RICHAMPONG 2

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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
For the past decades, Public Procurement has gained much attention amongst the Least
Developed Countries (LCDs). According to Mlinga (2009) governments embarked on
reviews in their procurement systems in order to streamline and harmonize legal and
institutional framework. Effective evaluation and regulations are laudable; unfortunately
compliance with such policies, principles, rules and regulations governing procurement
has become a problem in MDAs and MMDAs in Ghana.This also necessitated the
Government of Ghana to review its procurement laws to aim in good procurement
practices which came into existence in 2003.
The World Bank (2003) estimated the annual value of public procurement for goods,
works, and consultancy services at 600 million US dollars representing about 10% of the
country’s GDP. In 2006, Adjei reveals that public procurement represents about 24
percent of total imports and apart from personal emoluments, public procurement
represents 50 to 70 percent of the national budget and 14 percent of Gross Domestic
Product (GDP).The bulk of the expenditure were programs run by MDAs and MMDAs
as well as Public Hospitals, Universities, Schools and Colleges which involve
procurement of works, goods, technical and consultancy services. Public procurement is
an integral function of governments in both developed and developing countries as the
gigantic financial outflows has a great impact on their economies that needs prudent
management (Thai, 2001). Thus the prudent handling of public procurement functions is

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fundamental to achieving economic, socio-political and other objectives of
government.In addition to this the bank programmed 1.8 billion dollars for the period
between 1997/98 for the health, nutrition and population sector of which financing for
pharmaceuticals accounted for between 220 and 250 million dollars of this total.Apart
from salaries, pharmaceuticals represent the largest category of recurrent health
expenditure in most government budgets.The total value of pharmaceuticals changing
hands in the developing world is estimated at 44 billion dollars. (Woodle, 2000).
The essence of an efficient public sector procurement system is to create wealth and
ensure good governance in Ministries, Departments and Agencies (MDAs).It is to reduce
poverty, corruption and improve the entire public financial management system in public
sector organisation.Public Procurement is the process of acquiring goods, works and
services at the best possible total cost, in the right quantity, quality, time and place for the
benefit of society.
The need for an efficient, corruption free practices and transparent public purchasing
system is one of the main drives behind most procurement practices review.Every year
many funds are spent to procure works, goods and services.The need for transparency
and efficiency in government purchasing has come at such a time when the economy of
the country has almost decline.Such developing countries have realized that a well
organized procurement systems contributes to good governance.According to
Hunja(2003) compliance with procurement laws increases public confidence.An equally
important reason for complying with procurement laws, procedures and processes in the
view of Evennett and Hoekman(2003) is that procurement is a condition for gaining

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access to foreign markets, loans and grants. Ghana has attempted to address its challenges
in public procurement process through several financial laws, rules and policies.The
public procurement reforms have come in a passage way of financial and legal forms
since independence.These are Legislative Instruments, Administrative Instructions and
Financial Circulars.In 1960, the Government of Ghana passed the Contract Act, Act 25 of
1960 and the Ghana Supply Commission Act which was reviewed later in 1990 by PNDC
law 245 to protect public resources in procurements
In 1976, the National Procurement Agency Decree, Supreme Military Council
decree(SMCD) 55 was passed by the Supreme Military Council.In 1979, another law, the
Financial Administration Decree SMCD221 and Financial Administration Regulation
(FAR) (LI 1234) 1979 was also passed to address weaknesses in public
procurements.The establishment of an effective oversight body to oversee the successful
implementation of these laws was to achieve procurement objectives.Ghana Supply
Commission and National Procurement Agency were established only as Central
Procurement Agencies and as procurement bodies but were not assigned oversight
responsibilities in public procurement. Procurement regimes in the Country between
1970 and 1980, no doubt, led to a system which was characterized by lack of harmonized
procedures and regulations as well as unclear institutional and organisational arrangement
required in the management of the public procurement process. It is in the light of these
challenges that the government after a major review of its public expenditure system, in
1993 established a comprehensive public financial reform programme known as Public
Financial Management Reform Programme (PUFMARP). This programme was designed
in order to strengthen its Public Financial Management System. PUFMARP, became

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operational in 1995 .It had the objective of promoting efficiency, transparency and
accountability in the public financial management system. The Ministry of Finance and
Economic Planning in 1999 established a steering committee known as Public
Procurement Oversight Group (PPOG) to assist in the design of a comprehensive public
procurement reform programme.The group completed one of its major findings by
drafting a public procurement bill in September 2002.In 2003 the Government of Ghana
passed the Public Procurement Act, 2003, Act 663 to operationalise the concept of good
governance and to push zero tolerance of corrupt practices.
The Act essentially provides framework for developing & strengthening procurement
institutions and streamlining their operational processes to reduce corruption and poverty,
set a guideline for private sector participation in the procurement process while
enhancing transparency, accountability and responsibility. The Act set out legal and
institutional framework, standardized procurement procedures and tender documents,
independent control system, proficient procurement staff and anti- corruption
measures.There are various thresholds methods of procurement provided under the Act
for use by public procurement entities. These are competitive tendering, request for
quotation, single source procurement. Public Procurement undergoes several processes
which are as follows:
1. Planning Procurement;
2. Tendering Process;
3. Contracts Management;
4. Monitoring and Evaluation;

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5. Appeals and Complains
6. It is for this reason that the study intends to find out the introduction of the
Public ProcurementAct 663(2003) on procurement practices and its effect on
Value for Money in Public Sector Organization in the Ga Central Municipal
Assembly.
1.2 Statement of the Problem
According to Adjei (2006), the procurement laws, decrees and instruments which were
meant to provide a comprehensive framework to regulate procurements within the public
sector did not work to achieve government objective in procurements. Despite
government concern for prudence in public procurements and irrespective of existence of
the Act:
 Some public entities have not established tender committees, tender coordination
committees, etc.
 Where these committees have been established they are not functioning as they
should
 Some public entities continue to flout the provisions of the PPA (633)
 Corruption, fraud, malpractices, etc continue to go on and government is losing a
lot of tax payer’s money on procurement
It is for this reason that the study intends to find out the introduction of the Public
Procurement Act 663(2003) on procurement practices and its effect on Value for Money
in Public Sector Organization.

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1.3 Objectives of the study
The main objective of the study is to find out the Public Procurement Act 663(2003) and
its effect on Value for money in public sector organisations in Ga Central Municipality.It
is to find out the extent to which these entities in the Municipality have led to cost
reduction, good corporate governance and enhanced image.The objectives are as follows:
1. . To ascertain whether procurement activities of the public sectororganisation are
in compliance with the Public Procurement Act, 663 (2003).
2. To examine whether transparency, efficiency and fairness exist and if any
procurements in the Municipality have positively contributed to the accountability
of the public entities.
3. . The extent to which the laid down procurements structures and procedures are
followed.
1.4 Research Questions
In order to attain the research objectives the following questions are posed:
1. Are procurement activities of public entities in the Municipality in conformity
with the Public Procurement Act, Act 663?
2. Do procurement activities minimize corruptions, frauds and irregularities as
intended by the Procurement Act, Act 663 (2003)?
3. How have cost reductions, transparency and accountability been achieved in
procurements and how have these impacted on value for money in the
Municipality?
4. What can be done to improve procurement in public entities in the Municipality?

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1.5 Importance of the Study
This study is important because it will contribute to knowledge and development of
literature in the subject area under investigation; and will also serve as a basis for further
research for all those interested in the topic.It will provide a framework for ensuring
effective and efficient procurement practices in the Municipality so as to enhance
corporate governance through transparency and accountability.It would influence
national and corporate procurement policies which would be relevance to other public
institutions and would serve as guide on what strategies to adopt in efficient procurement
practices.
1.6 Organization of the Study
The research work is organized into five (5) chapters.
Chapter one is about the introduction of the study. It looks at the background to the study,
the objectives of the study and the statement of the problem. It also briefly looks at the
research questions of the study. Chapter two presents the relevance on the subject.
Literature is reviewed according to the research questions and objectives of the study.
Chapter three highlights the methodology used in collection of the research data. It
explains the research design. It also gives details about the population, research sample
and sampling procedures used in the study. It explains the research instruments, methods
of data collection and data analysis plan. Chapter four is the data presentation and
analysis. Chapter five presents the findings, conclusion and recommendations for the
study.

