IMPACT OF PUBLIC PROCUREMENT POLICIES AND PROCEDURES ON THE HEALTH DELIVERY SYSTEM IN ZIMBABWE:...

8/12/2019 IMPACT OF PUBLIC PROCUREMENT POLICIES AND PROCEDURES ON THE HEALTH DELIVERY SYSTEM IN ZIMBABWE: CHITUNGWIZA CENTRAL HOS

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BINDURA UNIVERSITY OF SCIENCE EDUCATION

FACULTY OF COMMERCE

DEPARTMENT OF ECONOMICS

TOPIC

IMPACT OF PUBLIC PROCUREMENT POLICIES AND PROCEDURES ON THE HEALTH DELIVERYSYSTEM IN ZIMBABWE: CHITUNGWIZA CENTRAL HOSPITAL

BY

NYEKE DEZMORE

B1128603

A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ECONOMICS IN PARTIALFULFILLMENT OF THE REQUIREMENTS OF THE BACHELOR OF COMMERCE (HONS) DEGREE IN

PURCHASING AND SUPPLY

2013


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CHAPTER ONE

1.0 Introduction

Chitungwiza Central Hospital (CCH) is a quasi-government non-profit making

organization under the Ministry Of Health and Child Welfare. It is committed to the

provision of quality health services, which are promotive, preventive, curative and

rehabilitative, advocating and facilitating the provision of cost effective services in a

conducive environment indiscriminately. To achieve this it has a purchasing function

which its main function is to procure all goods and services for the hospital. ThePurchasing function is part of the broader concepts of materials management or logistics

management, provides materials, products and services to the enterprises in such a

manner that input costs are optimized, the competitive advantage of the firm is enhanced

and the welfare of the general community is increased. It is there as a result of the State

Procurement Act which states that all government departments should have this function.

Though this function is there, Chitungwiza Central Hospital is facing a number of

operational challenges. Inadequate medications, lack of back-up spares for diagnosticequipment, poor diet for patients, floor beds in wards are some the challenges hospitals

face in their quest to deliver quality healthcare to patients and Chitungwiza Central

Hospital is not exempted. Against this background, the research aims at assessing the

impact of the public procurement regulatory framework on the health delivery system in

Zimbabwe.

1.1 Background of the study

Health institutions in Zimbabwe are generally faced with a number of operational

challenges. Inadequate medications, lack of back-up spares for diagnostic equipment,

poor diet for patients, floor beds in wards are some the challenges hospitals face in their

quest to deliver quality healthcare to patients.


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Public procurement is not a new area in terms of research as there are a number of studies

conducted on the subject for instance, Lindskog, Brege and Brehmer (2010), Shui Hui

et.al (2010), Lawther and Martin (2005), Caldwell et.al (2005), Tikkanen and Kaleva

(2011), Cabras (2011), and Walker and Bremmer (2010). These researchers focused

intensely on public procurement in general. The impact of public procurement policies

and procedures on health delivery system in Zimbabwe has not been adequately

developed and applied. There are some studies done in other countries on issues to do

with public procurement but there are no similar cases which were done in Zimbabwe.

Thus, generalization for example, Procurement issues in Malaysia to all public

procurement scenarios worldwid e will result in a narrow approach being adopted.

Zimbabwe might not have the same challenges as Malaysia or China as nations vary

considerably. It can be noted that results of their investigations are context oriented.

In addition, resurgence of diseases like Cholera and Typhoid coupled with acute

shortages of drugs and medical equipment in some hospitals bring this research into

perspective. Also, this research come at a time when the Ministry of Finance, reiterated

the importance of efficiency and effectiveness in the service delivery (Chizu, 2011) . This

also coincided with the announcement by the State Procurement Board Chairman about

the need to improve competitiveness of tendering system (The Herald, 2011). The

resurgence of Cholera in 2008 which claimed thousands of lives and the recent Typhoid

outbreak in most parts of the country is a clear testimony of the challenges facing the

health industry. Late diagnosis of cervical and breast cancer in women add to the basket

of health challenges.

Further to this, the country s Tuberculosis (TB) Mo rtality rate remains high with the

nation ranked fourth in the world with reported cases of patients defaulting treatment

over allegations of high consultation fees at hospitals despite the free treatment policy

(Newsday, 2011) . Generally high acquisition cost of drugs, surgical and medical

equipment seem to be prevalent in most hospitals. Shortage of Anti-Retroviral drugs

(ARV) for HIV patients in hospitals and clinics remains a challenge. This is further

exacerbated by unavailability of doctors and under-equipped theatres and treatment

rooms. Floor beds in most hospital wards are seen scattered and perhaps an indication of


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inadequate physical infrastructure. There are long queues in sections such as the Casualty

and Outpatients departments resulting in longer turnaround time for patients.

As for existing medical equipment, constant breakdown and lack of back-up spares to

restore the functionality of these machines have been noted especially X-ray Machinesand Laboratory Analyzers. There are also cases where patients are booked for X-rays or

other specialized tests to be done after a couple of days.

Regarding the issue of diet in hospitals, patients have been served in some cases, with

food which is not palatable and nutritious in line with their varying dietary requirements.

This was well noted in 2008 and 2009 where patients were mostly served with beans or

cabbages as relish consecutively.

Despite these challenges, there are even cases where the hospitals do have the funds but

there are no medicines or specialist modern equipment and this has been highlighted by

the Minister of Finance. Other cases involve cancellation of tenders for drugs whilst some

take longer to be finalized irrespective of dwindling stock levels.

1.2 Statement of the Research Problem

The health sector is facing a multiplicity of issues ranging from unavailability of critical

medicines, influx of unregistered medicines, expiry of some drugs in hospitals and clinics

to inadequate diagnostic equipment in the laboratories and X-rays. This was evidenced by

the health sector s failure to cope with recent outbreaks of Cholera and Typhoid. Despite

these challenges, there are cases where the hospitals have the funds but there are no

medicines or specialist modern equipment and this has been highlighted by the Minister

of Finance. Other cases involve cancellation of tenders for drugs whilst some take longer

to be finalized irrespective of dwindling stock levels which result in stock outs. This

negatively affect the service delivery to the patient.


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1.3 Objectives

To evaluate the impact of public procurement policies and procedures on health

service delivery.

To assess the adequacy of procurement policies and procedures at ChitungwizaCentral Hospital.

To examine the causes of the delay in procurement activities and their effects.

1.4 Research Questions

How has the Public Procurement Act affected health delivery system at

Chitungwiza Central Hospital? To what extend are the procurement policies and procedures adequate for

Chitungwiza Central Hospital? What are the causes of delays in procurement activities?

1.5 Significance of the study

The rationale behind this study is to fulfill personal, academic and professional interest

1.5.1 The Organisation

To the government, this research will have the potential of changing the public

procurement terrain by enhancing efficiency and effectiveness in the system. Areas of

resource mobilization and allocation will be reconsidered resulting in mega savings in

resources and realization for Value for Money (VFM). The general well- being of

patients will be improved in hospitals and clinics. In essence, this research will unveil

areas where improvement is most and urgently required. And, for the institutions that are

used as case studies, the research will actually assist in the identification of all the

operational issues impacting the health delivery system at their hospitals. Employees of

these hospitals will have an honour or recognition of participating in a research that can

alter the history of the country in terms of health delivery.


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Lastly, for the researcher, the approach of the case studies will enable full understanding

of the research problem. Skills for analyzing, assessing, investigating will be invaluable

for the researcher even for future studies.

1.5.2 The University

The research can be added to the library and can be used by other researchers and can be

used as empirical evidence by other researchers.

