ABSTRACT
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This research sole aim is to improve on the development of conceptual procurement models that can create direct and indirect impacts of various forms of plant and equipment procurement in Kaduna state Tertiary Institutions in relation to, need assessment, delay in completion, costs and non-conformance with specification by suppliers and installation related issues, likewise the involvement of professionals in procurement activities. The model builds on existing classifications of procurement need assessment, costs benefits and is illustrated by means of diagrams and symbols. Questionnaires, interviews, stakeholder’s information and procurements records were used to generate data to acertain the present practice so as to identify strengths and weaknesses of the institutions. Results were analysed using various statistical tools to establish relationships. The development of the models led to the conclusion that assessment of the direct impact can be measured using the models in plant and equipment procurements. A form of engineer procure installs (EPeI) that was developed through many other models using this survey among other conceptual models generated out of the research, can minimise risk associated with procurement supply chain and delays. In addition, e-installation may offer possibilities for structural changes in existing procurement routines and give professionals opportunity to participate in this regard, which may in turn save cost of transportation of trainee and give direct relationship with the manufacturer and assist in technology transfer.
TABLE OF CONTENTS
Title Page- – – – – – – – – – – -i
Declaration- – – – – – – – – – – -ii
Certification- – – – – – – – – – – -iii
Dedication- – – – – – – – – – – -iv
Acknowledgement- – – – – – – – – – -v
Abstract- – – – – – – – – – -vi
Table of Contents – – – – – – – – – -vii
List of Figures- – – – – – – – – -xi
List of Tables- – – – – – – – – – – -xii
List of Appendices- – – – – – – – – – xiii
List of Appendices Figures- – – – – – – – – xiv
List of Appendices Tables- – – – – – – — – xvi
Definition of Terms- – – – – – – – – – -xvii
CHAPTER ONE– – – – – – – – – – -1
1.1 Background of the Study- – – – – – – – -1
1.2 Statement of the Research Problem- – – – – – – -4
1.3 Present Work- – – – – – – – – – -5
1.4 Aims and Objectives- – – – – – – – – -5
1.5 Significance of the Study- – – – – – – – -6
1.6 Scope and Limitation- – – – – – – – – -7
CHAPTER TWO- – – – – – – – – – -8
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LITERATURE REVIEW- – – – – – – – – -8
2.1 Introduction- – – – – – – – – – -8
2.2 Supply Chain Management- – – – – – – – -8
2.3 Procurement- – – – – – – – – – -8
2.3.1 Parties to Procurement- – – – – – – – -9
2.3.2 Procurement Objectives- – – – – — – -10
2.3.3 Needs Assessment Criteria- – – – – – – – -11
2.4 Review of Past Related Research- – – – – – – -12
2.4.1 Procurement Effectiveness and Efficiency Models- – – – – -12
2.4.2 e-Procurement- – — – – – – – – -13
2.4.3 EPC-Engineer Procure Construct- – – – – — – -17
2.4.4 Plant and Equipment Procurement- – – – – – – -19
2.4.5 Specification of Requirement (SOR)- – – – – – – -20
2.4.6 Equipment Maintenance and Service Agreements- – – – – -22
2.4.7 Physical Site Preparation– – – – – – – – -22
2.4.8 Installation- – – – – – – – – – -23
2.4.9 Acceptance- – – – – – – – – – -23
2.4.10 Warranties– – – – – – – – – – -23
2.4.11 Payment of Terms- — – – – – – – – -24
2.4.12 Supplier Terms and Conditions of Sale- – – – – – -24
2.4.13 Bonds- – – – – – — – – – – -24
CHAPTER THREE- – – – – – – – – – -25
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MATERIALS AND METHODOLOGY- – – – – – – -25
3.1 Introduction- – – – – – – – – – -25
3.2 Material or Data Collection Instrument- – – – – – -26
3.3 Data Collection Instrument- – – – – – – – -26
3.3.1 Primary Source of Data- – – – – – – – -26
3.3.2 Secondary Source of Data- – – – – – – – -27
3.4 Design of Questionnaire- – – – – – – – -27
3.4.1 Adminitration of Questionnaire- – – – – – – -28
3.4.2 Reliability and Validity on Questionnaire- – – – – – -29
3.5 Sampling Population- – – – – – – – – -29
3.6 Sampling- – – – – – – – – – -29
3.7 Data Analysis- – – – – – – – – – -30
3.7.1 Multiple Regression Model- – – – – – – – -31
CHAPTER FOUR- – – – – – – – – -33
RESULTS AND DISCUSSION- – – – – – – – -33
4.1 Introduction- – – – – — – – – – -33
4.2 General Information of the Respondents- – – – – – -33
4.3 Solution for Research Question– – – – – – — -37
4.4 Correlation Analysis- – – – – – – – – -50
4.5 Relationship between Knowledge and Cultural Issues- – – – -51
4.6 Relationship between Barriers and Cultural Issues- – – – – -51
4.7 Relationship between Barriers and Top Management Support- – – -53
4.8 Relationship between Communication and Mutual Trust- – – – -57
CHAPTER ONE
INTRODUCTION
1.1 Background of Study
Engineering construction projects play an important role in national economic development. Yet the construction industry as a whole faces formidable challenges and suffers from poor performance and low profit margin. Project schedule slips, budget overruns, compromised quality, resulting claims and counter-claims problems have plagued the industry. The reasons for poor project performances abound. Previous researches have dealt much with the problems of project risk and uncertainty, variations in project outcomes, work fragmentation, complex relationships among stakeholders and activities, and excessive phase overlaps in general. Some selected Nigerian Universities were allocated 1.3 trillion annually for Needs Assessment Funds on a three phase disbursement from 2013 to 2018 result of ASUU strike according to NUC but yet equipment procurement is still a major constraint to Tertiary Institutions.
