Obtaining the best value for money through procurement planning: can procurement regulatory compliance intervene?

Abstract

PurposeWhile empirical studies establish the importance of procurement planning in achieving value for money (VfM) in procurement, there is scant evidence demonstrating a link between procurement planning and procurement regulatory compliance, and thus VfM. As a result, this study examined how procurement regulatory compliance can be applied when procurement practitioners in Tanzania seek to maximize VfM through procurement planning.Design/methodology/approachA cross-sectional research design was adopted from which data were collected once through a structured questionnaire. The structural equation modeling (SEM) and Hayes' PROCESS macro test for mediation analysis were used to analyze the collected data.FindingsProcurement planning has a significant and positive relationship with procurement regulatory compliance (ß = 0.491, p < 0.001). Procurement regulatory compliance has a significant and positive relationship with VfM in procurement (ß = 0.586, p < 0.001). Results also show that procurement planning is a significant positive predictor of VfM (ß = 0.257, p = 0.005). Furthermore, the bootstrapping confidence intervals revealed that procurement regulatory compliance significantly mediates the relationship between procurement planning and VfM in procurement.Research limitations/implicationsAlthough the study was able to accomplish its overall objective, it is limited in terms of the geographical setting under which the study was conducted. Hence, the generalization of research results should be made with caution as each country has specific public procurement laws and regulations governing the conduct of procurement activities in the public sector.Originality/valueThe study contributes to the growing debate on achieving VfM in procurement activities. The study adds to the literature on public procurement by establishing the mediation effect of procurement regulatory compliance on the quest toward achieving VfM in public procurement.