An Appraisal of Risk Management in Procurement of Goods at Ghana Grid Company Limited (GRIDCo)

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June 2016
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The renewed focus on reducing energy costs due to increasing demand with limited supply called for the need to appraise risk within GRIDCo Procurement Process. This can be achieved not only by managing energy use but also by optimizing the procurement risk management of energy supply contracts. Energy bills for electricity, natural gas and oil are typically in the top four business overheads. In the competitive energy market, optimizing unit costs of energy is now possible with cost effective energy procurement and risk management strategies. The aim of this thesis was to appraise risk within public procurement process. Sample size of sixty, (60) from the sample frame was used for which questionnaires as research instrument were used to collect data for analysis. The data were analyzed using One-Sample t-test and descriptive statistics in which the mean values and p-values were determined and ranked accordingly. It was found from the study that “Demand Risks ranked first followed by Supply Risks, Control Risks, Environmental Risks and Process Risks in that order posed uncertainties on the Ghana Grid Company Limited energy procurement activities. The likelihood of the risk occurrence invariably impact on GRIDCo energy procurement as well as the entire public procurement process. It was found that delayed in delivery process and poor contract management, poor planning due to unrealistic cost and procurement timing and information management, poor need assessment, unethical behavior within procurement process, improper records and poor management of suppliers among others trigger risks to GRIDCo energy procurement. Recommendations such as entity ensuring implementation of standardized procedures, maintaining auditing and reviewing evaluation procedures, strict adherence to the Public Procurement Act 2003, Act 663 to provide value for money whiles ensuring appropriate energy need assessment prior to supply and through market research as well as investment in supply.
A Thesis submitted to the Department of Building Technology, College of Art and Built Environment in partial fulfillment of the requirements for the degree of Master Of Science