Supplier Evaluation Matrix v3e2k

MZUMBE UNIVERSITY

ASSESSMENT OF SUPPLIER EVALUATION MATRIX IN TANZANIA NATIONAL PARKS

Research Paper John E. Moshiro

2011

MZUMBE UNIVERSITY- P.O BOX

1,

MOROGORO-TZ

© J. E. Moshiro (2011), Supplier Evaluation Matrix, 1st edition personal research paper, Mzumbe University-Morogoro Tz A CASE STUDY OF MIKUMI NATIONAL PARK

John E. Moshiro - Mzumbe University

TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................................................. I DECLARATION.......................................................................................................................... II COPYRIGHT .............................................................................................................................. III DEDICATION.............................................................................................................................. V LIST OF ABBREVIATIONS .................................................................................................... VI LIST OF TABLES .................................................................................................................... VII AKNOWLEDGEMENT.......................................................................................................... VIII ABSTRACT ................................................................................................................................. IX CHAPTER ONE ........................................................................................................................... 1 INTRODUCTION AND BACKGROUND ........................................................................................... 1 1.1 1.2 1.3 1.4 1.5 1.5.1 1.5.2 1.6 1.7 1.8 1.8.1 1.8.2

Introduction ................................................................................................................................................... 1 Historical Background of Mikumi National Park ...................................................................................... 1 Background of the Research Problem ......................................................................................................... 1 Statement of the Research Problem ............................................................................................................. 2 Research Objectives ...................................................................................................................................... 3 Main Objective .............................................................................................................................................. 3 Specific Objectives......................................................................................................................................... 4 Research Questions ....................................................................................................................................... 4 Significance of the Study ............................................................................................................................... 4 Limitation and Delimitation of the Study.................................................................................................... 4 Limitation....................................................................................................................................................... 4 Delimitation ................................................................................................................................................... 5

CHAPTER TWO .......................................................................................................................... 5 LITERATURE REVIEW ...................................................................................................................... 6 2.0 2.1 2.1.1 2.1.2 2.1.3 2.2 2.2.1 2.2.2

Introduction ................................................................................................................................................... 6 Theoretical Literature Review ..................................................................................................................... 6 Perception on Supplier Evaluation .............................................................................................................. 6 Supplier Evaluation Matrix and the Public Procurement Act (PPA 2004) .............................................. 7 Sources of Information for Suppliers’ Location/Selection ......................................................................... 7 Empirical Literature Review ........................................................................................................................ 8 Empirical Studies of Cases in the Country ................................................................................................. 8 Empirical Studies of Cases in Abroad ......................................................................................................... 9

CHAPTER THREE .................................................................................................................... 10 RESEARCH METHODOLOGY ........................................................................................................ 10 3.0 3.1 3.2

Introduction ................................................................................................................................................. 10 Area of the study ......................................................................................................................................... 10 Research Design........................................................................................................................................... 10 John E. Moshiro - Mzumbe University

3.3 3.4 3.5 3.6 3.6.1 3.6.1.1 3.6.1.2 3.7

Population Study ......................................................................................................................................... 10 Sampling Technique .................................................................................................................................... 10 Nature of Data ............................................................................................................................................. 11 Data Collection Plan and Instrument ........................................................................................................ 11 Data Collection Method .............................................................................................................................. 11 Primary Methods......................................................................................................................................... 11 Secondary Methods ..................................................................................................................................... 12 Data Analysis and Presentation ................................................................................................................. 12

CHAPTER FOUR....................................................................................................................... 13 RESEARCH DATA PRESENTATION AND ANALYSIS OF FINDINGS .................................... 13 4.0 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.2 4.2.1 4.2.2 4.3 4.3.1 4.3.2 4.4 4.5

Introduction ................................................................................................................................................. 13 The existing Supplier Evaluation Matrix at MINAPA ............................................................................ 13 Evaluation Process Practiced in the Organization ................................................................................... 13 Procurement Methods and the evaluation matrix .................................................................................... 14 Common Evaluation Matrix used in Procurement of Goods .................................................................. 15 Evaluation Matrix for Consultancy Services ............................................................................................ 17 Evaluation Matrix for Non-Consultancy Services .................................................................................... 18 Price in the Matrix and Bid Cost Analysis ................................................................................................ 19 The Suppliers and the Matrix in Meeting Objectives .............................................................................. 20 Meeting of Purchasing Objectives ............................................................................................................. 20 Failure of Supplier to met Purchasing objectives ..................................................................................... 21 Strength and problems of the existing supplier evaluation matrix done in MINAPA .......................... 21 Strength of the existing supplier evaluation matrix ................................................................................. 21 Problems facing the existing supplier evaluation matrix ......................................................................... 23 Qualification and skills of the of evaluation committee ........................................................... 24 Recommendations from staff to improve supplier evaluation and selection at MINAPA .................... 25

CHAPTER FIVE ........................................................................................................................ 28 SUMMARY, CONCLUSION AND RECOMMENDATIONS ......................................................... 28 5.0 5.1 5.2 5.3 5.3.1 5.3.2 5.3.3 5.3.4

Introduction ................................................................................................................................................. 28 Summary of Analysis of Findings .............................................................................................................. 28 Conclusion .................................................................................................................................................... 28 Recommendation ......................................................................................................................................... 29 Emphasis on the use of PPA, 2004 and PPR, 2005 ................................................................................... 29 Motivation .................................................................................................................................................... 30 Training ........................................................................................................................................................ 30 Technology changes..................................................................................................................................... 30

REFERENCES ............................................................................................................................ 31 APPENDICES I .......................................................................................................................... 32

DECLARATION


I ………………………..……….…, hereby declare that this research report is my own original work and has not submitted to any other institution for any academic professional awards.

……………………………. Student Signature

…………………… Date

Supervisor I …………………..………………., hereby declare that I have read this report and I recommend for acceptance by Mzumbe University.

………………………. Supervisor’s Signature

…………………. Date

Internal Examiner I ……………………………..............., hereby declare that I have rechecked this report and therefore I my recommendation to the supervisor and student that the report real deserve to be accepted by the University.

……………………………. Internal Examiner Signature

....………………... Date

COPYRIGHT


All rights reserved. No part of this report can be published, reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise, without the prior written permission of the researcher or Mzumbe University in that behalf. © 2011 Copyright John Ernest M


DEDICATION I wish to dedicate this research report to my parents, Mr. E. J. Moshiro and Mrs. A. E. Massawe who have laid the foundation of my education hoping that their son has fulfilled their dreams and all my family . Above all, I would like to thank the Almighty God who was my strength, power and comfort in all suffering of writing this research report.


LIST OF ABBREVIATIONS AO

-

ing Officer

A

-

Certified Public ant

CSP

-

Certified Supplies Professional

SP

-

Certified Procurement and Supplies Officer

W

-

Chief Park Warden

MINAPA

-

Mikumi National Park

MU

-

Mzumbe University

OTB

-

Organizational Tender Board

PPA

-

Public Procurement Act

PPRA

-

Public Procurement Regulatory Authority

PMU

-

Procurement Management Unit

TANAPA

-

Tanzania National Parks

TB

-

Tender Board

TIN

-

Tax Identification Number

TRA

-

Tanzania Revenue Authority

VAT

-

Value Added Tax


LIST OF TABLES Table 1: Technical Evaluation Criteria ………………………………………………………...17 Table 2: Financial Evaluation criteria…………………………………………………………..17 Table 3: Below outline the sample of the Bid Cost Analysis ……………………………...…..18 Table 4: Strengths of the current supplier evaluation process at MINAPA ……………………21 Table 5: The frequency of respondent from each department to participate in Evaluation…….22 Table 6: The weakness of the methods used at MINAPA for supplier evaluation process…….23 Table 7: Level of education / professional qualification of respondents ………………………24 Table 8: Opportunity of staff to attend short course / training in supplier evaluation process…24 Table 9: Year‟s respondent work with organization …………………………………………...25 Table 10: competence and skills in evaluation team …………………………….…..25 Table 11: Recommendation from staff to improve supplier evaluation matrix ………………..26


AKNOWLEDGEMENT First of all, I thank Almighty God for bestowing me with good heath and patience for the completion of this work I would like to express my sincere gratitude to my supervisor Mr. Njovu for his supervision and contribution in the successful of the research period until the task was accomplished. I would also like to take this opportunity to thank all those who assisted me in one way or another directly or indirectly, moral and material . I‟m also grateful to the employees of MINAPA mainly Chief Park Warden (Mr. J.J Shemkunde), Department of Procurement and Supplies (Mr. D. Massawe), Finance Department (Mr. Omary), and Works Department (Mr. V. Mongi) and Stores In-Chage (Mr. K. Mavura) which I was working with them for the completion of this research report. There are no words to express my deepest gratitude to my lovely Father Mr. Ernest J. M, my lovely mummy Adela E. M and brother Thadey E.M, mw Sisters Pelagia E.M, my brother in-law Mr. H. Mollel for their financial , advice, and all help they gave me in order to accomplish my research study. I would like to extend my thanks to my best friends Mr. Kelya, Mr. Evance, Mr. Geofrey, Mr. Damas, Mr. Philemon, colleagues and my lecturers for their moral , love and encouragement during the field study.


