Contract Management and Procurement Performance of State Corporation in Kenya

Abstract

To enhance their competitive edge and optimize resource utilization, it is imperative for public sector entities to adopt efficient contract management strategies. Despite demonstrating a robust methodology for contract management, the energy industry experienced a significant 25% rise in procurement prices. Consequently, the research examined the impact of contract management on the efficacy of procurement processes within State organizations, encompassing contract administration, contract dispute resolution, contract relationship management, contract monitoring, and contract evaluation. This literature review examines the impact of contract management practices on procurement performance. The study was guided by the principles of general systems theory, institutional theory, contract management theory, and transactional cost theory. The study employed a cross-sectional research design. The study sample consisted of 157 individuals employed by one of the four state corporations in Kenya, specifically in the departments of managers'/vote holders, procurement, finance & accounts, or ICT. A sample size of 113 was generated using the sample size formulas proposed by Yamane in 1967. The proportion of the given criterion in the research population is approximately reflected in the sample due to the utilization of the stratified random sampling technique. The primary data was collected by means of a questionnaire. The dependability of the instrument was assessed through pilot testing, utilizing the Cronbach Alpha Reliability Coefficient. The dependability of the research tool was determined to be 0.839, a value that falls within the acceptable range. The investigation employed both descriptive and inferential statistics. The statistical analysis employed the Pearson correlation coefficient and multiple linear regression analysis at a significance threshold of 0.05. The data analysis was conducted using version 26 of the Statistical Package for Social Sciences (SPSS). The research revealed a statistically significant positive correlation between contract administration, contract dispute resolution, contract relationship management, contract monitoring, contract evaluation, and procurement performance. The findings of this study will contribute to the existing body of knowledge on contract management and procurement effectiveness in state businesses operating within the sector. The findings of the study indicate that enhancing contract management practices will lead to enhanced procurement performance within State Corporations. The efficacy of contract management can be juxtaposed with the efficiency of procurement endeavors undertaken by governmental entities and private corporations.