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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter presents a review of existing literature related to the research problem. It
provides the understanding and insight necessary to develop a logical framework on
public procurement; to generate ideas for possible areas of research; identify a number of
studies worthy of further evaluation; as well as providing opportunity to expand on the
work of others. For the purpose of the review, the chapter is divided into the following
sub-headings:Definitions by the Act and other authoritative definitions,Objectives of
procurement, Areas covered by the Act, Legal and Regulatory framework, Entities falling
under Public Institutions, Procurement cycle & principles, Methods, processes &
procedures and limitations of the Act.
2.1 Definition and Characteristics of Public Procurement
Public Procurement, according to the Public Procurement Act, 2003 (Act 663), is ‘the
acquisition of goods, works and services at the best possible total cost of ownership, in
the right 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’ (PPA Module,
2007). In other words, Public Procurement is the process by which organizations acquire
goods, works and services using public funds. It is a comprehensive process that runs
from proper procurement planning, budget allocation, bids invitation, bids evaluation,
award of contract, contract management, performance measurement, monitoring, auditing
and reporting. Depending on relevant laws, public institutions have to follow a system for
public procurement. This system could cover the way they advertise for suppliers, the

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grounds on which they choose a supplier, and the way in which they measure and enforce
the requirements they put on the supplier. The usual aim of such a system is to take
advantage of competition between suppliers and to reduce the risk of corruption.
2.2 Evolution of Public Procurement
At the beginning of the 20th century, purchasing was recognized primarily as clerical
function by many railroad organizations but prior to the First World War, purchasing was
regarded as an independent function. During the first and second world wars, the scope of
purchasing was broadened to cover raw materials, supplies and services needed to keep
the factories and mines operating. Purchasing continued to gain stature between 1950 and
1960; this was as a result of the improved techniques for performing the function which
became more refined as the number of trained professionals increased. The emphasis
became more managerial than administrative. The introduction of major public bodies
and inter-governmental organizations, such as United Nations, procurement became a
well-recognized science.More emphasis was placed on purchasing strategy between
1970 and 1980 as the ability to obtain needed items from suppliers at realistic prices
became evident. Pioneering this motion, Kraljic (1983) proposed the transformation of
the purchasing function which was basically tactical to a strategic function within a
business. Procurement started to become more integrated into the overall corporate
strategy in the 1990’s and a broad-based transformation of the business function ignited,
fuelled strongly by the development of supply management software solutions which
helped to automate the source-to-settle process. During this era, revolution in Information
Communication and Technology (ICT) fuelled the process of integrating procurement
into business planning and execution. The leader of the procurement function within

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many enterprises was established in 2000 with a C-Level title - the Chief Procurement
Officer (sometimes called the Head of Procurement). In developing public procurement
policy, governments are often concerned not only with value for money but also with
promoting their social and environmental objectives. However, imposing social and
environmental requirements makes it harder for some suppliers to participate in public
procurement.
2.3 The European Union Rules on Public Procurement
Governments & Public Utilities, Procurement of goods, services and public works are of
significant value to the European Union.“16% of EUs Gross Domestic Product (GDP) is
accounted for by public procurement contracts” (Matthew, 2010). The EUs public
procurement law sets out the regulations that govern the award of contracts. The law is
rooted in the Treaty of Rome of 1957 established by the European Economic Community
(EEC), of which six states were members. The Maastricht Treaty of 1992 altered the
name of the EEC to European Commission (EC) for simplicity. The European
Commission is a civil servant to the European Union, but is also one of the four
institutions of the EU. The ECs main roles are “to propose legislations to the European
Parliament and the council of the European Union, administer and implement EU
policies, enforce EU laws and negotiate international agreements”. However, it also has
three roles that are distinct to the public procurement law. First, the commission proposes
legislation, and engages in related consultations. Secondly, it provides guidance on the
law through publishing explanatory notes. Lastly, it enforces the law using its legal
powers under the EC Treaty.

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The European Commission uses its powers to investigate and proceed against
infringements in those states of the EC public procurement law. The “commission’s
power is rooted in Article 226 of the EC Treaty and the procedure taken to make their
power reign is referred to as the ‘infringement procedure’” (Matthew, 2010). When a
country does not apply the rules set out, the commission demands an explanation of the
issue at hand. If it was not satisfied with the answer it makes formal request to the
Member State to comply with the law within a fixed period.However, when the
commission notices that the country is not complying, it can then with its power take
actions before the ECJ for judgment on the matter. Clearly these set of rules would push
the Member States of the EU to abide. The ECJ may grant permission for the pending
contract to be suspended based on the merits of the project even after it has been
awarded. Member states under the article 228 of the EC treaty obliged to comply with the
European Commission Judgment.
The reason behind looking at the EUs public procurement law was to show that it was
possible for Ghana to follow their strategy, so that its public procurement act, would be
as efficient, effective, and transparent as they want it to be. It was also to show that the
Ghana public procurement act lacks punishment for those who go against the act or
simply do not take actions against rule breakers. It was to show that simply having a
public procurement act, does not solve the problems of effectiveness, accountability,
efficiency and transparency, but enforcing the rules would go a long way just as the EUs
public procurement rules does.

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2.3.1 Public Procurement Lessons from Kenya, Tanzania & Uganda
Kenya, Uganda and Tanzania have all experienced different reforms when it comes to
procurement processes. The comparison helped to analyze the initiatives they each took,
to make their procurement process efficient, and transparent in line with international
guideline of what a procurement law should look like.
In 1974, the three countries were using the same procurement system. Their delivery
offices were within the ministries, requiring the recruitment of supply officers to be in
charge of purchasing activities. Every institution in these economies had its own self-
governing and independent supply system. However, major goods, services and works
were purchased through the Central Tender Boards (Odhiambo et al., 2003). Due to the
joint procurement of the three East African countries, the governments came together to
create a shared procurement manual, the East African Supplies Manual. The manual
ceased to exist because the East African Community collapsed in 1977. The three
countries thus reversed to their status quo. Each country designed new procurement
guides which did not last long before they also collapsed. (Odhiambo et al., 2003)
affirmed that since independence, “the Finance and Ordinance Act of 1961 guided public
procurement in Tanzania”. It stipulated the procedures that must be followed when
conducting purchasing activities. However, the Act did not provide specific process of
procurement. It gave brief information on how to acquire goods, and mentioned where
procurement must take place. Yet, there was no tool made available “to control and
regulate activities of different procurement entities, though the Central Tender Board
existed” (Odhiambo et al, 2003).

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In their quest for an efficient and transparent procurement system and getting it in line
with international procurement guidelines, serious bottlenecks have continued to delay
the efforts to implement a competitive and fair procurement processes. The estimation of
size of public procurement encountered a number of conceptual as well as technical
problems. These problems emerged due to lack of data and the method utilized in
keeping data and reporting problems. The authorities of the EastAfrican Community
responsible for procurement activities do not keep information in relation to public
procurement. Instead, the procuring entities in the different ministries, department, and
local authorities kept the information. Thus the quality of information kept varies and is
not necessarily of quality. Over the years the public sector grew significantly in size and
role in economic activities. This required a new system to be put in place because the
existing ones were not working. Public procurement reforms then came up as a result of
finding the best way of resolving the problems that came up with the old public
procurement systems.
In Kenya, in 1986, Supply Goods Services (SGS) Consultants evaluated the public
procurement system, and found that a reform was needed, because the existing
procurement system was not efficient in its operations. According the SGS Consultants,
the state lost huge amount of money through shoddy deals. This showed that “the
procurement system in Kenya lacked transparency and fair competition, procurement
staff were not adequately trained and lacked professionalism” (Odhiambo et al., 2003). In
the late 1990s, government bodies and the international donors in union with the
Government of Kenya introduced the public procurement reform process. This reform
created a structure that allowed appropriate passing on of authority, incentives, purchase

