Procurement Structures in CARICOM Countries: A Research Analysis

Introduction

Public procurement management is the management of the processes surrounding the acquisition of services, goods, materials, and works required for the 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 essence, the protocols emphasize the principles of transparency, procedural fairness, value for money, and accountability in public procurement (CARICOM Protocols, 2017).

This study examines the current procurement processes in three CARICOM countries and identifies 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 collected through a closed-ended questionnaire. The specific objectives are as follows:

The corresponding null and alternative hypotheses are:

Objective 1
H₀: 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
H₀: 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 officials between CARICOM states.

Descriptive Statistics

This section summarizes the academic qualifications of the 15 respondents. Given differences in the naming and structure of departments across organizations and countries, it is not possible to obtain uniform descriptive statistics for respondents' current positions and departments. Therefore, the study focuses on the variable "highest academic qualification." Qualifications were assigned numerical values as follows: post-graduate = 3, graduate = 2, and high school graduate = 1.

Table 1 shows the distribution of respondents across Antigua and Barbuda (A&B), Grenada, and Trinidad and Tobago (T&T).

Table 1: Academic Qualifications of Respondents

Source: SPSS Output

Frequency statistics indicate that nine respondents (60 percent) hold a post-graduate qualification, one (6.7 percent) is a graduate, and five (33.3 percent) are high school graduates.

Table 2: Descriptive Statistics for Highest Academic Qualification

Source: SPSS Output

The analysis in Table 2 indicates a mode of 3, confirming that post-graduates make up the largest share of the sample. The negative skewness value of -0.616 indicates that there are relatively fewer observations at the lower end of the distribution (high school and graduate levels), with more values concentrated at the higher end (post-graduate qualifications). This supports the finding that post-graduates constitute the greatest share of the sample.

The academic qualifications breakdown per country is shown in Table 3 below.

Table 3: Qualifications of Respondents by Country

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

Empirical Analysis of Procurement Structures

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

Table 4: Frequency Distribution — National Government Procurement System

Source: SPSS Output

Table 4 indicates that 47 percent of respondents use a centralized procurement system in their countries, where purchasing is conducted by a single unit or designated departments. Thirteen percent reported that their countries use a decentralized system, where the procurement role is shared among departments. Thirty-three percent reported using a mixed system that combines elements of both centralized and decentralized systems, while 7 percent use an outsourced system in which a private entity carries out procurement on behalf of the national government. Thus, the centralized procurement system is the most popular among the three CARICOM states, followed by the mixed system, the decentralized system, and lastly the outsourced system.

Cross-tabulation results generally confirm that all three countries use a centralized procurement system, while the outsourced system is the least used in all countries.

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

Note: 19 cells (95.0%) have expected count less than 5. The minimum expected count is .10. Source: SPSS Output

Table 6: Symmetric Measures — Country versus Procurement System

Source: SPSS Output

The test yields a chi-square value of χ²(14) = 59.794; p = .000. The significance value is less than the confidence level of p = 0.05, implying a significant relationship between country and the procurement system used. This indicates that CARICOM countries do not equally prefer the centralized procurement system over the other three systems. Accordingly, we reject the null hypothesis and conclude that differences in procurement systems across CARICOM countries are significant. The Cramer's V value of 0.644 and the Phi value of 1.116 in Table 6 both indicate a strong association between country and the preferred national government procurement system.

The cross-tabulation results indicate CARICOM countries' preferences across four mechanisms: framework agreements, public bidding, private bidding, and direct purchasing.

Table 7: Cross-Tabulation — Use of Framework Agreements by Country

Source: SPSS Output

Table 8: Chi-Square Test Results — Framework Agreements

Note: 19 cells (95.0%) have expected count less than 5. The minimum expected count is .31. Source: SPSS Output

Table 9: Symmetric Measures — Use of Framework Agreements

Source: SPSS Output

The frequency cross-tabulation (Table 7) indicates that CARICOM countries generally use framework agreements as the second most used procurement and contracting mechanism. Both A&B and T&T rank framework agreements as their second most used mechanism, while Grenada ranks it as the second least used. The test yields a chi-square value of χ²(14) = 63.68; p = .000. The significance value is less than the confidence level of p = 0.05, indicating a significant relationship between country and the use of framework agreements. This implies that the countries do not equally apply framework agreements. Accordingly, we reject the null hypothesis and conclude that there are significant differences in the frequency with which CARICOM countries use framework agreements. The Cramer's V value of 0.665 and the Phi value of 1.152 indicate a strong association between country and the use of framework agreements.

Table 10: Cross-Tabulation — Frequency of Public Bidding among CARICOM States

Source: SPSS Output

Table 11: Chi-Square Test Results — Frequency of Public Bidding

Note: 19 cells (95.0%) have expected count less than 5. The minimum expected count is .21. Source: SPSS Output

The frequency cross-tabulation (Table 10) indicates that CARICOM countries generally prefer public bidding as the most used procurement and contracting mechanism. The test yields a chi-square value of χ²(14) = 65.28; p = .000. The significance value is less than the confidence level of p = 0.05, indicating a significant relationship between country and the frequency of public bidding. This implies that the three countries do not use public bidding equally as their most preferred technique. Accordingly, we reject the null hypothesis and conclude that there are significant differences in the frequency with which CARICOM countries use public bidding.

Table 12: Cross-Tabulation — Use of Private Bidding by Country

Source: SPSS Output

Table 13: Chi-Square Test Results — Country versus Frequency of Private Bidding

Note: 19 cells (95.0%) have expected count less than 5. The minimum expected count is .31. Source: SPSS Output

The frequency cross-tabulation (Table 12) indicates that it is not clearly discernible how private bidding ranks as a preferred mechanism across CARICOM countries. The test yields a chi-square value of χ²(14) = 88; p = .000. The significance value is less than the confidence level of p = 0.05, indicating a significant relationship between country and the frequency of private bidding. This implies that the three countries do not apply private bidding in equal measure. Accordingly, we reject the null hypothesis and conclude that there are significant differences in countries' use of private bidding for procurement.

References

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CARICOM Protocols (2017). Protocol on public procurement for the Caribbean Community. CARICOM. Retrieved from https://caricom.org/wp-content/uploads/Protocol-on-Public-Procurement-for-the-Caribbean-Community.pdf

Chiappinelli, O. (2019). Decentralization and public procurement performance: New evidence from Italy. Economic Inquiry, 58(2), 856–880.

Khan, N. (2018). Public procurement fundamentals: Lessons from and for the field. Emerald Publishing.

Rais, S. L. (2018). The possible challenges of green procurement implementation. IOP Conference Series. Retrieved from https://iopscience.iop.org/article/10.1088/1757-899X/429/1/012023/pdf