Assessing Decentralized Contract Life Cycle Management Issues and Challenges

This article examines the influence of contract life cycle management on procurement performance of Local Governments in Uganda using Bugiri District as the case study. The three specific objectives of this study were to: examine the influence of contract creation on procurement performance; to assess the influence of contract execution on procurement performance and lastly, to determine the influence of contract analysis on procurement performance. The researcher employed a descriptive case study research design. Using a researcher’s made five point Likert scale questionnaire, data was collected from a sample of respondents. Seventy (70) respondents out of a population of eighty (80) were selected using purposive and random sampling techniques (response rate of 94.3%). Data was analyzed using means and the regression analysis. Findings revealed that; the extent to which contract creation predicts performance was low (r = 0.36, Sig. Value= 0.000); the extent to which contract execution influences procurement performance was low (r = 0.34, Sig. Value = 0.003) and lastly, the extent to which contract analysis influences procurement performance was moderate (r =0.44, Sig. Value = 0.001). On the other hand, findings revealed that contract management at Bugiri District local government in Uganda highly and positively influences procurement performance (R= 0.779 Sig. Value= 0.000). This implies that where each of these variables; contract creation, execution and analysis are handled separately, each has a low influence on procurement performance. However if handled wholesomely, results show that high procurement performance (78%) will be achieved. In light of this, the researcher therefore concludes that; practioneers, managers and civil servants at Bugiri District should adopt a holistic approach in contract management, if procurement performance is to be maximized.


Introduction
In a bid to improve service delivery and enhance good governance, it is a government policy to involve contractors or suppliers in one way or another to support in providing services, products and works to meet its intended requirements at a decentralised level in Uganda. In several African countries, few articles have rigorously analyzed and empirically tested the factors that actually affect a government agency's decision to manage contracts. Within the relatively scarce empirical evidence on contracting decisions and management [1,2], there is yet little information on the effectiveness of contract management specific to public procurement. In Uganda Public procurement was centralized and carried out by Crown Agents on behalf of government in 1964; Central Tender Board Regulations transactions are governed by agreements or contracts and more than 10% of all executed contracts are lost. Furthermore, in Bugiri district, procurement performance was rated unsatisfactory due to failure to achieve best value for money through the contract life cycle management process. Procurement objectives were not achieved within defined time, budget and quality and hence resulted into a potential to make the whole procurement void and resulted in a potential loss of tax payers funds in Bugiri Local Government [19]. It was against this background that the researcher was compelled to undertake a study on contract management and procurement performance, using Bugiri Local Government as a case study.

Statement of the Problem
Despite the enactment of the PPDA Act and operationalization of various regulations to improve performance of the procurement function in Uganda, Bugiri District has persistently exhibited highly unsatisfactory procurement performance for the last three years [3,20]. The reports on Bugiri District revealed that; contract managers for a sample of projects worth UGX.490, 392,030 did not have implementation plans on file, contract extensions were made without approval of the Accounting officer, records on appointment of contract managers, payment documents, progress and completion reports were also missing [19]. Consequently, if the key elements involved in contract creation, execution and analysis are ignored, Bugiri district is more likely to suffer shocks that may eventually pose an increasing risk to Government of Uganda in terms of having contract deliverables not delivered on time or failing to be delivered, incurring expenditure that is not commensurate to the delivered outputs and perpetuating mismanagement of funds [19,21,22]. This study therefore sought to make a contribution by conducting an exploratory study on the influence of contract life cycle management on procurement performance of Bugiri District.

Purpose of the Study
The purpose of the study was to assess the influence of contract life cycle management on procurement performance among Local Governments in Uganda. The specific objectives of the study were; i) To examine the influence of contract creation on procurement performance of Bugiri District; ii) To assess the influence of contract execution on procurement performance at Bugiri District; iii) To determine the influence of contract analysis on procurement performance in Bugiri District.