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measures, planning and development of supplies manuals. The intention behind the
reform was to bring about transparency and create trustworthy institutions. In Uganda,
the procurement reform was seen as a strategy that focused on ways to eliminate poverty
by creating a conforming policy framework and re-orienting government spending to
needy sectors. There was a need for the reform because the existing procurement law was
characterized by malpractices such as under-invoicing, unqualified personnel that would
regulate the action of procurement officers. The reform then brought about the
establishment of a National Public Procurement Unit that looked over all matters of
public procurement.
2.3.2 Public Procurement in Ghana
2.3.2.1 Objectives and scope of Public Procurement Act
The main objective of Public Procurement Act 663(2003) is to harmonize public
procurement processes, secure judicious, economic & efficient use of state resources and
to ensure that public procurement functions undertaken within the public sector are fair,
transparent and nondiscriminatory. The Act makes reference to procurements financed
wholly or partly from public funds; with respect of procurement of goods, works,
services and contract administration. Reference is also made to disposal of public stores
and equipment and procurements financed by funds or loans taken by the government of
Ghana, including foreign aid funds.
2.3.2.2 Functions of the Public Procurement Authority and other Bodies
The Public Procurement Act establishes bodies such as the Public Procurement
Authority, Entity Tender Committees and Tender Review Boards. It specifies rules for

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procurement methods, procedures, appeals by tenderers and disposal of stores. It states
offences and applicable penalties. It also specifies procurement thresholds in schedules to
the Act. It also authorizes the issues of regulations, which are enforceable under the
Act.The following are the functions performed by the Authority which are as follows:
 Make proposals for the formulation of policies on procurement;
 Ensure policy implementation and human resource development for Public
Procurement;
 Develop draft rules, instructions, other regulatory documentation on public
procurement and formats for public procurement documentation;
 Monitor and supervise public procurement and ensure compliance with statutory
requirements;
 Have the right to obtain information concerning public procurement from
contracting authorities;
2.4. Areas Covered by the Act
The Public Procurement Act is classified into parts and various sections.
1. Establishment of the Board.
2. Procurement Structures
3. Procurement Rules
4. Methods of Procurement
5. Tendering Procedures
6. Methods and Procedures to engage the services of Consultants
7. Review

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8. Disposal of Stores, Plant and Equipment
9. Miscellaneous Provisions
2.5 Entities falling under Public Institutions
The Act mentions the roles of various institutions such as the central management
agencies; Ministries, Departments and Agencies (MDAs), subverted agencies and
governance institutions. Others includes state owned enterprises; public universities,
schools, colleges and hospitals, the Bank of Ghana and financial institutions owned or
where government is a majority shareholder as well as institutions established by
Government for the general welfare of the public.
Central Management Agencies consist of Controller and Accountant General’s
Department, Ghana Audit Service, Ghana National Fire Service, Ghana Revenue
Authority, Ministry of Local Government and Rural Development, Ministry of Finance
and Economic Planning, Office of the Head of Civil Service.
2.6 The Legal and Regulatory Framework of the Act 663
The Public Procurement Act, 2003 (Act 663) set out the legal, institutional and regulatory
framework to secure fiscal transparent and public accountability in Ghana’s procurement
system. The Act establishes five basic principles upon which the public procurement is
based World Bank, 2003). These pillars are: the legal and institutional framework;
standardized procurement procedures and tender documents; independent control system;
proficient procurement staff; and anti-corruption measures. The Public Procurement Act
663 establishes the Public Procurement Board (PPB) now PPA, Entity Tender
Committees (ETCs) and Tender Review Boards (TRBs). It specifies in clear terms the

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laws for procurement methods and thresholds, procedures, appeals and complaints
resolution procedures and disposal of stores. It authorizes the issuance of enforceable
regulations, Guidelines, Standard Tender Documents (STDs) and Manual under the Act
LEGAL FRAMEWORK DETAILS
Public Procurement Act, 2003
(Act 663)
Provide a comprehensive legal regime to harmonize and
safeguard public procurement
Public Procurement Manual Provides practical guidance and step-by-step procedures for
undertaking procurement in accordance with the Act
Standard Tender Documents
(STD)
They comprise standard invitation and contract documents for
procurement of all values. There are separate standard tender
documents for goods, works and services.
Public Procurement Regulations They contain detailed rules and procedures for all aspects of
the procurement system, the operations of PPA and
procurement entities and the conduct of procurement activities
Guidelines Issued by the Public Procurement Authority (PPA) which
provides supplementary guidance on disposal, single source
procurement, margins of preference, framework contract
agreements, sustainable public procurement (SPP) etc.?
2.7 Principles Affecting Procurement
The basic objectives of good procurement are to procure the right quality of goods, works
or services from a reliable supplier in the right quantity ensuring cost effectiveness.
Procurement items are to be delivered at the right time, to the right place, in the right
quantity and at the right price whiles achieving the lowest total cost.

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In the achievement of the objectives of a good procurement system the following factors
play a significance role in procurement: Professionalism; Transparency; Value for
money; Competitiveness and Accountability. Other factors include Fairness; Efficiency
and ethical approach to the conduct of procurement functions.
2.7.1 Professionalism
Professionalism is the discipline whereby educated, experienced and responsible
procurement officers make informed decisions regarding procurement operations. It is in
the recognition of this fact that the Public Procurement Authority focuses its resources on
the training, professional development, promotion and support for individuals that are
engaged in public procurement to ensure adherence to professional and ethical standards
(Adjei AB, 2006). To achieve this, the Authority developed a Capacity Development
Policy Paper which aimed at ensuring that
1. Each Procurement Entity has a functional Procurement Unit that is managed by
personnel who have the requisite procurement training, competencies, and adhere
to agreed code of ethics.
2. Personnel in the Procurement Units in the public service will have career paths in
procurement and given opportunities to gain professional procurement
qualifications.
3. Establishment of a Procurement Professionals Association
2.7.2 Transparency, Competitiveness and Fairness
Transparency means that the same rules apply to all suppliers of goods, works and
services and that these rules are publicized as the basis of procurement decisions prior to

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their use.Transparentprocurement procedures can contribute to a more efficient allocation
of resources through increased competition, higher quality procurement and budgetary
savings for governments and thus taxpayers (PPB Training Module 3, 2007). In order to
avoid corruption in the public procurement system there is the need to publish calls for
tenders, notifying contract awards in the media, including the successful bidder's name
and final price, and making award criteria more transparent and accountable. These are
some of the basic principles of transparency in government procurement which directly
affect corrupt practices (Evenett et al, 2005).
In this regard, the Act 663 and Regulations endorse the use of competitive tendering
which encourages maximum competition in the procurement system. It involves the use
of STDs, advertising procurement opportunities, public opening, publication of contract
awards, creating windows of addressing appeal and complains, etc. Public Procurements
using other uncompetitive methods are vigorously monitored and evaluated by PPA and
Audit Agency to ensure transparency, fairness and value for money (Act 663, 2003).
This position has been collaborated by Barden (2006) when he opined that, government
agencies can achieve transparency by strategizing through effective and efficient
advertising; publicly opening bid documents; effective evaluation of bid documents; the
publication of award results; fair and speedy protest and dispute resolution handling
processes and the disclosure of signed contracts; and the use of independent evaluation
methods, that are consistent with the terms of bid documents.

