Public finance
The researcher by introduction which includes background to the problem, Statement of the problem, Research questions, Objective of the study, Significance of the study, and the scope and limitation of the study. In the second chapter there is literature review, both theoretical and empirical literature review in which there are some terms defined with relevant theories. The third chapter explains about now the study wick be conducted and techniques that will be used in conducting the research study The third chapter shows and explains the schedule of activities, references and bibliography.
The fourth chapter give much details of the research topic by answering the research questions both specific and general research questions. It gives a detailed information gathered during the research period so as to give the real situation of the Ministry in relation to the research topic. The last fifth chapter gives the conclusion and recommendation of the researcher in the research area in relation to the research topic whether the Ministry conduct the situation satisfactory and if there are some added criteria in order to improve the situation in the research area.
- CPSP: Certified Procurement and Supplies Professional. MTB: Ministerial Tender Board
- NBMM: National Board for Materials Management
- PPA : Public Procurement Act
- IAA: Institute of Accountancy Arusha Head of Department HOD.
- PMU. Procurement Management Unit
- NGO: Non Governmental Organization . United States of America USA’ CICA.
- Competition in Contracting Act : Member of the Parliament MP The Ministry of Infrastructure Development (MID)
The name was officially launched in 1995 and was formerly known as Ministry of works. The ew ministry is the combination of the former Ministry of Works and the Ministry of Communication ; Transportation. It is headed by the Minister Hon. Mr. Andrew Chenge (MP), assisted by Hon. Dr. Maua Daftari (MP) and Dr. Makongoro Mahanga as Deputy Ministers. The ministry of Infrastructures Development is split into two Divisions, namely:
- Transport Division
- Communication Division
After the introduction of PMS in the year 2003,the ministry adopted a new vision and mission, the proposed functions and structures has put into the new vision, mission and objectives of the ministry. The overall responsibilities of MolD is to structure the transport and communication Infrastructure that is well maintained, providing safe and efficient environment that is friendly and affordable to all parts of Tanzania and one that integrates all modes of transport and communication system economically.
Vision of the Ministry: The vision of the ministry is to have efficient and cost effective domestic and international communication and Transport meteorology service to all segments of the population and sectors of National economy with maximum safety and minimum environmental Degradation. Mission of the Ministry: The mission of the Ministry is to have safe, effective and efficient transport and communication and meteorological infrastructures and operations which best meet the socio-Economic needs by improving levels of services at lower costs in a manner which support Government strategies for economically and environment sustainability.
Objectives of the Ministry:
In order to fulfill the above vision and mission of the sector, the ministry has got the following objectives: To facilitate the provision of adequate, affordable and efficient transport and communication and meteorology infrastructure and services with aximum safety and minimum environment degradation. To ensure a conducive environment for investment in the sector. To improve revenue collection from transport, communication and meteorology service rendered by the sector.
To harmonize transport, communication and meteorology standards to those of regional and international groups in which Tanzania is a member. To improve services and reduce HIV/AID Intection. Functions of the Ministry. The general function of the Ministry of Communications and Transport are: To initiate and coordinate polices, objectives and strategies on road, railway, pipeline, arine, air transport, posts and Telecommunications. Oversee and co-ordinate performance standards. Monitor and evaluate overall performance contracts.
To commercialize and privatize the parastatals in the transport and communication sector The organizational structure of the MolD In order to achieve the objectives, the ministry implements the objectives using five specialized departments at the Head quarter, three regulatory and three Executive agencies: Specialized Departments at the Head Quarters: Department of Administration and Personnel Department of Transport and Communication Department of Accounts and Finance Central Transport Licensing Authority.
Regulatory Bodies:
Tanzania Civil aviation Authority Tanzania Communication Regulatory Authority Surface and Marine Regulatory Authority Executive Agencies: Tanzania Airport authority Tanzania Government Flight Agency Tanzania Meteorological Agency.
1. 1 Background to the study
Tendering is the method of procurement where by Suppliers, Contractors, and Consultants are invited by procuring entity to compete each other in submitting priced tenders for goods, works, or services (PPA 2004).
It is the most popular method recommended by the Act due to its openness, transparency, efficient, and Economy. The history of Procurement Legislation in Tanzania of which tendering found its origin can be traced as far back to 1961 when the Exchequer and Audit Ordinance No. 21 of 1961 was enacted as a Legal mechanism for the purpose of controlling the Public Procurement and Supplies activities. Five years later i. e. 1965 the financial Order part Ill (Stores Regulation 5th Edition 1965) was enacted by the parliament as the guideline to the public Fund by Government officials.
Due to the weakness of the old legislation, there was a number of studies carried out in the Country funded by the World Bank to review the Public Procurement System hich eventually found that there was a need for more effective legislation to govern Procurement in the Public Sector to repeal and replace the Exchequer ; Audit Ordinance of 1961, and consequently, Public Procurement Act No. 21 of 2001 came into the e ttect to cater tor the detlciencies ot the old legislations. The enactment of PPA 2001 was only part of the on going Public Procurement reforms.
These reforms resulted into the enactment of the PPA 2004 which repealed PPA 2001. The enactment of PPA 2004 was aimed at addressing the deficiencies of the old legislation(s), by enforcing the best practices and professional standards of inancial Management and control of Public properties and resources It is because of this important historical background that TENDERING as a Procurement Method is accorded Importance by the Act due to its openness, efficiency, economy, and as far as Public Expenditure is concerned.
Good practice of tendering reduces total transaction costs and produce timely result, and efficiency use of resources, Poor practice of tendering led to waste and delays and often the cause of allegation of corruption and inefficiency (MasanJa 2004). It follows that the Public Sector particularly the Ministry of Infrastructure Development hould realize the values for money procurement and tendering, among other methods, it must be done in accordance to the existing procedures.
