Competitiveness in Procurement Cycle and Value for Money in Local Government Projects in Tanzania: The Quest for Good Governance

Abstract

Public procurement is regarded as a strategic area to create value for money in public sector projects; however high profile corruption cases continuously hit the news, raising a range of procurement-related governance concerns from the general public resulting from lack of competition and bid rigging.The objective of the study was to determine the influence of competitiveness on value for money in LGA procurement cycle in Tanzania. The study adopted cross-sectional research design with the sample size of 280 respondents from Local Government Authorities (LGA) in Tanzania. The data were analysed using structural equation modelling (SEM). The results revealed that the stakeholders perceived moderately the level of competition in LGA procurement cycle in Tanzania. The descriptive analysis of the competition variables were also rated as good by stakeholders where all competition indicators included in the study have shown the perception above average score. The hypothesis was tested by using the structural equation model by measuring the influence of competition in LGA procurement cycles on value for money adherence in LGA using confirmatory factor analysis (CFA). It was revealed that competition had a significance and positive influence with a higher cut-off Goodness-of-Fit Index (GFI) >.90 and RMSEA (spec. < 0.08). Thus, the results rejects the null hypothesis (H0) that, the competition in LGAs procurement cycle has no positive and significant influence on value for money adherence and accept the alternative hypothesis (Ha) that, the competition in LGAs procurement cycle has positive and significant influence on value for money adherence. The study concludes that competition in LGA procurement cycle has significant and positive influence on value for money adherence. The paper recommends the LGA to opt for more competitive procurement methods and automate the procurement process to reduce face to face contacts with suppliers to reduce potentials for corruptions for procurement projects to get better value for money and hence achieve good governance in public procurement.