ABSTRACT This report is presented in five chapters; Chapter One contain the introduction, background of the study, statement of the problem, objectives of the study, research questions, significances of the study, and scope of the study as well as limitation and delimitation of the study; Chapter Two provides review of various related literature in the context of the supplier evaluation matrix and selection process; Chapter Three elaborates the research methods and data collection techniques; Chapter Four provides presentation of research findings and analysis of data and Chapter Five embodies the summary, conclusions and recommendations. The Public Procurement Policies are based on the need to make the best possible use of public funds, whilst conducting all procurement activities with honesty and fairness, therefore all public officers and member of Tender Board who are undertaking or approving procurement shall be guided by the consideration of the public procurement policy, one being the importance of integrity, fairness and transparency in the procurement process. The study on the assessment of supplier evaluation matrix was carried out at Mikumi National Park (Morogoro-Tanzania). That is to say, it aimed at finding out how the supplier is evaluated and then see if the procedures employed comply with the vendor appraisal methods recommended in the PPA of 2004 and its regulations. The study examined the practice of supplier evaluation matrix at MINAPA and the researcher stayed at MINAPA from November 1, 2011 up to February 15, 2011. In the study, the researcher employed different methods of collecting data; primary and secondary data sources. The secondary source included the published books, documentation while primary source includes the use of closed and open ended questionnaires, interview and participation in some activities when the researcher got the opportunity to do so. Data were analyzed both quantitatively and qualitatively and the results presented by using statistical tools like frequencies and percentages. It was revealed that, MINAPA have qualified professional to operate purchasing activities. The supplier evaluation matrix in the organization are done by an appropriate level of seniority and experienced staff for instance Procurement and Supplies officer, Stores-in-charge, ants and other heads of departments.


CHAPTER ONE INTRODUCTION AND BACKGROUND 1.1

Introduction

This chapter summarizes background of the organization, background of the problem, statement of the problem, research question, objectives of the study, significance, scope of the study, research variables, limitation and delimitation of the study. 1.2

Historical Background of Mikumi National Park

Mikumi National Park is a national Park in Mikumi District in Morogoro Region - Tanzania. The park was gazette in 1964 covering area of 1070km2. It was later extended in 1975 to cover the current area of 3230 km² and is the fourth largest national park in the country. Mikumi National Park abuts the northern border of Africa's biggest game reserve that is Selous Game Reserve and is transected by the surfaced road between Dar es Salaam and Iringa. It is thus the most accessible part of a 75,000 square kilometre (47,000 square mile) tract of wilderness that stretches east almost as far as the Indian Ocean. More than 400 bird species have been recorded, with such colorful common residents as the lilac-breasted roller, yellow-throated long claw and bateleur eagle ed by a host of European migrants during the rainy season. Hippos are the star attraction of the pair of pools situated 5km north of the main entrance gate, ed by an ever-changing cast of water birds. 1.3

Background of the Research Problem

Supplier evaluation is an important aspect in any organization to ensure that the buying organization‟s needs are met perfectly. This means that the organization receives materials and services of the right quality, right quantity, right price, right place and at the right source brought by effective supplier evaluation process and selection. This also involves the fact that, evaluation should be in line with the Public Procurement Act‟s requirements especially in Tanzania context. A good supplier scoring and assessment process must identify and track performance along all dimensions that affect the total cost of using a supplier. And this good sourcing or good supplier‟s decisions will have greater impact on the cost leadership and competitive advantages enjoyed by the organization. Traditionally many organizations use price as the only dimension that suppliers have to be compared on. There are many other supplier characteristics for selections such as lead time, reliability, quality and design capability that impact the total cost of doing business with supplier.


In most organization including some government organizations, materials and services are bought from suppliers where the basis for supplier‟s evaluation has been price. Purchasing Practitioners in this case are speaking the same since suppliers quoting the cheapest or lowest price are ignorantly given priority to supply the requirements. This is not the way as other attributes of evaluating supplier are also being considered. Financial position of supplier, reliability of supplier, good relationship with buyers, capability of deliver, post-purchase services are all fundamental aspects in selecting and evaluating supplier. However, buyer – seller relationship marks a professional dilemma on the question of ethical competitive sourcing, transparency and ability. Well selected suppliers enhance the effective use of public funds, improve availability, quality, reliability and cost of public services, and improve the participation of private sector, and acts as an integral part of the governance process. According to Controller and Auditor General‟s report for the year 1996-1998, the Government has been incurring significant losses through poor material management and ing system, among are those related to late and undelivered items which can be contributed by poor supplier evaluation. Purchasing specialist cannot oppose the logical reasoning that supplier who are not properly evaluated and selected cannot deliver material and services timely since they may breach a contract of sales and generally, their deliveries may not conform to specifications. Thus to obtain the right supplier, the purchasing department which is responsible for the evaluation and selection of suppliers, needs to be conscious of associated poor supplier costs. When poor supplier is selected, follow up and expediting costs will be high, inspection of materials will be difficult and the probability of receiving wrong deliveries will be high. (TICTS‟ PM Comments; 2006) Therefore, the problem poor supplier evaluation undermine the profitability objectives of a firm and hinder the achievement of short and long-term goals of the firm, hence the whole exercise of supplier‟s evaluation and purchasing function become very poor. 1.4

Statement of the Research Problem

Many organization fail to execute the supplier evaluation function due to what has been said by many Public as well as Private firms do lie on selecting and evaluating suppliers on a price basis only, hence poor performance of the organization functions and the entire organizations as a whole. Government Ministerial and departments are the ones to guarantee welfare to citizens if they are well managed and organized. This has been contrary due to the truth the areas of purchasing has been faced with a number of limitations among them are those associated with lack of transparency, and not using the fundamental criteria of reliability, financial position of suppliers, quality conformity, post purchase services in evaluating and selecting suppliers since most buyers rely on prices the fundamental dimension of a good supplier. Practitioners in purchasing and related areas at ministerial as well as departmental levels have increasingly been heard to argue this anomaly. John E. Moshiro - Mzumbe University

Sourcing is not achieved solely based on securing competitive bids; therefore, lowest price are not the dimension to supplier‟s selection and evaluation. Most of government organizations use competitive tendering in purchasing which do not guarantee the strong relationships with suppliers for cost reduction. It is a fact that the situation has a professional dilemma since the only chance for reducing costs remains with the type of the supplier evaluation matrix used by a firm. The challenge of the public sector on effective supplier evaluation is related to the human resources required to make the system work. In principle, a comprehensive compilation and use an appropriate supplier evaluation matrixes require enough knowledge, skills and experience. (www.suppliermanagement.com 2006) Assessment and evaluation matrixes are used predominantly to establish a means to accurately assess supplier business partners and provide a framework for ongoing supplier development and effective supplier selection. Therefore supplier cannot well be evaluated without multiple supplier evaluation models, however most reports have shown that many organization especially government organization do not use appropriate supplier evaluation model and if uses, unqualified person fail to utilize effectively. (Debra L, 2006) The basis to public sector procurement falls under focus of competitive bidding in order to realize value for money and fair dealing with all bidders. Government procurements are normally made through tendering method, which is generally said to be transparent. The importance of performance evaluation is not considered in government procurement practices alone, but in fact it is the most necessary element, which needs to be recognized even by the private firms if they are to save costs in procurement. The observations concluded that in tendering method there is high possibility of the lowest evaluated bidder, who sells at lower prices to win the contract without effective consideration of other factor like quality, delivery and financial position of such supplier, which make a supplier reliable. Lack of control in selection procedure will found to be the source of complaints among suppliers. It is from this „alarm‟ that triggers the researcher on dealing with this analysis and expects to assess the „supplier evaluation matrix‟ as practiced in the Procurement Management Unit in Mikumi National Park as a case study aiming to observe the whole process of evaluating suppliers. 1.5

Research Objectives

1.5.1

Main Objective

The main objectives of the research was to assess the „supplier evaluation matrix‟ as used in the Procurement Management Unit – Mikumi National Park with the view of identifying the strength and or weaknesses of supplier evaluation model used in purchasing operations and suggest ways to improve supplier evaluation model/matrix.