1. 2 Statement of the problem
The service oriented organization has a core interest to attain vision and mission. Public Sector in Tanzania, Ministry of Infrastructure Development being one of it, is there to deliver better services to the society, in other hand it spent about 80% of the National Budget on the procurement of goods, Services and works. On realization of this truth the Government has enacted the procurement laws as the guide to ensure roper utilization of Pubic Funds. One feature of procurement laws is open/unrestricted tendering characterized by fairness, transparency, and economy.
The procedure requires some steps to be accomplished before the contract for delivering of goods, services or execution of work is awarded to the prospective bidder. Open tendering is the most popular procurement method envisage by the Public Procurement Act No. 3 of 2004. It follow that the role of effective open tendering procedures and regulation is to ensure that the system is operated in such away that it reduces the transaction costs, fficiency use of the resources available, efficiency utilization of the time required, and ensure that the system is understood and can be handled by the concerned parties properly.
This will Justify the proper use of Public Fund and the attainment of Entitys objectives. The efficiency and adequacies of tendering procedures and quality performance is the end result realization. This is to say that if open tendering is adhered and administrated according to the laid down effective procedures and regulation the end result will be quality of goods, works and services delivered.
1. 3 Research Questions
1. 3. 1 General Question is open
Tendering as a procurement method in Public Sector e 71 32 Specitlc Questions O Are the people involved in procurement? I. e. members, the knowledge of Public Procurement Act 2004? Ministerial Tender Board PMIJ member and HOD have O Are the procedures and Regulation as directed by PPA for open tendering adhered by tender board members or tender evaluation committee or the PMIJ? O Are the tender documents prepared using standard tendering documents as issued by PPRA ? O Can lack of training and understanding of PPA 2004 and their respective regulations contribute to the ineffectiveness of tendering as procurement method?
1. 4 Study Objectives
1. 4. 1 General Objective
The general objective of the study is to evaluate factors that affect the effectiveness of open tendering as procurement method in Public Sector.
1. 4. 2 Specific Objectives
OTO find out whether the procedures and regulations used for open tendering in the Public Sector are inline with PPA requirements OTO evaluate whether those people i. e. PMU, CTB,;HOD are well involved in the procurement and have the knowledge of the PPA and Regulations. OTO find out whether the lack of procurement capacity in Public Sector contributes to the ineffectiveness of open tendering. OTO check out hether tender documents are prepared according to Standard Tendering Documents and other guidelines (if any) issued by PPRA.
1. 5 Significance of the Study
This study has shown clearly problems involved in tendering process including as well as factors hindering proper adhering procedures in Public Sectors. The study may attract the government, donors and NGOs on the need to build Procurement Capacity in the Public Sectors in Tanzania. On the other hand, this study has further served as guidelines for the future reference for those intending to study on procurement laws notably in the area of tendering transactions.
2. Scope and Limitation of the study his study has been conducted at the Ministry of Infrastructure Development Head Office, which is located in Dar-es-salaam City at llala Municipal. The study has based specifically on such areas as Procurement and Purchasing section, Tendering section and Supplies section. The study has examined the factors affecting the effectiveness of open tendering as procurement method in the Public sector. The coverage included system of procurement in tendering process, tendering documents and prospective laws applied.
During the research period the researcher expected the following limitations: O On the Job training took a lot of time for researcher to do other work which has no relation with the researcher topic so time for research has beeen limited to acquire the required data through interviews and questionnaires. (J Some ot the employees that the researcher managed to nave spot interview they became reluctant to give what is real practiced in the organization in fear that the information collected can be presented to the management and investigation can be made to the concerned staff.
Successful Tender “Means a tender selected by the procuring entity as; offering the lowest evaluated cost in case the method of procurement used was competitive tendering or being the most responsive to the needs of procuring entity if the procurement method used as competitive quotations, single sources procurement, competitive selection or where goods or services are of minor value”. Supplier “Means company, corporation organization, partnership, or individual person supplying goods, or services, hiring equipment or providing transport services and who is according to the contract is a potential party with the procuring entity’ Tender “Means offer, proposal or quotation made by a supplier, contractor, or consultant in response to a request drawn by a procuring entity’ Works “All works associated with the construction, reconstruction, demolition, repair or enovation of a building structure, road or airfield”.
Lowest Evaluated Costs ‘Means the priced offered by supplier, contractor or consultant that is found to be the lowest after consideration of all relevant factors and the calculation of any weighing for these factors, provided that such factors have been specified in the tender document”.
2. Theoretical basic of the study.
Mhilu (2006) in his paper presented during the 21st NBMM Professional Annual Conference contended that an open tendering is the preferred way to promote open and effective competition. He however agreed on the need to bring a balance etween tendering cost and the benefit received, he further enumerated circumstances where open tendering may not be the preferable method to include if; O There is Justification for single source or emergence procurement or OThe cost of an open tendering exceed direct savings that might be enjoyed or There are other benefits foregone by using another procurement method.
The World Bank guideline (1999) maintained that the objective of tendering is to attain both the classical and contemporary procurement objectives that include transparent and all aspects contributing towards proper administration of tender, hese are proper goods, works and services of right price, through authorization and in a transparent manner. The guideline further continue that, competitive bidding or tendering is the most effective method in attaining the above mentioned objective when properly administered. i Open Tender This is tendering process which is done through open advertisement through widely circulated media such as newspapers of wide circulation. Through the advertisement a procuring entity states its requirements through specification and terms of purchase.
