Achieving value for money in Ghana’s Public Procurement (Case Study: three procurement entities in Greater Accra Region)

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JUNE, 2014
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Public Procurement is the acquisition of goods, works and services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place for the direct benefit or use of Government, corporations, or individuals, generally via a contract. Value for money is derived from the optimal balance of benefits and costs on the basis of total cost of ownership. The nature of public procurement is such that it involves discretionary decision-taking on behalf of government at all levels. Malpractices occur throughout the procurement process and project cycle, through the actions and inactions of political officers, public servants, clients, consultants, contractors and suppliers which avert achieving Value for Money in Public procurement, and impede the development of the Country at large. Government do not have adequate resources to address all the needs of its people, however some of very few projects that state resources are committed to, do not give us Value for Money. The aim of the study was to establish how value for money is understood by officials involved in public procurement, to identify guiding principles that promote achieving value for money and to formulate recommendations on how Value for Money could be achieved in public sector procurement in Ghana. A questionnaire survey was carried out on a sampled Consultants, Contractors and Public Officials involved in Public Procurement in three departments, namely Ghana Highway Authority, National Health Insurance Authority and the Funds and Procurement Management Unit of Ministry of Education in the Greater Accra Region to understand how Value for Money was perceived and to assess the importance of the principles of Value for Money in public procurement in Ghana The survey revealed that “Value for Money” concept seems abstract and subjective, and not every Contractor, Consultant or Public Procurement Official can be presumed to be implementing it given that there was a lack of understanding of what it meant. A clearer definition of Value for Money is therefore required in order to facilitate its effective implementation in Public procurement. Systems and processes that consciously facilitate the achievement of Value for money were also not in place Public procurement Entities. Procurement Entities and State departments are recommended to adopt and implement these proposed guiding principles that promote achieving Value for Money in their procurement activities. This would help make judicious and productive use of the Tax Payers money to ensure that Government delivered on its mandate which is to meet the needs of citizens.
A thesis submitted in partial fulfillment of the requirements for the award of Master of Science in Procurement Management.
Public Procurement, Value for Money