1.5.2

Specific Objectives

i. Was to identify the existing supplier evaluation matrix/model used in evaluating suppliers in MINAPA ii. Was to determine the evaluation criteria that are used in evaluation matrix iii. Was to determine the education level, experience and qualification of employees appropriate for effective composition in the evaluation iv. Was to identify the strength and/weakness of the supplier evaluation matrix in Procurement Management Unit in Mikumi National Park v. Was to develop the basis for making suggestion and recommendation of which hopefully the management of the park will practice to improve their bases for evaluating suppliers. 1.6

Research Questions

i. What are the fundamental assessments that can be done on evaluation criteria in the matrix used by the park in evaluating suppliers? ii. What are the common criteria used to evaluate suppliers in the park? iii. Are the assigned personnel having professional qualifications and skills for proper setting and use of supplier evaluation matrix? iv. What are the strength and/weaknesses of the current used criteria in the supplier evaluation matrix? v. What are the recommendations and suggestions that can be used to improve supplier evaluation matrix. 1.7

Significance of the Study

i. The studies have an implication to other future researchers undertaking the same problem of the same of making an assessment of their supplier evaluation matrix. ii. The study was to help the management of the case study and decision makers of other organizations to be aware with the modern supplier evaluation matrix. iii. The study will be helpful to procurement managers in contract entering, budgeting process and preparation of tender documents particularly when including criteria for evaluation as clues in tender documents. iv. The study findings, suggestion and recommendation were an additional body of knowledge to the researcher in a practical approach. Thus, the study is valuable and adds value to number of people. 1.8

Limitation and Delimitation of the Study

1.8.1

Limitation

The study were covered the evaluation criteria in the park in supplier‟s evaluation model. Under normal circumstances, hurdles in the investigation were inevitable.


So the Researcher encountered with the following problems:i. An insufficient time unless otherwise the researcher utilizes all the opportunities available to accomplish the study. ii. Financial resource is another ambiguity, which puts the researcher‟s mind in a dilemma for such a wider coverage of the study. iii. Respondents are busy therefore, difficulties rose in begging their time to be interviewed. iv. Most of Tender Body Committee are Directors of other units and departments therefore was difficult to conduct interview with them. 1.8.2

Delimitation

The study was conducted in Mikumi National Park at Kilosa – Morogoro; only on the assessment of the „supplier‟s evaluation matrix‟

CHAPTER TWO


LITERATURE REVIEW 2.0

Introduction

This chapter visits ideas and theories propounded by different authors‟ in the field of purchasing, with the major focus to supplier evaluation matrix. It also focuses on the researches done by others relating to topic and finally gives the summary of the two called the Synthesis. The aim of this chapter was to guide the researcher to exclude from this work what has been done by other researchers relating to the same problem and therefore investigated the prevailing gap that needs further research. 2.1 2.1.1

Theoretical Literature Review Perception on Supplier Evaluation

Baily and David (2005) defines supplier‟s evaluation as a continuous process of the purchasing departments, limiting the supplier to supply the requirements. Actual sources with which one is dealing regularly can be evaluated largely on their track records, on the actual experience of working with them. A set of criteria, which form a basis of evaluating suppliers is, what constitutes a supplier evaluation matrix (model). Most of the organization spend about 80% of their annual spend with only 20% of the existing suppliers; therefore for a prudent buyer evaluation is needed. The basis of supplier evaluation matrix for proper selection and evaluation should include:i. ii. iii. iv. v.

Quality - both performance and conformance quality aspects are considered Quantity – right quantity deliveries Time – timely deliveries Sources/Services – before and after services Price – lower price among selected supplier

Datta A.K (1984) defines supplier evaluation as the process of preparing an exhausted list of suppliers and then sorting out one or ones with whom to do the business basing on the supplier evaluation matrix. Heinritiz (1991) defines a supplier as a vendor that is able and willing to provide consistent quality, services and at a competitive price to get the best source of supply for their needs; buyers often make choice of quality eligible source. Zenz Gary J. (1987) conceptualizes supplier evaluation as follow; after potential supplier have been determined and located as a qualitative evaluation and elimination process is used. This process compares suppliers in of their ability to provide the desired quality, quantity, price and services. In the purchasing context, quality refers to the suitability of the product as a conformance quality which is manifested by the product to meet specifications and performance determined when the


product satisfies the needs. Quantity is also a big aspect in the purchasing parlance. The supplier should be evaluated basing the ability to meet the delivered schedule. Services is often an intangible factor in supplier evaluation, including location, reserve capacity, technical assistance, quality control procedures, production assurance and labor and financial stability all constituting supplier evaluation matrix (model). Intel (2006) htt://www.supplierz.intel.com defines supplier evaluation as the process of limiting the number of suppliers that meet requirements on the basis of criteria set by the firm. The lack of world class suppliers qualified to supply products is a challenge all over the world in global economies in which even terrorist are competing to supply. Therefore the successful sourcing is not achieved solely on the basis of securing competitive bids. 2.1.2

Supplier Evaluation Matrix and the Public Procurement Act (PPA 2004)

According to the PPA 2004, S.65 (1) the law gives the procurement specialist an authority to prepare and include their supplier evaluation matrix in the tender documents. The Section says that; the basis for tender evaluation and selection of the lowest evaluated tender shall be clearly specified in the instruction to tenderers or in the specifications to the required goods or services. S. 65(2) of the PPA 2004 orders for the tender documents to specify the criteria for evaluation as says; the tender documents shall specify any factor in addition to price which may be taken into in evaluating a tender and how such factor may be quantified or otherwise evaluated. Under S.67 (1); The procuring entity shall evaluate on a common basis tenders that have not been rejected in order to determine the cost to the procuring entity of each tender in a manner that permits a comparison to be made between the tenders on the basis of evaluating costs but the lowest submitted price may not necessarily be the basis for selection for award of contracts. (2) Any relevant factor(s) in addition to price to be considered in tender evaluation and the manner in which they will be applied for the purpose of determining the lowest evaluated tender shall be specified in the tender documents for goods and equipments but the tender evaluation for works shall be undertaken strictly in monetary and completion period. (3) Any procedure which tenders above or below a predetermined assessment of tender value are automatically disqualified may not be accepted. (4) The procuring entity shall prepare a detailed report on the evaluating and comparison of tenders, setting out the specific reasons on which its recommendations for the award of each contract are based. 2.1.3

Sources of Information for Suppliers’ Location/Selection

According to Datta (1984), preparations of a list of prospective suppliers are done by the buyer use one or more of the following sources of supplier information:i.

Past experience with supplier


ii. iii. iv. v. vi. vii.

Interview with salesman Technical and Descriptive Catalogues Trade directories and trade journals Trade fair and conversions Trade representatives Open and limited tenders requesting for quotations and periodical ment in the press calling for supplier registrations.

