The Impact of Supplier Selection and Monitoring on the Effectiveness of Public Procurement in Ghana: Cost Reduction Point of View

Abstract

The aim of this study is to examine the role of supplier selection and monitoring on the effectiveness of public procurement in terms of cost reduction in Ghana. Procurement effectiveness as an element of public performance management can contribute to achieving Value for Money by reducing administrative overhead costs and directing resources to support more complex procurement processes. Procurement adds value by reducing costs, without the compromise of quality, product failures, assuring the operational efficiency to enable better quality without any additional cost with an aim to achieve the best objectives, output at a reduced cost in the supply chain. This study provides procurement practitioners with insights into selecting the proper suppliers and embracing supplier monitoring to achieve procurement efficiency in terms of cost reduction. This study examines the effects of supplier selection and supplier monitoring on procurement cost reduction as a measure of public procurement efficiency in the Ghanaian context. Consequently, it provides empirical evidence of supplier management practices in the public procurement context. A structured questionnaire was used to collect cross-sectional survey data from 170 public procuring entities in Ghana. Structural equation modelling (SEM) was used to analyse the collected data.