Risk Management in the Procurement of Road Works in the Public Sector: A Case Study of the Department of Feeder Roads

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In Ghana one of the most available forms of transport infrastructure is the road. Undisputedly, road infrastructure provides means of access to all major cities, towns and villages. The procurement of this important infrastructure is characterised by a lot of risk. The identification of these risks, the extent and the degree of severity, should they occur, have a bearing on the success of the procurement activity. Adopting a mix methodology approach, the prime purpose of this research was to identify the risk management practices used in the procurement of road works in the public sector. The literature review conducted explored various risk management practices used in the procurement of road works. Through the literature review the scope of the study was limited to four aspects of the procurement process. These included planning the procurement process; procurement documentation; contract management and evaluating the whole procurement. Data was also gathered using survey questionnaires and the results were analyzed using descriptive and relative importance index. The findings show that the highest risk in the procurement process is variations in prices and foreign exchange and the second is lack of technical know-how by consultants. The study also showed that the most employed risk management practice was the use of risk limitation. The second most practice risk management practice was transfer of risk. The least practice risk management tool was the use of public-private partnership and acceptance of risk. The study like any other had limitation and this included only focusing on how significant a risk is in terms of importance relative ranking but did not explore their significance in terms of their impact on the procurement process. Future research could explore the effect of risk on the procurement process and the impact of risk management practice on the procurement process.
Thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi in Partial Fulfillment of the requirements for the degree of Master of Science in Procurement Management, 2014
Risk Management, Procurement Process, Road Infrastructure