1.5.3 The Researcher

The researcher will bring a sense of achievement to the researcher. It will work as a

motivation tool as other researchers can make reference to the research on matters

pertaining to procurement and this will increase his confidence in the procurement field.

1.6 Assumptions of the study

The information that will be used for this research is reliable, accurate, unbiased

and will be obtained from relevant authors, persons, and publication. Issues under investigation shall remain constant throughout the period of research The researcher shall get all the information needed for this research All the targeted participants will cooperate All participants will provide accurate information The research shall be carried out within the premises of Chitungwiza Central

Hospital.

1.7 Delimitations of the study

The major concerns of the study shall be the impact of public procurement policies and

procedures on health delivery system. The study shall be carried out at Chitungwiza

Central Hospital and shall consider an evaluation of the State Procurement Act.

1.8 Limitations

The collection of data was difficult in areas that are governed by law and code of

ethics. However the researcher had to seek authority from the CEO who approved


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the researcher to have access to the required data. Information that is considered

sensitive and confidential was difficult to deal with as respondents were not

willing to release such information but the researcher had to educate them on the

importance of the information as it was purely for academic purposes. Some respondents were not able to return the filled questionnaires on time. The

researcher had to persuade them to finish on time.

1.9 Definition of terms

Procurement :- it is that function that describes the activities and processes that are done

to acquire goods and services

Inventory: - these are goods in stock

Organisation: - might be used to replace the hospital.

Code of ethics :- these are standards, rules and procedures that govern the way goods are

purchased

Purchasing :- this is the process of ordering and receiving of goods and services (Benton,

2010)

CCH- will be representing Chitungwiza Central Hospital.

1.10 Summary

This chapter will explore the background of the study, statement of the problem,

significance of the study, assumptions, delimitations and limitations of the study.


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CHAPTER TWO

Literature Review

2.0 Introduction

This Chapter critically assess and evaluate the published works of accredited scholars and

researchers, relevant and applicable in the public procurement. This Chapter is logically

organised in two parts namely, general public procurement perspective and health

procurement perspective.

To fully appreciate and understand the direction of this research, it is deemed crucial and

relevant to define public procurement in general and outline its context to give direction

to the academic audience.

2.1 Theoretical Literature

The review of literature by other authors will be reviewed under this heading. Theresearcher started by defining procurement.

2.1.1 Conceptual Definition of Procurement

Procurement is the process of acquiring goods, works and services, covering both

acquisitions from third parties. It involves option appraisal and the critical make or buy

decision which may result in the provision of goods and services in appropriate

circumstances (PPB, 2003).

Procurement is to purchase the right quality of material at the right time, in the rightquantity, from the right source, at the right price. The main objectives of procurement

include: supplying the organization with a steady flow of materials and services to meet

its needs, to buy efficiently and wisely, obtaining by ethical means the best value for


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every money spent, to manage inventory so as to give the best possible service to users at

lowest cost and protect the government s cost structure (Barly, 1994).

2.1.2 Definition of Public Procurement

Public procurement has been defined as, a process whereby public authorities -

including all levels of government and public agencies-buy goods and services or

commission work , Kasta nioti et al.( 2012,p.1).

Public procurement can be described as centrally negotiated legal processes which are

guided by political decisions and practically implemented by various local purchasers. It

should be acknowledged that public procurement has both economic and social benefits,

but the social benefits of public procurement are primarily seen as indirect positive

effects from economic savings and environmental improvements (Bjrn Wickenberg

2004). Procurement is a potential instrument of integrating socially and economically

sustainable benefits to stimulate employment programmes.

According to Waara (2007), Public Procurement is any purchasing performed by any

public authority within the classical sector or within the utilities sector. The public

procurement rules applicable to purchasing entities also depend on whether the total

purchase value is over or below certain so- called threshold values, which differ as

regards goods, services and construction works. All procurements above the threshold

values apply procurement directives and must be advertised in the Supplement to the

Official Journal for public tenders. There are a number of different procurement

procedures to choose from, depending on whether it is a purchase above or below the

threshold values. Many minor purchases are subject to so- called direct procurement,

which do not have to be publicly advertised. However, due to principles of market

competition, direct procurement should not take place repeatedly, and purchases should

not be divided into smaller units in order to avoid exceeding the threshold values .

Again, according to Ghana Integrity Initiative (2007), Public Procurement is the

acquisition of goods and services at the best possible total cost of ownership, in the right


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quantity and quality, at the right time, in the right place for the direct benefit or use of

governments, corporations, or individuals, generally via a contract. It can be said to be

the purchase of goods, services and public works by government and public institutions.

It has both an important effect on the economy and a direct impact on the daily lives of

people as it is a way in which public policies are implemented (Ghana Integrity Initiative,

2007).

It is interesting to note that purchasing by government departments and agencies

represent a substantial contribution to the country s Gross Domestic Product (GDP). In

most developed countries, it is estimated that GDP contribute about 10-15 percent while

in developing countries it is approximately 20 percent (Mukhopadhyay 2011). The funds

that are utilised in the procurement of goods and services are mainly harnessed from

income tax, companies tax and duties on imports (Hui et al. 2011). In some countrie s the

parliament approves the budget prior to disbursements to individual government

departments. Generally the decision making process in public purchase is cumbersome,

tedious, complex and time consuming primarily because of extensive authorisation

procedures and also multiple stakeholders (Van Weele (2005). Further, there is pursuance

of political, budget policy and public accountability objectives in public procurement as

given by Van Weele (2005) and it is of paramount importance to review these objectives.

2.2 Critical objectives in Public Procurement

Public procurement has its objectives and the researcher saw it worth to look in to these

objectives.

2.2.1. Political Objectives

Political objectives play a pivotal role in shaping procurement policies and procedures in

the public sector. Issues relating to employment creation, development of and protectionof local industries are at the heart of government iniatives. The moves by the

Zimbabwean government to adopt the Look East Policy where certain products are

procured mainly from China clearly illustrate the encroachment of political objectives

into public procurement framework. This is a very contentious issue though defended by

the State Procurement Board (Langa 2012). The Indigenisation and Empowerment policy


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where a certain percentage of the public tenders are reserved for local companies again

poses serious implications in public procurement. Indigenous companies should not be

synonymous to brief case companies whom when contracted fail to meet up to the

contractual obligations. The recent awarding of tender to a South African company by

Zimbabwe Electricity Supply Authority (ZESA) ignited debate and criticism in line with

the Indigenisation and Empowerment policy. Further, the Cabinet instruction for all

public institutions and parastatals that all vehicles should be procured from local

manufacturers such as Willowvale Mazda Motor Industries and Quest Motors, while

protecting local industries may impede service delivery particularly that the former

manufacturer was brought before the parliamentary portfolio committee on health for

failing to manufacture ambulances for hospital within the agreed time-frame

(Government of Zimbabwe 2011).

While political objectives may be addressed, issues relating to efficiency can be lagging

behind. Therefore a balanced approach needs to be adopted especially when political

objectives are at variance with economic objectives. It is imperative to take cognisance of

the fact that how suppliers are selected determine the performance of government

departments particularly that the Zimbabwe Finance Minister registered displeasure over

incomplete projects by contracted companies despite advance payments. Therefore,

performance of public hospital or any department hinges heavily on the competitiveness,

novelty and capability of its suppliers (Vonderembse and Tracey 1999).

2.2.2 Budget Policy objective

As mentioned earlier on, funds used for the procurement of goods and services are levied

from taxpayers. These funds are then passed through parliament for endorsement prior to

disbursements. Once approved, the budget for each department is like a licens e to

spend as noted by Van Weele (2005, p.341) What this entails is that all funds allocatedfor that particular year must be exhausted failure of which may lead to the funds

reallocated for other purposes. Also, failure to appropriately and fully utilise the funds

will impact negatively on the next year s budget allocations (Van Weele 2005). And so,

the strategic role of purchasing in this regard is detrimentally and regrettably missing in


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all government purchases. Savings through negotiations or use of innovative supply chain

strategies will not be credited to the respective department ( Van Weele 2005).

