Research Analysis: Procurement Structures in CARICOM Countries

Introduction

Public procurement management is the management of the processes surrounding the acquisition of services, goods, materials, and services required for efficient running of operations in the public sector (Khan, 2018). Among CARICOM member states, public procurement is governed by the public procurement protocols for the Caribbean community. The CARICOM protocols define public procurement as the acquisition of works, goods, or services by a procuring entity for public use or using public funds (CARICOM Protocols, 2017). In a nutshell, the protocols emphasize the principles of transparency, procedural fairness, value for money, and accountability in public procurement (CARICOM Protocols, 2017).

The proposed study sought to examine the current procurement processes in three CARICOM countries and identify the challenges faced in implementing the CARICOM procurement protocols. The overall aim is to identify ways to make the public procurement process in these countries more effective. The study makes use of primary data that was collected through a closed-ended questionnaire. The specific objectives are as follows:

Objective 1: To examine the current procurement structures, in CARICOM member states.

Objective 2: To identify the current trends and challenges facing public procurement and contracting in CARICOM member-states.

Objective 3: To identify potential solutions to the current challenges and how to make public procurement in these countries more responsive and effective.

The corresponding null and alternative hypotheses are:

Objective 1

Ho: There is no difference in the procurement structures of CARICOM member states

Ha: There is a difference in the procurement structures of CARICOM member states

Objective 2

Ho: There is no difference in the challenges faced by public procurement and contracting officials between CARICOM states

Ha: There are significant differences in the challenges faced by public procurement and contracting between CARICOM states

Descriptive Statistics

a) What is the Academic Qualification of Respondents?

This segment tries to understand the academic qualification of the 15 respondents. Given differences in the naming and structure of departments across organizations and countries, it may not be possible to obtain descriptive statistics for respondentscurrent position and department. Thus, the study only summarizes the descriptive statistics for the variable highest academic qualification. To obtain descriptive statistics, the highest academic qualifications were assigned numerical values as follows: post graduate a value of 3, graduate a value of 2, and high school graduate a value of 1.

Table 1 shows the distribution of the respondents as post graduates, graduates and high school graduates of A & B, Jamaica and Trinidad and Tobago (T&T).

Table 1: Table showing academic qualification of the respondents

Your highest qualification

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1

5

33.3

33.3

33.3

2

1

6.7

6.7

40.0

3

9

60.0

60.0

100.0

Total

15

100

100.0

Missing

System

0

0

Total

15

100.0

(Source: SPSS Output)

Frequency statistics indicate that nine of the respondents (60 percent) have a post-graduate qualification, 1 (6.7 percent) is a graduate, and 5 (33.3 percent) are high school graduates.

Table 2: Descriptive Statistics for Highest Academic Qualification

Statistics

Your highest qualification

N

Valid

15

Missing

0

Mode

3

Std. Deviation

.961

Skewness

-.616

Std. Error of Skewness

.580

Kurtosis

-1.776

Std. Error of Kurtosis

1.121

(Source: SPSS Output)

The analysis in table 2 indicates a mode of 3, implying that post graduates make up the largest share in the sample. The negative skewness value of -.616 indicates that there are relatively fewer observations in the lower end of the distribution (high school and graduate levels), with more values concentrated in the higher end, which is the post-graduate qualifications. This supports the finding that post-graduates make up the biggest share of the sample.

The academic qualifications breakdown per country is as shown in Table 2

Table 2: Qualifications of Respondents by Country

Country

Post-Graduate

Graduate

High School Graduate

Total

Granada

4

0

1

5

A&B

3

0

2

5

T&T

2

1

2

5

Total

9

1

5

15

Four of the post-graduate respondents in the sample are from Granada, 3 from A&B, and 2 from T&T. Among the high school graduates, 2 each are drawn from A&B and T&T, while one is from Granada. Thus, Granada accounts for the highest percentage of post-graduate respondents, T&T accounts for the only graduate-level respondent in the sample, while A&B and T&T account for equal shares of high-school level respondents.