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2.7.3 Accountability
Accountability can be explained as the process of holding an individual or an
organization fully responsible for all aspects of the procurement process over which they
exert authority. The essence of accountability is to strengthen the perception of
transparency and fairness. It reduces the incidence of corruption and enforces the Act 663
and regulatory framework which clearly defined responsibilities (PPB Training Module
3, 2007).
2.7.4 Value for Money
Value for money refers to the optimum combination of whole life cost‟ and quality to
meet customers or the end-users requirements of the procured goods or service under
consideration.Value for money is a way of comparing alternatives for the supply of goods
and services. Assessing value for money includes consideration of a number of factors.
These include the contribution to the advancement of Government Priorities; cost related
factors such as whole-of-life and transaction costs as well as non-cost factors such as
fitness for purpose, quality, service and support, and sustainability considerations.
The concept of Value for Money (VFM) in everyday life according to R. Glendinning,
(1988) is easily understood as not paying more money for a good or service than ensuring
that its quality or availability justifies the procurement. In relation to public spending it
implies having a concern for economy, efficiency and effectiveness. In procurement the
concept of value for money refers to cost minimization, output maximization and full
attainment of the intended results. The practical conclusion is that policy makers in
procurements must frame precise aims so that at least there are some criteria with which

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to compare results. That is there should be laid down values and a means of measuring
these values. VFM requires that steps must be taken to ensure that procurement activities
of public sector organizations are in conformity with these values. The concept of VFM
also reflects in the price of the item procured. It is the responsibility of a Public
Procurement Board according to Adjei (ibid) to “harmonize the processes of public
procurement in the public service so as to secure a judicious, economic and efficient use
of state resources in public procurement‟. This principle of value for money in the
procurement system is emphasized by the Act
2.8 Methods, Processes and Procedures in the Public Procurement Act
There are various methods of procurement provided under the law for use by public
procurement entities. The choice of particular method is based on the amount involved
(threshold) and the circumstances surrounding the procurement.
2.8.1 Competitive Tendering (Section 35 & Part V of Act 663).
The Act and Regulations endorse the use of competitive tendering method for standard
high value procurement for goods, works and consultancy services. The two types of
competitive tendering methods include
(1) International Competitive Tendering (ICT) which is used when effective competition
cannot be achieved without the inclusion of foreign firms (s.45).
(2) National Competitive Tendering (NCT) is used when the procurement entity so
decides (s.44) and subject to contract value thresholds specified in Schedule 3.

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It is the most preferable methods under the law, as it encourages maximum competition
in the procurement system. The invitation to tender is always advertised and opened
publicly.
2.8.2 Request for quotations (Sections 42-43 of Act 663)
The process of organizing a fully-fledged tendering or other competitive tendering
procedure is normally a time consuming and costly exercise which can be dispensed with
when the contract value is small. The main idea is to allow procuring entities to use a
simplified procedure in those instances where the contract value is so small.The main
idea is to allow procuring entities to use a simplified procedure in those instances where
the contract value is so small that the administrative effort related to a full- fledged
tendering procedures appears out of proportion (Acts 663, 2003). The method is based on
comparing price quotations obtained from at least three foreign or local suppliers for
goods/works that are small in value.
2.8.3 Two-Stage Tendering (Sections 36-37 of Act 663)
Two-stage tendering is only allowed where detailed specifications cannot be made
available before going to tender (s.36) or the optimal solution is unknown. In the case of
services, it is used to obtain proposal or offers on various means to meet its procurement
requirements.
2.8.4 Restricted Tendering (Sections 38-39 of Act 663)
This is a procurement method with limited competition. A maximum of six and a
minimum of three short-listed suppliers are invited to tender. To apply this method, a

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procurement entity requires specific approval from the Public Procurement Authority
(PPA). The Restricted Tendering method is applied mainly where procurement
requirement is of specialised nature and there is enough evidence to show that there is
limited number of potential suppliers. In 2009 a total of 167 out of 179 entities received
approval to use this method of procurement as compared to 2008 approval of 166 out of
173 applications received (PPA Annual report, 2009).
2.8.5 Single Source Procurement (Sections 40-41 of Act 663)
This system involves procurement from a supplier without any competition. It is
normally used for procurement of sole or single sourced requirements. The law allows
this method where: procurement is for justifiably urgent items, requirements can only be
28 supplied by one source, additional requirements for purposes of standardisation,
purposes for research, experiment, study or development, procurement that concerns
national security. In 2009, 323 out of 360 single source applications received were either
approved or conditionally approved as against 318 out of 342 in 2008 by PPA (PPA
Annual report, 2008/2009). This method has often been abused by entities and political
leaders over the years. According to the Finance Minister, public procurement appears to
be one of government’s activities most vulnerable to waste, fraud and corruption due to
its complexity, the size of the financial flows it generates and the close interaction it
brings between the public and private sectors. On that note, the PPA Board was urged to
examine very carefully the conditions for approving sole-source procurement
applications with the view of making it more of an exception rather than the norm.

24
Thresholds for Procurement Methods
Procurement Method/Advertisement Contract Value Threshold
(1) Pre-qualification
(a) Goods
(b) Works
(c) Technical Services
Above GHC 35 billion
Above GHC 70billion
(not more than 10% of cost of works)
(2) International Competitive Tender
(a) Goods
(b) Works
Above GHC 15.0 billion
Above GHC 20. 0 billion
Above GHC 2.0 billion
(3) National Competitive Tender
(a) Goods
(b) Works
More than GHC 200 million up to GHC
2.0 billion
More than GHC 500 million up to
GHC 15 billion
More than GHC 200 million up to
GHC 2.0 billion
(4) Restricted Tendering Subject to Approval by PB
(5) Price Quotation
(a) Goods
(b) Works
(c ) Technical Services
Up to GHC 200million
(6) Single Source Procurement and Selection Subject to Approval by PB
(7) Advertisements for Expressions of
Interest for Consulting Services
Above GHC 700million
(8) Least-Cost Selection Up to GHC 700million
Source: Public Procurement Act, 2003.

25
2.9 Limitations with the Public Procurement Act
The Procurement Act of Ghana, Act 663(2003) was enacted and promulgated by
parliament of the republic of Ghana to, among other things bring sanity and conformity
public procurement by instituting bodies and principles that harmonizes the public
procurement process and activities. The implementation of this well intentioned
document has being met with several challenges that ails the health of its object. The
following are identified weaknesses in the Act 663 and are discussed below
2.9.1 Lack of Clear Procedures for Emergency Procurement
Though the public procurement act has established guidelines, principles and tender
committees to take charge of its object, it has, however, failed to clearly provide for
emergency procurement procedures.This has culminated in procurement officers
resorting to their own discretion during emergency procurement which is subject to
intense human error.This remains one of the major ports of heckling, abuse, foul play and
transgression in the business of public procurement right from the Board to subcommittee
levels. (Public Procurement Authority, 2006)
2.9.2 Slow Pace in Regularizing the Draft Regulations
The public procurement Act, in its own wisdom in section 97, has empowered the
Finance Minister in consultation with the Public Procurement Authority, formulate and
institute regulations by legislative instrument , to give effect to the purpose of the Act
with a reasonable time period within which the regulations must be drafted and finalized
by the Finance Minister , given the fact that we are in a human society, people who
matter sometimes sleep over task assigned to them if pressure is not exerted to them to

26
perform.This has led in abysmal compliance levels various public procurement entities
across the country.(Ernest Osei- Tutu et al, 2011).
Despite the reverence and confidence that the procurement Act has imposed on the
procurement department with regards to its capability to add value to the organisation,
many internal customers actually act on their own and more often bypass the procuring
department (Schiele& McCue, 2006).This as a result of the fact that the regulations
regarding clear procurement procedures and performance standards are not effectively
implemented.
2.9.3 Lack of Qualified Procurement Personnel
The Public Procurement Act has clearly stated in section 3(k), as part of the functions of
the Authority to develop, promote and support training and professional development of
persons engaged in public procurement and ensure adherence of the trained persons to
ethical standards.This however, seems to be the opposite of what is exactly on the
ground.The PPA, after its review in 2006, reported that there is lack of qualified
procurement personnel in the system that cause a lot of inconsistencies leading to gross
inefficiencies of the concept
2.9.4 Membership of the Board
The Public Procurement Act of Ghana in its bid to institute working bodies to carry out
its object as a working document, has established a Public Procurement Authority, to
harmonize the process of public procurement in the public sector.The Board of the
Authority is to have a numerical strength of nine comprising of a Chairman, four

27
appointees from the public sector (a representative of the attorney general a woman and
two men), three appointees from the private sector(at least a woman and two men) and a
Chief Executive .In the absence of any unknown peculiar clarifying document, the Act
has not being clear on the issue of membership.
2.9.5 High Cost of Advertisement
In an attempt to promote transparency and accountability in the dealings of the Public
Procurement Authority the Act has directed that notices be given in a widely circulated
local and international newspaper.However, this endeavor has over the years increased
the cost of procuring materials, logistics and services for public entities,some of which,
the cost of advertisements outweighs the real cost of the item.It is not an overstatement to
opine that such transactions, economically, amounts to financial loss to the state. Ghana
is currently battling with corruption issues at the various MDA’s which is one of the
major hindrances to the achievement of the various MDGs as set out by the UNDP.Public
Procurement remains one of highly suspicious ventures which the instincts of society
sense the reality of the indicators of corruption.