Contract Creation and Procurement Performance
Contract creation is where two or more parties choose to enter a legally binding agreement for the acquisition of goods, works or services. The ultimate goal of contract creation is coordinated and integrated action to fulfil a need for goods, services or works in a timely manner and at a reasonable cost. Mullins (2002) noted that contract creation is the process of determining the procurement needs of an entity and the timing of their acquisition and their funding such that the entities operations are met as required in an efficient way [23]. Early and accurate planning is essential to avoid last minute, emergency or ill-planned procurement, which is contrary to open, efficient and effective and consequently transparent procurement. In addition, most potential savings in the procurement process are achieved by improvements in the planning stages. Contract creation clarifies what is needed and when it is needed to both user and buyer. Contract creation enables the procurement entity and its staff to work smoothly to achieve the organization's goals with the right quality and quantity of inputs in place; ineffective contract creation may result in failure to achieve those goals and procurement principles and causing damage to the credibility of the organization [24]. Adequate contract creation and prioritization of needs by each procurement entity is an essential prerequisite to effective purchasing for the following reasons; Funding for procurement is unlikely to be sufficient to meet all requirements, and scarce financial resources must be channelled that the priority aims of procurement entity are adequately met before spending on less essential procurements.
In Bugiri district, Contract creation is used to provide information about the purchase of goods and services, how vendors will be chosen, what kind(s) of contract(s) will be used, how vendors will be managed, and who will be involved at each stage of the process. This is done using a standard bid document that should be approved by the contracts committee before the actual procurement process begins. According to Camillus and Rosenthal (2010) [25], contracts like any other agreements can be entered into after a series of activities. In Bugiri, before formal steps of a contract are made, the contractor and potential bidders are involved in a series of activities. In the view of Trent and Monczka (2012) [26], these are considered as pre-contracts obligations or activities. These activities include; Identifying the need for a contract, Specification / Statement of Works, decisions on entering into a single or multiple supplier contracts, Sourcing, Selection of a Procurement Strategy, preparing necessary bid documents, Issuance of Solicitation Documents, Receipt and Opening of Offers, Evaluation of Tenders and drafting a Contract Management Plan.

Contract Execution and Procurement Performance
Contract execution refers to the activities involved in implementing the terms of a contract. In the view of Nyongesa and Waynoka (2014) [27], execution and the whole process of attaining successful contracts depends on the terms and conditions specified to be fulfilled. The contracting firm and the supplying firm have to live to fulfil the terms and conditions if the contract is to remain valid and binding. According to Adams et al. (2012) [28], conditions specified in the notice and the terms under which the works, services, or goods involved in the contract are to be supplied determine how it is implemented. When the terms specify providing on quarterly basis, this determines how much of the resources are invested and how the contract is implemented. According to Xu & Qin (2015) [29], nearly 45.9 percent of the contracts become less successful because the parties involved do not heed to the terms set and involved. Any violation of the terms and conditions contrary to the agreed ones at the time of signing and awarding the makes it a null dealing, at times at a cost. Reflecting on the process and ways in which contracts are implemented, Albano and Sparro (2013) [30] cites that proper delivery of the required services as spelt out in the contract is an automatic factor that one can address as the key indicator of successful contracting.
The rationale for entering into a contract is to secure reliable, timely, and quality services, which the entity may not with competence offer to itself and its user departments [26]. This view makes the quality and way in which the firm offers the required services under the contract, is a core indication factor that a firm can base on to evaluate the effectiveness of the contract underhand. According to Reuss (2009) [31] contracts are documents-backed contracts and hence the factor of proper documentation before, during after giving due consent to the contract by involved parties is critical. Preparation of the right and clearly consented to documents involved is very important for successful execution of the contract [32]. In the view of Wales et al. (2012) [32] documentation involved help to clearly define, clear start and finish dates, present the contract file, containing all details and correspondence, which should be held by the person responsible for setting up and managing the contract, payments, ways in which payments are effected and other terms and conditions attached. Any alteration or inconsistence in documentation makes the contract hard to implement and defend.
In Bugiri, the user department initiates, supports and ensures a smooth binding process, and on the other hand the bidders are expected to meet the bidding requirements before and later one fulfil the terms of reference and actual performance of the contract. During contract execution, it is essential that actual performance be compared with planned performance in all of these areas and action taken to remedy any indicated deficiencies. The responsibility is termed as monitoring and control [33]. The purpose is to determine whether the various activities that were planned to be active during the previous period were actually active, the extent of their progress and especially the anticipated completion date based on progress to date. During the contract execution phase, the contractor is usually required by the contract to furnish and abide by a quality plan.

