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NEED FOR EFFECTIVE AND EFFICIENT PROCUREMENT IN THE LOCAL GOVERNMENT SUB-SECTOR

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NEED FOR EFFECTIVE AND EFFICIENT PROCUREMENT IN THE LOCAL GOVERNMENT SUB-SECTOR

 

ABSTRACT

This project work is being written to analyse categorically and to justify the need for effective and efficient procurement in the local government sub-sector so as to enhance and profitability. It is also the aim of this research work to find out how best procurement operation should be done in order to effect cost reduction and show how effectively and efficiently now purchasing department is organized in these local government sub-sector. However, one thing stand out glaringly in the researcher’s mind and that is the purchasing function to a great extent has not been given adequate recognition as a specialist area in the materials management activities in the local government administrator and in industries undertakings.

 

CHAPTER ONE

1.0 INTRODUCTION

Despite the fact that purchasing is a young profession in the fiel of management the wind of change are blowing in purchasing and supply according to Baidy (1987 page 67). The changes are helping organization to survive and succeed in every competitive environment. However, purchasing and supply is an important function in almost every organization, right from private house to the federal states and local government. As well as industry as the members of companies industries begin to increase their purchases to new materials we dictated to the department that used it. As times goes on, purchasing later became a functional specialization which holds about 63% of the organization purse, purchasing is not a money making function as people may think rather, it is meant for reducing and saving cost.

In an organization like local government sub-sector such as Owerri Municipal and Ngor Okpala L.G.A through wise buying. When purchasing recognized the potentials of these function and the numerous opportunities they realized the needs for making an organized efforts towards self improvement and education in purchasing and it has become professional discipline. These are bodies that regulate the ethical codes and standards of practice while it’s members are bound to observe in Nigeria for example, the Nigeria institute of purchasing and supply management (NIPSM) and in Britain the charted institute of purchasing and supply (CIPS) regulate these codes of practices Purchasing is therefore, closely associated with other organizational function. Like inventory management, stores management, transportation, production, planning and control in manufacturing industries and merchandising in distribution organization have to work closely will buying effective and efficient procurement cannot be achieved in any local government administration such as Owerri municipal and Ngor Opkala L.G.A or even in an organization be it private or non-government establishment, it there is no viable purchasing department.

1.1 BACKGROUND TO THE STUDY

Purchasing and supply is an important function in almost every organization, right from private household to federal and state and local level as well as an industry through, these two local government was carried out of Owerri locality and has own 4000 employees each in the locality which carries out their various functions. These local government have some skilled workers who have various qualification. Like HND and the unskilled workers have at local primary and secondary school experience. They have over million annual turn over on the remarks mode by the sub-sectors. The reason to these turnover are based on these variables:

(a) The ability of the sub-sectors to identify the needs of the municipality.

(b) The inability of the sub-sector to while the ethics of purchasing concept before procurement 

(c) The ability of the sub-sector to adopt materials management concept like system approach in the locality.

1.2 STATEMENT OF THE PROBLEM

For so many years, now several local government in Nigeria including Owerri Municipal and Ngor Opkala Local Government sub-sector did not recognise the important of maintaining an effective and efficient purchasing department. This indeed has posed a lot of the threats towards the complete achievement of the corporate objective of the local area.

(1) One of the problems militating against these local government area is poor efficient and uneasy procurement activities carried out within the local government authority.

(2) The local government authority do not use right procedures and in making, their purchases with regards to materials and equipment and contracts awarding, thereby reducing efficiency.

(3) Infact, these local government sub-sectors as well as so many others local government in Nigeria are highly unprofessional as far as purchasing profession is concerned.

(4) The purchasing profession is as neglected in the local government authority and it has not been given pride and recognition it deserves

(5) In the local government authority, purchasing is not treated as a major function separated from those using it’s services this has resultedly led to the placement of purchasing department under finance/ supplies department.

1.3 OBJECTIVES OF THE STUDY 

The objectives of this research is to justify the needs for effective and efficient procurement in the local government sub-sector so as to enhance efficiency in service delivery. It also shows how effective and efficient purchasing department is organized. The researcher further explained how reliable an organization may become if the purchasing department is effectively managed. And the objectives of the study are 

(1) To identify the process involved in the local government sub-sector which starts in idea generation and ends in commercialization.

(2) To identify how the management policies influence effective and efficient procurement.

(3) To sort out alternatives measures of which when implemented by the local government, will lead to innovation of viable product at lower possible price or cost.

(4) To find out the strategy with which it implemented by the local government will increase or reduce profit making of the company.

1.4 RESEARCH QUESTION

Undoubtedly, must local government sub-sectors make use of professional to carry out the jobs. It is therefore the main stream of the project research is to determine reliable answers which will help the objectives of this object through the following research question.

(1) Do you prepare local purchase order (L.P.O) in your local government.

(2) Do you purchase departmentally?

(3) Who negotiate for you local government?

(4) Do you have purchasing department?

(5) Who buys for the local government ?

1.5 STATEMENT OF THE HYPOTHESIS

A research hypothesis may be defined as a declaration statement of relationship between two or more reliable used for better understanding of the problem of the study. A hypothesis in other words is simple, put ads a n assumption about certain population paramented which should be tested in order to accept or neglect the assumption. Therefore, the null and alternative hypothesis have been set out by the researcher to verify the accuracy of the data collected during the cause of the research work in carrying out this, the research will use both null (Ho) and alternative (Hi) to find out where effective and efficient procurement result and cost reduction and huge savings, in local government sub-sector. In thee project, the hypothesis are thus stated below that 

Ho: The effective and efficient procurement in local government sub-sector does not lead to positive change.