28
CHAPTER THREE
METHODOLOGY
3.0 Introduction
The chapter begins with the study area (Ga Central Municipal Assembly), population and
sampling techniques as well as analytical procedures were presented. The chapter further
dealt with the presentation of data gathered, sampling techniques, instruments for data
collection and sources of data, analysis of data and ethical standards on public
procurement officials. The study continued with the development of an interpretive
research methodology together with a review of the objective of the research.
3.1 Profile of GCMA
The Ga Central Municipal Assembly (GCMA) was carved from the Ga South Municipal
Assembly and inaugurated on the 28th June, 2012.The Assembly was established by
Legislative Assembly 213(2012) with the capital at Sowutuom. The Ga Central
Municipal Assembly (GCMA) is one of the sixteen (16) MMDA’s in the Greater Accra
Region and covers a Land Area of 103.44 square kilometre.It shares boundaries with
Accra Metropolitan Assembly (AMA) to the South, Ga West to the East and North, and
Ga South Assembly to the west.The population of the Municipality is about 158,437
people representing 49.9% male and 50.1% female.
3.2 The Research Design
This study adopted the exploratory design. According to Babbie (2005) exploratory
research involves collecting information for the purpose of answering research questions
concerning the current status of phenomena. Exploratory research design seeks to find

29
out how people get along in the setting under question, what meanings they give to their
actions, and what issues concern them. The goal is to investigate social phenomena
without explicit expectations (Russell, 2006).Exploratory research is used when the topic
or issue is new and when data is difficult to collect. The focus of exploratory design is on
gaining insights and familiarity on social phenomena. A key limitation of exploratory
design is that findings are not typically generalisable to the population at large.
Exploratory research is often used to generate formal hypotheses, models and
theories.Exploratory design can also utilize both qualitative and quantitative methods and
selection of subjects. In view of the fact the Act has been in existence for some time now,
this study seeks to explore issues involved in introduction of the Act with specific
reference to the public sector organisations in the Ga Central Municipality in the Greater
Accra region.
3.3 Population
A research population can be defined as the totality of a well-defined collection of
individuals or objects that have a common, binding characteristics or traits. The
population for this study comprised of all those who are involved in public procurement
activities within the Ga-Central Municipality.The study involves staffs from the
Procurement Authority,Ga- Central Municipal Assembly,Educational Institutions for eg.
SHS, Health Institutions and Suppliers & Contractors. Since the population is too large,
the study used sampling technique to select respondents for the administration of
questions, interviews and discussion on issues related to procurement in the Minicipality.

30
3.4 Sample and Sampling Techniques
In conducting a research study, it is practically impossible, time-consuming and too
expensive to test every individual in the entire population. Therefore smaller chunks of a
unit sample are chosen to represent the relevant attributes of the whole of the units
(Graziano & Raulin, 1997). The sample size was calculated in relation to the deVaus
proportion approach (deVaus, 2002).
n = N
𝑁
1 + (E)2
n = Sample Size
N = Sample frame
E = Confidence Level
Using the above formula, a sample size of 60 people was considered appropriate and
representative enough for the study. The study purposively targeted selected public
entities in the local government (GCMA) Education (Odorgonno SHS) and Health
Institutions (Deseret Hospital) to represent procurement activities in the Ga Central
Municipal Assembly. The study involved members of entity tender committees, tender
evaluation panel, procurement and management staff of Public Entities (PEs),
suppliers/contractors and consultants as well as staff of the Public Procurement Authority
3.5 Sources of Data
The study made an extensive use of both primary and secondary sources of information
from selected public institutions. The primary sources of data include information
gathered from the questionnaires and were administered to the respondents.

31
The advantage of using primary data is that, they are more reliable since they come from
the original sources and are collected especially for the purpose of the study. The
secondary sources of data included annual reports, brochures and manuals. A number of
both published and unpublished materials on public procurement in general from
journals and articles as much as possible were used.
3.6 Data Collection Instruments
Data collection instruments used to collect data for the studies were questionnaires and
interviews. Structures and unstructured questionnaires were prepared and administered.
The nature of the questionnaires was such that they helped respondents to provide
relevant responses. Other instruments used for data collection were observations, and
focus – group discussions with key stakeholders such as the Municipal Chief Executive,
Procurement Directors, Bursars, Stores, School Heads and Suppliers & Contractors.
A major challenge encountered during the research was the issue of honesty and truly
detailed answers to the questions from the participants. Most of the participants since
they work in the public sector did not want anybody to know of their identity and thought
that the answers they provided might be used against them. I overcame this problem by
not mentioning their names or trying to know their identities. Another problem
encountered was difficulty in gaining access to participants because most of them would
not want to talk publicly. I used an alternative method of interviewing the participants by
the researcher at their convenience

32
3.7 Questionnaires Design
The research questions were developed by the researcher and were reviewed by some
experts in academia and in procurement practice. Subsequently, a pilot test of the
questionnaire and interview was conducted for ten (10) participants in order to identify
and eliminate potential ambiguity in the questionnaire. Generally, the questionnaire is
designed to collect general data from the public sector organisations in the Municipality.
These questions were grouped in categories to collect data on nature of procurement
systems, procurement principles, compliance level as well as effect on value for money
on public entities in the Municipality. All items were rated by participants on a four-point
likert scale. The instrument consisted of the following sections: Section solicited personal
and general information from the participants using objective test. Section B, solicited
information on respondent’s perception on the introduction of the Public Procurement
Act. In section C each item was scaled from 1-4 with the statement: Strongly Agree,
Agree, Disagree, and Strongly Disagree respectively. Questions in this section solicit
data on the impact/effect of the reform.
3.8 Data Analysis
In this study, both quantitative and qualitative methods were employed in the data
analysis.Excel was used presentation of data analysis. Data preparation was the initial
step to convert raw data into structured format that was more appropriate for the analysis.
Tasks in this stage included data editing, data coding and data entry, frequency
distributions, percentages, and descriptive analysis of the public procurement law and
value for money in public sector organizations.

33
Data collected were collated and analyzed using various quantitative statistical models
such as tables, bar chart and pie chart to illustrate the results.

34
CHAPTER FOUR
DATA ANALYSIS, DISCUSSIONS AND PRESENTATIONS
4.0 Introduction
The focus of this chapter is on the analysis of data gathered from the field with the aid of
questionnaires and interviews. Collection of data for this study is centered on three main
sectors within the public organizations in the Ga Central Municipality that are directly
affected by the Public Procurement Act, 2003 (Act 663). This includes Odorgonno Senior
High, Ga Central Municipal Assembly and Deseret Hospital. This was mainly done to
gather information on the introduction of the Public Procurement Act and its effect on
value for money in public organizations in the Municipality in the Gt. Accra Region,
Ghana.
4.1 Background of Respondents
A total number of Seventy (70) questionnaires were administered to staff of Ga Central
Municipal Assembly, Ordogonno Senior High and Deseret Hospitals in the Municipality,
out of which sixty (60) were obtained and valid for the data analysis. These valid
questionnaires used for the analysis yielded 86% of response rate. This indicates that, the
response rate was quiet high and reflects the views of the entire population.
4.2 Response Rates
The study used a sample size of sixty respondents from the case institution. These
respondents were drawn from various public organisations in the Municipality.
Respondents drawn from staff of procurement office, account office & internal audit of
the Municipal Assembly and Deseret Hospital, tutors, stores and account office of

35
Ordogonno Senior High School. Their responses were analyzed with tables, figures and
graphs.
4.3.1 Demographic Characteristics
The demographic characteristics of respondents used in the study include gender, age,
and number of years respondents have worked in the Municipal Assembly, Deseret
Hospital and Ordogonno Senior High. Discussing these relevant variables provide an
overview of the sampled sixty from the various categories of respondents in the research
area. As indicated in Table 4.2, 20 respondents, representing 33.3% were within the age
interval (20-30) years, 41.67% of the respondents fell within the age bracket (31-40), 15
% of the respondents were within (41-50) and 6 out of the total respondents representing
10% were all above 50 years interval.This age distribution illustrated in Table 4.2 shows
that, majority of the respondents sampled were within the age interval of 31-40 years.
Also an appreciable number of the respondents were aged within 20-30 years interval
which in general shows somehow youthful aged workers in the Municipality. The gender
of respondents was also sampled. From Table 4.2, 88% respondents sampled were male
and 12% of them were female.Respondents’number of years experience in the
Municipality was relevant. It was revealed that majority of the respondents representing
25% had worked for 1- 5 years, 50% had worked for 6-10 years, and 15% had worked for
more than 10 years. Thisexplains that, majorityof the respondents in the Municipality for
more than 10 years know the procurement process.