Plus now day‟s suppliers information‟s can be obtained through the searching on internet for instance the application of E-Sourcing help the buyer to get all suppliers information required 2.2 2.2.1

Empirical Literature Review Empirical Studies of Cases in the Country

Most of the organization in Tanzania especially government use tendering as the basic method to evaluate and select suppliers. The problem has remained with less competition since always the same suppliers respond to tenders. The aim of soliciting many bids is solely for checking the prices of regular suppliers. The notion that the lowest bid comes from reliable suppliers is a mere assumption. The observation of the researcher indicated that even though low bid price suppliers were selected but still there are suppliers who were not well performing. Sometimes stores people are forced to return those goods as they are of poor quality as stated in their order. This causes delay to supply the s‟ needs hence poor governance. All these are related to poor evaluations, which never the vendor visiting, poor criteria for evaluation and lack of standard specifications. (Mchangila, 2003): 24 The basis to public sector; procurement falls under the focus of competitive bidding in order to realize value for money and fair dealing with all bidders. Government procurements are normally made through tendering method which is generally said to be transparent. The importance of performance evaluation is not considered in the government procurement practice alone, but in fact is the most necessary element, which needs to be recognized even by the private firm if they are to save costs in procuring goods and services. The observation from five ministries concluded that in tendering method there are high possibility of the lowest evaluated bidder who sells at lowest prices to win the contract without effective consideration of other factors like; quality, delivery, quantity and financial position of such supplier which make them reliable. Lack of control in selection procedures will found to be the source of complaints among suppliers. This situation has been observed in the study area where it was found that some contracts are awarded without proper evaluation. (Magesho, 2003): 31


2.2.2

Empirical Studies of Cases in Abroad

Experience reveals that in many procuring entities there are irregularities relating to the selection of consultancy, procurement of goods and services and contract istration in general. Application of bribery in obtaining contracts from public authority is also a global problem. Public procurement in the selection of supplier may be suspected for corruption and other irregularities because it is a key area where the public sector and private sector interact financially. Such irregularities are normally occur in areas such as o Improper selection of consultancy and non-consultancy procedures o Most of procuring entities lack effective control and the use of standard request for proposal, forms of contract and tender evaluation guidelines o Fraud and corruption at different stages of contract istration is now a global problem. o Some procuring entities and tender bodies divert from competitive selection and sometimes award contracts without even advertising the acquisition to the public (Source: International Development Law Organization „IDLO‟ enchanting Public Procurement, 2002)


CHAPTER THREE RESEARCH METHODOLOGY 3.0

Introduction

This chapter describes methodological aspects that the researcher was used in conducted the study. It begins with area of the study research design, population and sample size, sampling procedures, data collection methods, and how data will present and analyze to validate the research questions 3.1

Area of the study

The researcher was conducting the research at Mikumi National Park at Kilosa – Morogoro. And the study covered activities carried out in the Procurement Section were the purchasing of items and supplier evaluation is practiced. 3.2

Research Design

The research design in this study was case study conducted at Mikumi National Park-Morogoro. The design was to enable researcher in an intensive description and analysis of a single entity of study because it involve an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence. There are different types of research design such as Case Study, Survey and Experimental -

3.3

Case Study It was applied in conducting the research. Case study seems to be flexible in data collection as it allows the researcher to use the different methods of data collection. Case study also is less expensive since it is conducted at single area and allows intensive study Population Study

The targeted population was at Mikumi National Park-Procurement and Stores section staffs, Finance section staffs, Works Department, Medical department and Procurement Management. Population is the set of individuals, items or data from which the sample is taken. 3.4

Sampling Technique

Due to the nature of the study; the judgmental sampling technique was applied that enable to select the sample and selecting respondents to be included in the sample. This technique was used due to the nature of this study which demand collection of data from units with involvement, specialist experience and knowledge on supplier evaluation and selection as it was the best way through which the researcher access key people who were able to provide enough information about the phenomena under the study. Population Sample


DEPARTMET Procurement and Supplies Department Works Department Procurement Management Finance Department Medical Department Total

3.5

NUMBER OF RESPONDENTS 2 1 2 2 1 8

Nature of Data

The study comprised primary and secondary. Primary data are those which were collected for the first time from direct observation. Secondary data on the other hand, are those which were already been collected by someone else and which have been already ed through the statistical process and some from readings. 3.6

Data Collection Plan and Instrument

In the study, the researcher was use both primary and secondary data. Primary data were collected by the researcher using interview, observation and by using questionnaire while secondary data were obtained from various sources such as paper files of organization, magazine and the like. 3.6.1

Data Collection Method

3.6.1.1

Primary Methods

By using primary data collection methods, the researcher used three main techniques interview, observation/participation and questionnaires, to get data and / or information as indicated below; i.

Interview

This was face to face interaction between researcher and the experienced personnel at mi National Park. This method will supplement the questionnaires and enable the researcher to get more information that could not have been obtained through questionnaires. Unstructured interview questions will be used and researcher will use interview due to the nature of the study. ii.

Observation/Participation

Observation implies the use of eyes and ears. In here the researcher was watch and note those activities concerned in supplier evaluation model. Under this method the researcher paid serious attention in noting what will be carried out, since observation implies the use of eyes and ears. So the information gathered through the use of the actual practice method like announcement on evaluation of supplier. It will be a better method where important information will be note.


iii.

Questionnaires

The questionnaires were distributed to 8 employees as a selected sample size out of 23 employees, and were given to member of procurement management unit, works department ing department and other member involved in evaluation committee. The questionnaire was both open and close ended. 3.6.1.2

Secondary Methods

Secondary data collection methods the researcher used one main technique documentation as explained below; Documentation The researcher used different documents like internal files i.e. Evaluation reports, Quotation forms, purchasing orders and evaluator‟s guide, contract documents and other relevant sources from the literature review to collect data so as to meet the aim of the study. 3.7

Data Analysis and Presentation

Analysis of data was done both qualitatively and quantitatively. The qualitative approach entails analysis of data through describing and analyzing them (comparing them and aggregating into themes). The quantitative approach involves manipulation of numbers, use of tables of frequencies and percentages.


CHAPTER FOUR RESEARCH DATA PRESENTATION AND ANALYSIS OF FINDINGS 4.0

Introduction

This chapter presents the findings from data analysis in respect to the formulated research questions. This chapter is organized into two main sections The first section deals with data presentation and discussion while the second and last section deals with the analysis of questionnaire guiding questions to highlight the real issue obtained by the researcher during the whole period of the study. 4.1

The existing Supplier Evaluation Matrix at MINAPA

4.1.1

Evaluation Process Practiced in the Organization

Evaluation in the organization is done by an independent selected evaluation committee and the process differ evaluating services to goods. The evaluation committee is selected from other departments like Works Department in evaluating maintenance and building items and other departments. The evaluation for goods takes the following process: o Opening of Tender; this is done by which sealed documents from bidders are opened in the public in the presence of MINAPA . One from the committee lifts all the envelopes to show that they are sealed. The names of the evaluation committee are brought in the meeting however delays in bringing the names still exists therefore making evaluation late. o Preliminary evaluation; this process is aimed to check the documents like VAT payments identifications, state of attorney and business license to see the eligibility of such supplier. Bidders/suppliers who are substantially responsive in the evaluation process are subjected to detailed evaluation. o Detailed Evaluation; this process aim to weigh the dodders/suppliers on the basis of understanding specification and other economic criteria for evaluating suppliers. The substantially responsive bidders in this stage are subjected to price comparison. o Price comparison; the bidder in every lot in the purchase are compared on price and the lowest evaluated bidder/supplier to all cases is recommended for the award. o Submission of the evaluation report; the evaluation committee submits the evaluation report to the procurement department/secretariat where challenges on the evaluation are brief prepared to disclose the effectiveness of the evaluation reports and gives its recommendation. Most of the evaluation reports brought to the secretariat for improvement to matters relating to PPA 2004 and PPRA 2005 o Organizational Tender Board meeting; Recommendation from the evaluation committee and the secretariat in the OTB meeting for approval. If the time for the meeting is still far, John E. Moshiro - Mzumbe University

an extra ordinary meeting is called for approving early wanted requirements. If the purchases are urgent, they approved through circular resolution where each OTB member signs by approving or disapproving giving reasons for an actions. Observation shows that the letter written have no enough space to be reasonably for either of the actions. Moreover some disapprove purchases without interests favoring the public probably they need more trainings on the effects of disapproving to the s and the organization at large. Cases of losses of circular resolutions and other documents are dominating the PMU for reasons that no specific person able for such losses. If purchases are emergencies, the ing officer regardless of the authorization limits may approve them. (PPRA of 2005 S. 42). For more details of the process used with other procurement methods in buying services will be explained. 4.1.2

Procurement Methods and the evaluation matrix

One of the objectives of this study was to identify the existing criteria for evaluating supplier in organization. During the study, the researcher observed that there are different procurement methods and different ways of disseminating the evaluation criteria depended much on the goods, services bought and the prevailing environment. The following procurement methods were observed; Tendering For this method, all process are done in TANAPA Headquarter; where most cases and process of tendering is initiated by the tender board, where by the general secretary of the tender board invites tenders from competitive suppliers/manufacturers and then ments are made in news papers and on TANAPA‟s website. An opening ceremony is held and witnessed by the bidder‟s representative. The bids opening checklist forms are filled in for bids that were received. Competitive Quotations This method is done by giving quotations to short listed suppliers and these quotations have an inclusion of and conditions through which the suppliers will be evaluated. Competitive quotations are normally subjected to public opening hence followed by evaluation. Window Shopping Quotations This method requires to distribution of quotation to at least three suppliers where the evaluation criteria are disseminated in the quotations. And one of the basic criteria for this evaluation is price.


