ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE
PROGRAM OF PROJECT MANAGEMENT

ASSESSMENT OF PROJECT PROCUREMENT MANAGEMENT

PRACTICE IN ETHIO TELECOM

BY
KIDIST DAGNACHEW

ADDIS ABABA UNIVERSITY

SCHOOL OF COMMERCE
MA PROGRAM

JUNE, 2018
ADDIS ABABA, ETHIOPIA
 ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
PROGRAM OF PROJECT MANAGEMENT

ASSESSMENT OF PROJECT PROCUREMENT MANAGEMENT

PRACTICE IN ETHIO TELECOM

BY
KIDIST DAGNACHEW

A RESEARCH PROJECT WORK SUBMITTED TO ADDIS

ABABA UNIVERSITY SCHOOL OF COMMERCE IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF MASTER OF ARTS DEGREE IN PROJECT MANAGEMENT

ADVISOR
TEMESGEN BELAYNEH (PHD)

JUNE, 2018
ADDIS ABABA, ETHIOPIA
 ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
DEPARTMENT OF PROJECT MANAGEMENT

ASSESSMENT OF PROJECT PROCUREMENT MANAGEMENT

PRACTICE IN ETHIO TELECOM

BY
KIDIST DAGNACHEW

Approved Board Committee:

_____________________________ ______________
Examiner Signature

_____________________________ _______________
Examiner Signature

_____________________________ _______________
Advisor Signature
 DECLARATION

I, the undersigned, declare that, this research paper is my original work, prepared under the
guidance of Dr. Temesgen Belayneh. All resources and materials used herein have been properly
acknowledged. I further confirm that the project work has never been presented either in part or in
full to any other university for the purpose of earning any degree.

BY: KIDIST DAGNACHEW

SIGNATURE: _____________
DATE: ___________________

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 Table of Contents
Acknowledgements ........................................................................................................................ iv
List of Abbreviation .........................................................................................................................v
List of Tables ................................................................................................................................. vi
Abstract ........................................................................................................................................ viii
CHAPTER ONE .............................................................................................................................1
INTRODUCTION ...........................................................................................................................1
1.1.Background of the Study .....................................................................................................1
1.2.Background of the Company ...............................................................................................2
1.3.Statement of the Problem .....................................................................................................4
1.4.Basic Research Questions ....................................................................................................5
1.5.Objective of the Study .........................................................................................................5
1.6.Significance of the Study .....................................................................................................6
1.7.Delimitation of the Study ....................................................................................................7
1.8.Limitation of the Study ........................................................................................................7
1.9. Organization of the Paper ...................................................................................................8
CHAPTER TWO .............................................................................................................................9
REVIEW OF RELATED LITERATURE .......................................................................................9
2. 1 Project ................................................................................................................................9
2. 2 Project Management ........................................................................................................10
2. 3 Definition of Procurement and Project Procurement Management ................................14
2.3.1. Definition of Procurement ....................................................................................14
2.3.2. Definition of Project Procurement Management..................................................15
2. 4 Project Procurement Management Process ....................................................................15
2.4.1. Procurement Planning ..........................................................................................16
2.4.2. Solicitation Planning ............................................................................................17
2.4.3. Solicitation............................................................................................................19
2.4.4. Source Selection ...................................................................................................20

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 2.4.5. Contract Administration .......................................................................................21
2.4.6. Contract Closeout .................................................................................................23
2. 5 Empirical Literature Review of the Study .......................................................................23
CHAPTER THREE.................................................................................................................................. 27
RESEARCH METHODOLOGY .......................................................................................................... 27
3.1.Research Design ...............................................................................................................26
3.2. Population of the Study ........................................................................................................... 26
3.3. Sample Size and Sample Technique ...............................................................................27
3.3.1 Sampling Technique..................................................................................................... 27
3.3.2 Sample Size ................................................................................................................... 27
3.4. Sources and Instruments of Data Collection ...................................................................27
3.5. Method of Data Analysis .................................................................................................28
3.6. Validity and Reliability of the Instrument .......................................................................28
3.7. Ethical Consideration ......................................................................................................29
CHAPTER FOUR .................................................................................................................................... 30
RESULTS AND DISCUSION .............................................................................................................. 30
4.1.General Information of the Respondents ................................................................................ 30
4.2.Analysis of Data Collected From Respondents ..................................................................... 31
4.2.1. Project Procurement Planning..................................................................................... 32
4.2.2. Solicitation Planning .................................................................................................... 39
4.2.3. Solicitation..................................................................................................................... 41
4.2.4. Source Selection ........................................................................................................... 44
4.2.5. Contract Administration .............................................................................................. 50
4.2.6. Contract Closeout ......................................................................................................... 52
CHAPTER FIVE ...................................................................................................................................... 55
SUMMARY, CONCLUSIONS & RECOMMENDATIONS ............................................................ 55
5.1. Summary of the study............................................................................................................. 55
5.2. Conclusions ............................................................................................................................ 58
5.3.Recommendations .................................................................................................................... 59
Reference ................................................................................................................................................... 61
Appendix ................................................................................................................................................... 64

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 ACKNOWLEDGEMENTS

First and foremost I would like to thanks to the Almighty God for giving me patience and strength
for accomplishing this project work.

