Organizational Factors Influencing Implementation of Public Procurement Preference and Reservation Law Among Kenyan Commercial Parastatals

Abstract

As part of the Access to Government Procurement Opportunity program, Kenya's government passed the Public Procurement Preference and Reservation Law to make it easier for youth, women, and people with disabilities to partake in public procurement (GoK, 2013; Langat et al. 2016). In the act, this segment of the population is here referred to as special group. Organizational considerations, such as budget allocation, supplier development, and procurement structure, might, however, influence the policy's implementation (Singh, 2015). Given their demographic and contribution to the economy, the Procurement Preference and Reservation Law were enacted to ensure that the group receives at least thirty percent (30%) of all government contracts. Despite these initiatives, state parastatals averaged less than the 30% percent allocated to the special group which implies that the law is not fully been followed, thereby necessitating this research. To achieve the objectives, the study examined the proportion of budget allocated towards young people, women, and people with disabilities among Kenyan commercial state parastatals, regulate the influence of supplier development, and procurement structure on the implementation of public procurement preference and reservation Law among Kenyan commercial state parastatals as well as the mediating effect of access to finance on implementation of the Law. The institutional theory, the social economic theory and resource-based theory, as well as some empirical studies, are part of the works of literature that has influenced this project. To test the hypothesis, a descriptive research design was adopted and target population was two respondents from each of the 31 commercial state corporations in Kenya. The data collected through a structured questionnaire were analyzed through descriptive and inferential statistics. with a response rate of 77%. The study concluded that there is a positive and significant relationship between supplier development and implementation of the reservation and preference law among Kenyan commercial state corporations. In addition, the findings also indicated that organizational factors account for up to 21% of the variation in the implementation of the law. All the factors were positive and significant on implementation of the law. Finally, it was concluded that access to finance partially mediate the relationship. Given that access to finance played a role in implementation of the law as demonstrated by challenges in accessing funds, there was a need for the corporations to seek alternatives ways of funding the special groups. The study recommends and improvement in adoption of supplier development practices such as conducting training for the special group since this has been done a moderate extent. Finally, as part of the recommendation, the public procurement should establish an independent body to facilitate capacity development of special group.