2.2.3. Public Accountability objective

The procurement activities by government institutions or agencies are under intense

scrutiny from the general pub lic primarily because it involves the use of tax payers funds

which parliament endorses (Erridge and Nondi 1995). The Office of the Comptroller and

Auditor General verifies all expenditure and that explains why government departments

must meticulously and religiously follow the laid down procurement policies and

procedures resulting in the officers discharging procurement duties to be procedure

oriented rather than results oriented (Van Weele 2005,p.342). The development of

stringent legal and policy framework is carefully crafted towards the achievement of aneconomical, effective, transparent and efficient delivery system.

In some cases, the regulations are specifically designed to reduce fraud, corruption, abuse

of office through establishing an audit-trail procurement system (Mukhopadhyay 2012;

Lindskog, Brege and Brehmer 2010). Corruption has been of major concern particularly

in the public sector and for that reason it is necessary to briefly examine its extent and

implications.

2.2.3.1 Corruption in the Public Sector

Despite the strict jurisdiction, incidences of fraud, bribery and corruption has been

unearthed either through audits or traps by the Anti-Corruption Units in various nations.

As claimed by Auriol (2006), the research conducted by World Bank uncovered that

about $US 200 billion per year are fleeced from government expenditure worldwide

through bribery and corruption. It will however, remain unclear as to what was the actual

purchase price because it is the biggest briber and not the most appropriate supplier whois awarded the tender (Auriol 2006).

However, the emergence of corruption practices in many governmental departments,

everything else being equal, can be an indication of gross institutional performance gaps

or deficiencies and that probably explains why public officers circumvent the


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procurement procedures. The probing question is why the institutions lacking in the first

instance (Aidt, Dutta and Sena 2008). Raymond (2008) strongly contends that corruption

is rife in developing countries than developed countries. Poverty and weak enforcement

of the procurement regulations could explain such as scenario. Whichever way one may

explain the reasons, corruption has far reaching effects particularly in public hospitals. In

some cases it takes the form of gifts, but, as noted by Brennan (2009) the value of gifts

could be borne proportionally by the patients in the form of higher prices. In addition,

evidence of corrupt tendencies frustrate donor support particularly vaccines and

pharmaceuticals supplies bringing fiscal pressure to the government to provide for any

procurement activity.

When corruption goes to astronomical levels as reported by World Bank, it necessitates

the review of ethics in purchasing.

2.2.3.2 Ethics in Purchasing

Ethics is defined as, the principles of conduct governing an individual or group; concern

for what is right or wrong, good or bad , Lysons and Farrington (2006,p.655).

The importance of ethics in purchasing has not been central as compared to other

established professions such as medicine, surgery, law, accountancy and architecture

(Lysons and Farrington 2006). For instance, a medical doctor or registered general nurse,

the right to practice is subject to appropriate professional membership. Malpractice in

these professions, unlike purchasing, has serious repercussions. Michael Jackson s

Physician, Dr Murray s practicing license was revoked when convicted of ethical breach.

Of course, there are reasons or developments highlighted below that necessitated the

pursuance of ethical codes in purchasing.

Susceptibility of purchasing professional to corruption because of their position asorganisation s representative to the external suppliers and also the volume of

financial resources at their disposal. Importance of trust and unimpeachable level of integrity in maintaining and

sustaining relationships in the supply chain network. Demand for accountability and transparency by the stakeholders.


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While there are professional bodies in the field of purchasing like the Institute of Supply

Management (ISM) in the United States of America and the Chartered Institute of

Purchasing and Supply (CIPS) in the United Kingdom that provide enough guidance onethical issues in procurement, they have not yet developed a comprehensive sanction

system for those who deviate from the prescribed code of conduct. Considering

purchasing being prone to corrupt activities, it is expected that penalties are attached to

malpractice particularly that there are far reaching effects in terms of service delivery.

The other reason given by Lysons and Farrington (2006) is that a conflict of interests may

arise in that the professional codes of conduct can be superseded by the organisational

ethics standards.

2.2.4. Competitive Objective

The underpinning principle of regulatory framework in both national and international

laws (including European Commission Directives) is to promote competition (Tadelis

2012). The establishment of legal system in public procurement is to impede preferential

procurement tendencies (Christopher 2005). When many players participate in tendering

undeterred, prices go down and Value for Money (VFM) is enhanced. This

competitiveness objective is contended by Caldwell et al. (2005, p.243) that in public

markets it is still difficult to achieve especially when tested against the economic models

of perfect competition and low barriers to supplier entry or exit . It is therefore crucial

to evaluate the concept of Value for Money (VFM) because of its centrality to all

government purchases. Budgetary constraints are also critical to that concept.

2.2.5 Value for Money (VFM)

In order to fully understand the Value for Money concept in relation to public procurement, it is essential to define it.

Definition of Value for Money:

Value for Money is the optimum combination of whole life costs and quality UK

Government (2004, p.17)


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From this definition, it is very important to underline that the VFM concept is premised

on the idea of whole or total costs and not on the lowest purchase price. The EC

procurement directives have taken cognisance of the total life cycle costs. Whole life

costs encompass the acquisition, possession, use and disposition of a commodity (Ellram

1994)

2.2.5.1Implications of the Regulatory Framework

The highly prescriptive nature of the procurement policies and procedures have been

criticised mainly because of the burden it exerts on public institutions in the process of

acquiring commodities and also the suppliers participating in the tendering. The recent

Zimbabwean court case where the Minister of Energy and Power expeditiously procured

the much needed fuel amid revelations that the country s reserves had reached criticallevels, as a result, a criminal charge was filed against the Minister for failing to follow

procurement procedures. As such, the procedures and policies may not be consistent with

the urgency and criticality of the item required. Medicines, surgical consumables can fit

in that category where sickness cannot be postponed to a future date to allow complete

authorisation. Gerson (2004) as referenced by Cabras (2011) suggested public

procurement efficiency by reducing the number of inputs without compromising on

quality.

After considering the contribution of procurement, for instance, to the country s GDP, it

is of paramount importance to examine the strategic role of purchasing in enhancing the

competitiveness of an organisation.

2.3 Empirical Literature

2.3.1 Strategic role of purchasing in Enhancing Competitiveness

Over the past decades, purchasing in general was perceived to be not strategic in some

organisations and industry segments. This was evidenced in the employment of non-

purchasing staff who may not even sit in a purchasing department and might not call th e

process purchasing , Zheng et al. (2007,p.76). A Clinician performing procurement

duties was the scenario one could find in some organisations. A survey conducted by


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Cammish and Keough (1991) unearthed that in some industries such as pharmaceuticals,

consumer products and laboratory suppliers, the strategic role of procurement appeared to

be marginalised.

Despite the above low perceived value of purchasing, the recognition of purchasing as astrategic function has increased notably in recent years to reflect broad external and

internal business trends (Van Weele 2005). Deregulation of trade as a direct result of

globalisation by most governments has intensified competition hence need for exploiting

purchasing function in positioning the competitiveness of the organisation. The above is

further exacerbated by changing customer needs and preferences where customers

developed an extended value concept that incorporated flexibility, dependability,

convenience, novelty of their product or service (Van Weele 2005). Thus, the

procurement function in any organisation is strategically positioned to mitigate the

environmental and industry risks, Chen et al. (2004) as quoted by Lawson et al. (2004 ).