Empirical Analysis of Procurement Structures across CARICOM member states?

To determine whether there are significant differences in countries procurement structures, this study will use the chi-square test to check for associations. The chi-square test will indicate whether there is an association between country and the preferred procurement systems, contracting mechanisms, use of electronic procurement systems, and challenges faced in procurement.

a) What is the Nature of the National Government Procurement System?

Table 3: Cross-Tabulation of Responses on the Nature of the National Governments Procurement System

What Is your national governments procurement

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Centralized (i.e. the majority of purchasing is the responsibility of a single unit or designated units purchase particular products or services)

7

46.7

46.7

46.7

Decentralized (i.e. responsibility for procurement is shared between departments)

2

13.3

13.3

60

Mixed

5

33.3

33.3

93.3

Outsourced (i.e. a private company carries out procurement on behalf of your National government)

1

6.7

6.7

100.0

Total

100.0

100.0

(Source: SPSS Output)

Table 3 indicates that 47 percent of respondents use a centralized procurement system in their countries, where purchasing is done by a single unit or department, or units are designated to purchase particular services or products. 13 percent reported that their countries use a decentralized system, where the procurement role is shared among departments, or departments do procurement for themselves. 33 percent of respondents reported using a mixed system that combines elements of both centralized and decentralized systems, while 7 percent use an outsourced system, where the procurement role is carried out by a private entity on behalf of the national government, leading to a cumulative percentage of 100. Thus, the centralized procurement system is the most popular in the three CARICOM states, followed by the mixed system, the decentralized system, while the outsourced is the least popular procurement system.

Results of the cross-tabulation carried out on SPSS comparing country with the procurement system shows the following output:

Table 4: Cross Tabulation Results Country versus Procurement System

Country * Indicate the procurement and contracting mechanisms provided for, in the regulations of your country; assigning 1 to the most used and 4 to the least used. Degree used (please rank from level 1 to 4) [Public Bidding] * Indicate the procurement and contracting mechanisms provided for, in the regulations of your country; assigning 1 to the most used and 4 to the least used. Degree used (please rank from level 1 to 4) [Private Bidding] Crosstabulation

Indicate the procurement and contracting mechanisms provided for, in the regulations of your country; assigning 1 to the most used and 4 to the least used. Degree used (please rank from level 1 to 4) [Private Bidding]: Total

Indicate the procurement and contracting mechanisms provided for, in the regulations of your country; assigning 1 to the most used and 4 to the least used. Degree used (please rank from level 1 to 4) [Public Bidding]

Total

Least Used

Most Used

Second Least Used

Second Most Used

A&B

1

1

0

3

5

% within Country

20.0%

20.0%

0.0%

60.0%

100.0%

25.0%

20.0%

0.0%

75.0%

10.4%

% of Total

2.1%

2.1%

0.0%

6.3%

10.4%

Grenada

Count

1

2

1

1

5

% within Country

20.0%

40.0%

20.0%

20.0%

100.0%

25.0%

40.0%

50.0%

25.0%

10.4%

% of Total

2.1%

4.2%

2.1%

2.1%

10.4%

T&T

Count

2

2

1

0

5

% within Country

40.0%

40.0%

20.0%

0.0%

100.0%

50.0%

40.0%

50.0%

0.0%

10.4%

% of Total

4.2%

4.2%

2.1%

0.0%

10.4%

Total

Count

4

5

2

4

15

% within Country

26.7%

33.3%

13.3%

26.7%

100.0%

Public Bidding

100.0%

100.0%

100.0%

100.0%

100.0%

% of Total

26.7%

33.3%

13.3%

26.7%

100.0%

1

Results of cross tabulation indicate that generally, all three countries use a centralized procurement system, while the outsourced system is the least used in all countries. The chi square test results comparing the relationship between country and procurement system is presented in table 5 below.