Hi: The effective and efficient procurement in local government sub-sector leads to positive change

Ho: Negotiation is not compulsory when buying to local government.

Hi: Negotiations is compulsory when buying to local government.

1.6 SIGNIFICANCE OF THE STUDY

The significance of the research work, is to help the research or schools to know the significance of this study because to discover. Whether there will be need for effective and efficient procurement function in the local government sub-sector. At the end of this work, the local government will be able and capable of ensuring that there is effective and efficient procure in the local government sub-sector.

1.7 SCOPE OF THE STUDY

Owerri municipal and Ngor Okpala Local Government sub-sector has to consider these element in the procurement in the local government sub-sector.

(a) Determining the consequences of poor effective and efficient procurement in these local government sub-sector.

(b) Considering the importance of maintaining an effective and efficient purchasing department.

(c) Determining the procedures and excess of solving the problems of using unprofessional purchasing in local government sun-sector.

(d) Enhancing wisely procurement activities that are carried out in the local government authority 

(e) To ensure that proper attention is directed more on purchasing department in other to ensure that there is the need for effective and efficient procurement activities in the local government.

1.8 LIMITATIONS OF THE STUDY

In the course of the research, the researcher noticed the existence of some limiting factors which teared up, nearly destroying the enthusiasm with which the researcher choose this project topic as a sub-sector. The researcher would undertake a more elaborated study on all the local government in Imo state but the following tactics limited the researcher’s efforts.

(1) TIME FACTOR As a matter of fact, a ,lot of study would have been done in other ministries, however the researcher as a student is occupied with other academic activities and had no time to extend his study to all local government and some ministries in Imo State as stated in the to all local government and some ministries in Imo State as stated in the preceding pragraphic.

(2) LACK OF ADEQUATE INFORMATION This research work is strictly based on local government more especially Owerri municipal and Ngor Opkala local government sub sector. It was not easy to gather information from respondents because information officers and superior councillors that would have been interviewed were not always on seats.

(5) TRANSPORTATION Transportation posed tremendous derail to the project the researcher wasted more time due to transportation delays thereby getting to the research place very late. At times, interviews arranged will be missed and replacing the journey becomes inevitable.

1.9 DEFINITION OF TERMS

(1) PROCUREMENT: In some what a broader term and includes purchasing, stores, traffic, receiving incoming inspection and salvage, the procurement process of ancient encompasses a wide wage of supply activities than those including the purchasing functions.

(2) PURCHASING: In general usage, the terms purchasing described the process of buyinhg of the need locating evaluating and selecting a supply negotiation process and other times placing order and following up to delivery at the agreed delivery dates.

(3) PURCHASING RESEARCH: It is a systematic collection classification and analysis of data as the basis for better purchasing decision therefore is a formularized means of obtaining information to be used in making purchasing decision.

(4) EFFICIENCY: This is a process of achieving the intending result without no waste of effort.

(5) ECONOMICAL: Providing waste time, money, efforts that are reducing once expertises. It also means giving the best value for money.

(6) ADMINISTRATION: It means management of public or business affairs in the most effective and efficient way in other to achieve positive result.

(7) MANAGEMENT: This is the act of continuing a business or similar organization.

(8) ORGANIZATION: This is a group of people from a business together in order to achieve a particular aim.

(9) COMPETITIVE: This is a n ability of a product to get greater share of the market, irrespective of other compelling products 

(10) ENVIRONMENT: this is the factors within an organization which affect the management of the organization

(11) SPECIALIZATION: this is to become an expert in a particular area of work study of business to spend more time on one area of work.

(12) COSTS: The amount of money that you need in order to buy, make or do.

(13) MUNICIPAL: this has to do or connect with or belonging to a town, city or district that has its won local government.

(14) COMMERCIALIZATION: This is the last stage of the struggle towards the development of any new product. It is also referred to as the launch for the new product.

(15) MANUFACTURE: This the process of converting raw materials into finished product.

(16) STRATEGY: This is the basis plan of action chosen to achieve an objective that is the overall plan that is decided upon to reach the objective that have been set.

(17) OBSOLETE: These are materials whose demand does not exceed any longer possibly because the producer of the finished good which these materials were incorporated has been stopped, or a substitute has been discarded.

(18) DISCREPANCY: This is the non-agreement between the stock balance as indicated in the stock record and the quantity physically found and counted during stock taking 

(19) REDUNDANT: This is a situation where the quantity of an item in stock is more than is reasonably necessary to provide and an adequate services to the production or operational activity.

(20) SUB-STANDARD: This is the inability or a p-roduct to confirm to specification.

(21) ORGANISED: This involves large numbers of people who work together to do something in a way that has been carefully planned.

(22) PROFESSIONAL: This is connected with a job that needs special training of skill.

(23) REGULATE: This is to control something by means of rules.

(24) INVENTORY: This is a written list of all the objects furniture e.i.c is a particular building etc. as the case may be.

(25) INSTITUTE: This is an organizational that has a particular purpose especially one that is connected will education or a particular profession.

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