Global Advanced Research Journal of Social Science (GARJSS)
July 2015 Vol. 4(1), pp. 001-005
Copyright © 2015 Global Advanced Research Journals

Full Length Research Paper

Contracting and Procurement Performance of State Owned Enterprises in Uganda

Ayub Masaba Kutosi, Sarah Eya and Muhwezi Moses

Department of Procurement and Logistics Management, Makerere University Business School

*Corresponding Author E-mail: kimayoka@gmail.com

Accepted 13 July 2015

Abstract

Contracting is one of the most important aspects in public procurement because it provides the framework for the economic exchange, outlining the nature and terms of the relationship, objectives of the contract, legality of parties, what is to be provided and the rights of contract parties. However, contracting has increasingly become problematic for Ugandan State owned Enterprises because of the nature of the public procurement procedures that are prone to heavy transaction costs and mal practices. Teams entrusted with negotiating do not abide with the contract objectives and sometimes do not have the ability to contract. This coupled with the bureaucratic nature leads to exploitation of the procurement process. This study therefore aimed at examining how contracting affects procurement performance of State owned Enterprises in Uganda. The study adopted a cross sectional research design. A correlation survey research design was applied to establish the relationship between contracting and procurement performance of State Owned Enterprises. Findings reveal that there existed a strong positive relationship between contracting and procurement performance (r =.653**, p<.01). The results also indicate that contracting predicts procurement performance of State owned Enterprises (Beta=0.595; p<0.01). For better procurement performance, there should be clear contracting procedures or governance structures that must be followed throughout the contracting process and above all, those involved in the contracting process should have the ability to contract so as to avoid future contracting costs and non execution of the procurement contracts. Further, State owned Enterprises should set clear procedures for those who are involved in the contracting process since it was found that the absence of clear procedures tempts the contracting team to set their own procedures.

Keywords: Public procurement, Contracting, Procurement performance, Uganda