36
The breakdown of all selected respondents with respect to the demographic
characteristics is shown in Table 4.3.1
Table: 4.3.1 Ages
Ages Frequency Percentage (%)
20-30 20 33
31-40 25 42
41-50 9 15
51-60 6 10
Total 60 100
Table: 4.3.2 Duration of Service
Years Frequency Percentage (%)
1-5 20 33.3
6-10 30 50.0
Above 10 10 16.67
Total 60 100
4.3.2 Educational Background of Respondents
Respondents selected were educated, this was expected, since the respondents were
already working in the departments which have a required educational level for its
minimum qualification. From the Figure, it was found that, majority of the respondents
were holders of university degree, which constitute 50%, this was followed by Secondary

37
School leavers which also constitutes 35% , 10%constituted JHS leavers and 5%
constituted Primary
Figure 4.3.2 Educational Background of Respondents
Source: Researcher’s Field Work, March 2015
4.4 Extent of Compliance with Procurement Law
The Public Procurement Authority (PPA) is mandated by Sections 3(d) 13(e) and 3(h) of
the Public Procurement Act, 2003 (ACT 663) to assess the performance of each entity to
ensure compliance with the provisions of Act 663.Compliance with the Public
Procurement Act (Act 663) is supreme in the execution of duties of those individuals
entrusted with procurement functions. The study looked at how Ga Central Municipal
Assembly, Odorgonno Senior High and the Deseret Hospital follow the laid down
procedures in good procurement practices.
Tertiary
SHS
JHS
Primary
50%
35%
10%
5%

38
Table 4.4.1 Compliance level of respondent
DESCRIPTION SHS (%)
YES NO
GCMA (%)
YES NO
DESERET HOSPITAL
YES NO
Establishment of tender
committee in the institution
75 25 80 20 60 40
Inspection of Public
Procurement Authority have
infleuence on the organisation
35 65 55 45 70 30
Enforcement of Rules and
Regulations by the Act
88 12 62 38 85 15
Source: Researchers Field Work
The researcher in this case wanted to find out whether the same rules apply to all
suppliers of goods, works and services and whether these rules are publicized as the basis
of procurement decisions. The descriptions of the various items were unanimously agreed
upon by all respondents.From the table above the compliance level of the Procurement
Act clearly shows that Ga Central Municipal Assembly, Deseret Hospital and Ordogonno
Senior High comply with the Procurement Act by establishing tender committee,
enforcement of rules and regulations and Inspection of procurement activities by the
Procurement practioners.
4.4.2 Medium of Advertising
As one of the conditions for ensuring that competition exists in procurement processes is
the medium of advertising .Respondents were asked if contracts for the supply of goods
and services were advertised to the general public, all of them answered in the

39
affirmative. The results is in line with section 19 of the Act (Act 663) which stipulates
that all contracts for the supply of goods and services to public sector institutions must be
advertised to ensure transparency.
To further ascertain compliance, the study sought to find out the medium through which
the Ordogonno Senior High School, Ga Central Municipal Assembly and the Deseret
Hospital advertised contracts for the supply of goods, works and services (Table 4.3.5).
The literature on Act offers a number of media through which advertisements for the
supply of goods and services should be utilized. These include newspapers, television,
and the internet and radio stations. As revealed by Table 4.3.5 of the respondents
representing 70 percent admitted that the national newspapers were as the major media
through which they advertised their tender information about procurement. 25 percent of
respondents indicated Radio/FM stations, whiles 5 percent indicated that they used
Television as the medium to advertise their contracts.
Table 4.4.1 Medium of Advertising
Medium Frequency Percentage (%)
Newspapers 42 70
Radio/FM stations 15 25
Television 3 5
Notice Board - -
Internet - -
Total 60 100
Source: Researchers field work March, 2015

40
4.5 Procurement Principles
4.5.1 Transparency
Transparency serves as the mirror for the process of public procurement of which trust is
created for the process. Thus, Act 663 endorse the use of Standard Tender Documents
(STDs), public opening, publication of contract awards, resolving disputes and
complains, and effective monitoring. A four point Likert Scale questions were used to
determine respondents’ knowledge of the Act. On a scale of 1 to 4, respondents were
asked to indicate transparency in the public entities in the Municipality. Of the Act as
follows: Strongly Agree (SA) = 1; Agree (A) =2 Disagree (D) =3; Strongly Disagree
(SD) = 4. Table 4.4 presents the results of respondents’ knowledge on procurement
principles which are as follows.
Table 4.5: Transparency in Procurement Practice
STATEMENT SA (%) A (%) D (%) SD (%)
Competitiveness and transparency 75 20 3 2
Contract awards posted on entity/ PPA website 60 40 - -
Monitoring and auditing of procurement activities by PPA 85 10 - 5
Researchers field work
The researcher in this case wanted to find out whether the same rules apply to all
suppliers of goods, works and services and whether these rules are publicized as the basis
of procurement decisions. The descriptions of the various items were unanimously agreed
upon by all respondents. There is a high level of satisfaction in fairness, competition and
transparent which shows 0.75 for strongly agreed, 0.20 for agreed, 0.03 for disagree and

41
0.02.Effective monitoring and auditing of procurement activities shows that these entities
act in accordance with the procurement law as stated in the table. The (Act 663, 2003)
provides that Procurements using other uncompetitive methods (Price Quotation, Sole
source etc) are vigorously monitored and evaluated by Public Procurement Authority
(PPA) and Audit Agency to ensure transparency. The study established that there are
improvements in transparency in procurement process resulting in increased competition,
help in attracting more investments, and improvement in tax payments in Ghana.
4.5.2 Professionalism
Professionalism discusses the education/training and capacity development of personnel
to make informed decisions regarding procurement operations.
Table 4.52: Table showing professionalism
STATEMENT SA (%) A (%) D (%) SD (%)
Qualified Staff and Experienced Procurement Officers 60 30 5 5
Informed decisions regarding Procurement Operations 55 40 2 3
Evaluation of tender done by competent persons 40 50 5 5
Researchers field work
The description of items under the professionalism shows that, all the items 0.6, 0.3, 0.05
and 0.05 respectivelyconcludes that all the description of professionalism, respondents
generally agree to the items that procurement staff do have the qualification and
experience to handle procurement process effectively. Public Procurement Act, 2003 has
mandated Public procurement Authority to develop career paths for procurement to
attract qualified staff and to give them opportunities to gain professional procurement

42
qualifications. Ten percent disagrees that procurement activities are not handled by
qualified procurement staff. This is because they stated that only few holds qualifications
in procurement and are well trained.
4.5.3 Efficiency and Value for Money
The research intended to find out if public entities are showing concern in exercising their
duty efficiently to achieve value for money in the practice of procurement.
Table 4.5.3: Efficiency and Value for Money
DESCRIPTION SA (%) A (%) D (%) SD (%)
Efficiency in Public Procurement 10 5 45 40
Utilisation of funds 20 10 50 20
Effective contact management and reporting entities 5 25 45 25
Completion of projects within time 5 15 50 30
Source: Researcher’s Field Work, March, 2015
All the descriptive items in above show a major disagreement and dissatisfaction on
individual items. For whether there is a greater efficiency in public procurement shows a
disagreement by respondents, better utilization of public funds, and contract management
by reporting bodies and completion of projects within time. Their respective percentages
shows that value for money and efficiency are not utilized when it comes to procurement
in the public sector organisations.

