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NEED FOR EFFECTIVE AND ECONOMICAL PROCUREMENT IN LOCAL GOVERNMENT ADMINISTRATION

CHAPTER ONE

1.0 INTRODUCTION 

Local government is the sphere of government closet to the people. Many basic services are delivered by local municipalities and local ward councilors are the politicians closet to communities. Organizations that play an activist and/or development role should understand how local government works in terms of procurement and how to effect it. Despite the fact that purchasing is a young profession on the field of management, the winds of change are being blown in purchasing and supply according to Baily (1987). However, purchasing and supply is an important function in almost every organization, right from the private household to the federal, state and local government as well as industry as the number of companies/industries being to increase the purchase of new materials are directed to the departments that specialize in it as well as the departments that make use of it.

1.1 BACKGROUND TO THE STUDY

Owerri North is a local government area of Imo State, Nigeria. It was created by the administration of general Sanni Abacha in 1998. this was the outcome of the request made by late Eze (Dr) Onu Egwunwoke for the creation of uratta L.G.A with its headquarters at Ori-Uratta. It has an area of 198km2 and a population of 175,395 at the 2005 census. The postal code of the area is 460. However, since the request for the creation of another local government by Emekuku/Emii and Alaenyi blocs did not come to fruition, they were fused into the said proposed Uratta L.G.A which culminated into changing the name to Owerri North L.G.A to accommodate the new configuration. 

The inclusion oxf Obube, Agbala, Ulakwo and Obibiezena bloc wasa later considered as they were not accepted by Ngor okpala L.G.A. There are nineteen (19) autonomous communities in Owerri North L.G.A with their traditional rulers. Agbala autonomous community – HRH Eze L.O Onyeneke, 
Olele II of Agbala. Akwakuma autonomous community – Amakohia autonomous community Awaka autonomous community – HRH Eze Dr. D.A  Osuagwu, Ezekoche II of Awaka Azaraubo autonomous community – HRH Eze Anthony C.  Egbujor, Atuogu, Ezeudo 1 of Azaraubo (late)  Egbu autonomous community – HRH Eze Felix N.O Egbukole  Ochoromma iv of Egbu.

Emekuku autonomous community – HRH Eze P. Ugochukwu  Obi III, Ezeukwu of Emekuku  Emii autonomous community – HRH Eze Sunday Okoro,  omenyi II of Emii  Ezimba autonomous community –  Ihiteocha autonomous community Ihitta ogada autonomous community Mbaoma autonomous community Naze autonomous community Obibiezena autonomous community Obibi autonomous community Obubu autonomous community Orji autonomous community Ulakwo autonomous community Umualaiku autonomous community Owerri North Local Government area is made up of four (4) blocs namely Uratta bloc Emekuku/Emii bloc Alaenyi bloc (Egbu, Naze, Awaka, Ihita ogada)  A.O.O bloc (Agbala, Obibiezena, Ulakwo, Obube).

BOUNDARIES

Owerri North is an urban local government area. It encircles Owerri municipal like a peninsular six major roads cut across Owerri North Local Government communities. In the North, Orlu road leads to Amakohia and Akokwakuma communities. In the cast, Okigwe roas leads to Orji communities Mcc road leads off wetheral road to Obibi uratta nad ihiheocha communities. In the south mbaise road heads to Egbu and Emekuku communities, while Aba road leads to Naze Agbala and Ulakwo communities.

1.2 STATEMENT OF THE PROBLEM

For so many years now, several local government in Nigeria including Owerri North Local Government did not recognize the importance of maintaining an effective and efficient purchasing departments. This indeed, has posed a lot of threats towards the complete achievement of the corporate objectives of the local area. One of the problems militating against the need for efficient and economical procurement in Owerri North Local Government is poor efficient and unwisely procurement activities carried out within the local government administration.

The local government administration do not use or follow right procedures and rules in making their purchases with regard to materials and equipment and contracts awarding, thereby reducing efficiency. Infact, that of Owerri North Local Government administration as well as so many other local government in Nigeria are highly unprofessional as far as purchasing profession is concerned. The purchasing profession is as neglected in the local government administration and it has not been given the pride and recognition it deserves. In the local government administration, purchasing is not treated as a major functions separated from those using its services.

This has resultantly led to the placement of purchasing department under the finance/supplies department. Procurement of goods and services for the government both local and state government administration generally is complex. On one hand there is need to ensure best value for money on behalf of the tax payer, and the need to ensure that the processes to achieve this are fair and open to scrutiny. This research was equally able to detect favoritisms as an advantage to some individuals who may belong to the same local government or autonomous community against outsiders. This favoritisms precisely manifest when it comes to awarding of capital expenditure contracts and purchase of major teams like school windows, bulldozers and fire engines.

1.3 PURPOSE OF THE STUDY

The purpose of this research is to justify the need for efficient and economic procurement in local government administration so as to enhance efficiency in services delivery. It also shows promoting improved procurement of goods and services that are cost effective and deliver be her outcomes. The research further explains how viable an organization may become. If the purchasing department is effectively managed. This study determines the acceptability of the local government areas to the act of purchasing and supply management, its essence of doing this, is to ascertain proposal and economical procurement in Owerri North Local Government administration.

1.4 SIGNIFANCE OF THE STUDY

Procurement is a significant function that can advance and support government policy on diversity issues. This includes looking at how and where local government authority advertise contract opportunities. The positive effects of a well negotiated and organized purchasing department is when there is proper efficient and economical procurement in the local government administration; which will lead to profitability and achievement of set objectives and goals.  At the end of this work/research, Owerri North Local Government will ensure that, more attention is gien to purchasing function and it will be capable of ensuring that, there is efficient and economical procurement function in the local government administration.