The work of Porter (1980); the Five Forces Model further uncover the strategic role of

purchasing in enhancing organisation s competitive position on the industry market. Out

of the five forces, two; the competitive nature of the industry and the bargaining powers

of buyers and suppliers are directly linked to the procurement department (Mol 2003).

Speckman, Kamauff and Salmond (1994,) also illuminated on the competitive and

strategic position of procurement in organisations in the light of the new competition .

This concept is premised on the idea that companies or organisations will not tomorrow

compete in the same manner they did yesterday, hence exposing the strategic role

purchasing has in exploiting the unique competencies of the suppliers that keep them

competitively afloat (Speckman, Kamauff and Salmond 1994).

However, there is need to examine some of the key drivers that have triggered the

recognition of purchasing as a strategic function in both public and private sectors.

2.3.2 Key drivers for the recognition of purchasing

As mentioned earlier, globalisation and the demanding nature of customers have

unravelled the issue of cost management as a driver for the recognition of the purchasing

function. Also, the emergence of supply chain related risks necessitated the proper


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positioning of purchasing department. Hence the two major drivers; cost and supply

chain risks need to be critically examined.

2.3.2.1 Cost

The purchasing department is the conduit of expenditure of an organisation and for that

reason it will be suicidal if not catastrophic to neglect this department given the volume

of resources at their disposal. Governments are also reviewing their budgets upwards to

maintain accommodate additional expenditure. Analysis of a cost structure of either a

manufacturing or service organisation indicates a larger cost percentage of goods and

services (Van Weele 2005). Thus, the cost structure of an organisation necessitated the

recognition of purchasing in spearheading cost reduction. Involvement of suppliers in the

previously sacred territories of research, product or system design by the procurementfunction signifies the importance of the department in terms of cost competitiveness.

2.3.2.2 Supply Chain related risks

Due to globalisation, the diverse nature of business operations where organisations can be

supplied by seller who in turn is supplied by a manufacturer with facilities all over the

world means that many participants or even products are involved and this complicates

the entire supply chain. Even the patient, for instance, on Anti-Retroviral therapy in

Zimbabwe feel the impact of these supply chain related risks if the treatment delays to

reach the hospitals. In 1994, Toyota realised the importance of purchasing in maintaining

and sustaining supplier relations when fire gutted their factory destroying one essential

component that brought the entire supply chain to an instant halt. The resuscitation of

operations at Toyota following that incident unmasked the unique role of purchasing

(Wilding 2008). Therefore, the procurement function offset these supply chain related

risks and maintains competitiveness of the organisation.

Having assessed and evaluated public procurement literature from a general perspective,

the nature of procurement in the health sector can now be critically examined.

2.3.3 Public procurement in the Health Sector


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As highlighted by the United Kindgom Office of Government Commerce (2008),

procurement is arguably one of the most important indispensable mechanisms to deliver

policy and this encompasses health delivery to citizens. Issues relating to provision of

affordable healthcare services to the patients are at the core of the health departments. In

recent years, health institutions around the globe faced challenges in terms of cost

containment of medical products, efficiency and budgetary constraints and

responsiveness in the medical supply chain (Saltman et al.1998 as quoted by Figueras,

Robinson and Jakubowski, 2005, Brennar, 2009). DeRoek et al. (2006) particularly

singled procurement of pharmaceuticals and vaccines as a challenge in low- and middle-

income countries. The rationale behind procurement challenges as noted by Woodle

(2000) could emanate from the historical assumption that the vaccines were donor-

supplied and as such were not budgeted for. But given the budgetary constraints on the part on the donors, the procurement responsibility is now shifting to the government

(Cohen, Reeh and Neroutsos, 2011). Apart from low and middle-income countries, in

New Zealand, the growth of pharmaceutical expenditure has been a great source of

concern in hospitals (Tordoff, Norris and Reith, 2008). Further, in the UK, the

government through National Health Service (NHS) put measures and strategies that seek

to regulate expenditure in the health services. Some of the measures included

standardisation in the purchase of medical equipment and accessories (Clark 2011).

Ghana in the Medium Term Health Sector Strategy also recognised the strategic role of

purchasing in reducing expenditure on drugs, surgical and other related hospital

consumables (Verhage et al. 2002). In South Africa, the Minister of Health reported a

reduction of the price of Anti-Retroviral drugs by more than half of the previous

expenditure (Albert 2010).

It is against this background that the World Health Organisation (2000) report inevitably

suggested strategic purchasing in the public sector as capable of improving medicinesavailability and reducing costs of acquisition. This also coincided with the budget

statement by the Zimbabwe Finance Minister, Tendai Biti that efficient procurement is

key to service delivery (Government of Zimbabwe, 2012). World Health

Organisation(2006) further acknowledged the importance of purchasing and supply chain

management in ensuring availability of Vital, Essential and Necessary (VEN) drugs in


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Africa. Pazirandeh (2011) argued that unavailability of drugs could be could be due to

uneven distribution within the supply chain network. This could be most relevant in

humanitarian situations than normal health care delivery in Africa but Tetteh (2009)

argued that even in normal situations, drug supply chains have a direct impact on

availability and affordability of medicines.

Therefore there are pertinent procurement issues in developing countries that were

highlighted by both World Health Organisation (2006) and Cohen, Reeh and Neurotsos

(2011) and these should be addressed to streamline procurement activities.

Key issues highlighted in the World Health Report (2006).

Unclear tender specifications for products Inadequate tender terms and conditions. Procurement laws and regulations lack relevance in addressing purchasing of

pharmaceuticals. Lack of transparency, integrity and good governance. Co-ordination in the medical supply chain Inadequate use of Information Technology (IT) in the procurement of medicines.

Key issues reported by Cohen, Reeh and Neurotsos (2011)

Technical competent procurement staff. Legal, policy, regulatory frameworks. Transparency and prevention of corruption in purchases. Budgetary issues (Financing).

After evaluating procurement in the health sector from a broad context, it is now

imperative to consider the procurement system in the health sector in Zimbabwe.

2.3.4 The Procurement System in the Health Sector in Zimbabwe

The Ministry of Health and Child Care (MOHCC) is responsible for ensuring service

delivery in all government hospitals and clinics nationwide. Its mandate is to ensure the


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provision of quality and safe health services through a network of health facilities

organised throughout the country (MOHCC 2012). Adequate and constant supply of safe,

efficacious medicines, surgical sundries, laboratory reagents and diagnostic equipment

remain the top priority of the Ministry. The table below indicate the public health

facilities in Zimbabwe.

Table 1.

2.3.4.1 Public Health Institutions

Provinces Primary

Level

1st Referral

Level

2nd Referral

Level

3rd Referral

Level

Total

Harare 45 0 0 7 52

Manicaland 253 36 1 0 290

Mashonaland

Central

130 15 1 0 146

Mashonaland

East

168 22 1 0 191

Mashonaland

West

128 22 1 0 151

Matebeleland

North

92 17 0 0 109

Mateleland South 105 18 1 0 124

Midlands 206 28 1 0 235

Masvingo 170 23 1 0 194

Bulawayo 34 0 0 7 41

Total 1,331 181 7 14 1,533

Source: Government of Zimbabwe (2008)


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Procurement of drugs is initially through the National Government Medical Stores

(Natpharm) which procures all the medicines, surgical sundries and reagents on behalf of

the above public health institutions. In the event that Natpharm does not have the stocks

of the required item, the hospital can tender for the required items in tandem with the

Procurement Act and Regulations 171 0f 2002 together with further guidelines from the

Medicines Control Authority of Zimbabwe in the case of drugs. For the reason that

procurement is guided by the Procurement Act and Regulations, it might be necessary to

review briefly the tendering system in the country.