Again deepest gratitude goes to my beloved late father Ato Dagnachew Damte who always gives
me his unconditional encouragement and support which made it possible for me to continue my
educational journey.

I am also thankful to all my friends for their encouragement, and invaluable support. Moreover I
extend my gratitude to all the interview and questionnaire participants for their cooperation and
support.

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 LIST OF ABBREVIATION AND ACRONYMS

CBS Convergent Billing System

CRM Customer Relation Management
ETC Ethiopian Telecommunication Corporation
FDRE Federal Democratic Republic of Ethiopia
GTP Great and Transformation Plan
IFB Invitation for Bid
IS Information System
IT Information Technology
MVAS Multi Value Added
NBE National Bank of Ethiopia
Network PRO Network Project Rollout
NGOs Non-Governmental Organizations
PMBOK Project Management Body of Knowledge
PMI Project Management Institution
RFP Request for Proposal
RFQ Request for Quotation
SD Standard Deviation
SPSS Statistical Package for Social Science
TEP Telephone Expansion Program
WBSs Work Breakdown Structures

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 LIST OF TABLES
Table 4.1: General Characteristics of the Respondents .................................................................30

Table 4.2 Provision of related training ..........................................................................................32

Table 4.3 Make-or-buy analysis for planning procurement...........................................................33

Table 4.4 Expert judgment for planning procurement ...................................................................33

Table 4.5 Conducting market research for planning procurement ................................................34

Table 4.6 Consideration of past project procurement documents..................................................35

Table 4.7 Activity resource and cost estimation consideration .....................................................35

Table 4.8 Associated risks and mitigation plan identification .......................................................36

Table 4.9 Identification of overall procurement need of the project .............................................37

Table 4.10 Separate procedure followed for managing project procurement ................................37

Table 4.11 Aggregate Mean and SD for Procurement Planning Process ......................................38

Table 4.12 Standardize procurement document prepared..............................................................39

Table 4.13 Accurateness, relevance and completeness of information obtained ..........................40

Table 4.14 Aggregate Mean and SD for Solicitation Planning Process ........................................40

Table 4.15 Appropriateness of procurement documents way of communication .........................41

Table 4.16 Arrangement of pre-proposal visits .............................................................................42

Table 4.17 Usage of bidders’ conference for answering questions ...............................................42

Table 4.18 Respond for questions and doubts raised for suppliers individually ...........................43

Table 4.19 Aggregate Mean and Standard Deviation for Solicitation Process..............................43

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Table 4.20 The presence of standardize pre-defined proposal evaluation criteria ........................44

Table 4.21 Preliminary screening used before making detail evaluation of proposal ...................45

Table 4.22 Cost and estimated delivery date are factors for evaluating proposal .........................45

Table 4.23 Consideration of other factors for selecting suppliers’ proposal .................................46

Table 4.24 Consideration of future requirement change in procurement contract ........................48

Table 4.25 Aggregate Mean and Standard Deviation for Source Selection ..................................49

Table 4.26 Monitoring and controlling of suppliers performance .................................................50

Table 4.27 Suppliers’ performance status gathered from concerned stakeholders ........................51

Table 4.28 Presence of formal procedure to accept/reject change.................................................51

Table 4.29 Aggregate Mean and SD for Contract Administration ................................................52

Table 4.30 Identification of contract closeout activities ................................................................53

Table 4.31 Lesson learned documentation.....................................................................................53

Table 4.32 Aggregate Mean and Standard Deviation for Contract Closeout ................................54

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 ABSTRACT

Project procurement management is among the ten knowledge areas that a project manager must
be familiar with for a successful implementation of a project work. Depending upon the specific
type of project being managed, over 50 percent of the total project cost can be attributed to parts,
supplies and services procured. For many high-technology projects, this procurement fraction can
approach 90 percent. Most of the world telecom operators upgrade their procurement capabilities
to achieve best suppliers relation, to bring improved risk management, and to enhance fast growth
opportunities. Hence, this study is targeted to assess project procurement practice of Ethio
Telecom by addressing the process undergone namely: Procurement planning, Solicitation
Planning, Solicitation, Source Selection, Contract Administration and Contract Closeout. The
primary data was collected from a total of 60 respondents from a total population of 198 out of
which 15 was approached for answering questions related to planning procurement process and
the rest 45 are approached for answering the remaining process which are selected using non-
probability purposive sampling and the collected data analyzed using SPSS version 20.0. Then the
data presented quantitatively using descriptive statistics with the help of table, frequency and
percentage. Semi-structured interview was also conducted with the 5 project managers and 4
Contract Management Program Managers, and analyzed qualitatively by integrating secondary
data obtained from the company policy and procedure documents, project management working
manual, reports, process templates and magazines. Accordingly, the finding of the study reveals
the company fail to provide training related to project and project procurement, fail to arrange
pre-proposal visit, not considering suppliers risk management issue as evaluation criteria, week
monitoring system for products arrived at the project site and not gathering suppliers’
performance status report from concerned stakeholders. Thus, a recommendation has been made
under this study on what actions should be taken in order to improve project procurement
management practice of Ethio Telecom.

