known as the Democratic Republic of Congo.

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donor-funded projects is usually linked to performance levels, as long as the


procurement management systems are geared towards the overall priorities of the
project (Kumaraswamy and Dissanayaka, 1998).

2.6 SUMMARY & CONCLUSIONS

Procurement management systems for donor-funded construction projects in developing


countries are clearly issues that need to be addressed collectively by all stakeholders.
The traditional ‘default system’ clearly does not deliver the intended sound finished
project at minimum cost with low maintenance requirements. In trying to improve the
performance of donor-funded projects through the use of more rigorous ‘imported’
templates designed for different social, cultural, political, legal and economic
backgrounds, other challenges have been created, such as, lack of understanding of
tender and contract documents, and lack of appreciation of the different roles and
responsibilities in contract management.

There are comprehensible suggestions that using country systems in procurement


procedures for donor-funded construction projects can be an effective way of improving
performance, as long as this is enhanced by tackling issues relating to local ownership
and untying of procurement from conditionalities specified by donors. However, it
should be noted that local ownership can only be adequately addressed if capacity is
built by revisiting the project management factors that are key to successful
development programmes and ensuring that local capacity is enhanced in relation to
these factors.

This chapter has reviewed literature relating to donor-funded procurement systems and
procedures used on construction projects in developing countries and their
consequences. However, in order to provide an appreciation of the background to these
procurement systems and procedures the next chapter focuses on the guidelines laid
down and issued by donors.

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CHAPTER 3. GUIDELINES FOR PUBLIC PROCUREMENT IN ZAMBIA

3.1 INTRODUCTION

Public procurement in Zambia is governed by an Act of Parliament, which establishes


the Zambia National Tender Board (ZNTB). In accordance with the ZNTB Act No 30 of
1982, ZNTB was established to regulate and control the procurement of goods and
services for the Government and parastatal bodies and to consolidate the law relating to
tenders generally, while providing for matters connected with or incidental to public
procurement. ZNTB regulates all public procurement in Zambia through the Central
Tender Committee and its subsidiary committees established within the Ministries,
Provinces and Spending Agencies (MPSAs)2.

This chapter gives an overview of the various guidelines, procedures and regulations
used in Zambian public sector construction procurement. Emphasis is put on guidelines,
procedures and regulations of donor institutions because of the fact that, on average,
92% of the procurement of public sector construction projects is funded by donor
institutions. Along with the national procurement legislation, which is governed by the
ZNTB Act No. 30 of 1982, MPSAs in the public sector are required to follow the
guidelines, procedures and/or regulations of the bilateral or multilateral donor
institutions that fund construction projects. The purpose of this chapter is to provide
insight into how donor-funded public procurement is governed, regulated and carried
out in Zambia. In addition, the chapter provides an understanding of the underlying
principles of multilateral and bilateral donors and how the guidelines and procedures
prescribed by different donors are meant to impact on value-for-money in the use of
scarce public resources. The salient areas of the procurement guidelines and/or
regulations of some main donors that provide funding for infrastructure development
and rehabilitation in Zambia are briefly outlined.

2
Taken from Statutory Instrument No. 116 of 1995 of the Laws of Zambia.

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3.2 GUIDELINES FOR DONOR-FUNDED PROCUREMENT

There are a number of bilateral and multilateral donor institutions that provide funding
for construction projects in Zambia, who are usually referred to as Cooperating Partners
(CPs) as a group. Notable CPs that contribute to construction projects, other
infrastructure development and rehabilitation are the World Bank through the
International Development Association (IDA), the European Union through the
European Development Fund (EDF), the African Development Bank through the
African Development Fund (ADF), the Federal Government of Germany through the
Kreditanstalt für Wiederaufbau (KfW) Development Bank, and the Nordic countries
through the Nordic Development Fund (NDF).

3.2.1 World Bank Guidelines

The Bank’s Operations Policy, Bank Procedures and Procurement Guidelines constitute
the Bank’s policies on procurement (Bank-Financed Procurement Manual, July 2001-Edited
January 29, 2003:ix). According to the World Bank (2001), the principal hallmarks of

proficient public procurement are meant to give the purchaser best value-for-money,
simply and swiftly by producing positive results without protracted delays. Consistent
with the Bank’s Procurement Guidelines (2004), the responsibility for the
implementation of projects through the award and administration of contracts rests with
the Recipient, while the Bank’s role is to ensure that the proceeds of any loan are used
only for the purposes for which the loan was granted, with due attention to the need for
economy and efficiency, giving all eligible bidders equal opportunity, encouraging the
development of domestic contracting and transparency in the procurement process. This
transfer of responsibility is in conflict with the Bank’s prior review requirements
contained in Appendix 1 of the same procurement guidelines. Prior review requirements
such as furnishing draft bidding documents before bids are invited, submitting draft
evaluation reports before contracts are awarded and seeking prior authority before
amending contracts, adds to protracted delays in signing and administering contracts,
thereby reducing the value-for-money obtained. Anvuur and Kumaraswamy (2006)
emphasized that the poor performance of construction in Ghana was due to the public
sector’s lack of commercial edge in the exercise of its procurement function. They

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mainly attributed the causes of delays to extensive post-award negotiations, delays in


evaluation, and an extensive system of controls, reviews and approvals required by
funding institutions. This meant that project implementation was characterised by
additional cost, time overruns and hence poor quality (Crown Agents, 1998: Westring,
1997).

The Bank’s Procurement Manual (2001) further advocates that public procurement
should be impartial, consistent, and reliable, which rather contradicts the position taken
by the Procurement Guidelines (2004), that in practice the specific procurement rules
and procedures to be followed in the implementation of a project depend on the
circumstances of the particular case. The two documents may be in agreement on the
issue of impartiality, but contradict each other on the issues of consistency and
reliability. The latter document, which is provided for use of the implementing agencies,
states that public procurement practitioners should address issues on a case-by-case
basis, while the former document provided for use of Bank staff as they advise the
implementing agencies, states that procurement decisions should be consistent and
therefore reliable, not case-by-case.

The Procurement Guidelines (2004) maintain that procurement under a Bank loan is the
Borrower’s responsibility, but the Procurement Manual (2001) provides that, through its
staff, the World Bank renders support in helping Borrowers implement procurement
properly, by performing their role “persuasively and effectively” (World Bank 2005:…).
This echoes the point that ‘country ownership’ is still not respected in practice by the
World Bank (Oxfam, 2005). Oxfam also cited recent evidence from the Bank itself that
"…there is no one right way to achieve development" (World Bank 2005:…), implying
that they are not consistent and therefore their procurement decisions cannot be
considered as reliable as to be embraced without challenge.

The World Bank has developed detailed guidelines for procurement of goods, works
and services for all contracts financed in whole or in part by the World Bank. These
guidelines are split into the Procurement Guidelines (World Bank, 2004) applicable to
the procurement of goods, works and non-consulting services and the Consultant
Guidelines (World Bank, 2004) applicable to the procurement of consulting services.

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Both sets of guidelines are structured into distinct sections and generally follow the
same structure.

The Guidelines include a requirement for procurement planning and monitoring. As


prescribed by the World Bank (2004), the procurement plan is prepared and agreed upon
during the preparation of the project, as a pre-requisite to loan negotiations, meaning
that since it can take up to six months or more before the project actually becomes
effective, the Recipient shall be bound to implement what was agreed in the eighteen-
month procurement plan in the manner in which it had been approved by the Bank for
up to two years. This requirement hinders flexibility in terms of adapting the
procurement arrangements/activities to changes during the two year period. This is
despite a provision that allows for updating of the procurement plan annually, because
of “…the extensive system of controls, reviews and approvals” (Anvuur and
Kumaraswamy, 2006:3) under World Bank procedures. In Ghana, the World Bank
(1996) found that fiscal constraints and restrictive procurement practices had led to
insecurity of funding for construction projects and created delayed payments and
payment arrears to contractors and consultants, thereby contributing to reduction in
value-for-money through inadequate contract management systems.

Open competition is considered to be the basis for efficient public procurement and
according to the World Bank (2004) in most cases International Competitive Bidding
(ICB), if properly administered and implemented is the most appropriate method of
procurement. The KfW Development Bank (2003), also prescribes that, in principle,
supplies and services for projects are to be procured on the basis of ICB. This is not
necessarily reflected as such in the procurement guidelines of other multilateral donor-
funding agencies, such as the EDF (2006) and the ADF (2000), which simply provide
ICB as one of the optional procedures to be used depending on the circumstances.

3.2.2 European Development Fund Procurement Regulations

The European Union (EU) provides funding for development programmes through an
aid package composed of two parts – the external actions element of the General Budget
of the EU and the five-yearly allocations of funds known as the EDF under a partnership
agreement with African, Caribbean and Pacific (ACP) States (European Commission,

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2004). Member states of the European Union contribute to the EDF separately from
their contributions to the General Budget despite the fact that the EDF is administered
by the European Commission (Dearden, 2006) as is the General Budget. The EU-ACP
Partnership is currently implementing the 9th EDF which is known as the Cotonou
Agreement. The general objectives of the 9th EDF are " ... to promote and expedite the
economic, cultural and social development of the ACP States with a view to contributing
to peace and security and to promoting a stable and democratic political environment.”
(http://www.eubusiness.com/funding/europaid). The EU-ACP Partnership is focused on the

objective of reducing and eventually eradicating poverty consistent with the aim of
bringing about sustainable development and eventually facilitating the gradual
integration of the ACP countries into the world economy.

The ACP countries and the EU are jointly responsible for ensuring the proper, prompt
and efficient execution of projects and programmes that help achieve the development
objectives of the EDF (European Commission, 2004). The Guide to Financial
Procedures of the EDF, issued by the EuropeAid Cooperation Office of the European
Commission, constitutes the overall structure for project preparation and
implementation. It includes a section that covers public contracts/procurement in
general with reference to works contracts, supply contracts and service contracts.
According to the European Commission (2004), the preparation and award of public
contracts is governed by the General Regulations Applicable to Works, Supply and
Service Contracts financed by the EDF3, while the specific procedures to be followed
are described in detail in the Practical Guide to contract procedures for EC external
actions (European Commission, 2004).