Four forms of tender namely Competitive, Informal, Special-Formal and Formal are

commonly used in government purchases by various hospitals. The distinguishing factor

among the various forms of tenders is mainly value of purchase and urgency of the item.

Competitive and the Informal Tenders are prescribed to be done by the individual

hospitals without the interference of the Government Tender Board (State Procurement

Board). The threshold limits for those tenders are $US 10,000 and 50,000.00.00

respectively. Any purchases that are outside these threshold limits are to be administered

through the State Procurement Board on behalf of the procuring entity. It is imperative to

note that the various health institutions mainly rely on Natpharm for the bulk of the

pharmaceutical items but unfortunately, the stock levels at Natpharm as shown by the

table below is a great cause for concern at all public institutions.

2.3.4.2 Stock Status of Vital, Essential and Necessary (VEN) drugs at Natpharm

Table 2

200

4

200

5

200

6

200

7

De

c07

Ja

n08

Fe

b08

Ma

r08

Ap

r08

Ma

y08

Ju

ne08

Se

pt08

Oc

t08

No

v08

Vital 63

%

72

%

82

%

42

%

22

%

29

%

35

%

32

%

36

%

38

%

42

%

52

%

58

%

42

%

Essent 21 56 62 23 16 16 18 16 16 28 34 34 38 40


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ial % % % % % % % % % % % % % %

All

Drugs

41

%

65

%

68

%

31

%

18

%

22

%

22

%

25

%

26

%

26

%

35

%

43

%

45

%

36

%

Source: Government of Zimbabwe (2008)

VEN is the classification of medicines and surgical consumables in the Essential

List of Medicines in Zimbabwe (EDLIZ).

Vital Drugs means life saving drugs, non-availability may lead to

death/disability, optimum availability to be 100% Essential means non-availability of these drugs lead to pain, optimum

availability to be 80% Necessary means that these drugs are required but of lower priority than

the above drug classification.

From the above table, it is indicated that for all drug and surgical categories, stock levels

were well below the expected levels and what is more worrying is that the Vital Category

prescribed to be 100% has in 2007 dropped down to 23%, giving a variance of 73% and

these drugs a deemed life saving; non-availability has serious implications on the patient.

Thus, failure to provide drugs at public hospitals may also mean that patients will have to

source the drugs from the private pharmacies who may charge exorbitantly relative to

public hospital drug costs.

Therefore the procurement system in Zimbabwe depicts a semi-autonomous situation in

that the individual hospitals are responsible in part for the purchases because of theinvolvement of Natpharm and the State Procurement Board.

2.4 Delays in Procurement activities

2.4.1 Bureaucracy


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In discussing public procurement, bureaucracy cannot be left out since it ensures due

process and prevents some level of corruption. According to Weber (1920), bureaucracy

is an organizational form based on a hierarchy of offices and systems of rules with the

purpose of ensuring the permanence of the organization, even though employees within it

might come and go. The knowledge, practice and experience of the organization would

be preserved in files, thus ensuring permanence and continuity. The organization is

hierarchical, with one level subject to control by that above it. Everything done in the

name of the organization and its officials is recorded. The purpose of bureaucratic

structure is to attain the maximum degree of efficiency and to ensure the permanence of

the organization. Failure to do this leads to red tape, excessive procedures and obscure

and conflicting rules and regulations. All organizations are bureaucratic in the sense that

they all go through some sort of procedure for getting things done.

In state administration, bureaucracy has been used for denoting the prominent position

given by the centralized state power to permanently employed public officials and has

been applied as an instrument of critique against state power. It is the type of

administration in which the officials exert power in order to implement their own

interests. For example, the Encyclopedia of the Social Sciences, (1930:70-74) defines

bureaucracy as a system of government, which the control power is completely in the

hands of officials and that their power jeopardizes the liberties of ordinary citizens.

Bureaucracy is used to describe the rational organization. The usage is in accordance with

max Weber s ideal type, it denotes a form of organization characterized by a hi erarchy of

officers.

Bureaucracy has the following features; the rules are known by all, the purpose of the

rules is clear and based on a valid theory of cause and effect, rules are consistent with

each other, it is clear when rules are to apply and the scope for subjective interpretation is

limited.

In view of the above definitions, bureaucracy is a system of government where

professional officers who perform rationalized functions in organizations, especially

public institutions go through laid down procedures in performing their duties. Thus


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activities, which eventually increases expenditure and has detrimental effect on health

delivery system.

2.5 Summary of Literature Review

This part summarises key issues highlighted in the Literature Review.

Public procurement strategy or system reflects the political, budget policy,

competitive and public accountability objectives. The Value for Money (VFM) concept is central to all government purchases. The tight jurisdiction is also tailored to curb corruption in the public sector

and that corruption also affects adversely the health sector. Purchasing ethics seek to address the importance of trust, honesty, integrity,

accountability, transparency and competitiveness in the public procurement. Importance of strategic purchasing in view of costs and supply chain related

risks. Criticality of public procurement in the health delivery system.

From the Literature, it is evidenced that public procurement has been explored but

the researchers mainly focused from the general perspective and very few studies

has been done specifically in the health sector.


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CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter explains the approaches the researcher used to gain information on theresearch problem and includes the research design, study population and sample size,sampling design and procedure, data collection methods, measurement of variables.Procedure of data collection, data processing, analysis and presentation and anticipated

problems to the study.

3.1 Research design

This study used a case study research design involving both quantitative and qualitative'

methods because it provided detailed knowledge about the impact of the public procurement policies and procedures on the health delivery system in Zimbabwe . Thequalitative approach was used to explain the events and describe findings usinginterviews and documentary analysis.

3.2 Research Strategy: Case Study Approach

Since Public Procurement Act applies to all public institutions both the main stream

government and also parastatals. There are many hospitals in Zimbabwe and five Central

Hospitals which operate almost similarly and in the same environment. These central

hospitals are Parerinyatwa Group of Hospitals, Harare Hospital, Mpilo Hospital, UBH

and Cgitungwiza Cental Hospital. The researcher decided to use Chitungwiza Central

Hospital and generalise the findings on all Hospitals since they operate in the same

environment. All public hospitals receive funding from the fiscus and they operate using

the same Act hence the findings can be generalised to all the central hospitals.

3.2.1Definition of a Case Study:

A case study is a detailed intensive study of a unit, such as a corporation or a corporate

division, that stresses factors contributing to its success or failure. An empirical enquiry

that investigates a contemporary phenomenon in depth and within its real-life context,

especially when the boundaries between the phenomenon and context are not clearly

define d , Yin2009,p.18


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The decision of the researcher to use this strategy is in tandem with the guidelines

provided by Yin (2009). The research strategy is most applicable when a how and

why question is being asked about a contemporary sets of events which the

investigator has little or no control , Yin 2009, p.13. Therefore the area under

investigation relates to the impact of the public procurement policies and procedures on

the healthy delivery system. The subtleties and intricacies of the health delivery system

necessitated the adoption of the case study approach so that a spotlight is concentrated on

the selected health facility (Denscombe 2007) which is Chitungwiza Central Hospital.

So, this method or research strategy lends itself to the intensive and in-depth analysis of

complex environments such as the one investigated (Bryman 2010).

There are benefits that were considered by the researcher when the case study strategy

was adopted. The approach can unravel the intricacies and subtleties of the health delivery

environment (Denscombe 2007). It offers an in- depth analysis rather than a superficial . Critical to the research is an understanding of the processes and relationships and

so, this method holistically considers all these important aspects of the research

(Denscombe 2007). Further to the above, the case study strategy investigates a phenomenon in its

natural setting and not in an engineered environment (Yin 2009;

Denscombe 2007). The last advantage of this approach lies in its ability to infuse multiple sources

and methods of data collection like observation, interviews, questionnaires and

document analysis (Denscombe 2007).