Key words: Procurement, Project Procurement Management, Procurement Planning, solicitation

planning, solicitation, source selection, contract administration and contract closeout.

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 CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Projects now a day have great practice in private, government, NGOs and other forms of
organizations. It helps to find solutions for the existing problem, to provide new/improved
products, and also to win advantage of unexploited business opportunity. Unlike operations,
projects are characterized by uniqueness, complexities, non-repetitive, temporary life time with
constrained schedule, cost and performance. Such unique features require projects managed by
other forms of management called project management. Project management is the application of
knowledge, skills, tools, and techniques to project activities to meet the project requirements
(PMBOK, 2013).

According to Beleiu et al. (2015), adequate use of project management techniques is among the
main factors influencing project success globally. Like other sectors, application of project
management is important on telecommunication sectors for the following four main reasons
(Sherif, 2006). First, regulatory and technological changes promoted unbundling of
telecommunication services. Second, its infrastructural projects take several years and involve
several thousands of individuals. Third, the forms of telecommunication services, ranging from
basic telephony using wireline or wireless access, to internet or broadband services. Finally, new
services must fit within an environment defined by already existing technical and organizational
legacies.

PMBOK (2013), Project procurement management is among the ten knowledge areas that a project
manager must be familiar with for a successful implementation of a project work. It is needed to
acquire products, services, and/or results needed for the project. Procurement systems make a
difference in project implementation, while poorly managed project procurement relationships
negatively with project performance.

According to Kirai et al. (2016), Procurement is the nerve center of performance in every
institution which needs a tight system to be adopted and followed. Many procurement activities
suffer from neglect, lack of proper direction, poor co-ordination, bureaucracy, lack of open
competition and transparency, differing levels of corruption and not having a trained and qualified

1
procurement specialists who are competent to conduct and manage the procurement process in a
professional, timely and cost effective manner. Week project procurement in Ethiopia resulted
from insufficient planning, shortage of funds, and timely inaccurateness of large procurement
(Karlsson, 2011).

Ethio telecom is one of the dominant telecom industries in Africa having a vision to become world
class provider of telecom service. Since telecommunication is one of the prime support services
needed for rapid growth and modernization of various sectors of the economy as well as for
attracting investment, creating market opportunities, enhancing competitiveness and boosting
regional economic integration, the Ethiopian government has made huge investments to improve
service quality, coverage and institutional capacity in the telecom sector (NBE, 2017). Since the
company is responsible for such country wide contribution through its huge investments, it’s
important to assess the practice of project procurement of the company.

1.2 Background of the Company

Telecommunication service was introduced in Ethiopia in 1894 by Emperor Menelik II through

the telephone line constructed from Addis Ababa to Harar. The telecom service got different name
and structure throughout different years. From 1890 up to 1907 it is called “Central Administration
of Telephone and Telegraph System of Ethiopia”. It is renamed as “the Central Office of Post,
Telegraph and Telephone System of Ethiopia” since 1907-1909. After the independence from
Italian occupation, it was reestablished in the name of “Imperial Board of Telecommunication of
Ethiopia” in 1952 having the purpose to rehabilitate, extend, repair and maintained the
telecommunication facilities of Ethiopia and to engage in business of telecommunication for profit.

Under the Derg regime (1974-1991), the Ethiopian Telecommunication renamed as “The
Provisional Military Government of Socialist Ethiopia Telecommunication Service” at 1975 and
renamed again as “Ethiopian Telecommunication Authority” on 1981 that retained this name up
to 1996. At this period, the telecommunication service had made a major change of technology
ranging from automatic to digital technology.

Under the FDRE, the telecommunication sectored was restructured and separated into two entities
called “Ethiopian Telecommunication Authority” and “Ethiopian Telecommunication Corporation

2
(ETC)” on 1996. In 29th November 2010, Ethio Telecom is established having missions to connect
Ethiopia through state-of-the-art telecom service, provide high quality, innovative and affordable
telecom products and services that enhance the development of the nation, build reputable brand
known for its customers consideration, build its managerial capability and manpower’ talent that
enables Ethio Telecom to operate at international level and support community and environment
development. According to the a report revealed on May 18, 2018 Ethio Telecom has 64.4 million
mobile subscribers , 1.2 million fixed line subscribers, and the number of internet subscribers
reached 16.5 million. The company also able to collect 27.79 Billion Birr in which 75.3% is from
mobile subscribers, 17.1% from Data and internet while the remaining 5.2% is from international
services.