4.1.3

Common Evaluation Matrix used in Procurement of Goods

When Tendering is used; The study found these criteria being repeated for every investigated purchase of goods. The criteria are normally basing on quality and cost. The evaluation criteria included preliminary evaluation matrix and detailed evaluation matrix as follow; Preliminary evaluation matrix The purchaser examines the tenders to determine whether they are completed any computation errors have been made, whether required securities have been furnished, whether the documents have been properly signed and whether the tenders are generally in order. The purchaser confirms that the following documents are available; o A tender form and a price schedule: these documents are furnished in the tendering documents indicating the goods to be supplied, a brief description of goods, prices, quality and quantity. The tender form must be completed without any alteration to its format and no substitute shall be accepted. o Documentary evidence that the supplier is eligible to tender and really from a specific country and is qualified to perform the contract if it‟s tender is accepted. o Documentary evidence that the supplier has the financial, technical and production capabilities that are necessary to perform the contract. Also evidence to show that in case the tenderer is not doing business in the country, the tenderer is or will represented by an Agent in that country equipped. o Documentary evidence that the goods and services to be supplied by the supplier are eligible goods and services to be supplied and are conform the tendering documents. o Tender security: the amount of the security is specified in the tender data sheet and is required to protect the purchaser against the risk of supplier‟s conduct, which would warrant the security‟s forfeiture. The security may forfeiture if supplier‟ i. Withdraw its Tender during the period of Tender validity specified by the tenderer on the tender form except in exceptional circumstances, prior to the expiration of the tender validity period the purchaser may solicit the tenderer‟s consent to an extension of the period of the validity of the tender. ii. Does not accept the correction of the errors as follow‟ If there is a discrepancy between the unit price and the total price that is obtained by multiplying the unit price and the quantity; the unit price shall prevail and the total price shall be corrected, if there is a discrepancy words and figures, the amount in words will prevail. Now if the supplier does not accept the correction of the errors, its Tender will be rejected and its tender security may be forfeiture.


iii.

Fails to furnish performance security within an agreed time after receipt of notification from the purchaser or failure to comply the requirements.

Detailed Evaluation Matrix In detailed evaluation, only bids that were substantially responsive and conform to all and specifications of the bidding documents, without material deviation or reservations are considered. A material deviation or reservation is one which affects the scope, quality or performance of the contract, or which, in any substantial way, is inconsistent with the bid document or limits the procuring entity‟s right or the bidders‟ obligations under the contract, and affects unfairly the competitive position of bidders presenting responsive bidders. Detailed evaluation involves scrutinizing the selected bids systematically and critically to establish comparisons on common basis in order to select the bid that satisfies most of the criteria specified in the bidding document. When Quotations are used If quotations which do not undergo public opening are on question, the evaluation criteria are; Preliminary Evaluation matrix o The legal eligibility of the supplier in doing the business o The availability of Taxpaying Identification Number (TIN) provided by TRA Detailed Evaluation matrix The evaluation here is basically analyzing the prices of the quotations and the one with the lower price is selected to supply the goods. Other criteria are like determine completeness of filling tender documents, Submission of the relevant documents like TIN for TRA. In addition to the price other criteria used for evaluation are; Inland transportation, insurance and incidentals In many observed tender documents the cost of these elements are calculated by the purchaser on the basis of published tariff by the rail or road transport agencies, insurance companies and/or other appropriate sources. To facilitate such computations, the Tenderer shall furnish in its tender the estimated dimensions and shipping weight and approximate the value of each package. The above cost will be added by the purchaser to border point price. Delivery schedule The purchaser requires that the goods under the invitation for tenders shall be delivered or shipped at the time specified in the schedule of requirements. The estimated time for arrival of the goods at the project site are calculated for each tender after allowing reasonable transportation time. Earlier deliveries are not credited and Tenders offering beyond this range are treated as non-responsive.


Deviation in payment Payment schedule is set by the purchaser and the bidders should not deviate from these payment schedules. Bidders can however propose an alternative payment schedule and indicate the reduction in the Tender price they wish to offer for such alternative payment schedule. Now, If the purchaser waive any minor informality, nonconformity or irregularities in a tender which does not constitutes material deviation, provided such waiver does not prejudice or affect the relative ranking of any tenderer. Prior to detailed evaluation the evaluation committee selected by the PMU determines the substantial responsiveness of each bidder. If a Tender is not substantial responsive, it is rejected by the purchaser and may not subsequently be made responsive by the Tenderer by correction of nonconformity. For those responsive bidders they are subjected to detailed evaluation. 4.1.4

Evaluation Matrix for Consultancy Services

Under this evaluation, tenders includes technical evaluation for technical proposals and financial evaluation for financial evaluations Technical Evaluation This is mostly done on Consultants services; the technical evaluation is carried out by considering the several criteria which had been disclosed in the request for proposals. The evaluation committee used the following guides on evaluating; o Experience of the consultant in the same field as that of the assignment. o Professional reputation of the consultant and previous performance and experience with other organizations o Qualification of experts and experience in the field of the assignment o General qualifications: general education and training, length of experience, positions held, time with the consulting firm as staff qualification and experience. At the end of the process, the evaluation committee prepared an evaluation report of the “technical quality” of the proposals which substantiate the results of the evaluation and describe the relative strengths and weaknesses of the proposal and all records relating to the evaluation. Table 1: Technical Evaluation Criteria CRETERIA APPLICATION Participation of Technical Staff Yes Procurement Specialist in the Organization Yes Source of Consultancy Yes Every Head of Department is participating in Yes relation to his/her case under evaluation Description of the services Yes The special condition of contract Yes Service and facility provided by the employer Yes John E. Moshiro - Mzumbe University

SOURCE: Questionnaire response and MINAPA PMU Evaluation Report Financial Evaluation Prices of doing services constitute the basis for evaluation. The items contained in the price include; Salary – money paid to individual firm‟s home office Bonus paid out of profit Social costs which are non-monetary benefits like medical costs Cost of leave-these are the overheads, away from headquarter allowances (nights) or s and subsistence allowances. o of references also as specifications from ‟s act as fundamental criteria for supplier evaluation. o o o o

Table 2: Financial Evaluation criteria CRETERIA Bank guarantee Cost/Price benefits Suggestion of financial position by the organization‟s ants Budgetary limits suggested during the financial year Participation of Procurement Specialists SOURCE: Questionnaire Response 4.1.5

APPLICATION Yes Yes Yes Yes Yes

Evaluation Matrix for Non-Consultancy Services

Technical Proposal Evaluators of technical proposal should not have any access to the financial proposal until the technical evaluation is completed and either tender board and donor agency reviews and issue a letter of no objection. The same criteria used in the evaluation of consultancy services are used for evaluation except the following; o Geographical location of the organization- this criterion is normally used when buying services like cleaning services to help in estimating cost of services. o Contract Manager Work experiences to supervise the execution of the contract. Normally the criteria are the same but are twisted to suit the nature of the job and services. Financial Proposal After the evaluation of quality is completed, the client notifies those Tenderers whose proposal did not meet the minimum qualifying mark or were considered non-responsive and to the of reference indicating that their financial proposal will be returned unopened after completing


the selection process. And the ranking may be on Fixed or Budgetary Limits and Least – Cost Selection. The evaluation committee determines whether the financial proposals are completed, they have coasted all items of the corresponding Technical proposals. 4.1.6