Contract Analysis and Procurement Performance
According to Russell (2003) [34], Contract monitoring is a process of ensuring that a vendor adequately performs a contracted service. The level and type of monitoring conducted by state agencies is primarily at their discretion. Deficiencies in contract monitoring are related to violations of good management principles. Inadequate monitoring is often the result of the following: Poorly established criteria for evaluating vendor performance; Perception of oversight as a responsibility to develop a partnership rather than enforce rules, regulations, or contract provisions; Focus on rules and regulations rather than outcomes; Failure to conduct follow-up reviews to ensure that corrective action was taken; and, Failure to identify the risk and level of review necessary for each vendor. Camillus and Rosenthal (2010) [25], state that contract monitoring may be viewed as: A preventive function, an opportunity to determine the contractor's need for technical assistance and a valuable source of information concerning the effectiveness and quality of services being provided.
According to the PPDA Act, (2003) it is important for procurement practitioners to evaluate the procurement process to see how efficient and effective the procurement processes have been. There is the need to identify weaknesses and problems for corrective measures and evaluation may include a formal procurement audit. In Bugiri, a formal procurement audit is done to give assurance to management; to see if objectives are being achieved; it highlights deficiencies; ensures compliance with the law; ensures if the regulations are being followed to the latter and helps in the discovery of irregularities, fraud, and corruption. Nyeko (2014) [18], revealed that effective supplier performance monitoring and management requires the contract manager to: regularly check the supplier's progress to ensure that contractual obligations are being met, conduct regular random inspections of the supplied goods and/or services during the, contract period to ensure that they meet specification and are of a suitable standard check that all conditions and clauses in the contract are acted upon; the contract manager, should be aware of any breaches of contract and be prepared to take action (after seeking legal advice). This practice is actually ignored by many Public Entities as revealed by an analysis in Musisi (2013) [35] that showed poor contract management for example, contracts for revenue collection were awarded to companies which would draw from KCCA resources including staff, and in other cases there was a complete neglect of the supervisory function which resulted in loss of funds. Furthermore, the report also reveals that contracts were not supervised, engineers did not attend site meetings, monitor quality or value of works, contracts continue after expiry. There were also cases where payments were approved with little or no work done for example the leaking roof at City Hall.

Author's Perspective;
Value for money is a concept generally used to assess an organization's capacity to obtain the maximum benefit from the goods, services or work it acquires or provides, in close relation to the resources available to it. This assessment does not only measure the cost of goods, services but also works. It equally takes into account a complex mix of factors, such as quality, cost, use of resources, and fitness for the organization's purposes, timeliness and opportunity. Once these factors have been comprehensively taken into consideration, an assessment can be made as to whether the highest value has indeed been achieved for the money paid. However, some of these factors can be subjectively measured, making them more difficult to quantify or harder to understand. Following the awarding of the contract, it is imperative to ensure efficient management of the contract to make sure that the supplier meets the deadlines, does not exceed the budget and meets the requirements and specifications set out by the purchaser. Sabiiti in December 2012 confirms that lapses in contract life cycle management are affecting the delivery of social amenities to Ugandans. Further research shows that often, donor and Government aided projects that are implemented through public contracts do not yield the intended value due to many factors including; corruption, conflict, non-existent (ghost) contracts, inflated costs, diversion of funds, unnecessary contracts, secrecy, cost overruns and budget revisions. Conclusively, contract life cycle management if clearly understood and appropriately embraced in an organisation may lead to; cost reduction, timeliness and quality improvement.

