CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

Procurements processes entail various functions move far beyond traditional perception that procurement main role is acquiring works or services from outside sources for replenishing organization needs. Mlinga (2007), describe procurements as activity of assessing, buying of works, goods and service.

Today, in many countries, public procurement has become an issue of public attention and debate, and has been subjected to reforms, restructuring, rules and regulations. Public procurement refers to the acquisition of goods, services and works by a procuring entity using public funds (World Bank, 1995). Public bodies have always been big purchasers, dealing with huge budgets, public procurement represents 18.42% of the world GDP (Roodhooft & Abbeele, 2006; Mahmood, 2010). In developing countries, public procurement is increasingly recognized as essential in service delivery and it accounts for a high proportion of total expenditure (Hunja, 2003). Due to the colossal amount of money involved in government procurement and the fact that such money comes from the public, there is need for accountability and transparency (Hui et al., 2011). Consequently, various countries both in developed and least developed countries have instituted procurement reforms involving laws and regulations. The major obstacle however, has been inadequate regulatory compliance. Non-compliance problem affects not only the third world countries but also countries in the developed economies. Hui et al. (2011), while analysing procurement issues in Malaysia, established that procurement officers were blamed for malpractice and non-compliance to the procurement policies and procedures. Most developing countries are facing a problem of rapid changes in procurements which are imparting pressure on how the procurement function performs its internal and external processes in order to achieve its objectives (Wambui, 2013). Its implementation is perhaps driven by development partners who have focussed on getting countries to introduce a standard law developed by the United Nations Commission on international trade law (McDonald, 2008). The public procurement reforms currently focus on getting countries to implement a standard procurement law and system. This is a challenge that countries ought to cope up with as pointed out by Thai (2001) that public practitioners may have to put up with contradictory and contrasting procurement requirements and objectives imposed by policies and trade agreements. Such challenges in procurement reforms are beyond procurement regulations and include processes, methods, procurement organizational structures and workforce. Public procurement regulations are based on agreed upon donor requirements and the procedures should be consistent with international standards (MoE, 2007). The implementation of stipulated public procurement structures could determine implementation or no implementation of public procurement regulations. The sole purpose of this research is to therefore find out the challenges affecting procurement processes in public organizations in Nigeria.

1.2     Statement of the Problem

Public procurement has been identified as the government activity most Vulnerable to corruption. As a major interface between the public and the private sectors, public procurement provides multiple opportunities for both public and private actors to divert public funds for private gain. For example, bribery by international firms in OECD countries is more pervasive in public procurement than in utilities, taxation, judiciary and state capture (OECD, 2007: 9). The challenge of ensuring integrity in the public procurement processes is therefore not a problem peculiar to Nigeria or the developing countries alone. The lack of open processes and procedures and mismanagement of resources in the award of contracts in the government circles may have necessitated calls by international organizations for governments to pay greater attention to the public procurement process, to ensure that award of contracts and other procurement matters are handled professionally, in compliance to acceptable global standards.

Also the Impact of challenges affecting these processes in Public organizations has not received much attention, as most of the study focused in central government procurement whereby Government is directly involved through taxpayer’s monies. Although procurement processes has been followed as per existing regulations but still there are many challenges to overcome and addressed for improving in this portion.

1.3     Objective of the Study

The main objective of this study is to find out the challenges affecting procurement processes in public organization in Nigeria, specifically the study intends to:

1.     Find out the challenges affecting procurement processes in public organizations in Nigeria

2.     Examine how procurement methods affects procurement processes in public organizations

3.     Proffer solution to the challenges affecting procurement processes in public organizations

1.4     Research Question

1.     What are the challenges affecting procurement processes in public organizations in Nigeria?

2.     Does procurement methods affects procurement processes in public organizations?

3.     What is the solution to the challenges affecting procurement processes in public organizations?

1.5     Research Hypothesis

Ho: there is no challenges affecting procurement processes in public organizations in Nigeria

Hi: there is challenges affecting procurement processes in public organizations in Nigeria

1.6     Significance of the Study

This study will be of benefit by providing insight to the effects for public procurement processes for Parastatal organizations in Nigeria, furthermore through attaining the intending purpose the researcher anticipate this study to be of benefit to the following: First, to add the current existing knowledge in Public Procurement which contributes to academicians in developing knowledge regarding the effects of procurements processes for Public and Parastatal organizations.

The findings of the study also will assist public organizations to utilize the best practices as suggested throughout this study. The findings will ensure work improvements and lead to better incentives and remunerations achieved through better utilization of resources in regards to improving processes for procurement and general organization performance.

1.7     Scope of the Study

This research will focus on public procurement processes in Nigeria and their challenges, this research will also be conducted in Lagos state.

1.8     Delimitation of the Study

Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.

However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.9     Definition of Terms

Procurement Processes: the process of finding, agreeing terms and acquiring goods, services or works from an external source, often via a tendering or competitive bidding process.

Public Organization: any organisation that is defined as being part of the public sector by a legal framework at any level