3.2.2 Lack of access

The researcher has noted the importance of access to information regarding the

case and negotiated complete access to the hospital which was granted

unconditionally by management. Access to participants, minutes and policy

documents is critical in the data collection stage. The letter attached as Appendix

A confirms the approval.


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3.2.3 Resource limitations

Case study approach, by its nature, is time-consuming and also requires resources.

The choice of a single case has taken consideration of these resources limitation.

3.3 Study Population

The researcher targeted to get the information from thirty people. Out of the thirty people

the researcher saw it necessary to use judgemental sampling method to come up with the

sample which was of twenty people. The people included in the sample are those who are

involved in the procurement process at Chitungwiza Central Hospital including those

from the buying department and those who sit in the procurement committee. Different

research instruments were applied to the different individuals with more than one

instrument being applied to some individuals. The population included those directly

involved in the procurement process and those who are the users of the products and or

services. The pollution included the procurement committee, the buying staff, user

departments like sisters from different wards and heads of other departments.

Table 1

TITLE NO OF THOSEINVOLVED

1. Director of Operations 1

2. Director of Finance 1

3. Director of Human Resources 1

4. Director of Clinical Services 1

5. Principal Nursing Officer 1

6. Chairperson of the ProcurementCommittee

1

7. Chief Procurement Officer 1

8. Sister-In-Charge (all wards) 7

9. Head of Canteen Services 1


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10. Accountant (Expenditure) 1

11. Administration Manager 1

12. Chief Pharmacist 1

13. Assistant Pharmacist 1

14. Assistant Administrator 1

15. Assistant Stores Administrator 1

16. Assistant Procurement Officer 1

17. Assistant Accountant 1

18. Stores Manager 1

19. Chief Matron 1

20. Deputy Chief Matron 5

3.4 Sample

Trochim (2006) defined sampling as, the process of selecting units (eg.people,

organisations) from a population of interest so that by studying the sample we may fairly

generalise our results back to the population from which they were chosen . This

explanation by Trochim (2006) was well represented by Saunders, Lewis and Thornhill

(2008) on the diagram below.The researcher decided to use a sample of twenty as it gives a fair view of how those

involved in the procurement processes view the procurement process. The total number

of those involved is thirty and twenty is a good number to give the views of those

involved and make decisions based on that information.

The researcher s decision to use a sample emanated from impracticalities associated with

collecting data from the entire population, in this case, all hospitals and employees

working within those health facilities. Limitations in terms of time, resources and accesswere central to the decision. The total number respondents selected is shown in Table 1

below.


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Table 2

Category of staff Population size Sample sizePercentage

Directors and Top Nursing Staff

8 5 25%

Managers andSisters In Charge

22 15 75%

Total 30 20 100%

Sample size

Table 3

Below is a table with all those who were interviewed and given the questionnaires.

1. Director of Operations

2. Director of Finance

3. Director of Human Resources

4. Director of Clinical Services

5. Principal Nursing Officer6. Chairperson of the Procurement Committee

7. Chief Procurement Officer

8. Sister-In-Charge (Operating Theatre)

9. Head of Canteen Services

10. Accountant (Expenditure)

11. Administration Manager

12. Chief Pharmacist

13. Assistant Pharmacist

14. Assistant Administrator

15. Assistant Stores Administrator

16. Assistant Procurement Officer


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17. Assistant Accountant

18. Stores Manager

19. Chief Matron

20. Deputy Chief Matron

3.5 Sampling Design and Procedure

Probability sampling focusing on random sampling technique was used to select low-

level staff to participate in the study. Non-probability sampling focusing on purposive

sampling technique was used to select high-level staff.

Probability (representational) sampling

In probability sampling, the chance of each case being selected is equal and as

highlighted by Saunders, Lewis and Thornhill (2008), this technique is most ideal when

the investigator assume that the sample selected will be representational. Surveys and

experiments are some of the strategies under probability sampling. In other words, this

method employs some form of random selection (Trochim 2006). Probability sampling

methods include random, simple, stratified and cluster.

Non-probability (judgemental) sampling

There are situations where the researcher was uncomfortable with random sampling

because of the impracticalities involved with probability techniques. As a result of this,

non-probability sampling was the most appropriate specifically the purposive sampling

technique. The decision of the researcher concerning the composition of the individuals

to be interviewed was based on the specialist knowledge of the respondents regarding

issues of public procurement policies and procedures and the general health delivery

system. Participants capacity and their willingness in this research further necessitatedthe -adoption of purposive sampling (Jupp 2006).

In summary, the decision to choose the non-probability sampling route heavily hinged on

feasibility and sensibility of data collection relative to the objectives of this research

(Saunders, Lewis and Thornhill 2007).


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Having explained on the sampling methodology adopted for this case study, data

collection methods can then follow.

3.6 Data Source and Type

The study was both primary and secondary data. Primary data was collected from thefield using - questionnaires and interview guides while secondary data was collected fromavailable published records such as textbooks, journals, magazines, manuals and internet.

3.7 Data Collection Instruments

Data will' be collected using questionnaires covering all the aspects of the study variablesand guided questions were used for this study to collect data from low level staff. This is

because they will enable the respondents to express freely their opinion about thevariables under study. Interviews were also used to gather data from the respondents.

3.7.1 Interviews

Kahn and Cannel (1957) as referenced by Saunders, Lewis and Thornhill (2007, p.310)

defined an interview as, a purposeful discussion between two or more people . Yin

(2009) simplified this by stating that an interview is a guided conversation. Having

defined what an interview is, there are many types of interviews as depicted by the

diagram below but the focus of this research is on non-standardised type, specifically

one-to-one, face to-face interviews.

The researcher decided to use this tool to gather the required information for the study.

The researcher decided to interview 15 members of those who are directly involved in the

procurement processes at Chitungwiza Central Hospital. Out of the 15 who were chosen

he managed to interview 12 members.

Below is the profile of those who were interviewed.

Table 4

1. Director of Operations

2. Director of Finance

3. Director of Clinical Services


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4. Principal Nursing Officer

5. Chairperson of the Procurement Committee

6. Chief Procurement Officer

7. Sister-In-Charge (Operating Theatre)

8. Head of Canteen Services

9. Accountant (Expenditure)

10. Administrator

11. Chief Pharmacist

12. Stores Administrator

Profile of the Interviewees

3.7.2 Questionnaires

A questionnaire is a data collection tool, designed by the researcher and whose main

purpose is to communicate to the respondents what is intended and to elicit desired

response in terms of empirical data from the respondents in order to achieve research

objectives (Mugenda & Mugenda, 2003). Questionnaires can cover a large number of

people and a researcher can use them to reach a wide geographic coverage. They are

relatively cheap and no prior arrangements are needed before posting. They avoid

embarrassment on the part of the respondents as it allows them to consider responses,

especially where there are pre-coded options. They also allow for possible anonymity of

respondent and have no interviewer bias if administered correctly. Interviewer bias is the

opinion or prejudice on the part of an interviewer which is displayed during the interview

process and may affect the results of the interview (Kothari, 2004; Cooper & Schindler,

2006).

3.7.2.1 Questionnaire Design

The importance of questionnaire design, layout and thoroughness of pilot testing cannot

be over-emphasised. Validity and reliability of data collected and the response rate hinges


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heavily on these important core aspects of the questionnaire: design, layout and pilot

testing (Saunders, Lewis and Thornhill 2007). In fact, Ford (1994), concurred by

emphasising on the relevance of good question formulation, further indicating the

criticality of designing the questionnaire in a way that the respondent will interpret the

questions in exactly the same manner the researcher intended.