Research Approach and Design
The researcher adopted a case study design which focused on a single entity. The case study approach was applicable because only civil servants of Bugiri Local Government were selected for the study, in order to place more emphasis on a full and in depth contextual analysis of fewer events and their interrelationship. Both qualitative and quantitative approaches were applied.

Data Collection
Data was collected from a population of 80 respondents. These were mainly tactical and senior management employees. Using the Krejcie and Morgan (1970) sample size determination formula, a total sample size of 70 respondents was considered for the study. Senior managers were sampled using purposive techniques while tactical managers were sampled using simple random techniques. A researcher's made five point Likert scale questionnaire was then used to collect data from the targeted sampled groups as indicated in Table 1.

Data Analysis
The data collected was categorized, coded and then fed into Excel spread sheets and analyzed to examine the influence of contract life cycle management on procurement performance. Regression analysis was used to determine the influence of contract life cycle management on procurement performance. Excel Solver was used to provide a quick snap shot at the current situation of the district by presenting the cost reduction (savings), quality improvements and level of competitive advantage attained through timely delivery. Table 2 shows numerical values and response modes used to interpret the means used in the analysis of data collected.

Contract Creation at Bugiri District Local Government
Findings showed that the extent of contract creation at Bugiri District was low with an average mean of 2.65 and standard deviation of 1.117. This was attributed to negligible responses in the following: Pre-contractual activities at Bugiri Local Government involve identifying the various needs that ought to be supplied (mean = 4.70, S.D = 0.744); Planning before entering into a contract allows consistency between design and supplier's process capabilities at Bugiri District (mean =4.61, S.D = 0.857); Before entering into a contract, the Procurement and Disposal Unit of Bugiri Local Government prepares necessary bid documents (mean =2.24, S.D = 1.348); Bugiri Local Government engages in selecting the most suitable tenderer and awards him/her a contract (mean =1.91, S.D= 1.576), Bugiri Local Government makes decision on whether to have a single supplier or multiple supplier before signing a contract (mean =1.74, S.D =1.316); Upon creation of a contract at Bugiri District Local Government, the contract manager prepares a contract management plan (mean=1.70, S.D = 1.189); User departments nominate contract managers for each contract created at Bugiri District local government (mean=1.65, S.D = 1.209).

Contract Execution at Bugiri District
Findings showed that the extent of contract execution at Bugiri District was moderate with an average mean of 2.784 and standard deviation of 1.157. This was attributed to moderate responses in the following: Preparation of rightly and clearly consented documents involved facilitate successful execution of a contract at Bugiri Local Government (mean =4.59, S.D =0.784); Corrective action taken to remedy any indicated deficiencies during contract execution at Bugiri District (mean =4. 15

Contract Analysis at Bugiri District
Findings showed that the extent of contract execution at Bugiri District was moderate with an average mean of 3.07 and standard deviation of 1.1175. This was attributed to the moderate level of responses in the following: Deficiencies in contract monitoring are related to violations of good management principles at Bugiri District (mean= 4.61, S.D= 0.875); inadequate monitoring of contracts at Bugiri District is often the result of the poorly established criteria for evaluating supplier performance (mean=4.55, S.D=0.995); Contract Analysis requires follow-up, feedback, and enough awareness of what is occurring to eliminate surprise (mean=4.39, S.D= 1.276); The management of Bugiri District local government appoints on-site monitoring officials to conduct random inspections of vendor records and the delivery of services to ensure all terms of the contract are being fulfilled (mean= 1.64, S.D=1.211 ); The contract manager regularly checks the supplier's progress to ensure that contractual obligations are being met at Bugiri District (mean= 1.61, S.D=1.214); Bugiri District Local Government has contingency plans, as a way of risk management in the event that a contract is not successfully completed (mean=1.62, S.D= 1.134).