Through the positive changes gained from the research, other local government administration will ensure that there is proper and adequate economical procurement in their administration. Other researchers and students will gain from this study is that when there is positive effects of a well negotiated and organized purchasing department in any government and non government administration, there will be proper efficient and economical procurement which will lead to profitability.

1.5 RESEARCH QUESTIONS

Undoubtedly, most local government administrations do not make use of professionals to carry out their jobs. It is therefore, the mainstream of this project research to determine reliable answers which will help to achieve the objectives of this project through the following research questions.

1. Do Owerri North Local Government have a purchasing department?

2. Do Owerri North Local Government prepare local purchase order?

3. Do Owerri North Local Government purchase departmentally?

4. Who buys/purchase for the local government?

5. who negotiate for the local government administration, (Owerri North)?

1.6 RESEARCH HYPOTHESIS

Hypothesis is simply put as an assumption about certain population parameter which should be tested in order to accept or reject the assumption. Research Hypothesis on the other hand, may be defined as a declaration statement of relationship between two or more variables used for better understanding of the problems of the study. Therefore, the null and alternative hypothesis have been set out by the researcher to verify the accuracy of the data collected during the course of the research work. In carrying out this research, both null (HO) and alternative (Hi) hypothesis will be used to find out whether efficient and economical procurement results to cost reduction and huge savings in local government administration. The hypothesis are thus stated below:

Ho: The local government council does not benefit from effective procurement practice.

HI: The local government council do benefit from effective procurement practice.

Ho: The local government council do not negotiate when purchasing needed items.

HI: The local government council do negotiate when purchasing needed items.

1.7 SCOPE OF THE STUDY

This research is based mainly on a study on the need for efficient and economical procurement in Owerri North Local Government administration. Determining the consequences of poor efficiency and economical procurement in Owerri North Local Government administration. The importance of maintaining an effective and efficient purchasing department.
Determining the procedures and rules of solving the problems of using unprofessional purchasing in local government administration. Enhancing wisely procurement activities that are carried out in local government administration. To ensure that proper attention is directed more on purchasing department in order to ensure that, there is the need for efficient and economical procurement activities in the local government authority.

1.8 LIMITATIONS OF THE STUDY

In the course of writing this work/research, it was noticed that the existence of some limiting factors which reared up, nearly destroying the enthusiasm with which the researcher choose this project topic as a case study. These are some of the limiting factors.

TIME FACTOR As a matter of fact, a lot of study would have been done in other ministries in order to compare different local government administrations but as a student who has other academic activities and study to consider, time was a limiting factor in undergoing more research. There was also a time inadequacy to visit and revisit many other local government outside the choose local government (Owerri North) and as such, the researcher did not subscribed to the rigorous statiscal sampling for the obvious reasons here in.

LACK OF ADEQUATE INFORMATION This research is mainly based on local government more especially Owerri North Local Government administration.
It is not easy to gather information from respondents because information officers and supervisory councilors that would have been interviewed are not always on seat.

RESEARCH BASES Most respondents although knowing the aim this research, refused to cooperate.  The research had to waste some time persuading them to answer one question or two.

TRANSPORTATION Transportation posed tremendous trait to the project. The researcher wasted much time and money in transportation and traffic yam thereby leading to delays and getting to the research place very late. At times, interview arranged between researcher and respondent will be missed and repetition of journey to the proposed place of research becomes inevitable.

FINANCE Due to delays in transportation and non-availability of materials and information unnecessary cost will be incurred there by limiting certain useful places of research and collection of information to be achieved generating to huge amount of money to be spent and sometimes unavailability of fund to support the success of the project.

1.9 DEFINITION OF TERMS

PURCHASING Purchasing is a term used to denote the process of procuring materials, supplies, equipment and services. Purchasing implies a systematic approach to the process of buying required goods and services in proper quantities and qualities, from the right sources, at the right time and at fair prices. The term also implies the ability provide adequate storage, distribution to all locations within the municipality and surplus programs.

PROCUREMENT According to Dobher and Burt (1996:36) the procurement process or concepts encompasses a wide range of supply activities than those include in the purchasing functions. These are specific activities usually included in the process: Conduct of all purchasing function activities Conduct of materials studies and management of value analysis activities.

LOCAL GOVERNMENT Local government refers collectively to administration authorities over areas that are smaller than a state. Local government generally acts within powers delegated to it by legislation or directives of the higher level of government and each country has some kind of local government which will differ from those of other countries.

MUNCIPALITY Municipality is a local government administrative division composed of a defined territory and population. These are many varieties of municipalities, most fall into one of two categories (a) a single settlement, a city, town, or village, and (b) a land area similar to a township that may contain multiple settlements or even just part of one, such as a city’s borough.

EFFICIENCY Efficiency in the public sector involves making best use of the resources available for the provision of public services. Those reforms to delivery process and resource (including work force) utilization that achieve: Reduced numbers of inputs (e.g people or assets), whilst maintaining the same level of service provision, or lower prices for the resources needed to provide public services or additional outputs, such as enhanced quality or quantity of service for the same level of inputs.

BIDDING Bidding is a formal competitive procurement procedure, by means of which offers to finish goods, works, or services are solicitated received and evaluated, and a contract is awarded to the bidder whose offer is most advantageous.

ECONOMY Avoiding waste, time, money, efforts that are reduce one’s expenses. Giving best value for money.

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