The Practical Guide is the sole working tool, which explains the contracting procedures
applying to all EC external aid contracts financed from the EU’s general budget and the
EDF. The purpose of this working tool is to provide users with all the information
necessary to undertake procurement from the very first steps to the award of contracts
(Practical Guide to Contract Procedures for EC External Actions, August 2006:6). Despite the fact
that the Practical Guide is applicable to both the EU’s General Budget and the EDF,
certain specific procurement procedures are restricted to procurement with funding from

3
These are contained in Annex IV of the Cotonou Agreement.

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the general budget and others are imposed only on funding from the EDF. These are
highlighted throughout the Practical Guide and a closer look shows the weaknesses of
these provisions. For example the competitive negotiated procedure is restricted to
General Budget funding, while the simplified procedure is imposed under EDF funding
for use under similar circumstances (European Commission, 2006). It is clear that this
makes procurement under the general budget less onerous because some requirements in
the procedures are circumvented. Note that beneficiaries of EU funding do not
participate in the procurement process under General Budget funding since it is a
dispensation of the European Commission and the result is that procurement
practitioners using general budget funding appear to perform more efficiently and
effectively than procurement practitioners using EDF funding. The integration of the
EDF into the General Budget would lead to greater cost effectiveness and harmonised
procurement procedures would improve the value-for-money derived from EDF
funding. This is emphasised by the European Commission (2007) who stated that the
unification of administrative and legal rules, decision-making structures, and
commitment and payment procedures would remove a certain amount of duplication.
The Commission also stated that this would help simplify reporting requirements,
reduce the administrative burden on beneficiary countries and respond in a more
efficient manner to the challenges faced by developing countries
(http://europa.eu.int/scadplus/leg/en/lvb/r12110.htm). Overall it would add to obtaining more
value-for-money in the quest to reducing and eventually eradicating poverty.

In addition, standard tender documents are provided in two distinct sets, which
respectively apply to the EU’s general budget and to the EDF (European Commission
2007). Again this stresses the differences in the input required from procurement
practitioners using the general budget funding and those using EDF funding.

The Practical Guide is composed of a brief introduction that highlights its purpose and
its application, and five detailed sections covering the basic rules for contracting, then
specific rules for service, supply and works contracts, and contracts financed through
grants. The Practical Guide does not apply to contracts for which the EC acts as the
Contracting Authority (CA) on its own account, but it applies to contracts where entities
of the country benefiting from the EDF acts as the Contracting Authority.

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3.2.3 AfDB Procurement Regulations

Procurement under AfDB-financed contracts is carried out in accordance with the


requirements stipulated in the Rules and Procedure for Procurement of Goods and
Works, and the Rules and Procedures for the Use of Consultants.

The procurement policy of the AfDB is guided by economy & efficiency in the
implementation of projects, fairness in that procedures must give member countries
adequate, fair and equal opportunity to compete, development & participation of
contractors and supplies from member countries, and transparency in the procurement
process in order to combat fraud and corruption
(http://www.newportalgolive.strategydocs\aboutus\howwework).

The AfDB has issued separate documents outlining the laid down Rules of Procedure
for procurement of goods and works for contracts financed in whole or in part by a loan
from the ADB and the use of consultants on projects financed in whole or in part by a
loan from the ADB. The purpose of these Rules is to inform those carrying out a project
of the arrangements to be made for procuring the goods and works required for a project
and selection and use of consultants on the project (Rules of Procedure for Procurement of
Goods and Works, January 2000:2).

3.2.4 KfW Procurement Guidelines

Procurement under the KfW is regulated by the Procedures Followed in the Financial
Cooperation of the Federal Republic of Germany4, a document issued by the KfW
Development Bank. The development policy of the Federal Republic of Germany aims
at improving economic and social living conditions in developing countries through
bilateral, government-to-government cooperation (Procedures Followed in the Financial
Cooperation of the Federal Republic of Germany, 2006:2). This policy document outlines the

purpose of financial cooperation, the forms of financing and assistance provided, and
gives the terms and conditions of financial cooperation with the Federal Government.

4
Available online, at www.kfw.de/

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The Procedures include a section on project implementation that gives a brief outline of
how consultants should be engaged and how the tendering procedure for goods and
services should be executed. This section includes the use of public tenders and
minimum advertising requirements, KfW approval requirements and general
requirements pertaining to drafting of contract documents.

KfW has developed a set of detailed guidelines for procurement of supply and work
contracts and another set for assignment of consultants. The guidelines are structured
such that they are all-inclusive in that they outline all the minimum requirements for the
award of contracts, including draft standard bidding and contract documentation in one
volume. This is unlike the World Bank, EDF and AfDB guidelines and documentation,
which have separate volumes for the guidelines, bidding documents and contract
documents.

3.2.5 NDF General Procurement Guidelines

Through it’s mission and strategy, the Nordic Investment Bank (NIB), established by
Denmark, Finland, Sweden, Iceland and Norway, promotes sustainable growth of its
member countries by providing long-term complementary financing to projects that
strengthen competitiveness and enhance the environment, by promoting competitiveness
and providing financing in the form of loans and guarantees for activities in which NIB
can add value and complement other financing sources
(http://www.nib.int/news/news_1.html).

NIB puts particular emphasis on projects involving:

• investments in infrastructure;

• investments improving the environment;

• large investments by the corporate sector; and

• small and medium-sized enterprises, targeted in cooperation with financial

intermediaries.

Procurement of contracts financed by the NIB is regulated by the "General Guidelines


for Procurement" issued and published by the NIB (www.ndf.fi/page3be.shtml/). These
guidelines are intended to provide contractors, suppliers and promoters with information

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on the procedures relating to tendering and briefing of potential tenderers, while placing
emphasis on transparency and accountability in procurement (NIB General Guidelines for
Procurement, February 1999: Foreword). The NIB Guidelines are issued in form of a brief

brochure meant to serve as a general guide rather than a detailed manual, whereas
further or more detailed information is available from the lending departments of the
Bank, which provide finding to the NDF.

Somewhat like the KfW guidelines, the NDF Guidelines are in form of a brief brochure,
comprising a general section that clearly states that the rights and obligations of the
parties to NDF financed contracts are governed by the contracts signed by the Recipient
or implementing agency and the providers of goods, works and services and not by the
NDF Guidelines or the agreement between Nordic countries and the Recipient of
funding. This general section also underscores the point that NDF principles follow
internationally recognised practice used by the World Bank and other regional
development banks, referred to as Lead Agencies, by including clauses in NDF-financed
contracts that are in accordance with procurement guidelines of the Lead Agencies (NDF
General Procurement Guidelines, June 2000:1). Unlike the World Bank, EDF and AfDB, the

NDF does not issue detailed procurement guidelines of its own, but relies on those of
Lead Agencies.

3.3 SECTOR WIDE APPROACHES

According to Dickinson et al (2007) and Garner et al (2000), the sector-wide approach


(SWAp) is a relatively new way of working between governments and donors. It is one
which a large number of donors are starting to favour, though it also has its opponents
(Cambodian Development and Rehabilitation Board, 2002). SWAps are a new
development in the organisation of aid to developing countries where donors and
lenders collectively contribute to funding the entire economic sector to ensure that the
aid given makes the most impact (Garner et al, 2000). SWAps work differently in
different countries, but they are all designed to focus on the whole of a particular
economic sector with the following features (http://www.eldis.org/go/topics/resource-guides):

• All significant government and donor-funding for the sector supports a single

sector policy and expenditure programme.


• Government leads the process and its implementation.

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• Common approaches are adopted across the sector by all parties.

• There is deliberate progress towards relying on government procedures to

disburse and account for all funding under the SWAp.

SWAp programmes under government leadership ensure the adoption of common


approaches to planning and implementation, as the Mozambique experience has shown
that the alignment of global programme activities with national development strategies
is essential for effective implementation (Dickinson et al, 2007). SWAp mechanisms
should strive for inclusiveness if aid is to be made more effective through more
efficient, effective and consistent donor support, where all significant sector investments
are channeled towards the same objectives, following a consistent strategy that is guided
by a consolidated investment plan (Hansen 2004). As indicated by Garner (2000),
donors are embracing SWAps enthusiastically, and they have been introduced in several
countries, including Zambia, Ghana, and Bangladesh, but the realities of their impact
have not been tested much. As explained by Sangowawa (2000), the recipient country
and the donor community negotiate and agree policies and plans for development in the
sector, including resource allocation, and the potential benefit is that money is spent on
priorities set by the country, not external agencies, adding efficiency to management
through the country's existing structures. For poorer countries, with many donors
contributing to the sector, SWAps could dramatically improve the effectiveness of donor
aid (Rashid, 2000).

The Council for the Development of Cambodia (2003) emphasizes that a key
component of the SWAp process is Aid Coordination. In the Education Sector Donor
Report 2002, the Council added that all significant funding in the sector supported a
single sector policy and expenditure program, under Government leadership, adopting
common approaches across the sector, relying on government procedures to disburse
and account for all funds (http://www.cdc-crdb.gov.kh/cdc/practices_chapter6.htm). This paved
way for a shift from donorship to partnership, and eventually to ownership since SWAp
was launched in education sector and government ownership had definitely been
enhanced (Council for the Development of Cambodia, 2003).

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3.4 SUMMARY & CONCLUSIONS

Bilateral and multilateral donor institutions that provide funding for construction
projects in Zambia have different procurement guidelines and procedures. Clearly there
are some similarities and differences in the guidelines and procedures for managing
procurement and how they are applied. KfW and NDF guidelines tend to favour the use
of country systems and enhance local ownership, while those of IDA, EDF and ADB are
more conservative in relinquishing overall responsibility and control over procurement
functions and decisions making.

However, the introduction and use of SWAp mechanisms and processes is forcing
bilateral and multilateral donor institutions to relinquish the overall responsibility and
control over procurement management functions and decisions making to recipient
governments in order to shift from donor driven programmes to partnerships, and
eventually this should lead locally led project implementation. This has been seen to be
able to improve the effectiveness of donor aid in some countries.

The next chapter documents the rationale, methodology, findings and analysis of the
research carried out by the author on the role and effect of procurement management on
economic and efficient delivery of outputs and outcomes on donor-funded construction
projects.