Procurement Performance at Bugiri District
Findings showed that the performance of procurement at Bugiri District was low with an average mean of 2.

Inferential Statistical Analysis
Inferential analysis was conducted to generate analysis of the variance and regression coefficients. The purpose of regression analysis was to understand the influence among variables; contract life cycle management and procurement performance. Regression analysis is used to predict the value of one variable based on the value of the other. Table 3 shows regression results on the major purpose of the study, which was to assess the influence of contract life cycle management on procurement performance in Bugiri District. Findings revealed that, contract life cycle management positively and significantly predicts procurement performance of Bugiri District Local Government with R 2 value 78%, and Sig. value 0.000. This implies that, 78% variability in procurement performance is explained by contract life cycle management, while the remaining 22% is the unexplained variables. The researcher therefore, concludes that, contract life cycle management highly predicts procurement performance. From Table 4, results indicated that, contract creation positively and significantly predicts procurement performance of Bugiri District by an R 2 value of 36% and Sig. 0.000. To digest this further, one would say that, 36% change in procurement performance at Bugiri District is due to contract creation. Secondly, findings also showed that, contract execution positively and significantly predicts procurement performance of Bugiri District with R 2 value 34% and Sig. value 0.003. This implies that, 34% of the variations in procurement performance can be explained by contract execution. Thirdly, findings showed that, contract analysis positively and significantly predicts procurement performance of Bugiri District with R 2 value 44% and Sig. value 0.001. This implies that, 44% of the variations in procurement performance can be explained by contract analysis. That notwithstanding, the influence of contract management on procurement performance in Bugiri District is 77.9% with a perfect sig. of 0.000. An indication that on the whole, contract creation, contract execution and contract analysis have a high combined influence on procurement performance.

Contract Creation on Procurement Performance at Bugiri District
A low level of contract creation in Bugiri District was indicated with an average mean of 2.65. This was then regressed against procurement performance, and it was revealed that, the extent to which contract creation predicts procurement performance was low (R 2 value 36%, and Sig. value 0.000). This implies that the extent to which precontractual activities are done appropriately at Bugiri District is low. These pre-contractual activities include; need identification, specification, selection of a procurement strategy, preparation and issuance of bid documents, evaluation of bids, and award of contract, appointment of contract managers and implementation of a contract management plan. This is in contrast with Camillus and Rosenthal (2010) and Trent and Monczka (2012) [25,26] who are of the view that, before formal steps of contracts, the contractor and potential bidders are involved in a series of activities. These activities include identifying a need for a contract, specifications/ statement of works, decisions on entering into a single or multiple suppliers contract, preparing necessary bid documents and preparation of a contract management plan. Furthermore results shows non-compliance to the PPDA Regulations 2014, Part V section 51-53 that states that that "upon receipt of a contract, the contract manager shall prepare a contract management plan using Form 49 in Schedule 2 and forward a copy to the procurement and disposal unit for purposes of monitoring." In addition, "Where a contract manager or user department has any reservation or difficulty with the terms or conditions of the contract, the contract manager shall discuss and resolve the reservation or difficulty with the procurement and disposal unit." The PPDA Regulations 2014 further reveal that the contract manager should be one with appropriate skills and is nominated by user department to the accounting officer. Where the pre-contractual activities are not undertaken in the entity, the organization may fail to achieve its targeted goals and procurement principles thus causing damage to the credibility of the organization [24].

