The Traditional Public Procurement System - Research Proposal Example

Table of Contents Table of Contents 1 Background 2 Project question and/or hypotheses 5 Look into the causes and remedies of delays encountered in paper-based public purchasing system in third world countries. 5 Background information 5 Statement of project aims and project questions 6 Statement of expected outcomes 7 Data collection and analysis 8 Data collection has to start from the previous research or studies done on the public procurement system. That will yield a qualitative output and the research will be largely descriptive in nature. The pool of literature collected this way might also lead a hypothesis never actually thought of earlier. Since this will be a descriptive study, it will mostly use observations on the Creswell model defining present situation, past history, and exploration into the causes of a particular situation. When this is done, a survey can be organized among respondents linked directly or indirectly with procurement system .This will give the quantitative output. 8 Project management details and timelines 9 References 10 Background The traditional public procurement system has been increasingly difficult to execute on account of the amount of paperwork required where each step of requisition, bids, purchase order, advice on shipping, invoice, and payment leaves its own trail. The process is considered to be labour intensive and surprisingly the same process is repeated all over for purchasing something as small as a pin or as big as earthmoving equipment. This becomes a typical clerical activity, and shoots the administrative efforts up and doubtlessly increases the amount of paperwork involved. But, at the same time, it is irrefutable that the governments of any nation are the biggest procurers of goods and services thus offering huge business opportunities for the suppliers. Public procurement system chiefly runs on the traditional model, though e-procurements are now replacing the old, antiqued system; but none – either the governments or the suppliers – can afford to give it up. The former because it needs supplies and the latter because it is willing to supply goods or services. Each party is dependent on the other, and that actually becomes one of many causes for the massive paperwork involved. The fact can be gauzed by a rough estimation of the huge public procurements needed per annum. In the third world countries public procurement system again faces many challenges, driven by such factors as social, economic, political and cultural environment. The system get further complicated when these countries’ procurement practices clash with similar sets of problems that their developed counterparts in other countries face, but handle differently. The need for a proper procurement system is more in the third world which incur high expenditures on procurement. The examples could be 70% in Uganda and 40% in Malawi, which is much higher than 12-20% global average (Development Assistance Committee, 2005). On the global front, and according to OECD data, ration of total consumption and investment expenditure for all levels of government stands at 19.96% or USD 4 733 billion. The same is pegged at 14.48% or USD 816 billion for non-member countries. The procurement rate stands at the global level stood roughly at 82.3% globally in terms of service exports and merchandise a decade ago. Even though there is a global rhetoric from several governments on reducing the paperwork, it still and substantially contributes to extreme burden on the exchequer. (Waxan and Lynch, 2006). Since the public procurement procedures are difficult, expensive, and less efficient, it adds to the paperwork burden. While the private sector is attempting to go green world over, public systems are yet to understand the positive impacts of the same. The public procurement system is not willing to reduce procedural burden on suppliers – be they medium or large suppliers, not to speak of SMEs. That these procedures were in vogue in 1970s was understandable because the world was trying to grow its business and public procurements needed a direction to follow. But since today businesses are done manifold as compared to three decades before, the paperwork has accordingly increased. Public procurement, unfortunately, is still based on rules and not as much efficient on speed as it should have been. Also local governments aren’t ready to stress on professionalism and pooling their databases. The public procurement system is fraught with pitfalls right from the bidding step. Normally the paperwork starts piling up in direct proportion to the bids received, even though the final selection would pick only one eligible supplier. Paperwork of all the rejected bids is a pure waste of time and resources, which could be avoided by “self-declaration” process of bidding, in which all suppliers declare that they will submit the required documents, while the only one selected at last would have to do so in reality. Massive paperwork in public procurement system makes it distinctive and also vulnerable to corruption and collusion. Since there is paperwork at every stage of the procurement process, it becomes easier for the signing officer to create artificial bottlenecks. No paperwork means more transparency, high accountability, easier scrutiny and thus no corruption. Project question and/or hypotheses Look into the causes and remedies of delays encountered in paper-based public purchasing system in third world countries. Background information Third world nations are involved in active procurement processes, yet this system has been exposed to greater degrees of dissatisfaction, inefficiency and malpractices over the last decade – all fraught with extreme delays in the procurement. In these countries biggest chunk of expenditure is incurred on procurement through various developmental plans. Escalating prices, high cost on procurement, delays encountered on account of a traditional system, and stiff competition has led to a thinking that public procurement needs to be revamped. But a widespread consensus has begun to be generated leading to the real causes of the delays and measures that could be adopted to counter them. The first bottleneck that seems to be coming in the way of an efficient system is lack of appropriate laws on public procurement and absence of ideal bodies that could