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CHAPTER 4. RESEARCH METHOD

4.1 INTRODUCTION

Chapters 1 through 3 have examined procurement management in relation to overall


project management and in particular donor-funded procurement systems, regulations
and guidelines. Chapter 2 focuses on how others consider the effect of traditional
procurement systems on the efficient and effective delivery of project outputs and
achievement of project objectives. This chapter covers the development and justification
for the selection of an opinion-based survey as against other types of research methods.
The aim of this study is to highlight the shortcomings and areas of concern relating to
donor-funded procurement that can be addressed locally, while providing insight to the
donor community about some of the inefficiencies and ineffectiveness of current
procurement systems, by answering the research questions raised in chapter 1, which
are:

i. Do the procurement systems used on donor-funded construction projects in


Zambia deliver best value-for-money in terms of meeting quality requirements,
as well as adhering to time and cost constraints?;
ii. Should the procurement systems used be agreed upon mutually from the onset of
the projects or be agreed upon as the project is being implemented?; and
iii. Do the procurement systems used create any unintended consequences that have
a negative impact on overall project performance?

This chapter starts out with a review of the work of others and explaining the main
factors that influenced the selection of the opinion-based survey as an appropriate
technique for this study. It follows through with a justification of the use of a survey-
based approach. Having made this justification, the research questionnaire is developed
by first focusing on the factors of the working environment that may influence the
opinion of the respondents, before directing the probe towards the actual opinion of the
respondents. The research instrument (in this case a questionnaire), was structured with
closed-format questions after due consideration of the type and nature of the data
sought.

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4.2 CRITICAL REVIEW OF A SURVEY-BASED APPROACH

4.2.1 The Surveys

The following critique is based upon a review of survey-based research into


procurement management arrangements published in various forms during the period
from 1998 through to 2008.

Using a questionnaire survey Love et al (1998), carried out a research to determine the
influence of different project types and procurement methods on rework costs in
construction projects. It was widely recognized that additional costs due to rework can
have an adverse effect on project performance, although limited empirical research had
been done to investigate the influencing factors. Data was obtained from 161 Australian
construction projects in order to analyse the direct and indirect consequences of rework.
The findings showed that, much to the contradiction of the researchers’ expectations,
rework costs do not differ relative to project type or procurement method. In addition, it
was found that rework contributed an average of 52% of a project's cost overrun and
26% of the variance in cost overrun was attributable to changes due to direct rework.
The researchers observed that since project type or procurement method did not affect
rework costs, in order to reduce rework costs and improve project performance,
construction organisations should begin to measure them, understand their magnitude
and root causes, and then put in place effective prevention strategies.

Through a national questionnaire survey administered to clients, architects, quantity


surveyors, engineers, project managers and general contractors in South Africa, Bowen
et al (1999) carried out an empirical study into the nature and effectiveness of the
project briefing process, and the selection and effectiveness of procurement methods in
the attainment of client objectives. The study revealed that an effective client briefing
process and the selection of an appropriate construction procurement system both
contribute to the attainment of client objectives with respect to time, cost and quality for
construction projects. The results showed that room for improvement exists in the

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manner in which project briefing is conducted and subsequently, the manner in which
procurement methods are selected.

Omar et al (2001), used a questionnaire survey, in the Philippines and Uganda, in order
to analyse the conditions for effective procurement strategies and ascertain what
conditions were suitable for decentralised procurement strategies to prove most
effective. Data collected showed that both of these countries undertook ambitious and
well-documented decentralisation programs in the 1980s and 1990s. Some difficulties
arose due to the sheer variances between the two countries’ systems and social
dynamics. Some questions could not be asked the same way in both countries. For
reasons of precision and resource constraints, some of the methods used in Uganda had
to be adjusted in the Philippines, although there were a lot of circumstances where
questions and data were comparable. The survey covered 20 provinces, 81
municipalities and 301 neighborhoods 1120 households in the Philippines. Where
households were selected provincial and municipal administrators, health officers and
education officers were also interviewed in order to provide supplementary data.
Similarly, in Uganda, where data was collected in 75 sub-counties, chosen randomly
from 10 selected districts, officials were interviewed in each district as well. Findings of
the research showed that hierarchical constraints were quite prevalent, where local
officials reported substantial restrictions on their ability to adjust funding and service
delivery to local demand, while officials at the district level reported significantly more
discretion, let alone those at provincial level.

The survey revealed some problems of data quality and comparability, although there
was more difficulty in collecting complete and reliable data in Uganda. This was
attributed to the variances between the systems and social dynamics and the questions
that could not be asked in the same way. The research team performed several reliability
tests that proved that the data collected in Uganda was less reliable than the data
collected in the Philippines. Also, the researchers could not collect time-series data to
enable them compare the conditions before and after decentralisation.

Chege and Rwelamila (2002), reviewed the relationship between risk management and
the choice of procurement systems by using a research project that had been carried out
in Botswana in 1992 and a follow-up study of projects in five other Southern African
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Development Community (SADC) countries as case studies. These case studies assisted
in emphasising the importance of employing the appropriate procurement selection
criteria and the implications on risk management if that was not done. The paper
discussed the link between risk management and the choice of procurement systems in
the construction industry. According to Chege and Rwelamila (2002), research had been
done on the use of various procurement systems in construction, but not enough
emphasis had been placed on the link between the systems and risk management. One of
the main objectives of using systems other than the traditional procurement system is to
transfer risk to the party that is more capable of dealing with it. Some projects involve a
higher level of risk than others; hence a client needs to choose the procurement system
that is best suited for a particular project after analysing the risks involved. The
principal aim of this review was to highlight the link between risk management and the
client’s choice of procurement system. By looking at the several different types of
procurement systems that had evolved over the years (with the aim of achieving project
objectives), the findings showed that procurement systems can be viewed as an
important tool for risk management. The construction industries in Africa and other
continents face a similar problem and need to improve their risk allocation methods and
procurement strategies. Chege and Rwelamila (2002) recommended that awareness of
the link between the different procurement systems and risk management should be
increased through the efficient dissemination of literature on various risk management
and procurement approaches to project stakeholders.

Luu et al (2003) carried out an empirical survey-based study in Australia with clients
and project managers to uncover the importance and interrelationships of identified
procurement selection parameters. The results indicated that the perception of clients
and project managers on the importance of procurement selection parameters was
generally consistent and that underlying relationships exist among the parameters. The
results also brought to the fore the fact that there was a need for clients to ensure that
interrelated procurement selection parameters are not overlooked when assessing the
suitability of construction procurement systems. The lack of structured procedures,
based on all-embracing and reliable information, for the selection of construction
procurement systems sometimes inhibits the opportunity for clients to choose a
procurement option in a fully informed manner. The researchers revealed that selection
and use of an unsuitable procurement approaches could eventually lead to project
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failure. To formalise the procurement selection procedures, clients should establish a set
of appropriate procurement selection parameters based on their distinctive
characteristics and project objectives, specific requirements, and the external
environment. In the paper prepared for this study, a list of 34 procurement selection
parameters were drawn up according to the findings of researchers in procurement
selection.

Ogunlana and Sysavath (2003) derived primary data from questionnaires and interviews
conducted through government departments in Lao. The respondents were mainly
professionals in the construction industry such as donor representatives, contractors,
government officers and engineers. Secondary data were obtained from various
ministries in the form of documents, reports, rules and regulations, guidelines and
procedures prepared by the government institutions and consultants. The questionnaires
comprised both open-ended and close-ended questions. 40 questionnaires were sent to
government ministries managing infrastructure projects and 9 government engineers
were also interviewed. A total of 21 samples were returned (52.5 % return rate). 40
questionnaires were also sent to large companies, of which 15 were returned (37.5%
response rate). Data analysis and interpretation basically used statistical methods.

The findings showed that the problems associated with contract management in Lao
need urgent attention and the shortcomings of owners in contract monitoring and
contract administration lead to many delays, poor quality and cost overruns. Although
there were foreign consultants engaged to carry out construction supervision, problems
still existed. Even where there were guidelines and standard bidding documents
developed by consultants they were not effectively utilized for project implementation.
Various problems were found, such as:
1. Contractors were not able to comprehend and interpret contract documents.
2. Many local contractors had no financial capability.
3. Some contractor’s equipment were not sufficient to carry out the projects.
4. Contract conditions were not strictly enforced especially the defects liability clause.
5. Roles and functions of consultants and the engineers were not clear.
6. Various contract clauses were neither fair nor conforming to the local circumstances.

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Finally, Ogunlana and Sysavath (2003) noted that evidence from other previous
researches showed that the contract related problems identified in their study were not
unique to the Lao situation. Rather they were common problems in developing countries
where foreign contract practices were introduced without adequate consideration of the
local customs and practices.

Heath and Stewart (2003), used a survey-based approach to directly compare online and
postal data collection methods with the same survey instrument on two samples drawn
from the same population of football club subscribers. The findings showed that the
widespread acceptance of the use of online techniques in market research necessitates an
appreciation of the relative advantages and disadvantages of these techniques over more
traditional research methods. The results confirmed that the online and postal
respondents are demographically different. The researchers revealed that online data
collection is shown to be less expensive per respondent and that data collection is faster,
however, an overall lower response level is achieved relative to the postal data
collection method. Of greater importance, though, were the findings that respondents
seemed to answer questions differently online than they do via postal methods. The
conclusion there was that online data collection should not be treated as a direct
substitute for postal data collection in every instance, but must be used where cost and
time constraints justify it.

By employing a survey-based approach, Kong and Gray (2006), reported on an


exploratory interview survey of construction project participants aimed at identifying
the reasons for the reduced prevalence in use of the traditional procurement system in
Malaysia. The results showed that primarily most people believed the traditional
procurement system was too slow. This appeared to be in part due to the contiguous
nature of the various phases and stages of the process and especially the separation of
the design and construction phases. The report also disclosed that delays caused by
disputes between the various parties were also seen as a contributory factor to lack of
effective project delivery and the frequency of variations was the most prominent cause
of cost and time overruns. Design and scope changes during the construction phase were
a particular source of discontent to contractors and clients alike. It was concluded that
an improvement of the whole of the time related reward/penalty system might be the

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most appropriate measure for the effectiveness of the procurement system used in
future.

