Assessing competitiveness in private sector procurement (a case study of PBC Limited)

Given that competition is a pillar of capitalism in all industries in that it stimulates innovation, encourages efficiency, ensures quality of goods, works and services, or drive down prices, procurement approaches and procedures should therefore be important and suitable for what is being used for and the market must be able to make available in affordable price. The key benefits of competitive procurement is, its expectancy to lower procurement cost and also prevent corruption. Hence, the aim of the study was to assess the challenges and provide strategies for the successful implementation of competitive procurement procedures in PBC Limited. To achieve this aim, the following objectives were developed; to analyse the current procurement practices pursued by PBC Limited, to identify the challenges associated with the implementation of competitive procurement procedures at PBC Limited, and to identify strategies in addressing the smooth implementation of competitive procurement procedures. The study further reviewed other literature that was done on the subject matter to bring out opinions of different authors on the subject area. The review of associated literature captured important areas such as: an overview of procurement, procurement cycle, PPA (Act 663), procurement methods and competitive tendering practices. Primary Data was collected from the all 21 procurement practitioners in PBC Limited using questionnaires. The data that was received was generally examined using SPSS 17.0 (Statistical Package for Social Sciences) computer software program and Mean Score (MS) where necessary. The analysis revealed that there was an institutional framework or policy which serves as a guide to the company when procuring, but not all the procurement practitioners are aware of its existence. Limited Competitive Tendering methods like Request for Quotations, Single Sourcing and Restricted Tendering was revealed to be the most used procurement methods in the company and also from the opinion of the respondents, it was concluded that the purchasing methods being used by PBC Limited are not competitive and needs to be reviewed to achieve value for money in a transparent and fair manner. Furthermore, the need for strategic procurement in the private sector was an issue worth addressing and inadequate measures for monitoring and evaluating procurement activities was also a major challenge that faces the organization and must be addressed. It is recommended that there should be a comprehensive and transparent institutional procurement framework or policy with emphasis on competition towards achieving value for money, transparency and fairness, consolidation of all procurement undertakings under one Department or Unit, training and development of its procurement practitioners in competitive procurement, establishment of an effective independent procurement monitoring and audit team which report to the Board of Directors periodically on procurement activities, and adopt procurement planning systems instituted in the Public Procurement Act 2003, (Act 663) to prevent “artificial” emergencies.

Source: KNUST