Therefore, the three aspects of the questionnaire: design, layout and pilot testing need to

be thoroughly considered.

3.7.2.2 Design and layout of the questionnaire

Starting with questionnaire design, the researcher considered the pitfalls of poor design in

that it can affect the response rate and reliability of data. The drafting of the questionsstarted with a thorough review of the research problem, aims and objectives of the

research so that only relevant and necessary questions are included. And so, the design of

the questionnaire included open, scaled and ranked questions with the majority of them

being closed (yes/no) questions.

The researcher s strategy of inc luding more closed questions was premised on the

assumption that they are relatively easy for the respondent to answer considering the busy

schedules some of the clinicians have. While open questions are most ideal in soliciting

qualitative data, they have a tendency of producing data which is difficult to analyse.

Instructions to complete closed questions included ticking the box that represented the

respondent s answer. To avoid the frustration in answering closed questions, an option of

Other was provided to broaden the respondent s options.

In addition, filter questions were also reasonably employed to reduce frustration and

confusion by allowing respondents to avoid unnecessary questions. Further to the above,

scaled questions were fairly used to measure the respondent s priorities while ranked

questions were also used for the same purpose.


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It is also crucial to indicate that the author noted the importance of avoiding leading

questions, jargon and to use a friendly, polite and persuasive tone in the design of

questions.

3.7.2.3 Structure and layout of questions

Structure and layout of the questionnaire is indispensable to the success of the research

and for that reason, the researcher adopted the following layout:

1. Introduction

An introduction was inserted right at the beginning in the main body of the questions.

The rationale being that a separate introductory letter may get lost. The short introductionexplained the purpose of the research, why it was of paramount importance to be

completed. Assurances of confidentiality and anonymity were offered given the nature of

the study which may include very sensitive issues. Instructions on how to complete and

return the questionnaire were also contained in the introductory part. That information

highlighted will increase the response rate (Saunders, Lewis and Thornhill 2007).

2. Sub-heading

Sub-headings were employed to clearly direct the respondent. The sub-headings were

addressing the three objectives of the research.

3.7.2.1 Pilot Testing

It will be a rare scenario if a customer purchases any electrical appliance without being

tested for functionality. It is in the same vein that Saunders, Lewis and Thornhill (2007) prescribed pilot testing before the final questionnaire draft is used to collect data for the

reason that the suitability and reliability of questions asked. In view of the above, three

knowledgeable people in the area of investigation were given the draft and the following

were highlighted and incorporated into the final draft after the pilot testing.


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Some of the questions appeared to be vague and so, they were re-written so that the

respondent is clear on what is being asked. The pilot test unearthed that there was need to broaden the respondent s view by

including a None of the above on closed questions, giving also enough space for

the respondent to describe. Also, questions that appear to be too technical were re-organised so that the

respondent could interpret them in the same way intended by the researcher. Additional questions were added to incorporate issues that are pertinent to the

research aims and objectives.

After the amendments to the questionnaire, it was distributed to twenty people personally

and expected to be completed in two weeks. The period of two weeks was to given ampletime for the respondents to unhurriedly complete the questionnaire, giving enough detail

where necessary. The researcher chose to hand-deliver the questionnaire in an effort to

overcome potential difficulties in terms offering face to face explanation. This way, the

respondents can also be persuaded and reminded about completing the questionnaire

(Walliman 2010).

3.8 Procedure of data collection

A letter of authorization from the CEO was provided as a request for permission to

conduct the study. A covering letter accompanied the questionnaires explaining the

purpose of the study and the questionnaires was distributed directly to the respondents in

their respective areas for filling and was collected after two weeks following its dispatch

and filling. The data collected was edited and decisions made on whether to use it or not

3.9 Document Analysis

The study will also review existing literature related to the study problem and variables in

form of reports, journals, websites and databases to gain information on the topic.

Documents such as hospital management meeting minutes that were generated weekly,

letters, memoranda, departmental reports, strategic and business plans provided

invaluable data relating to the issues investigated. While it is true that these documents


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were not specifically produced for the case study, they provided quite useful data worthy

following up with interviews. The researcher reviewed these documents with full

knowledge that they were intended for another purpose (Yin 2009).

3.10 Data Analysis

Two types of analyses was conducted and these are quantitative and qualitative analysis.

The following sub- sections explains the analyses, in detail.

3.10.1 Quantitative Analysis

Quantitative data was collected, edited and coded. Two types of analyses was computed.

The first will include descriptive statistics (frequencies and percentages) and the second

will include inferential statistics (correlations). The frequencies and percentages were

used to determine the respondents' views on each of the study variables. Pearson

correlation tests was used to test for significant relationships between the variables.

3.10.2 Qualitative Analysis

In qualitative analysis, content analysis was used to edit the data and reorganize it into

meaningful shorter sentences. This will then be presented as quotations to supplement the

quantitative data in order to have a clearly interpretation of the results.

3.11 Anticipated Problems to the Study

1. These include financial problems in terms of photocopying, secretarial services,

transport costs.

2. Inadequate time to exhaustively conduct the research since it is done in the course

of the semester. This was overcome by putting more effort and spending

conducting research.

3. The research will encountered problem of non responses from some respondents.

Summery


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This chapter began by stating the philosophies employed in carrying out the research. A

detailed explanation of why that philosophy was chosen then followed. Tools for

gathering data were discussed but the data analysis and results were not demonstrated

here as there are dealt with in the next chapter which is chapter four.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION

4.0. Introduction

This Chapter simply presents the qualitative and quantitative findings extracted from the

questionnaires, interviews and hospital documentation. First, the response rate for both

questionnaires and interviews will be given, followed by the profile of the respondentsand thereafter, presentation of findings on an issue by issue basis. Pertinent issues that

emanated from the research will be presented in turn.

4.1. Questionnaire response rate

Starting with questionnaires, twenty were distributed with fifteen being returned and fully

completed from the respondents. This represented a response rate of 75 percent. The high

response rate could be attributed to the proper design, layout and distribution strategy

adopted by the author. Ample time were given to the respondents and often reminded

weekly about completion of the questionnaires.

The table below simply summarises the questionnaire response rate.

Table 4.1. Questionnaire Response Rate

Name of Respondents SentQuestionnaires

ResponsesObtained

% ResponseRate

Purchasing, Operations/Adminand Clinical staff

20 15 75

Total 20 20 100


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Total 15 100.0

While the majority of the respondents were males (73 percent) and the rest females (27

percent), the author assumed that their composition will be of no effect to the researchoutcomes.

4.3.2. Employment Period (Experience)

The selection and distribution strategy of the questionnaires was purposively crafted with

the view of soliciting rich information from experienced people and that is why the

employment period was included in the questionnaire.

The graph below (figure 4.3.2) shows the employment period of the respondents.

4.3.2. Bar Graph Showing Employment Period

The time that respondents have been in the hospital can be a measure of their level of

experience. Figure 4.3.2 above revealed that most of the respondents have a length of

service of 6 to 10 years (66.7percent), followed by those with more than 10 years

(20.0percent) and then those with 1 to 5 years (13.3percent).

0

10

20

30

4050

60

70

1 - 5 6 - 10 10+

P e r c e n t a g e

Employment period (years)


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4.5.1. Summary of Questionnaire Responses

Question Response Category N % Cum %

Is procurementimportant?

Yes 15 100.0 100.0

No 0 0.0 100.0

Total 15 100.0

To what extent is itimportant?

