1. MEASURING PROCUREMENT PERFORMANCE IN
RWANDA
CASE STUDY: SOCIAL SECURITY FUND OF
RWANDA: YEAR JULY 2010-JUNE 2011

2.  Importance of procurement:
 public sector procurement at 8% (US$3.2 trillion)
of the worldwide GDP of US$40 trillion
 Rwanda: more than 40 % of all public expenses.
 but still organizations face delays, poor
deliveries, fund misuses and other losses
 Some studies suggest that in developing
countries, the procurement function is
transitioning from a clerical non strategic unit to
an effective socio-economic unit
 How about Social Security Fund of Rwanda

3.  Two objectives:
 showing the areas of improvement by
measuring procurement performance
 highlight challenges faced by the
procurement function specifically in those
weak areas.

4.  Efforts improve performance of the
procurement function
 public procurement is still a theater of poor
works, poor quality goods and services, poor
deliveries even corruption
 procurement performance measurement had
been attracting attention from long ago
 1931, the National Association of Purchasing
Agents (NAPA), USA organized a contest on
the topic.

5.  In 1945, guidelines on procurement performance
in USA
 2004, the European Institute of Purchasing
Management (EIPM) organized a conference
“Measuring Purchasing Performance”
 We know about audits
 generalizing that the procurement function is
not performing without indicating the criteria
used to reach that conclusion or just basing it on
financial statements is not reasonable
(Muhwezi, 2006).

6.  Questions can be asked:
 how to judge the performance if it measured
against irrelevant criteria or if it is not
measured at all
 do public institutions have a framework for
measuring procurement performance?
 Etc.

7.  For the purpose of this research two
questions will be asked:
 What are the areas of improvement in the
SSFR procurement performance?
 What are the challenges faced by the
procurement function specifically in those
areas of weak performance?

8.  Techniques of data collection:
 Documentary technique
 Interview technique
 Methods of data analysis:
 Analytical method
 Deductive method
 Sample: 30 OCB tenders out 122; 41 are OCB

9.  Definition:
 Many different definitions
 meaning of purchasing performance still
difficult. covers broader areas of procurement,
for instance (Knudsen, 1999)
 Van Weele (2006) performance= effectiveness +
efficiency
 Sabine Adotévi(2004): performance= how well
the process+ how good the outcome.
 We keep performance= effectiveness +
efficiency

10. WHY MEASURING PURCHASING
PERFORMANCE?
• From different authors:
• Identify areas for improvement
• Ensure that procurement directly contributes to
fulfillment of corporate objectives
• provides information for analysis and decision making
• enhanced profitability
• cost reduction,
• Etc

11.  Many from different authors:
 SMART:
Specific, Measurable, Agreed, Realistic, Time
d.
 Easy to measure
 Contributing directly to the delivery of one or
more corporate objectives
 Linked to corrective actions and outcomes, so
that people could see the value that the
Procurement function was delivering

12.  SSFR has no P.P measurement framework
 Proposed one aligned with SSFR corporate
objectives:
Corporate objective Procurement indicator
PROVIDE QUALITY SERVICE QUALITY
TO CUSTOMERS
PREPARE AND IMPLEMENT DELIVERY
ORGANIZATIONAL PLANS
EFFECTIVE FUND COST
MANAGEMENT
DEVELOP A CAPABLE AND RESPONSIVENESS
RESPONSIVE
ORGANIZATION

13. Procurement performance indicator Targets
QUALITY The number of request for repair should
zero during its guaranty period
Durability: product purchased should last
the for the whole warranty period
DELIVERY All deliveries should be done in the time
stipulated in the contract
The level of defects should be zero
defects.
COST All contracts should be below or equal the
estimated budget
Cost avoidance: the number of request
modified should reach 20% of all received
requests

14. Procurement Performance indicator Procurement Objectives
COST………. A price market research should be
conducted for each tender
RESPONSIVENESS Each customer’s query should be have a
response within 48 hours after receipt
The renewal of fixed time contract should be
done before the expiration date
Upon request information should be
available within 3 days to the public.

15.  Scoring:
The scoring method proposed assumes that
under a certain frequency (like below or
above half repetition), the indicator under
reasonable performance will be considered as
unrated or the score will be zero. For instance
as the sample is 30, the scoring will be 100
points at maximum (30) and 0 points at the
frequency of 15.

16.  Balanced score card:
General Indicator Specific indicator Score
QUALITY NUMBER OF REPAIRS 86,6%
DURABILITY(warranty period) 66,7 %
DELIVERY DELIVERY TIME 33,3 %
DEFECTS REJECTION RATE 66,7%
COST COST AVOIDANCE 73,3%
PRICE MARKET RESEARCH 33,3%
PAYMENT VS BUDGET 80%
RESPONSIVENESS QUICKNESS OF SATISFYING 33,3%
CUSTOMER REQUEST
CONTRACT RENEWAL 75%
ACCESSIBILITY TO INFORMATION 73,3%

17.  Areas where score is below 70%:
 Durability
 Delivery time
 Defect rejection rate
 Market research
 Quickness of customer satisfaction

18.  Durability:
 Testing
 Carelessness of users
 Fear of retendering
 delivery time
 Suppliers accept penalties(1/1000 per day)
 Land locked country: dependence on external
factors(transport, fuel price, ……)

19.  Defect rejection rate
 Tenders awarded to lowest price bidders
 Transport
 Market research
 Awareness
 quickness of customer query satisfaction
 Structure
 Nature of some tenders(investment projects)

20.  Introduction of a procurement policy
 Draft a framework for procurement
performance measurement
 To place public procurement unit directly
under the Director General’s office
 Allocate more time to market research
 Advocate foe the inclusion of investment
project under special procurement (law)

21.  It is a human being work
 Not perfect
 Critics, suggestions, advices and corrections
are more than welcome.
Thanks.