Ndandiko (2006) revealed that the performance of PPPs in developing countries


especially Sub-Saharan Africa does not seem to reflect the optimism of their success,
especially in the context of local governments. The traditional procurement system of
delivering public infrastructure and services through fiscal budgets is increasingly
becoming unviable in developing economies due to budget deficits. According to Chege
(2001) macroeconomic instability and growing investment requirements have shown
that public financing is limited, volatile and often inefficient. This has necessitated the
consideration of PPPs and studies have suggested that they constitute a viable option
and may even dominate infrastructure and service delivery in developing countries.
However, Ndandiko (2006) argued that in the absence of strong public and/or private
sector institutions, and an adequate legal framework, an unsystematic introduction of
PPPs in local governments could worsen infrastructure and service delivery and are
unlikely to benefit the public client. In conclusion, he attempted to highlight the flaws
and constraints in extending the PPP approach to local governments in developing
countries. The major constraint the revelations purported was the lack of PPP
prerequisites, such as, policy guidelines, regulatory frameworks and strong public and
private sector institutions.

4.2.2 Limitations of the Survey-Based Approach

The survey-based research cases presented in the last section have raised some areas of
concerns mainly regarding the demographics and reliability of the data captured. Once a
questionnaire is administered, control over the environment is limited and this
sometimes manifests into low response rates. This can be seen in cases like Omar et al
(2001), and Ogunlana and Sysavath (2003), where researchers had to use supplementary
questionnaires or interviews to improve the response rates. Problems of comparability of
data obtained from two different sample groups also arose in the case of Uganda and the
Philippines, although these were mitigated by adjusting some of the questions in the
questionnaire to suit the local environment. This still raised issues of data quality, since
there was more difficulty in collecting complete and reliable data in Uganda.

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Variances between the procurement systems and social dynamics of the respondents
when a questionnaire survey is used may affect the reliability and validity of the
responses in terms of differing comprehension levels. Where interviews are used the
interviewer can provide clarifications immediately and issues of comprehension do not
arise with case studies which are concerned with particular events on a particular case.
More elaborate questionnaire design or administration may provide slightly better data,
but the cost of such a questionnaire can be much higher and offset their economic
advantage. However, as seen in the Uganda sample reliability tests on the data collected
can be used to check against this concern.

The inability to collect time-series data when using the questionnaire survey-based
method is another limitation of this approach. For example, it makes it difficult to
investigate how the several different types of procurement systems that have evolved
over the years, have impacted on achieving overall project objectives. Most of the
respondents to a questionnaire survey are not likely to have experienced the evolution of
procurement systems in similar social and economic environments over a period of
time.

The results of Heath and Stewart (2003) that confirmed that the overall response level
achieved is lower with online data collection relative to the postal data collection
method and the different manner in which questions are answered also raises concerns
that require some attention. These concerns can be mitigated by the increased number of
the target sample size achievable when the internet is used and the average amount of
time required to carryout the survey. However, it should be noted that even though the
administration of a questionnaire through the internet reduces the amount of time
required to respond and also conquers the issue of geographic diversity of the sample
group, there is no guarantee that responses will be received in good time, if at all.

Needless to say that, although the review carried out indicated that procurement systems
are increasingly being used as tools for risk management in order to improve project
performance, it also brought to the fore a lack of adequate evidence of research on
procurement systems used specifically in developing countries to enhance value-for-
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money realised from donor-funded construction projects. The review showed that more
research seems to have been done on procurement strategies used during project
implementation to enhance value-for-money on construction projects.

4.2.3 Justification of Survey-Based Approach

Gable (1994) proposes that integrating case study and survey research methods and
more specifically that for combining qualitative and quantitative methods, is appropriate
where a hybrid form of information is the objective of the research. The emphasis here
is on the qualitative case study method being able to compliment more quantitative
survey research and can be applied to answer the research questions. The question that
arises here is “would a case study approach justifiably add valuable information to the
results of the survey, in order to meet the objectives of the study?” In order to get a non-
biased assessment using the case study approach, the reality is that several case studies,
funded by different donors, would have to be considered in order to get meaningful
information that can be used to address the objectives of the study.

There are several methods of conducting research, such as, carrying out experiments,
interviews, case studies or surveys. The difference in research method applicable to the
circumstances here can be illustrated through a hypothetical example.

Suppose that the objective of the study is to assess whether the current procurement
systems in place under World Bank funding have any impact on time and cost overruns
on construction projects. In the first instance those who come to mind are those most
familiar with World Bank procurement systems; i.e. procurement professionals either
with the World Bank or working on World Bank funded projects and engineers working
in government departments, such as, roads and buildings department. Ideally, these are
the people who should form the sample to either be interviewed or answer a structured
questionnaire. The question that arises is whether these respondents are likely to be
impartial in providing responses. To some extent their responses may be impartial.
However, considering that all on them are key participants in the project delivery
process, the procurement professionals may not be keen to accept that the systems they
put in place or use without questioning, create unintended consequences that lead to

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time and cost overruns. In a similar vein, the engineers working in government
departments may not be keen to agree that the time and cost overruns are caused by their
lack of comprehension of contract documentation or lack of adequate project
management skills.

To take this illustration further, in order to have some level of impartiality in the
responses, other key participants in the project delivery process must be included in the
sample. These may be project managers and financial management personnel in the
same institutions as the procurement personnel referred to earlier. This brings us to the
issue of other stakeholders such as the consultants and contractors. Do they form a
reliable source of information? Do they play a role in mitigating or can they contribute
to reductions in time and cost overruns? Let’s assume that they are also included in the
sample group.

The next step would be to come up with a suitable approach to gathering the required
data and information from the sample group. Interviews are an option and they may be
either personal interviews, telephone interviews or online interviews. Personal
interviews require face-to-face meetings with the participants either formally, such as in
an office, or informally, on site or at home. Telephone interviews are very costly
requiring that you spend quite some time on the phone with each respondent and it can
be quite difficult to get the sort of participants that can provide the information required.
Online interviews require the participants to be available real-time and they must have
the technological support to participate. With the interview method, subjective
information is obtained from the participants (Chikasa, 2006) and this usually generates
a wide range of responses that are qualitative in nature and cannot easily be analysed.
Going back to our hypothetical situation, we should note that, although a large
proportion of it is in the capital city, the sample group we have is essentially spread
around the country and may not be easily accessible considering constraints such as the
amount of time and funds available for the survey.

Other options, like case studies would provide the opportunity to focus on contemporary
events, particular projects or organisational behaviour in real situations (Yin, 1994) and
the researcher would basically be an observer. In the hypothetical situation the objective
is to collect current data from individuals currently involved in the implementation of
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construction projects funded by the World Bank. Those currently supervising or


implementing projects are involved in different projects, with different circumstances
and in different organisational environments. This is in direct contradiction with the
contemporary events and particular projects referred to by Yin (1994). In addition,
according to Edwards (2008), case studies are mostly applied to answer research
questions that ask why and how a situation occurred, in order to explain the why and
how. In the example presented, there is no particular situation to observe. In fact, there
may be a range of situations attributable to the variances between institutions and
project environments. The only homogeneous platform in the example would be the
procurement systems currently in use under World Bank funded projects. The example
asks the question whether, not why. The case study approach would therefore be
unsuitable for the kind of study for the example.

The survey-based approach is justified by several factors that surround the environment
within which this study has been undertaken and the very nature of the data required to
answer the research questions. The survey instrument is designed to address the issues
raised in chapter 2 and 3, while taking into account the limitations of the approach. Love
et al (1998) emphasised that where there has been limited empirical research, often
questionnaires are the only feasible way to reach a number of reviewers large enough to
allow statistical analysis of the results. The approach adopted for the study, allowed for
a structured questionnaire to be administered through the internet. This approach
provided an inexpensive way to gather data from a potentially large number of
respondents spread over a large geographic area. By administering the the survey-based
structured questionnaire through email, the marginal cost of surveying was also reduced,
making the larger sample possible.

The amount of time it would have taken to use any of the other options discussed herein
would have made it virtually impossible for the study to be completed within the time
constraints. Assuming that only the data gathered within the time constraints through
either interviews or case studies were to be used, there is every reason to doubt that the
sample could be considered representative of the overall population enough to lend
validity to the findings. This further justified the use of a survey-based questionnaire
administered through email.

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In summary, basically 3 likely approaches available for collecting data on this subject
have been discussed. Out of the 3, only the survey-based approach has been considered
suitable considering all the constraints surrounding the study and therefore this approach
has been selected. On the whole, this approach shall be used to collect qualitative rather
than quantitative data.

4.3 DESIGN OF THE SURVEY INSTRUMENT

4.3.1 Design Considerations

According to Creative Research Systems (2008), there is no all encompassing rule for
when to use a questionnaire. The choice will be made based on a variety of factors
including the type of information to be gathered and the available resources for the
experiment. A questionnaire may be considered in the following circumstances:

i. When resources and money are limited in terms of funding and time available;
ii. When the issue of confidentiality on the part of the respondents is paramount;
and
iii. When just corroborating other findings, such as confirmation of findings of a
scientific experiment.

In this case the rationale was the constraints of cost at time available to the author. The
questionnaire was designed as an opinion-survey questionnaire with closed format
questions the solicited answered from a specific range of options provided by the author.
A well-designed questionnaire that is used effectively can gather information on both
the overall performance of a system as well as information on specific components of
the system (http://www.cc.gatech.edu/Topics/quest-design/). Open format questions are those
that ask for unprompted opinions, with no predetermined set of responses. Open format
questions are good for soliciting subjective data with an obvious advantage of a variety
of responses more truly reflecting the opinions of the respondents
(http://www.cc.gatech.edu/Topics/quest-design/). By restricting the answer set, the intention was

to gain an advantage in less time spent responding to the questions and it made it easy to
calculate percentages and other hard statistical data over the whole group or over any

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subgroup of participants (O’neill, 2004). Responses to closed format questions are easy
to tabulate or perform statistical analysis on them. This was obviously less costly in
terms of both time and money, and was practical for a low budget and time sensitive
analysis. Open format questions require more thought and time on the part of the
respondent and these issues were be eliminated by using closed format questions.

4.3.2 Justification of the Survey Questions

The study explored a number of issues relating to procurement systems, regulations and
guidelines that affect overall project performance. Another area explored was explored
is the perception of the respondents in terms of the relative importance of various tenets
of public sector procurement. Due to the nature of the study these issues, as presented in
chapter 5, are also based on the different experiences and perceptions of the respondents
with due regard to:

i. General occupational background;


ii. Procurement management and operational environment; and
iii. Appreciation of donor-funded procurement.

