Prospects and Challenges of Public Procurement in Outsourcing non-core Activities: A case study of Addis Ababa University
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Date
2019-06
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Addis Ababa University
Abstract
Procurement is a means by which an organization acquires works, good, consultancy and other services in a scientific manner. More than two third of the organization annual budget is spend through procurement. Every activity of the organization, either service or goods provider, is highly attached with the procured product. The purpose of this research is to assess the challenges and prospects of public procurement in outsourcing the non- core activities with a case study in Addis Ababa University. The study areas were four colleges namely Main Campus, Colleges of Business and Economics, Addis Ababa Institute of Technology (AAiT) and College of Natural Sciences on security and cleaning or janitorial services. The research is a descriptive study applying both quantitative and qualitative approach in which questioner was collected across a population through purposive sampling and uses descriptive statistics for the data analysis.
The finding of the study shows that outsourced service assist Addis Ababa University to focus more on core functions and strategic areas, to save management time and upscale its primary objective of establishment as teaching and learning, conducting problem solving research and providing community service. On the other side, conflict of interest between outsourced employees and permanent University employees, difficulty to measure service/Product quality, Poor structure to manage the outsourced function , loss of autonomy in decision making, Possibility of harm and/ damage to university resource, high budget and cash flow requirement, leaking of information to competitors and loss of confidentiality and poor and/ infant Industries on the sector were the major challenges of the University due to outsourcing. Finally based on the finding, the researcher recommended that the University should conduct due diligence on the service provider’s related work experience, quality of services provided, ethical considerations, technical capabilities, the resource possessed, the recruitment and selection criteria, and the reward packages provided. When it is used in a calculated and well-designed way, outsourcing could bring lots of benefits to the client organization. If applied without proper assessment of the capacities of service providers, it may involve irreparable damages in the short-range and could draw lots of risks that may disturb time-honored organizational culture. Hence, any form of outsourcing is likely called for maximizing benefits and minimizing risks.
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Keywords
Public procurement, Challenges of Outsourcing, Benefits of outsourcing