Effect of procurement management practices on project performance in non governmental organizations in Nairobi county, Kenya

Abstract

With the worldwide fluctuation in donor funding to NGOs there is need to enhance operational procurement functions that brings confidence can retain and attracts more funding by donor community. In Kenya the inefficiency and ineptness of project performance in NGO contribute to diminishing support of the donor community, increased cost of project implementation, delays in timeliness of project completion and low quality products that fail to meet the minimal standard of specification. Cost effectiveness in project performance could be achieved through strict adherence of procurement functions. However many of the NGO have partially implemented procurement functions and practices. Others are struggling to effectively set up these functions. Funding nations /donors are not trusting process that are being undertaken by NGOs. The general objective of the study was to establish effects of procurement functions such as need assessment, supplier sourcing, contract management and inventory management on project performance in Non-Governmental Organizations in Nairobi County. The study employed a descriptive research design and used questionnaires as its main data collection tool. A total of 76 NGO’s were sampled using simple random sampling from a total of 328 NGO’s in Nairobi County. Of these, 70 questionnaires were submitted back for analysis, representing a response rate of 92.1%. Results were analysed using SPSS version 22. Majority of the respondents indicated that need assessment, supplier sourcing, contract management and inventory management affected project performance to a large extent. Regression analysis results also indicated that need assessment, supplier sourcing, contract management and inventory management all have an effect on Project Performance. Upon conducting hypothesis tests, all these functions were found to have a statistically significant effect on project performance. The study also found an R-Square of 0.395 which implies that 39.5% of the independent variable, which were inventory management, supplier sourcing process, need assessment, contract management explained project performance. It also found a statistically significant F calculated value of 4.303 as indicated by a p value of p = 0.004 >0.05. The study therefore concluded that procurement management practices such as need assessment, supplier sourcing, contract management and inventory management have a positive effect on project performance. It therefore recommended NGO’s to implement them in the execution of projects.