The difficulties associated with procurement of plants and equipment have been identified as one of the most influential problems facing Nigerian Universities (Aniekwu, 2006). Knowledge of engineering fundamental helps to check critical choice of equipment and its financial implication with merits of different approach in selection, best cost effective and alternative to achieve the best approach in eliminating financial waste and enable right-in time job delivery (lekan 2015). According to Onyema2011,procurement is a big challenge being encountered due to the late passage of annual budget by the federal Government and parastatals in Nigeria. Experience has shown that most countries budgets are passed about the first quarter of the Appropriation year or more. Even when passed, it takes quite a long period of time before financial releases are made to them. The implication is that the Ministries,Departments and
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Agencies (MDA) of government are usually put under due pressures to start and conclude their yearly procurements within a short period so as to avoid their monies being mopped up. The frosty working relationship between the Ministries and the parastatals under them has been variously reported as a challenge in guaranteeing good public procurement processes. Most of Ministries still insist in micromanaging of the parastatals and even starving those with essential information that was enable them independently conduct their procurement activities. In many instances, the Ministries still insist of approving payments for contracts in the parastatals under them contrary to the relevant circular from the Office of the Secretary to the Government of the Federation (SGF). In spite of the observed shortcomings of the public procurement practice in Nigeria so far, it was believed that based on the newness of the procurement, the existing level of corruption in the country and the general Nigerians’ mindset towards getting rich quick syndrome, that the practice need to be applauded, although urgent actions need to be followed to guarantee the public procurement best practices. What remains is to chart away forward towards ensuring the prospects of the practice. In view of this, a strong political and Government supports and professional involvement are needed as this was ensure a holistic economic transformation of the county. It is very heartwarming that critical National and International Institutions are now paying good attention to Nigeria procurement practice. The efforts of the World Bank, United Nations Development Programme (UNDP), United Nations Office on Drugs and Crime (UNODC), Nigeria Financial Intelligence Unit and Nigeria Economic Summit Group (NESG), among others, are commendable in sustaining procurement practice in Nigeria. In its recent Policy Dialogue, the NESG mobilized local and international experts to brainstorm on corruption in Public Sector business or public procurement, its challenges and impact on national development. While commending their efforts, it is expected that they, together with other relevant Organizations, should partner with Civil Society Organizations and Professional Bodies to make their work people oriented by embarking on
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mass enlightenment programmes at the rural areas. What remains is Tertiary Institutions to join hands in developing and championing strategies that was sustain procurement, especially, combating public procurement corruption, which has been identified as its greatest challenge. To eliminate corruption in the procurement of plants and equipment and enhance delivery on the right time and place more strategies beyond, procurement act needs to be employed as a method of risk elimination and control.
According to Yeo and Ning (2002), a better management of time uncertainty in major equipment procurement in engineering construction projects can significantly contribute to project performance. A survey study shows that time buffer is a popularly used approach to protect project schedule from activity duration variation and uncertainty,there introduce various models of enhancing procurement performance. The problem is that there are repetitive time allowances inserted in the procurement supply chain process and these time buffers are used ineffectively, thus leading to considerable time wastage. In order to eliminate the time waste in the major equipment procurement process caused by the ineffective use of time buffers, it is proposed that the concept and method of critical chain project management be integrated with the supply chain management and brought to bear on the procurement of major equipment (Yeo and Ning, 2002).
Saunders (2006)research Onion diagram model has been based upon excludes the three philosophies of Ontology, Epistemology and Axiology. Understanding and choosing a philosophy is an important step in planning and carrying out research, so we have included these as three additional elements outside of the main onion.