Among its sixteen divisions, Program Management Division is the one which is responsible to
manage the project management methodologies, skills, and tools within the company. Its primary
objective is to achieve all of the project goals and targets while honoring the preconceived project
constraints. It is also have an objective to optimize the allocation and integration of inputs
necessary to meet pre-defined objectives. The scope of the division is limited to make follow up
of projects which fulfill one or combination of the following parameters. The total cost of the
project need to be greater than 10 million Birr, the scope of the project needed to cover more than
2 divisions and/or the project required to have strategic importance for the company. Other projects
that do not meet one of the above requirements fall under the supervision of their own respective
division. There are two types of projects identified by the Program Management division called
Hardware Projects that include infrastructural expansion assigned to Network division of the
company and the Software Projects which is assigned to the Information System division.

The Sourcing and Facilities division has three sections. Sourcing section organizes the purchasing
control and delivery of goods and services within the appropriate framework and in accordance
with the company strategic plan and budget. It manages the company relationship with its suppliers
and partners. The section is responsible both for the day-to-day operation as well as for projects
procurement. The Logistics section optimizes logistics resources to facilitate goods management
by optimizing the Warehouse management, by facilitating goods shipment and by performing
inventory management. The Facilities and Fleet section provides facilities and fleet to the whole
company.

3
1.3 Statement of the Problem

Effective procurement is critical for execution of projects successfully. Depending upon the
specific type of project being managed, over 50 percent of the total project cost can be attributed
to parts, supplies, and services procured, and for many high-technology projects, this procurement
fraction can approach 90 percent (Morris & Pinto, 2007).

According to Wyman (2013), most of the world telecom operators upgrade their procurement
capabilities to achieve best suppliers relation, to bring improved risk management, and to enhance
fast growth opportunities. They need to improve their procurement practice due to their purchasing
portfolio become increasingly diverse from simple items such as switches and routers to a much
wider array of products such as software, IT solutions, maintenance and margin engineering on
resale. Since technologies are shift very rapidly, their procurement expected to look up compatible
suppliers that help them to be flexible and react quickly. For example traditional telecom vendors
like Ericson and Nokia have seen significant drops in their margins, due to aggressive competition
from new players like Huawei and ZTE.

Karlsson (2011), conducted a study to understand project management in Ethiopia and Sweden
which conclude method of procurement management has big weakness and the lack of adequate
planning often causes problems in the production when materials, machines and parts are delivered
too late or not at all in Ethiopia, however, the study was on construction companies. Other research
was conducted on effective public procurement management impact in the implementation of
successful public project by (Martha, 2015) but the study is on the area of housing development
projects of the country. Another study on project procurement practice conducted on Alemgena
road maintenance project having an objective to assess the studied project procurement practice.
The Major gap from the different studies is that they do not cover up each process of the project
procurement.

Academic research are conducted on Ethio Telecom that covers areas such as supply chain
management, sourcing staff perception, foreign purchase practice, and supplier performance
management but there is no study on project procurement management of the company.

4
According to the gathered report from GTP meeting held on 2016, different project team members
of the studied company reveals that most of delay in projects occurs due to quality problem of the
purchased item, corruption, lack of adequate make/buy analysis and fail to deliver the ordered
items on time by the Sourcing and Facility Division of the company. Therefore, this study has been
initiated with the intention filling the gap between the practices of project procurement
management with that of the theoretical perspective of the knowledge area.

1.4 Basic Research Questions

The general question of this study was what are the practices of project procurement management
at Ethio Telecom?

Specifically the researcher answered the following research questions after collecting and
analyzing the data.

 How does the project procurement planning look like in Ethio Telecom?
 How does solicitation planning and solicitation practice is being undertaken in Ethio
Telecom?
 How does source evaluation and selection practice is being undertaken in Ethio Telecom?
 How does contract administration practice of Ethio Telecom looks like?
 What practices are being followed to close out a contract in Ethio Telecom?

1.5 Objective of the Study

The general objective of the study is to describe the practice of project procurement management
in Ethio Telecom. While attempting to achieve the stated general objective, the study was also
specifically tries to achieve the following objectives:

 To examine the project procurement planning practice in Ethio Telecom.

 To examine solicitation planning and solicitation practice of Ethio Telecom.
 To investigate source evaluation and selection practice in Ethio Telecom.
 To assess contract administration practice of Ethio Telecom.
 To examine contract closing out practice of Ethio telecom.