General occupational background may influence the opinions of the respondents in


terms of what nature of organisation they belonged to, what level or position they hold
in the organisation, their geographic location (i.e. whether urban or rural area), whether
they are procurement practitioners or not and how regularly they are involved in the
implementation of donor-funded construction projects. For instance a procurement
practitioner who is in a strategic decision making level located in the capital city would
have more regular engagement with donor institutions than one located in a provincial
town. Similarly, a procurement practitioner at senior officer level may have a different
perception of the restrictions posed by regulations and guidelines than someone at
director level, simply because of their different roles in the organisation. The
questionnaire addresses these issues in section A and a few of the questions in section B.

The procurement management systems in a workplace obviously differ depending on


the nature of the organisation, its organisation structure and whether it is public sector
institution or private sector institution. Other areas regarding operational environment

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are affected by the value of contracts and, the category and type of procurements usually
undertaken. Donor institutions are more regularly involved in high value procurements
that are more risk averse and the systems imposed on the different category and type of
procurement also differ. It should be appreciated that procurement practices in public
sector organisations also have to be in compliance with the national legal instruments
that govern the use of public resources, unlike private sector organisations. In order to
try and appreciate the likely inclinations of the respondents the questionnaire posed
several questions that delve into theses issues.

In order to appreciate what extent the respondents were knowledgeable of the subject
matter of the study, it was necessary to explore the level of involvement in donor-funded
procurement in terms of whether or not they were involved in the recent past, how
regularly they were involved and whether they were actually involved in construction
projects. For instance a procurement practitioner who is regularly involved in the
implementation of donor-funded construction projects would have more appreciation of
the day-to-day bottlenecks the procurement regulations and guidelines present than one
who is rarely is involved in donor funded projects, let alone someone who is not even a
procurement practitioner. The questionnaire also queried this was in order to gauge what
proportion of the respondents actually was involved in donor-funded projects and
whether the inferences taken from the sample group can be considered valid.

It cannot go without saying that, as with any other profession or discipline, the tenets of
public sector procurement are the hallmarks around which the “systems” (institutional,
reporting and oversight arrangements) and the “regulations and guidelines”
(procurement documentation outlining procedures), are designed. Hence, the final
section of the questionnaire was devoted to the tenets of public sector procurement.

The results of the survey are set forth in detail in the next chapter that also presents the
analysis and interpretation of the findings.

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4.3.3 Structure of the Questionnaire

The basic structure of the questionnaire was designed to address the research questions
and solicit answers that could be used to test the hypothesis. Due consideration was
taken to incorporate the different peripheral experiences and circumstances of the
respondents considering occupational background, varying organisational systems and
arrangements in workplaces and the contrasts in application of procurement regulations
and guidelines in the various economic sectors.

The questionnaire was structured into four sections. Section A covered the general
background information of the respondent. Section B followed through with questions
that drew the occupational details of the respondents, while section C solicited for the
specific views of the respondents on donor-funded procurement in relation with their
personal experiences over the past four years. Finally, section D dealt with the
perceptions of the respondents of the relative importance of the various tenets of public
sector procurement.

Section A brought out background information, such as, the country of residence of the
respondent, the current organisation they are employed in, what level or position they
are in the organisation and their geographic location in terms of capital city, other city,
provincial town, peri-urban area or rural district.

Section B looked into the occupational details, which relate to whether the respondent is
a procurement practitioner, whether their day-to-day operations involve donor-funded
construction works projects and what the value of the projects they have been involved
in are. In addition, the section digs into what method of procurements are usually used
and why the particular methods of procurement are selected. The section also addresses
what the effect of modifying the general procurement norm of open tendering is and
whether the respondents are of the opinion that the systems and regulations used on
donor-funded projects help deliver value-for-money.

Section C addressed the specific views of the respondents in terms of whether current
procurement systems, regulations and guidelines being used help meet quality
requirements, regarding time and cost constraints. The section also explores whether the

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procurement systems, regulations and guidelines should be subject to mutual agreement


and also be flexible during project implementation, or not. Another point investigated
here is whether the procurement systems used create unintended consequences that
actually have a negative impact on project performance and what areas should be
focused on and modified in order to improve overall project performance.

Section D then focused on the tenets of public sector procurement in terms of whether
they are considered of utmost importance, very important, only desirable or not
important at all. Some of the tenets found to be considered most important are
transparency/accountability, professionalism/integrity and value for money. Others that
were considered in the survey are efficiency, competitiveness, capacity building,
creativity/innovativeness and the use of local inputs on construction projects.

4.4 CONCLUSIONS

This Chapter has presented a critical review of the extant of the survey-based
procurement research with a bias towards donor-funded procurement in developing
countries. The chapter has justified the use of an opinion survey-based approach for
collecting data in order to answer the research questions raised and test the hypothesis
developed in Chapter 1. The development of the survey instrument has been described,
after providing a synopsis of the considerations made when designing the questionnaire
and a justification of the survey questions. In the next chapter the detailed results of the
survey are presented together with an analysis of the data and an appropriate
interpretation of the findings of the study.

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CHAPTER 5. OPINION SURVEY ADMINISTRATION, DATA ANALYSIS &


INTERPRETATION

5.1 INTRODUCTION

This chapter reports on the administration of the survey, presents the results of the
survey and furnishes an analysis of the data collected. It also provides an interpretation
of the findings. In addition, the chapter covers the issue of whether a “best-value”
selection process should be incorporated into public procurement systems in Zambia.

The objectives of the study were to determine whether procurement systems on donor-
funded construction projects contribute to failure in economic and efficient attainment
of project deliverables, determine the underlying reasons why procurement systems on
donor-funded construction projects continue to contribute to such failure, and provide
insight on the areas surrounding procurement systems that need to be focused on to
improve overall project performance on the donor-funded project portfolio in Zambia.

The chapter underscores the issue of whether procurement systems, regulations and
guidelines used on donor-funded projects contribute to uneconomic and inefficient
delivery of project outputs and goes further to shed light on whether procurement
systems, regulations and guidelines used on donor-funded projects negatively contribute
to quality requirements in terms of time and cost constraints. It also provides some
insight on what the public procurement fraternity recommends as the areas of public
procurement that need to be focused on to improve overall project performance.
Whether a “best-value” selection process can and should be incorporated into public
procurement systems in Zambia is mentioned in this chapter, but shall be covered in
further detail in the following chapter that draws on the conclusions and
recommendations of the study.

5.2 SURVEY ADMINISTRATION

5.2.1 Sample Targeting


The sample for the research was taken by targeting the principal participants in public
procurement, with emphasis on those that participate in the implementation of donor-

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funded construction projects. The specific target group was procurement and financial
management personnel in both the public and private sectors directly involved in the
implementation of donor-funded projects in central government ministries and
departments, including local government departments. Through the general membership
of the Zambia Institute of Purchasing and Supply, a mix of respondents from parastatal
organisations, quasi-government institutions, non-governmental organisations and some
large private sector corporations that benefit from investment funding from multilateral
and bilateral donor institutions were also targeted.

The procurement process on donor-funded projects starts early on in the project cycle
during the project appraisal stage. This is after the Loan Agreement has been signed
between donor and recipient and decisions are being made on which regulations and
guidelines are to be used during project implementation, what types of items should be
procured and what different methods of procurement should be used. At this stage the
procurement personnel work closely with the financial management personnel, the
project managers and the project sponsors, in order to ensure that a broad spectrum of
issues that may affect project implementation are considered and taken into account
before decisions are reached between donor and recipient. It was in this light that the
author decided to collect data from the participants in the project appraisal process.

Later in the project cycle, after the project has been commissioned and implementation
begins, in addition to those mentioned in the previous chapter, there are other
participants in the procurement process. These are the user departments who need to
give input on requirements, specifications and terms of reference, and the beneficiaries
of project outputs who may be both from the public and private sectors. The key
participants, in this case, come from central government ministries and departments,
local government departments, parastatal organisations, quasi-government institutions,
non-governmental organisations and some large private sector corporations. Hence, it
was considered appropriate to target respondents from these institutions as well.

5.2.2 The Actual Sample


Apart from 24 relevant email addresses that the author already had, 62 email addresses
for project staff were obtained from the World Bank country office in Zambia. A further

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154 email addresses were obtained from the Zambia Institute of Purchasing and
Supply’s database and 5 projects funded by USAID, AfDB and the EU. However, it was
noted that some of the addresses for project staff who were also procurement
practitioners were listed the Zambia Institute of Purchasing and Supply’s database.
These had to be sieved in order to ensure that there was no duplication in the total
sample size. The total sample size was difficult to ascertain, considering that the use of
the internet hinders verification of how many questionnaires were actually delivered.
However, some questionnaires were delivered by hand to key institutions.

The response rate was as follows:

Method Administered Received Response Rate


Email 240 51 21%
By Hand 14 7 50%

Total 254 58 23%

The questionnaire was initially sent to the general membership of the Zambia Institute
of Purchasing and Supply, the procurement cadre of the World Bank project portfolio
and their project managers and finance managers. It was then sent to personnel involved
in the implementation of projects financed by other multilateral donor institutions.

Most of the responses were received through the internet and the data was entered into a
spreadsheet. It was inevitable for the author to make physical follow-ups on some
respondents who did not respond by email, but were considered critical in terms of the
involvement of the Ministries they represented in implementation of donor-funded
construction projects. For this reason, 7 responses were received by hand and the actual
sample size came to 58.

5.2.3 Challenges Encountered


Some of the challenges encountered during data collection were the following:

i. The author found it difficult to ensure that all the email addresses obtained for
key procurement and financial management staff involved in the implementation

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of donor-funded projects were current and active. This was highlighted by the
number of undelivered emails returned to the author, although the response rate
was acceptable;
ii. Although a strategy of contacting some key respondents in advance and alerting
them to expect the questionnaire was adopted in order to enhance the response
rate from key institutions, this strategy proved to be quite difficult to implement.
It was very difficult to get the relevant people to respond in time as some of
them were reported to be frequently out of office;
iii. Control over the environment of administering the questionnaire, that is, the
services provided by internet service providers, was somewhat limited. This
meant that some responses from the recipients of the questionnaire may not have
been received due to circumstances beyond the control of both the author and the
respondent; and
iv. Despite the fact that the respondents were given two weeks to answer and return
the questionnaires, few of them responded within that period. This led to an
extension of the deadline for receipt of responses and a continuous amendment
of the statistics presented in the following section as some late responses were
being incorporated.