Price in the Matrix and Bid Cost Analysis

Observations of reviewed Tender documents and interviews have shown that among other factors, price is one among the criteria used to evaluate suppliers. Many briefs from the secretariat trying to challenge the evaluation shows that the vendors selling at lower price are awarded the contract at MINAPA. This has an exception of services evaluated basing on the fixed budgets methods of selection. In evaluating the tenders, each lot is crosschecked to determine the bidder who gives the lowest price. This is done when the purchases are of goods and for competitive quotations the same is done. If the method is through other quotations which are not competitive, three suppliers are taken as standard for competitions where the basis for evaluation is price. Likewise, Market prices are determined by the departments and the budget unit that added a contingency amount to the price to overcome economic changes for market changes like inflation and deflation problems which affect both micro and macroeconomic policies. The evaluation of prices therefore relies on the budget which has market estimations. Bid Cost Analysis Bidders who qualified were ranked in the order format of lowest price to highest price. The evaluation committee recommended an award of contract to the lowest evaluated bidder and that is the bidder who quoted the lowest price and verified all criteria of evaluation. Table 3: below outline the sample of the Bid Cost Analysis

S/N

BIDDER

PRICE [as read out]

Lot 1

Lot 2

(TSHS)

Lot 3

SOURCE: MINAPA PMU After evaluation, verification of each bid document are made by the tender committee and therefore providing the report for Tender board. Tender board reviews the evaluation and recommendation made by the PMU. The tender board may either; approve the recommendation and authorize the PMU to accept the tender and award a contract in the form specified in the tender documents.


The MINAPA – PMU was not exercising the pre-qualification criteria in its procurement process. The PMU usually uses other criteria like standard quotation methods and open tender (national and International) methods. They use these methods because they fear corruption from its suppliers. The department also does not carry vendor rating and supplier base development. It is not exercising the post qualification exercise after supplier evaluation. Instead of post qualification after evaluation; PMU evaluates the performance of its tender through periodical evaluation whereby after the evaluation PMU reports to the tender Board about the performance of suppliers. If there is a need, the Board may direct the meeting between the supplier and PE to discuss the performance of the contract. The meeting can also take place at the site if the work in progress is outside the office. However for minor procurement activities, the pre-qualified suppliers of responsible tasks were invited to submit their profoma invoices and be evaluated. The one with lowest price was given LPO as a contract to perform that work.

4.2

The Suppliers and the Matrix in Meeting Objectives

4.2.1

Meeting of Purchasing Objectives

Interview results shows that the purchasing objectives of the organization are primarily aimed to purchase requirements of the right quality, right quantity, right price/cost, right time deliveries and at right source (5R‟s of purchasing) and are as follow; The right quality Supplier has the capacity to supply the right quality. In purchasing that this will adhere to specification. Therefore quality must be evaluated by considering how the product is to be used. Generally we define quality as composite/conformity properties found in product. The right quantity Supplier has needed to have capacity to supply the right quantity as indicating in the quotation or tender without delay or supply in installation. The right price A supplier must be at a right or fair price, that means he or she always must quote the best price initially that will be reasonable to both buyer and supplier. The right time of deliveries A good supplier has proper sense of time to avoid lost of material, halted of production and penalty clauses which may be invoked by dissatisfied customer. For the case the same firm have be characterized by good Management on-time deliveries is maintained. Well managed suppliers improved methods and reduced costs, develops better products, also deliver on time. By considering these factors the organization will be in a position to increase its competitiveness and efficient in performing their activities within its internal and external working environment. John E. Moshiro - Mzumbe University

4.2.2

Failure of Supplier to met Purchasing objectives

Interview results shows that some purchasing objectives are not met though evaluation use a number of criteria to evaluate suppliers cause them to fail in met the objectives. The analyses of suppliers on fulfilling the criteria are given as follow; Late deliveries Observation and documentary reviews revealed that suppliers are not always punctual to delivery schedules. The interview with the purchasing and supplies officer shows the same. Suppliers sometimes deliver late with the reasons that sometimes the items ordered are not in stock. Wrong deliveries Observation from incoming goods from different suppliers for different goods especially supplier of vehicle spare parts and dispensaries/medicines deliver some items that did not conform to specification and therefore asked to replace the items. However the suppliers who supply items not conforming to specification are not kept in records for the sake of assessing the evaluation performance and the performance of the unit in general. Rejects Other suppliers are not trustful though the evaluation termed them to be reputable but they deliver goods which are non-conformity. The situation normally occurred in the purchase of stationary items like Toners which supplied while enclosed in boxes therefore become difficult to make inspection. Most s claimed that some toners could not fit into their printing machine therefore lacking performance quality though the conformance quality was achieved during inspection. Now rejects are notified to the respective supplier and they are informed to make replacement of the rejected goods. 4.3

Strength and problems of the existing supplier evaluation matrix done in MINAPA

4.3.1

Strength of the existing supplier evaluation matrix

The following tables shows the result from respondents, whereby respondents were asked to mention the strengths of the methods used in MINAPA in supplier evaluation process, as well as the frequency of respondents of each department participating in the evaluation team. Table 4: Strengths of the current supplier evaluation process at MINAPA Mentioned strengths No; of respondents Fairly and all bidders treated equally hence reduce doubts 3 and improve suppliers competition Right source provided reduce costs of works, goods and 1 services

Percentage of respondents 37.5

12.5


-ability -Transparency -Accuracy Total

4

50

8

100.0

Source: Questionnaire response

Analysis From the above table; shows the strengths of the current methods used in MINAPA for supplier evaluation process, 37.5% of the overall results shows that, in evaluation process there was right source provided which reduced costs of works, goods and services. This is because of being strictly in the evaluation process whereby the entire activity is guided by the stipulated conditions in the tender documents as they are always prepared by the technicians and different people with different skills. Also it reduces costs of goods, works and consultants services. This was highly achieved due to the fact that right suppliers are obtained and assigned the right works according to efficiencies which they can easily perform as they are within their capacities. However 12.5% of the results shows that evaluation and selection of suppliers at MINAPA were done fairly and all bidders treated equally hence reduced doubts and improve competition to suppliers in which in the process of bids open, bids were opened transparently with bidder representatives, bid price and bid security were ready out and every bid price known and those who not submitted bid security were also known, and in the process of evaluation all criteria were followed such as preliminary examination, responsiveness of bidder, detailed evaluation, technical evaluation and bid cost analysis. Also 50% of the results shows that the evaluation process for supplier selection at MINAPA were done accurately, transparently and ably that adhere with organization requirements. Table 5: The frequency of respondent from each department to participate in Evaluation team Response Equal representation

No. of Respondents 8

Percentage of Respondents 100

Unequal representation

-

-

Not sure

-

-

Total

8

100

SOURCE: Questionnaire response.

From the above table; 100% show equal representation of staff from each department to participate in evaluation team. From that results show that there is high degree of each staff from


different department to participate in supplier evaluation team/committee since 0% falls under unequal representation. The researcher see that TB had given enough opportunity to staff of different sections to participate in evaluation since selections was done to different staffs in different sections and in different evaluation tasks by considering the type of purchase and the skills of the people who will be useful in that evaluation. 4.3.2

Problems facing the existing supplier evaluation matrix

The following table shows the results from respondents whereby respondents asked to mention problems facing the existing procedure of identifying and selection of the right supplier‟s at MINAPA. Table 6: The weakness of the methods used at MINAPA for supplier evaluation process Mentioned problems/weaknesses

Number of respondents Percentage from different Departments respondent

Time of the process – it took a lot of time

4

50%

2

25%

1

12.5%

No weakness/problem

1

12.5%

Total

8

100%

-Supplier procedures

ignorance

of

on

-Misunderstanding of scope of work by suppliers Bureaucracy Budget

and

Limited

SOURCE: Researcher’s response and analysis.