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1.6 Significance of the Study

After named Ethio Telecom the company announce the most critical program on April, 2014 called
Telecom Expansion Program (TEP). The company budgeted 1.6 billion dollar for the program and
scheduled to implement within 6 month for Addis Ababa and 2 years for regional sites. The goal
of the program is to improve the network quality and capacity. Its objective is to serve additional
39 million customers, 3G network expansion to regions, to launch 4G network for 400,000
customers in Addis Ababa, to improve the network capacity from 64% to 85%, to create modern
call center and customer service.

According to the TEP project charter, the major stakeholders of the program are Information
System Division, Network Division, and Sourcing and Facility Division of the company. The
Information System division of the company establish IS-Transition Section which includes Multi
Value Added-MVAS, Customer Relation Management –CRM, Convergent Billing System – CBS,
and Dunning automation/Debt collection management departments to implement the software
project of the Program. The network division also establish Network PRO section to implement
infrastructural expansion of fixed line and wireless network projects of the program over 13
telecom network circles all over the country. The company budgeted its 85%-90% for procurement
of product and service for the program from local and international suppliers. From this, it can be
conclude that it is important to assess the project procurement practice of the company.

This study will help the company to evaluate its current project procurement practice. Findings
and recommendations also will guide the studied company to maximize the contribution of its
sourcing and program management functions to meet projects objective. The findings may be of
great use to the academia, especially those who may wish to carry out further research on project
procurement

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1.7 Delimitation of the Study

The findings and conclusion that are drawn from the research represented projects of Ethio
Telecom. Among the different projects undertaken in Ethio Telecom, the study focus on projects
under the umbrella of Telephone Expansion Program (TEP.

1.8 Limitation of the Study

The researcher experienced the following holdups during the research process.

 Difficulty to meet all the targeted respondents who are managers due to their busy schedule
and taking annual leave. Due to this two of the project managers reached via phone
interview and one of the interviewee respondents was on acting but included on the study
due to resignation of the main manager.
 Documents which are important for the researcher but confidential to the company are not
allowed for detail review but only for eye screening on some permitted study points. Such
materials include cost related documents, project charter, and some project activity plans,
process and procedure templates.
 Respondents which are staff members of the company that have know-how starting from
planning up to closing phase of the procurement process are very few in number and
difficult to reach. By considering this the researcher prepare separate questionnaire for
those who are participated in planning phase of procurement and others who are
participated in the rest of the process.
 Due to the project is on closing phase, some of sample respondents of questionnaire already
receive reassign letter to work on their previous operational position while still working on
the project in which their busy schedule makes the data collection process difficult.

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1.9. Organization of the Research Report

This study is organized in five chapters in which the first part contains background of the study,
background about the studied company, statements of the problem, basic research questions,
objective of the study, significance, scope and delimitation of the study. The second chapter deals
with review of related literature and the third chapter describes the methodology of the study. It
covers research design, sample and sampling techniques, source and instruments of data collection
and method of data analysis. Validity and reliability of the study as well as ethical consideration
also included. Results and discussion are discussed in the fourth chapter, and the last chapter deals
with the research summary, conclusion and recommendations. At the end, References and some
annexes had been attached.

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 CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Project

There are number of definitions about project by different scholars having similar meaning.
According to Wysocki (2014), Project is a sequence of unique, complex, and connected activities
that have one goal or purpose and that must be completed by a specific time, within budget, and
according to specification. Another definition provided by Kerzner (2009), states project is a series
of activities and tasks that have a specific objective to be completed within certain specification
having defined schedule, funding limit, and consume human and non-human resources (i.e., money
and equipment) with multifunctional nature (i.e., cut across several functional lines).

Another definition provided by PMBOK (2013), Project is a temporary endeavor undertaken to

create a unique product, service, or result. According to Heerkens (2002), Project is temporary in
nature undertaken to achieve a particular aim in response to a need and the solution to a problem
which consists of small jobs (tasks) and ordinarily culminates in the creation of an end product or
products (deliverables). It is also defined by Tayntor (2010), as a unique, finite set of multiple
activities intended to accomplish a specific goal.

The above definitions have basic similarity which helps to emanate the following basic
characteristics of project. Project is a temporary endeavor which refers done only one time having
a definite beginning and end date. It does not necessarily mean the duration of the project
is short (PMBOK, 2013). Unlike operations, projects need to end eventually having a defined life
span.

An ongoing work effort consists of a repetitive process which follows the organization procedure
that may involve in providing the same product is Operation. Unlike operations, though similar
activities are done a true project is unique at least in one aspect (Tayntor, 2010). Projects are a
means to respond for those requests that cannot be addressed within the normal operation of the
organization. Generally uniqueness of the project means non-routine or a one-off activity which
never repeated exactly.

9
It has defined constraints in terms of time, cost, and performance requirements. Since projects are
finite, they have specified beginning and completion date. It also requires considering the
dedicated budget and limited resources. The client or the recipient of the project’s deliverables,
expects a certain level of functionality and quality from the project which refers to performance
requirement. Projects also characterized by having single and definable purpose which used to
determine whether the goal has been made at the end.