5.3 DATA PRESENTATION & ANALYSIS

The analysis of the data was carried out using Microsoft Excel after taking due
consideration of the presentation and phrasing of the questions in the questionnaire, and
the nature of responses provided for the survey questions. A statistical method of
analysis was chosen as the most appropriate. Using Microsoft Excel made it possible to
tabulate and perform preliminary analyses on the data collected. This technique
provided a clear presentation of the results and allowed for ease in the analysis of the
findings over the whole group of respondents and sub-groups.

This approach was adopted in order to ensure that, despite the fact that the questionnaire
had a total of 34 questions, some of the questions covered background information of
the respondents that shall be presented in the demographics of the actual sample. The

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findings and analyses are presented under relevant sub-headings bringing forth the
information required to address the objectives of the study.

5.3.1 Demographics
In order to mitigate the subjectivity of the data collected for this study, the author sent
the questionnaire to as many email addresses as possible to people from different
professions, at different levels within there organisations and from different sectors of
the economy. The sector distribution of the sample is shown in figure 5.1 below.

21% 3%
5%

24% 47%

Cabinet Government Parastatal NGO Private

Figure 5.1 Sector Distribution

The respondents were well spread in terms of sector distribution, with 47% from the
public sector, 24% from parastatal organisations and 21% from the private sector. Less
significant representation was 5% from non-governmental organisations and only 3%
from high level political office including office of the vice president and cabinet office.
Taking into account the level of involvement of public and private sector institutions in
the implementation of donor-funded projects, the responses were representative of the
target group. In chapter 1, the statistics presented on donor financing showed that 85%
of the capital expenditure budget actually going towards the financing of infrastructure
projects, which are to a large extent the premise of government ministries and
departments, along with parastatal organisations.

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Figure 5.2 below shows that the dominant level within the organisations for the sample
was middle management at 48% with heads of department and senior officers at 19%
and 16%, respectively. Respondents at director level represented only 12% while the
other 5% were those below senior officer level. This largely reflected the level of
personnel in the hierarchy of any typical public or private sector organisation actually
involved in procurement activities. Normally most day-to-day procurement activities are
undertaken by personnel in middle management and senior officer level.

16% 5%
12%

48% 19%

Director Head Dept Middle Mgt Sen Officer Other

Figure 5.2 Level in Organisation

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10% 9% 0%

81%

Capital Other City Prov Tow n Peri Urban Rural District

Figure 5.3 Location of Respondents

In order to incorporate the factor of geographic location of the respondents, the


questionnaire addressed the issue by classifying the respondents by capital city, other
city, provincial town, peri-urban area and rural district. It was found that 81% of the
respondents were located in capital cities, with the other 19% in other cities and
provincial towns. There were no responses from peri-urban areas or rural districts and
this could be attributed to the fact that the use of the internet in peri-urban areas and
rural districts is still very low in developing countries such as Zambia. Of the
respondents 64% were procurement practitioners with at least 64% of them having also
been involved in implementing donor-funded construction projects over the last four
years. The average annual value of procurement processed by the respondents over the
last four years was between U$5m to US$10m, which is considered quite considerable
in Zambia, seeing that only road construction projects are usually valued at more than
US$10m.

The results revealed that 91% of the respondents were from capital and other cities, and
79% were at middle management level and above in their organisations. The location of
the respondents brought to the fore the proximity to where the donor agencies are
situated. The level in the organisations shows how knowledgeable the respondents may

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be and their familiarity with the subject matter. It was found that in both cases the
proportions were high, thereby giving a high level of validity to the findings.

5.4 FINDINGS

5.4.1 General Presentation


The results and findings of the research are presented in this section as statistical and
descriptive information followed by an analysis of these findings. The findings are
classified in three relevant sections. Firstly, the occupational details that establish the
respondents’ working environment and level of experience in relation the subject matter.
Then the views of the respondents on public sector procurement, inclined towards
systems, regulations and guidelines used on donor-funded construction projects. Finally,
the core tenets of public procurement in terms of their relative importance.

5.4.2 Occupational Details

Other Director
Sen Officer 3% 8%
19%
Head Dept
16%

Middle Mgt
54%

Figure 5.4 Position of Procurement Practitioners

As shown in Figure 5.2, of the 58 respondents personnel in middle management


positions accounted for 49% of the responses received. Similarly, Figure 5.4 above
shows that of the procurement practitioners who responded to the questionnaire 54%
were in middle management. The heads of department, combined with the senior
officers, represented another 35% of the procurement practitioners. Only 8% of

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procurement practitioners amongst the respondents had reached director level, lending
credence to the inference that the procurement practitioners would not have much
strategic influence on procurement systems, regulations and guidelines used in
government, parastatals and NGOs. This means that procurement practitioners from the
side of the recipient of the donor funding are often not involved in the project appraisal
stage, when the critical decisions are being made on which procurement systems,
regulations and guidelines should be used during project implementation.

The results showed that 64% of the respondents were procurement practitioners and
72% of them were involved in the implementation of donor-funded projects on a regular
basis. It follows then that the sample group was quite familiar with the subject matter of
the study and this lends reliability to the findings.

It was noted that 71% of the respondents said that the basis of selection of the method of
procurement was the applicable regulations and guidelines. However, most of them also
said that the method of procurement used was usually not the most economic or most
effective. This showed that, despite such high reliance on the regulations and guidelines
for selection of the method of procurement, procurement practitioners involved in the
implementation of the projects are not usually involved in deciding which procurement
systems, regulations and guidelines are to be used. The results also revealed that 21% of
the respondents actually thought that the method of procurement they usually used was
not the most appropriate considering the type and value of the contracts.

However, looking at general involvement in donor-funded projects at any stage in the


project cycle, 71% of the respondents stated that had been involved in the
implementation of donor-funded projects within the last four years. 38% had been
involved very often, 17% were involved quite often, while only 9% said rarely. What is
notable here is that the target group is generally actively involved in the implementation
of donor-funded projects and can be relied on in terms of the validity of the information
provided. The results showed that 78% of the respondents were involved in the
procurement of a combination of goods, equipment, consultancy services and/or
construction works, showing that they should have a broad understanding of the
application of the regulations and guidelines.

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5.4.3 Views on Donor-Funded Procurement


A significant part of the research focussed on what the respondents’ personal views on
various areas of interest in public sector procurement and how they considered donor-
funded procurement systems, regulations and procedures in relation to these areas. This
section outlines the findings of the research in relation to value-for-money, meeting
quality requirements, mutual agreement between the donor and the recipient, and
whether there are unintended consequences of the regulations and guidelines followed,
inter alia.

i. Value-for-Money
In the background to this research, the issue of value-for-money was considered
cardinal in the quest to derive more from available limited resources hence
public projects are governed by strict statutory and regulatory provisions
(Heisse, 2002). However, the findings of the study showed that a significant
proportion of the respondents did not agree that the procurement systems used
on donor-funded projects delivered best value. Considering that fact that the
major thrust of the procurement systems, regulations and guidelines used for
donor-funded procurement is to enhance value-for-money, the fact that only
42% of the respondents actually agree to this is quite notable.

Out of the 58 respondents, 48% stated that the practice of short-listing


contractors and suppliers did not have a negative effect on prices, while 19%
thought that factors other than mere short listing contributed to higher costs.
That meant that only 33% of the respondents actually considered that short-
listing has a negative effect on costs and contributes to reduction in overall
value-for-money. This is in contradiction to the use of open tendering as the
default procurement method on donor-funded projects and concurs with the
observations that the dominant traditional construction procurement system used
in the public construction sector is now considered inappropriate as a
construction procurement system (Rwelamila, 2000). Since open tendering
requires that more time is allocated to the tender floatation period than is the
case when a shortlist is used, the fact that more than 50% of the respondents did
not agree that the method of procurement usually used was not the most

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economic or effective, lends credence to the statement that the procurement


methods make it difficult to deliver any substantial cost and quality benefits
(Walker et al., 2000). It is important to note that 96% of the respondents stated
that they actually consider other factors rather than technical and financial issues
during the evaluation of bids. In addition, 98% stated that the "best-value"
selection process, which advocates for the formal inclusion of quality issues in
the bid evaluation process, should be applied in public sector procurement.
These are significantly high proportions considering that the sample group was
knowledgeable and familiar with the subject matter.

ii. Time and Cost Constraints


The most significant finding is the revelation that 58% do not agree on delivery
of best value, and yet when the issues of meeting time and cost constraints are
observed the findings show that a larger proportion of the respondents agree that
the systems, regulations and guidelines help meet time and cost constraints.

40
29 40
30

35
25
Number of Respondents

30
Number of Respondents

20
20
25

15 20

15
9
10
10
10 8

5
5

0 0
A gree Disagree Neither A gree Disagree Neither

Figure 5.5 Help Meet Time Constraints Figure 5.6 Help Meet Cost Constraints

Out of the 58 respondents, 29 agreed that the systems, regulations and guidelines
used help meet quality in terms of ‘time’ constraints. This represented 50% of
the respondents compared to 69% who agreed that the systems, regulations and
guidelines used help meet quality in terms of ‘cost’ constraints. Significant
factors identified through quantitative models developed during a study by

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Dissanayaka and Kumaraswamy (2006), indicated that time overrun levels were
mainly influenced by non-procurement related factors, such as, project
characteristics and client/contractor representative characteristics. On the other
hand, cost overrun levels were significantly influenced by procurement related
factors, such as contractual payment modalities. This concurs with the shift in
the results of this study that show that procurement factors affect cost
implications more than they affect project duration.

iii. Project Appraisal Stage


The rules that apply to the procurement of construction contracts on donor-
funded projects are agreed during the project appraisal stage early on in the
project life-cycle. This means that the systems, regulations and guidelines that
are binding during project implementation are not subject to negotiation and are
not flexible over the life of the project. The results indicate that 56 of the
respondents agreed that the systems, regulations and guidelines should be
subject to mutual agreement between the donor and the recipient. This
represented 97% of the sample group, while a much lower proportion of 60%
agreed that the systems, regulations and guidelines should also be flexible during
project implementation. Table 5.1 below shows the distribution of the responses
received and notable is the fact that there were no undecided respondents on the
issue of mutual agreement and the flexibility of the terms during
implementation.

