Kwame Nkrumah University of Science and Technology, Kumasi an Assessment of Benefits Management Practices of Public Procurement
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KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY, KUMASI AN ASSESSMENT OF BENEFITS MANAGEMENT PRACTICES OF PUBLIC PROCUREMENT ENTITIES IN THE PROCUREMENT OF INFRASTRUCTURAL PROJECTS IN GHANA: CASE STUDY OF KUMASI METROPOLITAN ASSEMBLY (KMA) BY AKUA ASANTEWAA OHENE- ADDAE (BSc. (Hons) Building Technology, CEMPA) A Thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi In Partial Fulfillment of the requirements for the degree of MASTER OF SCIENCE IN PROCUREMENT MANAGEMENT Department of Building Technology College of Architecture and Planning 2013 DEDICATION I dedicate this work firstly to the Almighty God for the gift of life and how far he has brought me. It’s also to my dear husband Kwame, my mum Millicent and my sister Dorcas. God bless you all. i ACKNOWLEDGEMENTS Sometimes our light goes out but is blown into flame by another human being. Each of us owns deepest thanks to those who have rekindled this light. ‘Albert Schweitzer’. I would like to express my sincere appreciation to my supervisor, Dr Theophilus Adjei Kumi, for his guidance throughout the whole project, Dr Gabriel Nani, and the entire lecturers of the Department of Building Technology for their encouragement. Advice and constructive criticism was received on selected parts of the work from my office colleagues, friends for their encouragement and really appreciates all the comments I received and has made good use of them. I would also like to thank all the staff of KMA for their contributions towards the successfulness of this work. Thanks also to all my fellow masters students with whom it has been possible to discuss this work. God Bless you all. ii TABLE OF CONTENTS PAGE DEDICATION I ACKNOWLEDGEMENT II TABLE OF CONTENT III LIST OF TABLES VIII LIST OF FIGURES IX ABSTRACT X CHAPTER ONE: INTRODUCTION 1.0 Introduction 1 1.1Background of the study 1 1.2 Problem Statement 3 1.3 Objectives of the Study 4 1.4 Scope of the Study 5 1.5 Justification of the Study 5 iii 1.6 Organization of the Study 6 CHAPTER TWO: LITERATURE REVIEW 2.0 Introduction 7 2.1 Concept of Public Procurement 7 2.2 Concept of Benefit Realization Management 10 2.3 Classification of Benefits of Project 13 2.3.1 Value types 13 2.3.2 Organisational or Business Impact 14 2.3.3 Unplanned or Emergent Benefits 14 2.3.4 Tangible 14 2.3.5 Efficiency 15 2.3.6 Effectiveness 15 2.4 Benefit Realization Management Approaches 16 2.4.1 Active Benefit Realization (ABR) 16 2.4.2 Office of government Commerce (OGC) Benefit Management approach 18 2.5 Benefit Realization Techniques 22 iv 2.5.1 Benefit Identification 23 2.5.2 Benefit Profile 24 2.5.3 Benefit Realization plan 24 2.5.4 Benefit monitoring, Review and Evaluation 25 2.6 Summary 27 CHAPTER THREE: METHODOLOGY 3.1 Research Design 28 3.2 Population of the research 29 3.3 Sample Techniques 29 3.4 Sample size 30 3.5 Data Requirements and Sources 34 3.6 Data Collection and Processing 35 3.6.1 Data Collection Instruments and Method 35 3.6.2 Processing of Data 36 3.7 Data Presentation and Analysis 36 3.7.1 Presentation of Data 36 v 3.8 Profile of Study Area 36 3.8.1 Kumasi Metropolis 36 3.8.2 Kumasi Metropolitan Assembly 39 CHAPTER FOUR: RESULTS AND DISCUSSION 4.0 Introductions 45 4.1 Characteristics of Respondents 45 4.1.1 Gender Type and Working Experience 45 4.1.2 Gender and Facility Type Relationship of Respondents 47 4.2: Benefit Realization Practices at KMA 50 4.2.1 Stakeholders in Benefit Realization 50 4.2.2 Benefit Determination 52 4.3 Challenges Facing KMA in Benefit Realization 59 4.4 Public Perception on Infrastructural Projects Provided by KMA 61 4.4.1: KMA and Facility Users Interaction 62 4.5: Framework for Benefit Realization at KMA 70 vi CHAPTER FIVE: MAJOR FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.0 Introduction 73 5.1 Summary of Major Findings 73 5.1.1 Benefit Realization Practices Employed by KMA for Infrastructural Projects 73 5.1.2 Factors that Militates Against the Operation of Effective Benefit Realization by KMA 74 5.1.3 Public Perception of some Infrastructural Projects Provided by KMA 74 5.2 Conclusion 75 5.3 Recommendation 76 REFERENCES 79 APPENDICES Appendix 1: Questionnaire for facility users 82 Appendix 2: Interview Guide for KMA 85 vii LIST OF TABLES Table 2.1: Paradigm shift for benefits realisation 12 Table 2.2: Roles of Stakeholders in Projects and Their Responsibilities 17 Table 2.3: Key Stakeholders and their Responsibilities in Project Management 19 Table 3.1: Sample size determination 33 Table 4.1: Characteristic of Facility Users 46 Table 4.2: Gender and Facility Type Relationship of Facility Users 47 Table 4.3: Stakeholder and their Roles in Infrastructural Facility in Kumasi Metropolis 50 Table 4.4: Review and Evaluation of Project to Ensure Benefit Realization 57 Table 4.5: Methods