Projects are ever increasingly needed by many organizational forms due to the following some
reasons mentioned by scholars. Heerkens (2002) states that projects are not only required for
negative problems but also positive kinds of problems such as developing new product. According
to PMBOK (2013), the outcome of the project may be tangible or intangible that can create product
which can be either a component of another item, an enhancement of an item, or an end item in
itself. It can also create a service or a capability to perform a service, an improvement in the
existing product lines and a result such as outcome of a document. They are also means to respond
to those requests that cannot be addressed within the organization normal operational limits
(Koväcs, 2004). Project used to find solution for a critical business problem, and/or take advantage
of the untapped business opportunity (Wysocki, 2014).

2.2 Project Management

Project management is the application of knowledge, skills, tools, and techniques to project
activities to meet the project requirements (PMBOK, 2013). Project management is accomplished
through the application and integration of the project management processes of initiating,
planning, executing, monitoring and controlling, and closing. It requires all of the skills of general
management to secure the project success.

According to Robert K. Wysocki project management is designed to answer what business

situation is being addressed, what does the business need to do, what will you do, how will you do
it, how will you know you did it and how well did you do. Project management is an organized
common-sense approach that utilizes the appropriate client involvement in order to meet sponsor
needs and deliver expected incremental business value (Wysocki, 2014).

10
According to Tayntor (2010), the major difference between project management and fundamental
management is that added up skill required from project manager is called the ability to manage
change. Unlike project managers, the general manager of the operations management requires for
maintaining status quo to make thing stable. While the project manager changes it.

Project management processes are grouped into five categories known as Project Management
Process Groups by Project management Institutes (PMI). Initiating process group performed to
define a new project or a new phase of an existing project by obtaining authorization to start the
project or phase. It involves activities such as selection of the best project given resource limits,
recognizing the benefits of the project, preparation of the documents to sanction the project and
assigning of the project manager.

Planning process group required to establish the scope of the project, refine the objectives, and
define the course of action required to attain the objectives that the project was undertaken to
achieve. There is definition of the work requirements, definition of the quality and quantity of
work, definition of the resources needed, scheduling the activities and evaluation of the various
risks.

While Executing process group performed to complete the work defined in the project
management plan to satisfy the project specifications. It requires negotiating for the project team
members, directing and managing the work as well as working with the team members to help
them improved.

Monitoring and controlling process group required to track, review, and regulate the progress and
performance of the project; comparing actual outcome to predicted outcome; identify any areas in
which changes to the plan are required; and initiate the corresponding changes.

Finally closing process group performed to finalize all activities across all Process Groups to
formally close the project or phase. It verifying that all of the work has been accomplished,
contractual closure of the contract, financial closure of the charge numbers and administrative
closure of the paperwork.

According to the PMBOK (2013), there are ten project management knowledge areas that every
project addresses and these Knowledge areas represent a set of competency skills and processes

11
that must be properly utilized by the project managers throughout the life cycle of the project.
These are;

 Project Scope Management

It includes the processes required to ensure that the project includes all the work required to
complete the project successfully. It is an umbrella for the processes facilitating the inclusion of
all the necessary and sufficient goods and/or services in the procurement package (Koväcs, 2004).
Managing the project scope is first and foremost concerned with defining and controlling what is
and is not included in the project.

 Project Time Management

It is a set of those processes that support the timely completion of the procurement. Project Time
Management includes both a planning component and a control component. The planning
component provides time estimates for both the duration of a project task (that is, how long will it
take in terms of clock time to complete the task) and the actual effort or labor time required to
complete the task. The duration is used to estimate the total time needed to complete the project.
The labor time is used to estimate the total labor cost of the project. The control component is part
of the Monitoring and Controlling Process Group and involves comparing estimated times to actual
times as well as managing the schedule and cost variances (Wysocki, 2014).

 Project Cost Management

It is involved in planning, estimating, budgeting, financing, funding, managing, and controlling

costs so that the project can be completed within the approved budget (PMBOK, 2013). According
to Rad (2002), it used to minimize the cost of the project while maintaining acceptable levels of
quality as well as scope of the deliverables for the duration of the project.

 Project Quality Management

According to (Heerkens, 2002), it includes both quality assurance (planning to meet quality
requirements) and quality control (steps taken to monitor results to see if they conform to
requirements).

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  Project Human Resource Management

It focuses on actions related to human aspect of the project. It includes the processes that organize,
manage, and lead the project team/staff. All the team members with assigned roles and
responsibilities having their varied set of skills are important in project planning and decision
making by adding their expertise to the process and strengthens their commitment to the project.