Lesser extent 0 0.0 0.0

Greater extent 15 100.0 100.0

Not sure 0 0.0 100.0

Total 15 100.0

Are procurement lawsand regulationsadequate?

Yes 13 86.7 86.7

No 2 13.3 100.0

Total 15 100.0

Describe the tenderingprocess at yourhospital

Efficient 3 20.0 20.0

Competitive 1 6.7 26.7

Effective 2 13.3 40.0

Transparent 9 60.0 100.0

Total 15 100.0

Do you sometimespurchase products

without going totender?

Yes 5 33.3 33.3

No 10 66.7 100.0Total 15 100.0

Most common tendertype

Competitive 10 66.7 66.7

Informal 5 33.3 100.0


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Special-formal 0 0.0 100.0

Formal 0 0.0 100.0

Total 15 100.0

Question Response Category N % Cum %

Number of peopleinvolved in tenderingor procurementprocess

1 - 3 0 0.0 0.0

4 - 6 0 0.0 0.0

7 - 9 0 0.0 0.0

10+ 15 100.0 100.0

Total 15 100.0

Why are they involvedin the tendering /procurement process?

Transparency 14 93.3 93.3

Expert knowledge 1 6.7 100.0

Total 15 100.0

Most important factorin tendering /procurement process

Price 5 33.3 33.3

Quantity 2 13.3 46.6

Quality 2 13.3 59.9

Conformance 3 20 79.9

Back-up availability 2 13.3 93.2

Delivery period 1 6.7 6.7

Total 15 100.0

Structure ofprocurement system

centralised 14 93.3 93.3

De-centralised 1 6.7 6.7Total 15 100.0


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4.6. Importance and Relevance of Procurement

The significance of procurement as an important business lever was reiterated by all the

15 questionnaire respondents as shown on the above table. In fact, one of the

interviewees indicated that procurement is the heart of all operations and failure of

procurement will paralyse the whole system of depa rtments . Another respondent,

illuminated on the importance of purchasing by saying, it s actually the engine of the

organisation . Minutes of weekly hospital management meeting under the action slot

put purchasing department as responsible for the sourcing all drugs, surgicals and

laboratory reagents reported to be out of stock.Regarding the issue of relevance of procurement regulations to the health sector, the

following bar graph (figure 4.6.1) summarises the questionnaire responses.

Bar Graph Showing Distribution of Procurement Regulations Relevancy andAdequacy.

Figure 4.6.1

0

10

20

30

40

50

60

70

8090

Yes No

P e r c e n t a g e


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From the Bar Graph above, 86.7percent responded Yes to the relevance of the

procurement regulation to the hospital with 13.3percent indicating a No on the same

issue. However, the main reason indicated by the respondents for the Yes answer was

transparency . The regulations foster transparency in the entire procurement system.

The interview response corroborated with the questionnaire outcome by indicating that

while they are relevant, they are not appropriate to the unique needs of the hospital. One

of the respondents added that, the idea of these regulations was to promote transparency

in the whole purchasing process and to make sure they are the guidelines for every

institution. However, I think these regulations need to be reviewed especially looking at

the hospital set- up .

4.7. Supplier Selection

Suppliers for pharmaceuticals, medical equipment, detergents, laboratory reagents, linen,

haberdashery etc, were primarily selected on the basis of the lowest purchase price upon

solicitation of three quotations. Questionnaire respondents clearly ranked price as the

main variable in the selection of suppliers. Further to the above, a sample of purchase

documents (Comparative Schedule) were selected covering drugs, surgical consumables

and laboratory reagents and the following findings were noted.


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4.7.1. Pie Chart Showing the Factors Considered in the Supplier Selection

Out of 100 purchase documents from January to the 5 th of August 2013, 83 were

considered on the basis of the purchase price and only 1 had quality ticked as the

variable. 9 purchase documents were selected on the basis of the supplier s reputation

while 1 was on the availability of stock from the supplier. The remaining purchase

documents did not indicate the factor (s) considered in the award of the tenders to the

suppliers.

The dominance of purchase price as a key supplier selection factor has been echoed by

one of the interviewee who highlighted that, according to the regulations, the main

variable for selecting a supplier is the lowest bidder. If you could consider other variables

just like reputation, quality that invites serious explanation from Auditors. When we look

at the lowest bidder, it means the quality is compromised. Almost 20 percent of the

suppliers end up with price variations. Every suppliers in the market now know that the

government regulation need to select the lowest price and fail to supply . Another

Price83%

Quality1%

Reputation9%

Ex-Stock1%

Not Indicated6%

Percentage of purchase documents undersame selection criteria


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respondent , concurred by indicating that, sometimes we are forced to buy cheaper

versions of equipment which are not usually the best versions that we can get

In addition, minutes of the hospital management meeting held on the 16 th of January 2007

recommended to the Procurement Committee that they should consider other variables

like existing stock in selecting suppliers. Evidently the background of that

recommendation has issues relating to delays in delivery of commodities hence need to

consider availability of a product. Minutes of management meeting also held on the 31 st

of July, 2012 reported that suppliers are not delivering in time further indicating that

the Ultra-sound scan machine and the Full Blood Count (FBC) machine were not

functional. Regarding the ultra-sound scan machine, the spares were said to be

unavailable by the Hospital Equipment department. Obviously, it is an issue missed in the

selection of suppliers where back-up services (including availability of spares) shouldhave been incorporated.

4. 8. Purchasing Cycle

The significance of the hospital purchasing cycle is that it affects the responsiveness of

the services to the patients against the assumption that sickness cannot be postponed to a

later date when all the services and products are available. Thus, the hospital s

purchasing cycle has three important stages: Request for Quotation (RFQ), Tendering and

Ordering. The following flow chart summarises the purchasing cycle.

4.8.1. Flowchart of the Purchasing Cycle

Stage 1 Request for quotation

Identification of need (User department)

Pharmacy / laboratory / General Stores

Head of Departments approval


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Stage 2 Tendering

Accountants approval

Director of operations

Chief executive officer

Director of finance

Floating of Tenders

Tender Opening (Appending of Signatures on Quotations)

Preparation of Comparative Schedules

Adjudication of Procurement Committee

Formal 90days

Informal 14days

Competitive 7days


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Starting with Stage 1 (Request for Quotation), it is very much clear that for the process to

be completed about seven signatures should be appended to give full authorization to be

next stage which is the tendering. Again on tendering, the process as indicated above

seems long and winding particularly if the tender avenue pursued is Informal (14days) or

Formal (90days). The entire process of tendering passes through 8 phases up to the Chief

Executive Officer who approves the adjudication documents. After that, comes ordering

which is the final stage. Research also uncovered that the existing Procurement Act of

2001 suffocated the hospital operations especially during the hyper-inflationary period in

2008 prior to dollarization.

Thus, it becomes imperative for the researcher to establish the supply lead-time given the

long procurement cycle indicated above. In view of that, a sample of 19 purchase

documents was selected to provide an indication of the supply lead-time and so the table

below indicate the sampled documents and the corresponding supply-lead time.

Table: 4.8.2. Showing Supply Lead-Time

Purchase Document Number and ItemDescription

Supply Lead- Time(days)

1. Dental Cartridges 492.

Sutures Material 783. Crepe bandages 294. Hand paper Towels 615. Blue Ball Pens 436. X-ray films (blue) 157. Oxygen Flow meters 2398. Endotracheal tubes 339. 5% Dextrose 108

10. Brown Shoes 19911. Linen Savers 4112. 3ml syringes 2413. Methyldopa 250mg tablets 25414. Repair of Incinerator 3715. Abdominal swabs 15016. Latex Examination gloves 1817. Anaesthetic machines 134


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18. Theatre Pendants and LED lights 32119.

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