monitor the supply chain from beginning to end. The faulty implementation of the processes and loopholes that stay perennially in the chain offer windows for corruption and bribery. This, along with, wrong tendering processes where there is little scope for adjustments needed during inflation and existence of multiple tender boards, thus evading transparency, add to the magnitude of the problem. The present procurement scenario is drastically different from what it was two decades back, but is still governed by a traditional system that is three decades old. New demands that have emerged, like huge procurements needed, technical complexities and procurement values are not being met satisfactorily by this traditional system prevalent in the third world countries, which are ridden with lack of bureaucratic transparency and accountability. (Brett, 1996) Statement of project aims and project questions In the developing nations, the very basic problem in the procurement system is the need for an efficient and viable structural organization, which can turn the system less flawed. Better structural organization will pave way for handling other concurrent, but relatively minor, issues related with the system. Specifically, this project is going to address certain issues, and answer some questions based on aims that it wants to achieve: 1. What changes have been done the developing nations’ procurement system in the last decade, and have there been any recommendations there If yes, what has been their impact on the change and what likely will be. a. What have been the perceivable effects in terms of quality of service? b. Have there been any effects in terms of career advancement and training in the public procurement system? c. What is being done with regard to legal framework on the system; have any laws been passed and if yes, then what has been the impact? d. What revisions have been made in procurement policies in order to be non-partial and transparent with contracts? 2. How can present procurement framework be rated in terms of its stability and is it consistent with the existing regulations and policies? 3. Does private sector have any say in the system and do its opinions count for the improvement of the system? Statement of expected outcomes Once this report is finalized, it is expected to pave a way for further work on the problem, where: Transparency is achieved by defining procedures and regulations that public can scrutinize Standardise and simplify tender documents and offer equal bidding opportunities among all Develop means to fight corruption prevalent in the system. Lower risks by creating a more user-friendly atmosphere Revamp procurement process by electronic means Data collection and analysis Data collection has to start from the previous research or studies done on the public procurement system. That will yield a qualitative output and the research will be largely descriptive in nature. The pool of literature collected this way might also lead a hypothesis never actually thought of earlier. Since this will be a descriptive study, it will mostly use observations on the Creswell model defining present situation, past history, and exploration into the causes of a particular situation. When this is done, a survey can be organized among respondents linked directly or indirectly with procurement system .This will give the quantitative output. The respondent population chosen can be direct, phone, or email contacts from both sides of the public procurement system. Procurement managers can be another segment who can be interviewed separately. Before the questionnaire-based survey is started, survey questionnaire set will have to be validated first by handpicking a few respondents to answer the questions and at the same time give opinions and suggestions on the questionnaire itself. All changes desired by the respondents in the questionnaire will have to be incorporated and a revised questionnaire developed, after this the questionnaire’s reliability will have to be pre-chekced before launching it among other respondents for mass response. The response thus collected will have to be analysed using statistical packages to derive results. Most of the research, however, will be qualitative in nature since it allows for iteration and flexibility, as design methods can be modified even while the research is going on. This offers the freedom to disown unproductive areas and concentrate on new and important questions as they arise, even though they may not be a part of the original plan of investigation. Questionnaire and interviews will provide primary source and secondary source will come from internet, libraries, published social science journals specifically dedicated to third world countries’ procurement methods. All that is collected will undergo a content analysis at the end, and provide a conclusion based on the null hypotheses. Project management details and timelines It is expected that the project will continue for at least 5 months. First two months can be allotted for secondary collection data through libraries and online databases. One month will go into collection of primary data; which will be based on research-made questionnaires and interviews. The problem statements and study hypothesis will be analysed in coherence with the result got from statistically-treated data got from the primary sources. The remaining 2 months will be utilised in the preparation of the final study. References Purchasing - advantage, benefits, cost, The traditional purchasing process http://www.referenceforbusiness.com/small/Op-Qu/Purchasing.html#ixzz1Uz51Mgpa Waxan H.A.and Lynch S.F. 2006, United States House of Representatives Committee on Governmnt Reform – Minority Staff, Special Investigation Division High Level Conference on Public Procurement Toespraak, 2011 Speech by the Minister of Economic Affairs, Agriculture and Innovation, Maxime Verhagen, at the High Level Conference on Public Procurement on 30 June 2011 in Brussels. Creswell, J.W. 1994 Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage. Brett E. A., "Uganda," in P. Engbert Pedersen, et al., eds., 1996, Limits of Adjustment in Africa: The Effects of Economic Liberalization, 1986-94 Development Assistance Committee, 2005, Harmonising Donor Practices for Effective Aid Delivery; Volume 3: Strengthening Procurement Capacities in Developing Countries. Paris, France: OECD. Read More