 Project Communication Management

It includes the processes that are required to ensure timely and appropriate planning, collection,
creation, distribution, storage, retrieval, management, control, monitoring, and the ultimate
disposition of project information (PMBOK, 2013). At the heart of many of the top ten reasons
why projects fail is poor communications (Wysocki, 2014). The main reason for such failure is not
from planning effective communication plan but from executing such plan.

 Project Risk Management

It is a set of processes to realize, examine, prevent, eliminate, or diminish procurement risks

(Koväcs, 2004). According to PMBOK (2013), project risk management includes the processes of
conducting risk management planning, identification, analysis, response planning, and controlling
risk on a project. Its primary focus is to minimize the probability of negative events challenging
the outcome of the project and maximizing any opportunities that exist.

 Project Procurement Management

It ensures that the project is getting the right materials at the right time with the best cost.

 Project Stakeholder Management

It includes the processes required to identify the people, groups, or organizations that could impact
or be impacted by the project, to analyze stakeholder expectations and their impact on the project,
and to develop appropriate management strategies for effectively engaging stakeholders in project
decisions and execution (PMBOK, 2013).

13
  Project Integration Management

It includes the processes and activities to identify, define, combine, unify, and coordinate the
various processes and project management activities within the project management process
groups (PMBOK, 2013).

Generally speaking, one way or another project manager and the project team members are
involved in performing the above knowledge management areas throughout the life of a project.

2.3 Definition of Procurement and Project Procurement Management

2.3.1 Definition of Procurement

Kerzner (2009), Define Procurement as the acquisition of goods and services by involving two
parties customer who is buying and supplier who is selling with different objectives who interact
in a given market segment. Procurement characterized by most often a dynamic and repeated
activity with short-term objectives often conflicting with long term ones (Dimitri, Piga, &
Spagnolo, 2006).

Another definition of procurement is management of a broad range of processes that are associated
with an organization desire to obtain the necessary goods and services needed for manufacturing
a product, transforming inputs to outputs, or indirectly operating the organization. These processes
involves identifying and analyzing user requirements and type of purchase,
selecting suppliers, negotiating contracts, acting as liaison between the supplier and the user,
and evaluating and forging strategic alliances with suppliers (Morris & Pinto, 2007). Its function
extends to acquisition of suppliers, pricing, purchasing, and administration of contracts.
It also involves to storage, logistics, inspection, expediting, transportation, and handling
of materials and supplies. According to Laby et al. (2014), a procurement process involves a series
of activities like purchasing, transporting, stoking and supply.

Since it is economically difficult for companies to make all the materials they use, procurement
process is used to ensure the buyer receives goods, services or works at the best possible price,
when aspects such as quality, quantity, time, and location are compared (Wikipedia, 2010). It is
also a practice that can increase corporate profitability by taking advantage of quantity discounts,

14
minimizing cash flow problems, and seeking out quality suppliers (Kerzner, 2009). According to
Dimitri et.al (2006), efficient procurement is a core necessity for firms’ profitability as well as
survival. But the problem is that most companies see the procurement process as tactical rather
than strategic and as cost rather than a benefit to the company (Neef, 2001).

2.3.2 Definition of Project Procurement Management

According to PMBOK project procurement management is one of the ten knowledge areas of
project management that includes the processes necessary to purchase or acquire products,
services, or results needed from outside the project team. Another definition of project
procurement management is the processes to control and administrate contracts and purchase
orders from sources external to the project organization (Karlsson, 2011).

According to Heagney (2012), project procurement management involves deciding what must be
procured, issuing requests for bids or quotations, selecting suppliers, administering contracts, and
closing them when the job is finished.

2.4 Project Procurement Management Process

PMBOK (2013), identifies four processes of project procurement management namely plan
procurement management, conduct procurements, control procurements, and close procurements.
Plan procurement Management is the process of documenting project procurement decisions,
specifying the approach, and identifying potential sellers. While conduct procurement is the
process of obtaining seller responses, selecting a seller, and awarding a contract. Control
procurement is a process of managing procurement relations, monitoring contract performance,
and making changes and corrections to contracts as appropriate. Finally, close procurement
process is about completing each procurement.

Wysocki (2014), Morris et.al (2007), Luckey (2006), Fleming (2003) and PMBOK, (2000),
identified six phases of project procurement management namely procurement planning,
solicitation planning, solicitation, source selection, contract administration and contract closeout.
This classification will used by this literature in the next section by reviewing the studied company
procurement policy. PMBOK (2013), assumed that in order to say project procurement exists the
buyer of an item for the project is assigned to the project team and that the seller is organizationally

15
external to the project team. It is also assumed that a formal contractual relationship will be
developed and exists between the buyer and the seller.

2.4.1. Procurement Planning

Martha citing Basheka (2008) define procurement planning as a process of determining the
procurement needs of a project and the timing of their acquisition and their funding such that met
the projects need as required in an efficient way. Plan Procurement Management is the process of
documenting project procurement decisions, specifying the approach, and identifying potential
sellers (PMBOK, 2013). Care need to be taken at this stage since other activities of the project
procurement implementation decisions emanates from its planning document.