Wiersman (1995) defined research as a process of systematic inquiry,investigation and analysis of data in order to increase knowledge,test hypothesis where necessary and to arrive at
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conclusion.The collection of data through inquiry and investigation,records of procurements and analysing of the gathered data in order to find a solution to a specific problem.
1.2 Statement of the Research Problem
Procurement activities in most cases are usually not inline with the special conditions of contract, therefore incomplete supply of equipment that should come with all the necessary accesories as stated in the condition of contract are always missing.Insufficient technical details during procurement planning and need assesment of procurement also contribute to the problems of procurements in our institution, likewise equipment contract administrators negotiating equipment maintenance/service agreements is not always fully described in the scope of the work to avoid any misunderstandings or unsatisfactory levels of service. Terms and conditions that sometimes are agreed upon do not include working hours, labour, excluded services (what the supplier is not obligated to do), warranty, excluding parts, response time, loaner equipment, and appropriate insurance coverage. Procurement of plants and equipments in Nigeria has experience alot of financial wastages,delay in completion and specification related issues due to incompetency of some of the contractors and contracting authorities, which encourage corruption and other procurement related delays and abandonment.The financial wastages and delay in completion and supply of unspecified equipment has necessitated this research to create models for risk avoidance and a better procurement system in our tertiary institutions.
1.3 Present Work
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This research wasto investigate the present constraints inview of creating some conceptual models that can provide a total solution to the equipment procurement problems in our tertiary institutions in Kaduna state.
So many procurement projects are abandoned due to the complex nature of its process and insufficient technical details. This research was to investigate the present constraints in view of creating a conceptual model that can provide a total solution to the equipment procurement problems in our tertiary institutions in Kaduna state.
1.4 Aims and objectives
The aim of this research is to investigate the present procurement process in tertiary institutions in Kaduna state and to create various procurement solution models.
The specific objectives are:
i. To determine theeffect of procurement knowledge, skills and experience on the plant and equipment procurement (regression).
ii. To determine the plant and equipment procurement cost,level of completion and completion periods.
iii. To determine the relationship with regards to completion between drivers/facilitators for introducing plant and equipment procurement and the barrier to plant and equipment procurement models implementations (canonical correlation).
iv. To describe the various risks associated with procurement of plants and equipment in tertiary institutions, then determine variety of different strategies of enhancing risk-free plant and equipment procurement (descriptive).
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v. To determine the strength of the relationship betweenstrategies and a series of other factors that can contribute to the sucessful implementation of conceptual plant and equipment procurement models using multiple regression.
1.5 Significance of the Study
There are various surveys that highlighted that major plant and equipment procurement represents a critical connecting function between engineering and plant and equipment, as procurement of equipments provide the anchors for the construction facilities. Material costs represent a major portion of the total construction costs in Nigerian Universities and in turn, a high percentage of procurement expenses go into equipment purchases. Equipment procurement requires expediting on the vendors, contractors and manufacturers’ progress to ensure on-time delivery and regular communication and occasional re-negotiation by both parties. It is also generally agreed that successful procurement management can lead to improved performance in overall project cost and delivery. The two propositions demonstrate only two relevant aspects of major plant and equipment procurement and associated uncertainty management. To investigate the current practice in tertiary institutions,addition of buffer in proportion to the equipment delivery lead-time that may in fact contribute time waste from a supply chain point of view involving a constellation of supplier and his supply. The non-availability of proper need assessment, brand name and other specification related issues by the procuring entity also contribute to the time wastages, abandonments of projects and supply of plant and equipment that can be rejected by end users which affects the procurement supply chain process. Procurement process is used inefficiently due to task fragmentation and problems in interfaces or boundaries along the supply chain. Current uncertainty management practices pay too much attention to prevent the negative impact of uncertainty, but give too little attention to exploit the positive aspect of uncertainty as opportunity. The theory of
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aggregation (Goldratt, 1997) of pluses and minuses of time variation may allow considerably shorter overall procurement lead-time.This research will assist the tertiary institutions in conducting an efficient plant and equipment procurement for value for money through stakeholder participation in procurement activities and conceptual model that could bea guide to achieving an effective and efficient system.
With a view to improve productivity in engineering procurement projects, there is limited previous research efforts being devoted to developing new models, approaches and techniques. This research focused on improvements in major equipment process. The procurement performance and delivery processes can be defined both at the corporate and project levels. These processes can be partly represented as corporate systems, policies and procedures which are influenced by the prevailing, functional operational activities.
1.6 Scope and Limitation
The scope of this research focused on evaluating the procurement processes and identifying their shortcomings and development of conceptual models for procuring plant and equipments that can find a solution or way forward to the plant and equipments procurement shortcomings in tertiary institutions in Kaduna state.Data was obtained from stakeholders, end-users, consultants, contractors and manufacturers, where necessary, other client bodies withintertiary institutions in Kaduna, Nigeria.
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