Table 5.1 Systems Regulations & Guidelines


Mutual Agreement Counts Flexible Terms Counts
Agree 56 97% Agree 35 60%
Disagree 2 3% Disagree 23 40%
Neither 0 0% Neither 0 0%

These findings imply that, as long as the procurement systems, regulations and
guidelines are subject to mutual agreement and personnel from the recipient of
the donor funding are actively involved in the decision making process at project
appraisal stage, the need for flexibility is reduced drastically.

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iv. Impact on Overall Project Performance


Part of the hypothesis formulated for the study was that the procurement
systems, regulations and guidelines used on donor-funded projects create
unintended consequences that have a negative impact on overall project
performance. The questionnaire covered this issue through a collection of
questions focused on unintended consequences and the effect the systems,
regulations and guidelines may have on the economic and efficient attainment of
project deliverables.

34% 26%

40%

Agree Disagree Neither

Figure 5.7 Unintended Negative Consequences

40% of the respondents agreed that the procurement systems used create
unintended consequences that have a negative impact on overall project
performance, while another 26% neither agreed nor disagreed. Only 34%
disagreed with this supposition, showing the low level of confidence that the
respondents had on the impact of the procurement systems, regulations and
guidelines used on donor-funded projects. However, the respondents have a
higher level of confidence on the effect of the systems, regulations and
guidelines on economic and efficient attainment of project deliverables.

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44%

16%

40%

Agree Disagree Neither

Figure 5.8 Systems Reduce Economy & Efficiency

29%

22%

49%

Agree Disagree Neither

Figure 5.9 Systems Reduce Economy & Efficiency

Compared with the 40% of the respondents who agreed that procurement
systems used create unintended consequences that have a negative impact on
overall project performance, only 16% agreed that procurement systems used
reduce the economic and efficient attainment of project deliverables. In a similar
vein, only 22% agreed that procurement regulations and guidelines used reduce
the economic and efficient attainment of project deliverables. The implication of
these findings is that, the procurement systems used create unintended
consequences that have a negative impact on overall project performance.
However, these negative consequences so created may not necessarily reduce the

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economic and efficient attainment of project deliverables. The unintended


negative consequences may therefore have little to do with economy and
efficiency, but nevertheless, they are caused.

By observing the systems against the regulations and guidelines in terms of how
they affect economy and efficiency, the findings show that almost twice the
proportion of the respondents were not decided on the issue of the effect of the
systems on economy and efficiency. This may be because the systems, that is,
institutional, reporting and oversight arrangements are much less tangible than
the regulations and guidelines, which are laid down procurement documentation.

v. Focus Area
As discussed in earlier chapters, public procurement is subject to an extensive
system of stringent controls, reviews and approvals required by funding
institutions (Anvuur and Kumaraswamy, 2006). It was also stated that fiscal
constraints and restrictive procurement practices had led to insecurity of funding
for construction projects and created delays, thereby contributing to reduction in
value-for-money (World Bank, 1996). Accordingly, this meant that project
implementation was characterised by additional cost, time overruns and hence
poor quality (Crown Agents, 1998: Westring, 1997). With this background it
became necessary to get some insight on the areas of public sector procurement
management that may need to be focused on in order to improve overall project
performance on donor-funded projects.

Table 5.2 Public Procurement Management


Focus Area Counts
Reporting & Oversight Arrangements 19 33%
Approval Requirements & Procedures 23 40%
Regulations & Guidelines 16 28%

The areas contiguous to public procurement systems that directly affect


implementation of donor-funded projects are the regulations and guidelines
followed, the approval requierments and procedures, and the reporting and
oversight arrangements. Table 5.2 shows that regarding the areas of focus that

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may require modification in order to improve overall project performance, the


most impact would be by focussing on approval requierments and procedures.

In agreement with Anvuur and Kumaraswamy (2006), 40% of the respondents


consider the stringent approval requirements and lengthy procedures quite
unnecessary. The findings showed that more of the respondents would focus on
modifying approval requirements and procedures in order to improve overall
project performance, rather than the regulations and guidelines that can merely
be read, understood and applied as they are.

5.4.4 Tenets of Public Procurement


Economy and efficiency, transparency and accountability, professionalism and integrity,
competitiveness and value-for-money are some of the tenets of public sector
procurement that the World Bank and other multilateral and bilateral emphasise. The
study analyses these tenets in order to determine how procurement practitioners and
others involved in the implementation of donor-funded projects consider them. The
research also analyses other less emphasised tenets that often come to the fore when
applying public procurement regulations and guidelines. These are the use of local
materials and supplies, training and skills transfer, capacity building for domestic
contractors and, creativity and innovativeness.

Table 5.3a Tenets of Public Procurement - 1


Transparency & Creativity & Professionalism
Efficiency Competition Accountability Innovativeness & Integrity
Utmost
Importance 57% 40% 81% 28% 74%
Very Important 33% 52% 19% 34% 22%
Desirable 10% 9% 0% 29% 3%
Not Important 0% 0% 0% 9% 0%

Table 5.3b Tenets of Public Procurement - 2


Local Materials Training and
& Supplies Skills Transfer Capacity Building Value-for-Money
Utmost
Importance 9% 34% 38% 74%
Very Important 36% 57% 48% 22%
Desirable 53% 9% 10% 3%
Not Important 2% 0% 3% 0%

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It is not surprising to note that the findings showed that transparency and accountability,
professionalism and integrity, and value-for-money are considered the most important
tenets of public sector procurement. These are considered by most of the respondents to
be of utmost importance. This may be so because these are also the tenets that the
multilateral and bilateral donors promulgate as being the most critical to public sector
procurement and the use of public resources.

Tenets such as competitiveness, training and skills transfer and capacity building are
considered by most of the respondents to be very important, but not of utmost
importance. Creativity and innovativeness, and the use of local materials are only
desirable according to most of the responses received. They may only be desirable due
to the fact that the regulations and guidelines used on donor-funded projects are so
stringent that they do not provide the opportunity for creativity and innovation to
flourish. In addition, the use of local materials and supplies is usually hampered by the
lack of well developed local industries in most developing countries such as Zambia,
hence procurement practitioners rely heavily on imported materials and supplies.

5.5 CONCLUSIONS

This chapter has revealed that, by and large, procurement practitioners do not have
much strategic influence on procurement systems, regulations and guidelines used in
implementing donor-funded projects due to the fact that most of them are not in top
management positions. They are not strategic decision makers and merely implement
what has already been agreed upon. However, they are quite substantially involved in
the implementation of donor-funded projects and therefore they have leverage on
overall project performance.

The findings clearly suggest that procurement systems, regulations and guidelines
should be subject to mutual agreement and the “best-value” selection process should be
incorporated into public procurement systems. It is also suggested that there is need to
focus on how a “best-value” selection process can be incorporated into public
procurement systems in developing countries. In addition, contrary to the notion that
open tendering leads to competitive tender prices, short-listing contractors does not

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necessarily have a negative effect on prices, but rather other factors contribute more to
higher prices. This contradiction concurs with the observations that the dominant
traditional construction procurement system used in the public construction sector is no
longer the most appropriate.

The issue of value-for-money is considered cardinal in the quest to derive better value
from available resources and the fact that procurement systems used on donor-funded
projects usually do not deliver best value, shows that there are areas of improvement.

A more concise discussion directed towards answering the research questions and
testing the hypothesis formulated for this study is presented in the next chapter. The
chapter also addresses the objectives of the study and finally forms the conclusions and
recommendations of this report.

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CHAPTER 6. CONCLUSIONS AND RECOMMENDATIONS

6.1 INTRODUCTION

This research has explored public sector procurement management systems used on
donor-funded construction projects, focussing upon the how procurement systems,
regulations and guidelines impact on overall project performance. The research problem
was stated in Chapter 1 as follows:

There is growing concern that donor-funded construction projects in Zambia


do not achieve project objectives in an economic and efficient manner. In
addition, measures that have been taken to improve the performance of these
projects in the recent past through the use of more effective procurement
systems do not seem to have delivered any tangible results.

The research questions framed in order to provide a focus for investigating the problem
were:

iv. Do the procurement systems used on donor-funded construction projects


in Zambia deliver best value-for-money in terms of meeting quality
requirements, as well as adhering to time and cost constraints?;
v. Should the procurement systems used be agreed upon mutually from the
onset of the projects or be agreed upon as the project is being
implemented?; and
vi. Do the procurement systems used create any unintended consequences
that have a negative impact on overall project performance?

The hypothesis tested by the study is:

The procurement systems used on donor-funded construction projects in


Zambia do not deliver best value-for-money in terms of meeting quality
requirements, as well as adhering to time and cost constraints, mainly
because they are not agreed upon mutually at the onset of the projects
and amending or changing the systems during project implementation is
almost impossible, thereby causing unintended consequences that have a
negative impact on overall project performance.

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The methodology chosen for the research was an opinion survey-based approach
comprising a critical review of appropriate literature and a questionnaire survey of a
targeted sample, using a qualitative approach.

In this chapter, the findings of the research questions are presented, followed by a
review of the hypothesis developed for the research. Conclusions are drawn from the
research findings and recommendations are made for future research. Finally, the
achievement of the research aims and objectives is discussed.

6.2 FINDINGS OF THE RESEARCH QUESTIONS

Chapters 4 and 5 report the investigation into the research questions.

An opinion survey instrument was designed as outlined in Chapter 4 and administered

by email to explore whether procurement systems used on donor-funded construction

projects in Zambia do not deliver best value-for-money. The survey aimed to highlight

the shortcomings and areas of concern relating to donor-funded procurement that can be

addressed locally, while providing insight to the donor community about some of the

inefficiencies and ineffectiveness of current procurement systems.

Qn 1.
Do the procurement systems used on donor-funded construction projects in
Zambia deliver best value-for-money in terms of meeting quality requirements,
as well as adhering to time and cost constraints?

The findings of the survey presented in Chapter 5 indicate that the procurement systems used
on donor-funded construction projects in Zambia do not deliver value-for-money in
terms of meeting quality requirements. However, in terms of adhering to time and cost
constraints, the procurement systems actually assist.

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Qn 2.
Should the procurement systems used be agreed upon mutually from the onset
of the projects or be agreed upon as the project is being implemented?

The findings of the survey indicate that the procurement systems used should be agreed
upon mutually between donor and recipient at the onset of the projects. Nevertheless,
the procurement systems need not be flexible during the implementation of the projects.