43
4.6 Weaknesses in the Procurement Act
The Procurement law faces some weaknesses and how they affect the operation of
entities. The study will help to identify the challenges confronting stakeholders in the
implementation of the Public Procurement Act and its effect on their performance.
Table 4.6: Weaknesses in the Procurement Act
DESCRIPTION SA (%) A (%) D (%) SD (%)
Bureaucracy in Procurement Process 30 40 20 10
Expensive nature and cost involved in procurement 45 35 13 7
PPA programmes are too short and impracticable 50 40 5 5
Source: Researcher’s Field Work, March, 2015
The description for the challenges in the implementation of the Act were all greatly
agreed upon to be a major challenge in the execution of public projects. Some of these
challenges include the bureaucracy in the procurement system which saw a high percent
70 percent as against thirty percent those who disagrees, public procurement process
being costly and expensive which also had 80 percent as against twenty percent.
Impractical procurement training was all greatly agreed by the respondents to be a major
challenge of the entire process.
4.7 Review of the Procurement Law
Despite of the many challenges of the Act 663, it was necessary for the researcher to
establish the extent to which the practitioners of the Act agree to the proposed review of
the Public Procurement Act (Act 663). The results in Figure 4.6 show that more than half

44
of the respondents (70 percent) responded in the affirmative whereas (30 percent) were
not in favour of reviewing it.
Figure 4.7 Recommendations for Review of the Act
YES
NO
70
30

45
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
This chapter highlights the major findings of the study. The findings are outlined in direct
response to the specific objectives. Recommendations have been provided to improve the
structures, procedures, performance and policies of Public Procurement Authority with
the overall aim of maximazing efficiency and ensuring value for money in public sector
organisations in the Ga Central Municipality in the Greater Accra Region
5.1 Summary of Major Findings
The study revealed that the public procurement entities in the Municipality have largely
upheld the provisions of the Act 663 and other legal requirements.
5.1.2 Procurement Structures and Procedures
The Public Procurement Act, 2003 (Act 663) specify the establishment of procurement
structures that will support and strengthen the execution and supervision of the
procurement functions. These structures include Entity Tender Committee (ETC), Head
of Entity, Evaluation Panel, and Procurement Unit. These structures have varied activities
to perform in the procurement cycle. The study established that these structures,
especially ETCs and Procurement Units do not either exist in most entities or are not
properly constituted and so do not perform their functions well.As a result of this, it
compels other departments such as Planning/Works in the Municipal Assembly,
Accounts and Administration in the Second cycle institution (Odogonno Senior High)
and Hospitals (Deseret) to hold the forth for the non-existing procurement units. Though

46
majority of staff in these departments went through some short training in procurement,
they lack the technical expertise to execute procurement activities efficiently and
effectively to attain value for money.
5.1.3 Mode of Advertisement
It was revealed that national newspapers (dairies) were the most common media through
which the three public sector entities in the Municipality advertised for the supply of
goods and services. This was in conformity with the Procurement Act 2003 that requires
procurement entity to publish tender invitation in a wide national circulated newspaper as
stated in Section 47 (2) of Act 663. It was discovered that due to the low development
and limited expertise in ICT in the public sector entities do not advertise contracts using
the internet even though the Public Procurement Authority has established website for
institutions to advertise their contracts for the supply of goods and services.
5.1.4 Procurement Principles
There is greater transparency, fairness, and competition in public procurement in the
Municipality, than it was at the time of the introduction of the Act in 2003. There is
greater confidence and trust in Public Procurement Institutions in the procurement
process.
5.1.5 Lack of Professionalism
From the analysis it was shown that only few people of respondents hold qualifications in
procurement. Though most of these procurement officers have been given short training
(1-3 days), this has little impact on the procurement activities in the municipality The
training periods are too short and are highly theoretical.

47
5.1.6 Relating Procurement Practice to Value for Money
High cost of public procurement process due to high cost of advertising in the two most
widely read newspapers, payment of sitting allowances for ETC meetings and
refreshment during tender opening and evaluation panel meetings. This makes public
sector procurement more expensive to entities compared to the privatesector procurement
process. These Publishers have taken advantage of the provision to over-charge the
public entities as a result of the high demand for advertising procurement.
5.1.7 High Cost of Public Procurement
Some contractors and suppliers have complained about long delays in payment after they
have executed the projects or supplied the goods. Therefore every tender price has an
element of more than six (6) month inflation or exchange rate factored in the price.
Collusion between the entities and the suppliers, contractors, or consultants contributes to
this problem. Contracts are also increased by the costs of tender documents which are
sometimes much higher than the actual costs of the tendering document. Travelling cost
to purchase and to submit bid documents swell up contract price. Some contractors have
gone through several tenders and paid illegal huge fees (bribes) without ever securing any
contract. These expenses build up cost for any project tended.
5.2 Conclusions
The study confirms that public procurement Act, 2003 (Act 663) is observed to give
solutions which in the view of this study attained 60% compliance level. However this
achievement is not without challenges. It reveals out weaknesses and threats of the
various sectors of the economy. Public entities must establish the required structures and

48
engage procurement professionals to manage them. Coverage of monitoring activities
must be increased to cover more low spend entities across all sectors in the region.
Short/long term training must be continued and improved so as to improve capacity of
entities, service providers, and other key stakeholders to operate efficiently and
effectively in the procurement system. PPA, Cabinet and Parliament must hasten to
amend the Act to ensure smooth implementation and compliance. To curb corruption and
unethical behaviour in public procurement PPA should enforce blacklisting bidders who
have contravened the provisions of the Act and hold public officials who engage in
irregularities accountable.
5.3 Recommendations
In light of the discussions, findings and the conclusions, the following recommendations
are made
5.3.1 Establishment of Procurement Structures
The Public Procurement Act makes provision for the establishment of structures such as
Procurement Units, Entity Tender Committees (ETCs) to manage procurement activities
in all entities and to engage persons proficient in procurement.
The study, therefore, recommends the establishment of permanent Procurement Units
and Entity Tender Committees (ETCs) managed by qualified procurement experts to
ensure an improved overall procurement performance and compliance with the Public
Procurement Act, 2003.

49
5.3.2 Engagement of Procurement Professionals
Public entities must ensure that suitable candidates are employed on the basis of merit
and placed in their relevant qualifications, skills, and experience with their roles and
responsibilities clearly defined to avoid role conflicts with other professions and
departments. Strategies must also be put in place to retain them. Public procurement
cannot be perceived as a mere ‘clerical routine,’ activity. For an entity to derive the full
benefit of the procurement reform, procurement function must be placed in strategic
management level.
5.3.4 Regular Training Programme
It is therefore recommended that the Public Procurement Authority must organise regular
training programmes to expose stakeholders involved in the procurement process to the
provisions and modalities for implementing the Act. This will help to develop the
competencies and capacities of all stakeholders involved in procurement .in the
implementation of the Act. Tertiary Institutions must develop a curriculum in public
procurement and introduce general basic procurement principles in other programmes to
ensure that their graduates have a basic knowledge in procurement principles. Thus, in
the next ten (10) years people occupying middle level and top level management
positions would have an appreciable knowledge in procurement as it is in accounting.
5.3.5 Decentralisation of Procurement Processes
To deal with the over reliance on bureaucratic processes for appeals and complaints the
complaints unit of the Act should be decentralised downstream to the Municipal/District

50
or college level. This will speed up the process of conflict negotiations and ensure that
entities and suppliers are effective.
5.3.6 Enforcing Accountability to Reducing Corruption in Procurement
Corruptions and bribes are widespread in government contracts (www.transparency.org).
In Ghana, corruptions in government contracts have been regularly reported in
newspapers; criminal prosecutions against state officials for violations of state
procurement laws, and bidding scandals from other parts of the country. In public
procurement, any violation of standard procurement principles and procedures is
considered willful and, therefore, construed as fraudulent and causing financial loss to the
state. To prevent corruption in public procurement PPA should seriously enforce
blacklisting bidders who have contravened the provisions of the Act and take disciplinary
action against public officials who engage in irregularities. Merely appearing on Public
Accounts Committee (PAC) of Parliament every year is not deterrent enough to address
corruption in public procurement