Contract Execution on Procurement Performance at Bugiri District
A low level of contract execution in Bugiri District was indicated with an average mean of 2.784. This was then regressed against procurement performance, and it was revealed that, the extent to which contract execution predicts procurement performance was weak (R 2 value 34%, and Sig. value 0.003). This implies that the extent to which actual performance is compared with planned performance and that corrective action taken to remedy and indicated deficiencies during contract execution at Bugiri District is low. Results from the study were in contrast with Bolton (2007) [33] who noted that during contract execution, it is essential that actual performance be compared with planned performance in all areas and action taken to remedy any indicated deficiencies. This ensures that cost effectiveness is applied throughout the procurement process. According to Adams et al. (2012) [28], conditions specified in the notice and the terms under which the works, services, or goods involved in the contract are to be supplied determine how it is implemented. When the terms specify providing on quarterly basis, this determines how much of the resources are invested and how the contract is implemented. This therefore reveals a weakness in contract execution at Bugiri District Local Government, according to Xu and Qin (2015) [29], who state that nearly 45.9% of the contracts become less successful because the parties involved do not heed to the terms set and involved.

Contract Analysis on Procurement Performance of Bugiri District
A moderate level of contract analysis in Bugiri District was indicated with an average mean of 3.07. This was then regressed against procurement performance, and it was revealed that, the extent to which contract execution predicts procurement performance was weak (R 2 value 44%, and Sig. value 0.001). This implies that the extent to which contracts are monitored and evaluated is moderate. Camillus & Rosenthal (2010) [25], in agreement further adds that good management and supervision requires follow-up, feedback, and enough awareness of what is occurring to eliminate surprises. More still, Nyeko (2014) [18], advises that effective supplier performance monitoring and management requires the contract manager to: regularly check the supplier's progress to ensure that contractual obligations are being met, conduct regular random inspections of the supplied goods and/or services during the, contract period to ensure that they meet specification and are of a suitable standard check that all conditions and clauses in the contract are acted upon; the contract manager, should be aware of any breaches of contract and be prepared to take action (after seeking legal advice). Findings from the interviews also revealed that the area of risk management has not been extensively explored. However, Lysons and Farrington (2013) [37] caution that agencies without contingency plans risk interruption of services when vendors default on their obligations and may pay additional costs for taking back services.

Conclusion
From the findings, the researcher concluded as follows: contract life cycle management highly predicts procurement performance in Bugiri District, contract creation lowly predicts procurement performance, contract execution weakly predicts procurement performance and lastly, contract analysis moderately predicts procurement performance. In this regard, managers, decision makers and practitioners at Bugiri District need to offer considerable attention to contract life cycle management in its entirety, in particular, ensure there is a combined effort on contract creation, execution and analysis. A holistic approached is therefore recommended in order to enhance good governance and facilitate effective service delivery. This will help the entity achieve set targets with an expenditure that is commensurate to the delivered outputs while ensuring transparency and integrity.

Recommendations
There is need for the PDE management of Bugiri District to review the procurement environment in the Entity to ascertain linkages between effective contract life cycle management and other critical stages of the procurement cycle for example appointment of contract managers and preparation of contract implementation plans. This also includes training of staff in light of the roles of a contract manager and how to prepare a contract management plan. This will help all the civil servants at Bugiri District to understand their role and contribution in contract management.
The practices of Bugiri District Local Government, should ensure proper performance of contracts by ensuring: (a) timely delivery of goods, services or works as per contract; and (b) delivery of goods, services or works in accordance with the specifications and standards required in the contracts. This is because contracts performed in contrast with specifications could lead to reworks which may be costly for Bugiri District Local Government.
Lastly, there is need for adequacy of reporting on contract management by Bugiri District Local Government and specifically preparing reports in a systematic and timely manner to ensure that PDE management is abreast with the status of contracts in the PDE. Such reporting ensures that timely actions can be taken to address any implementation challenges as and when they arise. The reporting on contract life cycle management ensures that sufficient information is available on supplier performance to improve future procurement.

Data Availability Statement
The data presented in this study are available in article.