Qn 3.
Do the procurement systems used create any unintended consequences that
have a negative impact on overall project performance?

The findings of the survey showed that the procurement systems used create unintended
consequences, but since these consequences do not impact on economy and efficiency, they do
not necessarily have a negative impact on overall project performance.

The Hypothesis

The study has tested the hypothesis and found in the affirmative that procurement
systems used on donor-funded construction projects in Zambia do not deliver best
value-for-money in terms of meeting quality requirements. However, the systems do not
affect adherence to time and cost constraints. As regards time and cost constraints, as
well as, reductions in efficiency and effectiveness, other factors are attributed to this as
they impact more than the procurement systems.

The fact that procurement systems are not agreed upon mutually at the onset of the
projects is not mainly to blame for the failure to deliver value-for-money, but there is
overwhelming agreement that there should be mutual agreement at the onset in order to
enhance overall project performance. The issue of amending or changing the systems
during project implementation is favoured, but the findings show that this is not
cardinal.

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Lastly, the procurement systems used cause unintended consequences that have a
negative impact on overall project performance, but the findings show that they do not
necessarily reduce efficiency and effectiveness.

The hypothesis has been proven to be correct in most of its constructs.

6.3 CONCLUSIONS

The study has shown that the procurement systems, regulations and guidelines do not
meet the level of the expectations of those using them to implement construction
projects in terms of delivery of value-for-money. The donor community needs to revisit
their approach to issues like local ownership and the use of local country systems in
order to allow more input from the recipients of donor aid in terms of how the
procurement systems are structured and applied.

The issue of value-for-money is considered cardinal by both donors and recipients and
the study has shown that there are areas of improvement. What stands out quite clearly
is that the areas of focus that need to be addressed are all the 3 areas that the survey
questions addressed. The relative weighting attached to the need to revisit reporting and
oversight arrangements, approval requirements and procedures, and regulations and
guidelines are close.

There is need to review the procurement management systems being used on donor-
funded projects in an all embracing manner in order to recommend meaningful
modifications.

6.4 RECOMMENDATIONS

Future research effort should be directed towards the incorporation of a “best-value” selection
process into the public sector procurement management systems for donor-funded projects.

It is also recommended that procurement management systems should be subject to mutual


agreement at the onset of projects.

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6.5 ACHIEVEMENT OF THE RESEARCH AIMS AND OBJECTIVES

The aim of this study was to highlight the shortcomings and areas of concern relating to

donor-funded procurement that can be addressed locally, while providing insight to the

donor community about some of the inefficiencies and ineffectiveness of current

procurement systems. The study has achieved these aims by providing insight into areas

of concern, such as:

i. procurement systems used do not deliver value-for-money;


ii. procurement practitioners do not have adequate influence on procurement
systems used;
iii. short-listing does not actually increase pricing;
iv. cost overrun levels are significantly influenced by procurement; and
v. procurement systems used actually cause unintended consequences.
The objectives of the study were to:

a. Determine whether procurement systems on donor-funded construction projects


contribute to failure in economic and efficient attainment of project deliverables;
b. Determine the underlying reasons why procurement systems on donor-funded
construction projects continue to contribute to such failure; and
c. Provide insight on the areas surrounding procurement systems that need to be
focused on to improve overall project performance on the donor-funded project
portfolio in Zambia and see whether a “best-value” selection process can be
incorporated.

The first objective has been achieved through the findings presented in chapter 5, which show
that procurement systems on donor-funded construction projects contribute to failure in
economic and efficient attainment of project deliverables by causing unintended
consequences. In addition, procurement related factors, such as contractual payment
modalities, significantly influence cost overrun levels. However, the findings show that
other factors contribute more to time overrun levels.

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The second objective has not been achieved since the study has not determined the
underlying reasons why procurement systems on donor-funded construction projects
continue to contribute to failure. The fact that the findings show that the procurement
systems contribute to failure does not mean that they have determined why.

The third objective has been achieved in that the study has provided insight on the areas
that need to be focused on to improve overall project performance and it has determined
that a best-value selection process can be incorporated. This is shown by the findings
that 72% of the sample group already considers parameters other than financial and
technical criteria during evaluation of bids and 98% of the sample group agreed that a
best-value selection process should be incorporated.

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Appendix

Research Questionnaire

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RESEARCH QUESTIONNAIRE

This questionnaire is part of a research being carried out by Keeta L. S. Shisholeka for a
Masters in Project Management degree at the Department of Construction Economics &
Management, University of Cape Town. The research aims to determine how public
procurement systems, regulations and guidelines used on donor-funded construction projects
affect delivery of best-value and provide insight on the areas surrounding public procurement
systems, regulations and guidelines that need to be focussed on in order to improve overall
project performance. Information provided in response to this questionnaire will be treated with
the strictest confidence. No details of the respondents or their respective organisations will be
published in any public domain nor used for anything other than academic purposes.

This questionnaire should take not more than 20 minutes of your valuable time. Kindly
complete the questionnaire by answering the questions in sections A, B, C and D. Your valuable
time in completing this questionnaire is much appreciated.

Instructions:

Please click in the text boxes provided to the right, insert your answers and save. Then return by email to
shskee001@uct.ac.za.

All questions must be answered in relation to your particular current and overall experience with
procurement.

The answers for questions A1 and A2 are provided as an example only and may be altered to reflect your particulars.

Section A: Background Information

A1. What is your country of residence? Tanzania

A2. Which of the following best describes your current employment/organisation?


a. Office of the President/Vice President/Cabinet Office/Parliament
b. Government Ministry/Department
c. Parastatal Organisation/Quasi Government/Local Government B
d. Non-Governmental Organisation
e. Private Sector

f. Other (please specify):

A3. What level or position are you at in the organisation?


a. Director/Deputy Director/Chief Executive Officer
b. Head of Department/Senior Management
c. Middle Management
d. Senior Officer

e. Other (please specify):

A4. What best represents your current geographic location?


a. Capital City
b. Other City
c. Provincial Town
d. Peri Urban Area
e. Rural District

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Section B: Occupational Information

B1. Are you a procurement practitioner?


a. Yes
b. No

B2. To what extent does your work involve donor-funded procurement?


a. Very often
b. Often
c. Sometimes
d. Rarely
e. Never

B3. Has your work involved any donor-funded construction works projects over the last four years?
a. Yes
b. No

B4. What is the average total value of projects you have been involved in over the last four years?
a. Above US$ 15 million
b. Between US$ 10 million and US$ 15 million
c. Between US$ 5 million and US$ 10 million
d. Between US$ 1 million and US$ 5 million
e. Below US$ 1 million

B5. What category of procurement are you involved in?


a. Project related procurement
b. Non-project/operational procurement
c. Both a & b

B6. What type of items/services do you usually procure?


a. Goods
b. Equipment
c. Consultancy services
d. Construction works
e. A combination of any two or more of the above

B7. What method of procurement do you usually use?


a. Open tendering
b. Restricted tendering
c. Single-sourcing
d. Request for quotations

B8. Why is the selected method of procurement usually used?


a. Simply based on value of procurement
b. Most effective according to you
c. Most economic according to you
d. Prescribed by regulations and guidelines
e. Dictated by others/other factors

B9. Is the method used the most appropriate considering the type and value of the procurement?
a. Yes.
b. No.

B10. Do you think restriction of bidder/supplier participation through short-listing negatively impacts
on project costs because of limited competition?
a. Yes
b. No
c. Other factors contribute

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B11. Other than technical and financial issues, do you consider quality issues in the bid/quotation
evaluation process?
a. Usually
b. Sometimes
c. Never.

B12. The "best-value" selection process advocates for the addition of quality issues in the
bid/quotation evaluation process. Do you think quality issues should be considered?
a. Yes
b. No

Section C: Specific Views on Donor-Funded Procurement

Note: The term “procurement systems” is used in reference to institutional, reporting and oversight arrangements,
while the term “procurement regulations and guidelines” refers to the laid down procurement documentation outlining
procedures to be followed.

C1. Procurement systems used usually deliver best value for money.
a. Agree
b. Neither agree nor disagree
c. Disagree

C2. Procurement regulations and guidelines used help meet quality requirements, as regards
“time” constraints.
a. Agree
b. Disagree
c. Neither agree nor disagree

C3. Procurement systems used help meet quality requirements, as regards “cost” constraints.
a. Agree
b. Disagree
c. Neither agree nor disagree

C4. Procurement regulations and guidelines used should be subject to mutual agreement between
the donor and the recipient.
a. Agree
b. Disagree

C5. Procurement regulations and guidelines used should be flexible during project
implementation.
a. Agree
b. Disagree

C6. Procurement systems used create unintended consequences that have a negative impact on
overall project performance.
a. Agree
b. Disagree
c. Neither agree nor disagree

C7. Procurement systems usually reduce economic and efficient attainment of project deliverables.
a. Agree
b. Neither agree nor disagree
c. Disagree

C8. Procurement regulations and guidelines usually reduce economic and efficient attainment of
project deliverables.
a. Agree
b. Neither agree nor disagree
c. Disagree

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C9. What area should be focussed on and modified in order to improve overall project performance?
a. Reporting and oversight arrangements
b. Approval requierments and procedures
c. Regulations and guidelines

d. Other (please state).

Section D: Please rate each of the following public procurement tenets.

D1. Efficiency
a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D2. Competitiveness
a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D3. Transparency & Accountability


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D4. Creativity & Innovativeness


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D5. Professionalism & Integrity


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D6. Use of Local Materials & Supplies


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D7. Training & Skills Transfer


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

D8. Capacity Building for Domestic Contractors


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

Keeta L. S. Shisholeka Page 84 of 90


Master Thesis in Project Management University of Cape Town

D9. Value for Money


a. Utmost importance
b. Very Important
c. Desirable
d. Not important

Thank you very much for your time and efforts. Should you have any queries kindly contact the
researcher at the following address or on the mobile numbers.

Keeta L. S. Shisholeka
Procurement Specialist
PEMFA Programme
Ministry of Finance & National Planning
Cnr Independence Avenue/Government Road
Lusaka, ZAMBIA

Office: +260 211 256227


Mobile: + 260 955 717171 or + 260 977 207505
Email: shskee001@uct.ac.za

To respond, simply
hold Ctrl key on
keyboard, click on
email address,
attach completed
document and
send. Thank you!

Keeta L. S. Shisholeka Page 85 of 90

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