51
REFERENCES
Adjei, A.B. (2006), “Message from the Chief Executive‟ Public Procurement Board,
June 2006. (online) Available at www.ppbghana.org/story accessed on 22.04.11).
Alderman, H., Canagarajah, S., and Younger, S. (1995) “A Comparison of Ghanaian
Civil Service earnings before and after Retrenchment.” Journal of African
Economies, 4(2):259-288.
Anvuur A, and Kumaraswamy M, (2006), “Taking forward public procurement
reforms in Ghana‟, CIB W107, Construction in Developing Economies
International Symposium; “Construction in Developing Economies: New issues
and Challenges‟ January 18th – 20th, Santiago, Chile.
Arrow, K. J. (1985), „The Economics of Agency‟ In J. Pratt & Zeckhauser (Eds.),
Principals and Agents: The structure of Business. 37-51. Cambridge, MA:
Harvard Business School.
Arrowsmith, S. (1998), “National and International Perspectives on the regulation of
Public Procurement: Harmony or conflict? ‟ Public Procurement: Global
Revolution (pp.3-6). London, UK: Kluwer Law International.
Babbie, N. (2005). Qualitative Evaluation Methods. Beverly Hills: Sage Publications.
Blaikie, N. (2000). Designing Social Research: The Logic of Anticipation. Malden,
Wardsworth Learning Inc.
Braithwaite, T. K. (1985). The proper use of off sets in International Procurement.
Journal of Public Procurement, 1 (3): 338-356.
Daily Graphic, Monday June 12, (2006). Public sectors institutions fail to comply with
procurement procedures. Pg 35.
Daily Graphic, Saturday, September 16, (2006). Public Procurement Act to reduce
corruption. Pg.10.
Dunoff, G. (2009). Model Law on Procurement of Goods, Construction and Services.
United Nations International Conference on International Trade Law. Vienna,
Austria.
Edquist, S. & Hommen, M. (2000). Public Procurement: The Continuing Revolution.
New York: Kluwer Law International.
European Commission (2008). Guidelines, Procurement under E.U. Loans and IDA
Credits. London, UK.

52
Falkenberg, T. & Tomson, G. (2000). The World Bank and pharmaceuticals. Health
Policy and Planning 15:52-58.
Hunja, R., (2003), “Obstacle to Public Procurement Reforms in Developing Countries‟
WTO-World Bank regional workshop on procurement reforms and transparency
in public procurement for Anglophone African countries, Tanzania. (online).
Available at www.worldbank.org
Hunja, R., (2003), “Obstacles to Public Procurement Reform in Developing Countries‟
WTO-World Bank Regional Workshop on procurement reforms and transparency
in public procurement for Anglophone African countries, Tanzania. {Online}
Available at www.worldbank.org.
Ministry of Finance and Economic Planning (2008). Review of Ghana’s Public
Procurement system. Annual report of the Ministry of Finance and Economic
Planning. Accra.
Public Procurement Board (2007). The role of tender entity committee in public
procurement. E-Bulletin, 2: 2-7.
R. Glendinning, (1988) "The Concept of Value for Money", International Journal of
Public Sector Management, Vol. 1 Iss: 1, pp.42 – 50.
Sarantakos, S. (2006). Social Research (3rd Ed). London: Macmillan Press Ltd.
Shields, T & Patricia, H. (2006). Case Study Research-Design and Methods, Newbury
Park: Sage Publications.
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13(1): 9-50.
Varnas, M. (2008). Development of a rationale for monitoring. London: Chapman &
Hall.
Verhage, R., Awanyo K, Boateng S. and Van de Gronden J., (2002), “Procurement
Reform in Ghana Health Sector‟, Journal of Public Procurement, 2 (2)
ABI/INFORM Global, pg. 261.
Vinterskog, G. (2011). Decentralizing the Purchasing Function in Municipal
Governments: A National Survey. Journal of Public Budgeting, Accounting &
Financial Management, 12 (2): 421-440.
Yin, R. K. (2003). Case Study Research Design and Methods. Thousand Oaks,
California: Sage Publications.

53
RESEARCH QUESTIONNAIRE
UNIVERSITY OF EDUCATION, WINNEBA
DEPARTMENT OF BUSINESS EDUCATION
BBA (ACCOUNTING)
The Introduction of the Public Procurement Act 2003 and its effect on value for
money on public sector organisations; a case study of the Ga Central Municipality
This research is part of a Bachelor Thesis being conducted in the Department of Business
Education, University of Education, Winneba, and Central Region. The study is based on
a selected sample in Accra, so your participation is important. The outcome of this study
will enhance knowledge on effect of Value for Money in the Ga Central Municipality by
the introduction of Public Procurement Act.
Participation in this study is voluntary, and all who participate will remain anonymous.
Your name is not needed. All information offered will be treated confidentially, and the
results will be presented in such a way that no individuals may be recognized. Please
read through the following questions and answer them accordingly
Please tick your answer and fill in the spaces where necessary
A. Personal Information
1. Gender of respondent.
a. Male [ ] Female [ ]
2. Age of respondent.
a. 20 – 30 years [ ] 30 – 40 years [ ] 40 –50 years [ ] 50 -60 years [ ]

54
3. Level of education
a. Primary [ ] Junior Secondary/ middle [ ] Senior Secondary [ ]
Tertiary [ ]
Others (specify)………………………………………………………………………
4. Which department or unit do you belong to? …………………………………
5. Duration of Service in the Organisation.
Less than 5 years [ ] 5-10years [ ] more than 10 years [ ]
B: Compliance of Procurement Law
1. How was procurement functions conducted in your outfit prior to the coming into force
of the Public Procurement Act 2003(Act 663)?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
2. The law stipulates that each procurement entity should have a tender committee. In
your activities in your organisation, would you say this provision is being complied with?
Yes [ ] No [ ]
3. Please provide reason for your choice of answer above.
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

55
4. Does inspection by Public Procurement Authority practitioners have any
influence on the behavior to comply with the rules and regulations?
Yes [ ] No [ ]
5. Please provide reason for your choice of answer above.
………………………………………………………………………………………………
………………………………………………………………………………………………
6. To what extent are the rules and regulations of the Public Procurement Act been
enforced?
Excellent [ ] Good [ ] Satisfactory [ ] Poor [ ] Very Poor [ ]
7. What can be done to make compliance of the law by the various entities successful?
................................................................................................................................................
................................................................................................................................................
................................................................................................................................................
Section C: Procurement Principles and Effects on Value For Money
On the scale of 1-4 answer the following questions
Professionalism
1. Are procurement staff qualified and experienced to handle Procurement process 1 2 3 4
2. Are procurement officers and committee members make informed decisions regarding
procurementoperations? 1 2 3 4

56
3. Are Tender Evaluation conducted by competent persons. 1 2 3 4
Transparency
1. There is transparency in the procurement process? 1 2 3 4
2. Are Procurement opportunities are advertised using the appropriate
medium? 1 2 3 4
3. Are contract awards posted on PPA/entity website and notice
boards? 1 2 3 4
Accountability
1. Do you think Procurement practitioners are held accountable for their
actions 1 2 3 4
2. There been a sanction against procurement entity or staff? 1 2 3 4
Ethics and Compliance with Regulatory Framework
1. Do stake holders uphold codeof ethics? 1 2 3 4
2. Do you think public entities comply with the Public Procurement Act 1 2 3 4
3. Procurement Entities applied appropriate procurement methods for
appropriate thresholds in procurement 1 2 3 4

57
4. Entities used Standard Tender Documents from PPA in procurement 1 2 3 4
5. Entities post their tender adverts and contract awards at PPA website 1 2 3 4
Challenges in the introduction of the Act
1. There are weaknesses in public procurement system 1 2 3 4
2. The general perception is that Public Procurement process is
too long 1 2 3 4
3. The Public Procurement process is too expensive 1 2 3 4
4. Cost of public procurement of works and goods are too expensive 1 2 3 4
5. There are delays in the procurement process 1 2 3 4
RECOMMENDATIONS
Can you suggest ways of improving on the Public Procurement Act, 2003 (Act 663)
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