Analysis The above table shows the weaknesses with the supplier evaluation process in relation to the overall tender process. 50% of the respondents show that the tender process is time consuming. Taking into , the starting time of preparing the tender to supplying the goods, services or works, this process takes a lot of time. Due to this constraint, some works are delayed or they are not performed efficiently. For stance, researcher observes that there is a delay of building Tourist Banda‟s at MINAPA. By this its seems that most of the respondents are not aware of PPA of 2004


25% of the respondents show that suppliers are ignorant in procedures and there is a misunderstanding to the scope of work of suppliers. According to respondents many suppliers who bid for tender do not understand there procedures in fulfilling customer needs and do not understanding the scope of work, this means they don‟t know the procedure of preparing tender documents as well as the procedure of evaluation up until the award of contract. They believe the awarding of contract is only given to the bidder who quotes the lowest price. There is also a weakness in knowledge of the lowest bidder concept, leading to poor performance of work, services or goods to the organization. Most suppliers selected by their quoted lowest price perform poorly because of their capabilities with respect to personnel, equipment and construction or poor quality manufacturing facilities. These reasons lead to poor performance of works, services and goods. 4.4

Qualification and skills of the of evaluation committee

Table 7: Level of education / professional qualification of respondents Qualification Advanced diploma/1st degree

No: of respondent 4

Percentage of respondent 50%

Master degree

2

25%

A/CSP/SP

2

25%

Total

8

100%

SOURCE: Researcher’s response

Analysis From the table above shows the education / professional qualification of respondents. Those with advanced diploma/first degree yield on 50%, those with Master degree yield 25% and those with professional qualification like A/SP yield 25%. Table 8: Opportunity of staff to attend short course / training in supplier evaluation process Yes

Response 2

No: of respondent

Percentage of respondent 25

No

5

62.5

Not sure

1

12.5

Total

8

100%



Analysis From the table above, 25% said there is opportunity of staffs to attend short course / training in supplier evaluation process while 62.5% said no such kind of opportunity to staff to attend short course/training in supplier evaluation process and 12.5% were not sure. Table 9: Year‟s respondent work with organization No: of years

No: of respondent

Percentage of respondent

0-5

3

37.5%

6-15

5

62.5%

Total

8

100.0%


Analysis From the table above, 37.5% of respondent work with organization from 0-5 years and 62.5% work with organization from 6-15 years. This show that, the organization contain man power that are well experienced and well conformity to the organization‟s daily activities as those having many years of working experience are more than those of few year-working experience. Table 10: competence and skills in evaluation team Response

No: of respondent


Strong agree

3

37.5%

Agree

5

62.5%

Total

8

100.0%

SOURCE: Questionnaire response

Analysis From the table above 37.5% agree to the member competence involved on the evaluation team while 62.5% strongly agree on the ‟ competence and skills in evaluation team. From the above results, most of these employees are involved in supplier evaluations and therefore the greater performance is expected from them as they are equipped with the above mentioned qualifications which can highly contribute to their ability to do well in the whole process of supplier evaluation. 4.5

Recommendations from staff to improve supplier evaluation and selection at

MINAPA Table 11: recommendation from staff to improve supplier evaluation matrix John E. Moshiro - Mzumbe University

Response

No: of respondent


-Evaluation team should be given direct clear criteria to the technical and financial criterion -Time (enough time for evaluation process and enough duration for project to be done), 6

75%

2

25%

-Training staffs on procurement especially those are not at PMU and involved in evaluation process, motivate staffs. -Employment of Technical and Procurement Specialists at evaluation exercise -Great awareness should be made to suppliers of goods and services. -Transparency -Equal opportunity supplier

Total

to

all

8

100.0%

Source: Researcher’s analysis.

Analysis The above table shows the recommended from staff that could possible improve supplier evaluation methods more effective and efficient. o The 75% of the respondents recommend, there should be given direct clear criteria to the technical and financial criterion, so that the suppliers can remove doubt and to be satisfied with the results. o Respondents recommended about the issue of time that is there should be sufficient time for evaluation, because some tenders were bids with many bidders and also have many lots; also there some items need high concentration on evaluation. Therefore, the PMU should prepare and arrange sufficient time for evaluation activities and also must consider John E. Moshiro - Mzumbe University

value and complexity of the procurement requirement, which were evaluated. Researcher observed that PMU gives evaluation committee not more than three (3) without considering the complexity of the works. Under this circumstance it could be better if PMU would be allocating time and sufficient number of people by considering the nature and complexity of the work so as there should effective performance. According to sec. 37 (3) of PPA 2004 it is explained that the number of of the evaluation committee shall depend on the value and complexity of the procurement requirement, but shall in all cases be a minimum of three . Also the Act recommends that evaluation of tenders and notification of award and obtaining necessary approvals should take 30 days. However respondents recommended that there should be enough training to procurement staffs and those who were not at PMU but mostly involved in evaluation process. This will help of PMU to be highly proactive in any matter which may rise in the evaluation process and also increase their ability to prepare a good evaluation report which is very important for decision tool to the TB for decision making. Also motivation should be given to staffs in order to increase their working morale so as to perform work effectively and efficiently. o 25% of the respondents recommend that great awareness should be made to suppliers of goods and services on evaluation process transparency and equal opportunity to all suppliers. This should be done through making them clear on the important requirement which should be included in there bidding documents so as to increase their competitive capacity. By doing this procurement will be conducted in a competitive way and therefore deliverance of goods or service quality, quantities, and time required will be at a good position.


CHAPTER FIVE SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.0

Introduction

This study was set out to explore the effectiveness of supplier evaluation matrix in TANAPA. So MINAPA was selected as the case study for conducting the research. Under this chapter the researcher had to conclude and give out recommendations basing on the findings the researcher was able to find. 5.1

Summary of Analysis of Findings o Some evaluation criteria like checking stock levels, items on order and financial position of bidders/suppliers are not take into o Visitation of suppliers/bidder during evaluations are not done therefore evaluators have concentrated much on evaluating documents. o Evaluation matrix for services are clearly and if effectively used can guarantee right sourcing. o Saving in the expenditure cannot be effective because the PMU has no market research and database for prevailing market prices therefore cost/price based evaluation are not effective. o Bases for evaluation in most cases are prices because most purchases are done through window-shopping due to lack of procurement planning and framework contracts for emergencies and small value purchases.

In assessing the performance of suppliers in meeting the organizational procurement objectives the researcher came out with the following results o Late payments to suppliers are dominating in the organization and discourage the supplier‟s performance. o Rejects without reasonable statements shows that generally evaluation is not good because the PMU has not always obtain the right sources of supplies. In assessing the weakness of the matrix, the researcher found the following o Late deliveries, wrong deliveries and rejects is weakness to supplier evaluation matrix and the PMU at large. o Some specifications are not clear and may result to limited competition if targeted to particular supplier. 5.2

Conclusion

The primary purpose of this research was to assess the effectiveness of supplier evaluation and selection at Mikumi National Park. After vital effectiveness of the findings, the following variables were arrived at in conclusion as the variables most responsible for evaluation and selection of supplier to be successful and conform to vendor appraisal for the benefit of the organization. John E. Moshiro - Mzumbe University

Practically at Mikumi National Park all procedure for supplier evaluation and selection are conducted by PMU and mostly use three procurement methods including tendering, window shopping (quotations) and Competitive quotation which are the far most transparent tool of procurement. Evaluation and selection of supplier at (PMU)-MINAPA were done with corroboration with other departments like works, technical, s and sections. PMU use five (5) levels of evaluation which are Preliminary Examination, Detailed Evaluation, Technical Evaluation, Financial Evaluation and Price/Bid Cost Analysis. Preliminary examination, this determine whether or not each bid is substantially responsive to the requirements of the bid documents, whether the bids have been properly signed and whether the bids are otherwise generally in order. Detailed Evaluation involves scrutinizing the selected bids systematically and critically to establish comparisons on common basis in order to select the bid that satisfies most of the critical specified in the bidding document. Financial Evaluation; this involve the determination of the prices of doing business by considering the budgetary constrains within the organization. Technical Evaluation and Price/Bid Cost Analysis. Technical evaluation mostly done on consultants was carried out by consider the several criteria which had been disclosed in the request for proposals while Bid cost analysis bidders ranked in the order format of lowest price to highest price. The performing of the PMU department towards ensuring that the organization is in competitive competition in term of efficiency and profitability seems to be better as shown transparency to a great extent. This is due to the fact that all the evaluation and selection procedures and activities are carried out as prescribed by Public procurement Act, 2004, section 37 which stipulates that “All evaluations shall be conducted by an evaluation committee, which shall report to the PMU and hip of the evaluation committee shall be recommended by the PMU, and approved by the AO or W. 5.3

Recommendation

The researcher believes that MINAPA is capable of doing more effective supplier evaluation if the following recommendations are consider in respect of the researcher findings. 5.3.1