Table 5: Chi Square Test Results Country versus National Government Procurement System

Value

Df

Asymp. Sig. (2-sided)

Pearson Chi-Square

59.794a

14

.000

Likelihood Ratio

64.155

14

.000

N of Valid Cases

15

a. 19 cells (95.0%) have expected count less than 5. The minimum expected count is .10.

(Source:...…this study uses this obstacle to test whether there are significant differences in the challenges that CARICOM countries face in sustainable procurement. The summary output from the chi square test is presented in tables 14 and 15 below:

Country * In your opinion, what are the barriers to your organizations procurement processes? (Place 1 next to the barrier that you consider most significant, 2 next to the one you consider to be in second place, and 3 next to any remaining obstacles). [Lack of information]

Table 15: Crosstabulation on Procurement Challenges: Lack of Information

In your opinion, what are the barriers to your organizations procurement processes? (Place 1 next to the barrier that you consider most significant, 2 next to the one you consider to be in second place, and 3 next to any remaining obstacles). [Lack of information]

Total

Minor Barrier

Moderate Barrier

Significant Barrier

A&B

Count

2

1

2

5

Expected Count

.5

.4

.6

5.0

Jamaica

Count

3

0

2

5

Expected Count

.5

.4

.6

5.0

T&T

Count

0

3

2

5

Expected Count

.5

.4

.6

5.0

Total

Count

5

4

6

15

Expected Count

5.0

4.0

6.0

15.0

Table 16: Chi-Square Test Results on Barriers to Procurement Processes: Lack of Information

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

68.160a

9

.000

Likelihood Ratio

68.171

9

.000

N of Valid Cases

15

a. 15 cells (93.8%) have expected count less than 5. The minimum expected count is .42.

(Source: SPSS Output)

Interpretation: The cross tabulation results indicate that generally, lack of information is a significant barrier to procurement across CARICOM states. The chi-square result of 68.16 indicates that more countries consider lack of information as the most significant barrier than would be expected if the null hypothesis were true. The differences across countries are significant as indicated by the .000 significance value, which is lower than the .05 confidence level. Thus, we reject the null hypothesis, which argues that there are no differences in the challenges of procurement management across CARICOM countries. The conclusion, therefore, is that there are significant differences in the challenges that CARICOM countries face in procurement.

Generally, the results indicate that there are significant differences in CARICOM countries procurement structures on all four dimensions: national procurement systems, most preferred contracting mechanism, use of electronic procurement systems, and challenges in implementing sustainable procurement. Thus, it is prudent that CARICOM focuses on ensuring more standardization in procurement across member countries as a means to increase efficiency.

Recommendations

The most significant solution is to enhance the technical capabilities of national procurement departments to make them better able to carry out effective sustainable procurement. Further, given that the lack of information emerges as the most significant obstacle to effective procurement in these countries, it may be beneficial to invest in information systems geared at increasing knowhow on green procurement among procurement officers in national departments across the countries. As Allal-Cheriff (2012) points out, information systems can provide support services and stimulate and disseminate sustainable purhasing policies (p. 1). This could be complemented with continuous training and education on green procurement (Rais, 2018).

Finally, it may be beneficial for CARICOM countries to encourage more member countries to move from the current centralized procurement system to a mixed system. A procurement system that is fully centralized creates cost savings in in both purchase and process costs as the procurement departments enjoys economies of scale (Chiappinelli, 2019). However, a fully centralized system may not adequately respond to specific local needs, such as the need for sustainable procurement unique to each department, which are available in a decentralized system. (Chiappinelli, 2019). A mixed procurement system would make it possible to reap the benefits of both centralized and decentralized systems (Chiappinelli, 2019). For maximum efficacy, centralized procurement could be adopted for standardized goods, while decentralization could be used for less standardized goods such as infrastructure, which may be unique to a departments specific needs (Chiappinelli, 2019).