use For Evaluation and Review of Project at Each Phase of project 58 Table 4.6: Challenges KMA faces in Ensuring Benefit Realization 60 Table 4.7: KMA and Facility Users interaction 62 Table 4.8: Users’ Perspective of Problems with Facilities 64 Table 4.9: Rating of Problems from Perceptive of Facility Users at Market centers 66 Table 4.10: User’s Satisfaction with Facility 67 viii LIST OF FIGURES Figure 2.1 Benefit Management Process by Office of Government Commerce 21 Figure 3.1: Map of Market Centres in Kumasi 38 Figure 4.1: Number of Years Spent at Facility Center 48 Figure 4.2: Gender of Respondents and Facility Type 48 Figure 4.3 Pie Chart Showing Review and Evaluation of Project to Ensure Benefit Realization at Post Construction Stage 57 Figure 4.4: Pie Chart Showing Challenges KMA Faces in Ensuring Benefit Realization 60 Figure 4.5: Users’ Perspective of Problems with Facilities 65 Figure 4.6: Pie Chart Showing Rating of Problems from Perceptive of Facility Users at Market centers 66 Figure 4.7: User’s Satisfaction with Facility 68 Figure 4.8: Framework for benefit realization 70 ix ABSTRACT It is common knowledge that public procurement entities especially Metropolitan, Municipal and District Assemblies have huge investments in infrastructural projects. However the impact on the quality of lives of people or intended beneficiaries is questionable (Ashurst and Doherty, 2003). This study seeks to research into the Benefit Realization Practices of Public Procurement Entities in the procurement of infrastructural projects in Ghana. The study was conducted in Kumasi Metropolis using KMA as a public procurement entity to assess whether or not market centers and transport terminals provided by KMA meet the needs of the users. In order to get realistic outcome, the study selected market queens and transport union leaders from the market centers and transport terminals respectively. The study realized that KMA has a benefit management practice in place ranging from pre design stage to post construction stage. However, it was realized that KMA does not directly involve the beneficiaries (market queens and transport union leaders) in the projects and does not quantity benefits identified for each projects. This has resulted in problems at the facilities had problems but the problems was less severe in facility where user were more involved in the project and more understood the actual benefit of the project. The study therefore recommended that KMA should create awareness of actual benefit of project before their commencement, assign specific roles to facility users as stakeholder in benefit realization and intensify evaluation before, during and after construction of facility and inclusion of Benefit realization in the Procurement Cycle. x DECLARATION I hereby declare that this submission is my own work towards the award of MSc in Procurement Management and that to the best of my knowledge, it contains no material previously published by another person nor material which has been accepted for award of any degree of the University, except where due acknowledgement has been made in the text. AKUA ASANTEWAA OHENE- ADDAE …………………… ……………… (PG 6685611) Signature Date Certified by: Dr. THEOPHILUS ADJEI KUMI …………………… ……………… (Supervisor) Signature Date Certified by: Prof. J. Ayarkwa …………………… ……………… Head of Department Signature Date xi CHAPTER ONE INTRODUCTION 1.0 Introduction This introductory chapter contains the background to the study, statement of the research problem, objectives of study; research questions, justification, limitations of the study, scope of this research project and organization of the study. 1.1 Background of the study All around the world, public infrastructure services needs are fast outpacing the resources for providing them. These socio-economic realities have intensified the search for more innovative means of delivering public services and the need to achieve value for money and this necessitated the need for introduction of Public Procurement. Public Procurement is the process of acquiring goods and/or services at the best possible total cost of ownership, in the right quantity, quality, time and place for use by government and public organizations via contracts (Glavee-Geo, 2008). Procurement processes and procedures in Ghana have gone through a number of changes, with the main objective of reducing or at best eliminating corruption in Public Procurement, realizing value for money, efficiency in the procurement process among others. A major change was the passing of the Procurement Act, Act 663, in 2003. As much as the usage of Act 663 has 1 streamlined procurement processes in the country and established a high level of sanity in the procurement environment, the International Trade Centre UNCTAD/WTO (ITC) advises developing and transition countries on the techniques of effective Public Procurement systems while supporting the policy goals established by governments.