Emphasis on the use of PPA, 2004 and PPR, 2005

TB should highlighting on the use of this Act in all of it procurement activities. All s of this Act should be trained on how to comply with it and the most important area of the Act should be considered. Also MINAPA should insist to its suppliers and service providers and encourage them to read and understand this Act and the standard tender document which are used so that to improve the ability of filling bid documents. In order to improve competition among bidders, PMU is responsible to educate them through communicating the reasons of their failures after completion of evaluation activities as it‟s stipulated in the Act. John E. Moshiro - Mzumbe University

PMU also should exercise post qualification after supplier evaluation as per sec. 48 of PPA, 2004 because post-qualification is undertaken to determine whether the lowest evaluated bidder has the capability and resources to carry out the contract. If this will be done weakness such as lowest bidder concept lead to poor performance of work or service or goods to the organization will be eliminated or solved. 5.3.2

Motivation

In any case, motivation of all staff involved in the process of supplier evaluation, is necessary in achieving fairness and honesty in the evaluation of suppliers. Should do the following; Pay employees better through paying them setting allowances after sitting on evaluating supplier, improving working environment and educating staff in of training workshops. 5.3.3

Training

Management of MINAPA should carry on providing job training, study tours to the procurement staffs and other staffs involved in evaluation as there is daily change of the environment and business condition in which the organization is operating. This will create there awareness on how the business is going on and therefore being able carryout there evaluation activities ever efficient. 5.3.4

Technology changes

Also MINAPA should see the needs to adopting technological changes in conducting procurement activities. For example by using computers which are internet connected, it can be easy to with the suppliers through sending the e-mails and therefore serve time needed to find them physically. It‟s also very efficiency way to get access to important information while being in the process of conducting supplier evaluation without contradicting with the time limits set to carry out the entire procurement.


REFERENCES Carr, A.S., and Pearson, J.N. (1999), Strategically managed buyer-supplier relationships and performance outcomes Journal of Operations Management; 17, 497-519 Carter, P.L., et al. (1998). The Future of Purchasing and Supply: A Five-and ten-year Forecast. Center for Advanced Purchasing Studies: Focus Study. Datta A.K (1984), Materials Management, procedures, texts and cases Dobler D.W. David and Burt (1996), Purchasing and Supply Management, 6th Edition, Tata Mc Graw-Hill Publishing, Delhi Farmer D, (1987) - Purchasing Management Handbook, Gowa Publishing Company Ltd, Graft Road England Kilimali E.M (CR 013948 S, 2004) How Specification and Evaluation affect Transparency in Public Procurement (Unpublished Report) Kivugo J.J (1981), Material Management, Vuga Press Tanzania Kothari C.R. (2004) Research Methodology, Methods and Techniques 2nd Edition, New Delhi Kunambi J, (2007) Analysis of Tendering Procedures in Public Institution Leenders, M.R. & Fearon, H.E. (1996) Purchasing and Supply Management Chicago: Irwin. Mchangila M.D (CSP 2003) Selecting Supplier through Tendering (Unpublished Report) NCC, (2000), Code of procedure for tendering for civil and building works in Tanzania, 2nd Edition Porter, A.M. (1999). Raising the Bar. Purchasing Online. Stanley, L.L. (1994). An Empirical Study of the Link between Buyer-Supplier Relationships and Purchasing Performance. Tempe: Arizona State University. The Public Procurement Act of 2004 (PPA 2004) and the Public Procurement Regulatory Authority of 2005 (PPRA 2005) Tanzania National Parks (TANAPA) Procurement Manual http//: www.tanapa.org.tz http//:www.minapa.org.tz http//:www.supplymanagement.com http//:www.manufacturing.net/magazine/purchasing, Retrieved April 10, 2000.


Appendices I Questionnaire Dear respondents; I am carrying out a Research Study on Supplier Evaluation Matrix/Model as a case study of Mikumi National Park as a partial fulfillment of the requirements for the award of Bachelor of Business istration in Procurement and Logistics Management offered by Mzumbe University (BBA/PLM III). Here is a questionnaire that I kindly ask you to fill out. Your thoughts and opinions are greatly appreciated. Your individual responses will remain strictly confidential. RESEARCH DATA QUESTIONS 1. (a) Job title ……………………………………………………………………………… o For how long have you been working in this organization? ……………………………………………………………………………..… o Have you ever involved in the tender committee for the purpose of contributing on supplier evaluation and selection process for the supply of material? [

] Yes

[

]

No

1 (b) Please tick the appropriate box to indicate the level of your Education and/or professional qualification. [

]

Certificate level

[

]

Diploma

[

]

Advance diploma/First degree

[

]

Masters Degree

[

]

A/CSP

[

]

Other Professional qualification: State…………………………

2. Do you think there is fair selection of staff from each Department to participate in evaluation team? (Tick as appropriate)

[

]

Equal selection/representation


3.

[

]

Unequal selection/representation

[

]

Not sure

Does procedure for supplier evaluation being followed? (Tick as Appropriate) [ ] Yes [

] No

[

] Not Sure

4. Does supplier‟s supply material according to the organization need? That is According to (5 R‟s) Right price, quality, source, time and quantity? (Tick appropriate) [ ] Yes [

] No

[

] Not sure

5. Does involvement of procurement specialist in evaluation team simplify the supplier evaluation process? (Tick appropriate) [

] Strong Agree

[

] Agree

[

] Disagree

[

] Strong disagree

6. Does Ministry of Finance provide opportunity for his staff to attend short course/ training in supplier evaluation process? (Tick appropriate) [ ] Yes [

] No

[

] Not sure

7. Does the member involved in evaluation committee have competence and skills for the task (Tick Appropriate) [ ] Strongly agree [

] Agree

[

] Disagree

[

] Strongly disagree John E. Moshiro - Mzumbe University

8. Which department(s) responsible for supplier evaluation and selection in organization? ………………………………………………………………..…………………… 9.

What are the strengths/benefits of the method use by organization for evaluation process? ………………………………………………………..…………………….. ……………………………………………………………..………………. ………………………………………………………………………………

10. What are the problems facing the existing procedures of identifying and selecting the right supplier? ………………………………………………………………………………….. …………………………………………………………………………….…… …………………………………………………………………………….…… 11. What are the common criteria used in supplier evaluation and selection process for the supply of material? ………………………………………………………………………….….. ………………………………………………………………………….….. ………………………………………………………………………….….. ………………………………………………………………………….….. 12.

What are the criteria used in supplier evaluation within the organization in of; a) Technical criteria ……………………………………………………………………………… ……………………………………………………………………………… ………………………………………………………………………….…… b) Financial criteria ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… John E. Moshiro - Mzumbe University

………………………………………………………………………...…… 13. Could your supplier evaluation process be effective in absence of the criteria you use for the evaluation? YES/NO Why? ………………………………………………………………………….…… …………………………………………………………………………….… …………………………………………………………………………….… 14. Do you think that your Procurement Organization Structure gives the committee/secretariat enough room/time to challenge evaluation? If YES; What are the challenge do you to have ever provided to the Organization Tender Board. (PMU)? ……………………………………………………………………………….. ……………………………………………………………………………….. ……………………………………………………………………………….. ……………………………………………………………………………….. If NO; What are the barriers? ………………………………………………………………………………... ……………………………………………………………………………..… …………………………………………………………………….…….…… …………………………………………………………………………..…… 15. Did you ever experience wrong deliveries, less quantity deliveries, wrong specifications or out-of-date goods from the selected suppliers? If YES; What do you think to be the causes. …………………………………………………………………….……….. ………………………………………………………………………..…….. ……………………………………………………………………………...


……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… If NO; Is supplier evaluation and selection has to do with such success? Why? ……………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………... 16. What do you think the Procurement Organizational Structure can do in order to make supplier evaluation process more effective and efficient? ……………………………………………………………………………… ………………………………………………………………………..…….. ……………………………………………………………………………….. ………………………………………………………………………………. ………………………………………………………………………………. ……………………………………………………………………………… 17.

Please give any OPINION/ COMMENT on this questionnaire! ………………………………………………………………………………. ………………………………………………………………………………. ………………………………………………………………………………. ………………………………………………………………………………. ……………………………………………………………………………… ………………………………………………………………………………

© 2011 Prepared by; John E. M

Thank you for your cooperation in responding to these questions.



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