AN ANALYSIS OF THE PROCUREMENT REFORMS ACT AS A TOOL FOR COST SAVINGS AND ACCOUNTABILITY IN KRPC
In the past, huge sums of government money have been siphoned through the processes of contract awards. A major thrust of this administration therefore, is the acceptance of Procurement Reforms Act as a tool for embracing transparency, competition, fairness, integrity, openness and value for money in the procurement reforms Act and seek the support of all governance for the implementation of the scheme in various ministries and government parastatals. The researcher intends to analyze on procurement reforms Act as a tool for cost savings and accountability in Kaduna Refining Petrochemical Company (KRPC) considering the several abuses to rules and standards in the award and execution of contracts.
These abuses are in the form of over-invoicing, inflation of contract costs, proliferation of white elephant projects, poor project delivery, over payment as well as manipulations of the processes leading to the award of contracts. The Kaduna Refining and Petrochemical Company is in the business of refining Crude oil into valuable petroleum and petrochemical products and manufacturing and packaging products efficiently. And the way and manner in which procurement practices are carried out is of great concern to the researcher. The edifice is a process plant designed to run steadily with minimum operating costs so as to make profit. In order to achieve this notable objective, it is imperative that replenishment drives are made to ensure that operational spare parts are readily available in the warehouse. Since over seventy percent (70%) of the company’s expenditure is in the area of materials procurement. It is with this realization in mind that several efforts have been made by both corporate and the subsidiaries management to control and regulate materials management activities, especially in the area of procurement of materials in order to save cost and enhance company’s operations. In this project the terms procurement and purchasing would be used interchangeably.
Background of the Study
The researcher developed interest to write on this topic because of personal interest in procurement reforms act and persona interaction with some staff who work in the procurement department under the umbrella of material management department (MMD) in Kaduna Refining and Petrochemical Company (KRPC). The researcher got an insight into the procurement activities of the company the company and the problems facing them and therefore feels that it would be of great benefit to the company to conduct a detailed study into its purchasing departments with the aim of identifying the problems and after necessary suggestions toward the solution of such problems for effective and efficient operations of the company, Kaduna Refining and Petrochemical Company (KRPC). Statement of the Problem The Material Management Department (MM) of the KRPC Ltd operates in an integrated form to make materials available in the warehouses because the spare parts are stored. “JUST IN CASE” for timely maintenance intervention or as the need may arise.
However, KRPC has taken a back seat in the implementation of the provisions of the Procurement Refining Act. Also, the statement of the general problem is the non-adoption of the Procurement Refining Act in KRPC Ltd. And over the years there have been incessant cases where critical material needed for maintenance intervention and other requests, are either over-stocked, under-stocked or out of stock. The scenario depicts the existence of procurement deficiencies in the area of planning, replenishing, coding and inventory control which affects plant sustainability in KRPC Ltd. Besides 2008 annual stock taking in KRPC revealed the available materials to the value of N8 billion which could be used for other purposes. Objectives of the Study The study is geared towards achieving the following objectives: Outline the risks associated with non-implementation of the provisions of the procurement Act in KRPC Ltd. Determine the impact of the non-implementation of Procurement Reforms Act to the organization. Examine the factors responsible for the non-implementation of the Act in KRP Ltd. Suggest or proffer solutions to the problems.