The purpose of project procurement plan is to determine whether to acquire outside support, and
if so, it determine what to acquire, how to acquire it, how much is needed, and when to acquire it.
Morris et.al (2007) sates procurement planning used to identify factors in the decision, make-or-
buy analysis and contract type selection of the project procurement. According to Laby et.al
(2016), Project procurement planning identifies the items that are needed to procure, define the
process for acquiring those items and finally schedule the time. Kerzner (2009), procurement plan
is the first step for planning purchases and acquisitions which used to answer the following; what
to procure, when and how, what are my sources, should I make or buy and if suppliers are not
qualified, how I shall qualify them questions.

Different authors describe what issues needed to be addressed in procurement planning process.
According to PMBOK (2013), procurement plan use project management plan, requirements
documentation, risk register, activity cost estimates, stakeholder register, enterprise environmental
factors, and organizational process asset as an input. Using make-or-buy analysis, expert
judgement, market research and meeting as technique and tool to produce an output of procurement
management plan, procurement statement of work, procurement documents, source selection
criteria, make-or-buy decisions, change requests and project documents updates.

Kerzner (2009), procurement plan includes defining the need for the project, development of the
procurement statement of work, specifications and work breakdown structure, performing a make
or buy analysis, laying out the major milestones and the timing/schedule, determining if long lead

16
procurement is necessary, cost estimating including life-cycle costing, determining whether
qualified sellers exist, identifying the source selection criteria, preparing a listing of possible
project/procurement risks (i.e., a risk register), developing a procurement plan and obtaining
authorization and approval to proceed.

The plan required to define items to be procured with justification statements and timelines, type
of contract to be used, risks associated with procurement management, how procurement risks will
be mitigated, determining costs and if/how they’re used as evaluation criteria, any standardized
procurement templates or documents to be used, how multiple suppliers will be managed if
applicable, contract approval process, decision criteria, establishing contract deliverables and
deadlines, how procurement and contracts are coordinated with project scope, budget, and
schedule, any constraints pertaining to procurement, direction to sellers on baseline requirements
such as contract schedules and work breakdown structures (WBSs), vendor management,
identification of any prequalified sellers if applicable and performance metrics for procurement
activities (www.projectmanagementdocs.com).

Koväcs (2004), Procurement management plan sets the procurement framework for the project
that will serve as a guide for managing procurement throughout the life of the project and updated
will be possible as acquisition needs change.

2.4.2. Solicitation Planning

According to Fleming (2003), it is the process of making plans leading to a solicitation of responses
from sellers. PMBOK (2000), also defines it as a process that involves preparing a document
needed to support the solicitation process. This process facilitate accurate, relevant and complete
responses from prospective sellers.

According to Fleming (2003) and PMBOK (2000), solicitation planning uses project procurement
planning as an input and use standard forms and expert judgment as tools and techniques to
produce evaluation criteria and procurement documents such as Invitation for Bid (IFB), Request
for Proposal (RFP) and Request for Quotations (RFQ).

According to Martha citing Lynch (2013), Request for Proposal (RFP) is a two envelope
procurement method which can be used for procuring goods, services or works. It requires sellers

17
to submit relevant and detailed information as per the request of the buyer. PMBOK (2013) also
define Request for Proposal (RFP) as type of procurement document used to request proposals
from prospective sellers of product or service. Wysocki (2014), states RFP is the heart of the
procurement process and provides the basis for the contract and the work to be completed. It is
used when suppliers, contractors or service providers are expected to propose a specific solution
(methodology and work plan) for fulfilling a particular procurement requirement.

Invitation for Bid (IFB) is used to obtain written requests for quotes, bids, best prices from
suppliers (Fleming , 2003). The major difference between Request for Proposal (RFP) and
Invitation for Bid (IFB) is that RFP is a great tool used in soliciting proposals from suppliers for
products and services that cannot be evaluated by cost alone. While IFB is used when there is no
substantive difference among the products and services that meet specifications so that the only
difference among responsive bids is price and used when price is only one of the criteria that are
needed for evaluating offers (https://dpi.wi.gov/school-nutrition/procurement/methods/formal).

Request for Quotation (RFQ) is type of procurement document used to request price quotations
from prospective sellers of common or standard products or services (PMBOK, 2013). It is
normally used to obtain price information on goods or services (Fleming , 2003).

Some literatures also recommend the use Request for Information (RFI). It is a type of procurement
document whereby the buyer requests a potential seller to provide various pieces of information
related to a product or service or seller capability (PMBOK, 2013). RFI is recommended when
there is little knowledge of exactly what is available on the commercial market or unable to identify
sellers who have the specific capability (Wysocki, 2014). When only information on a product or
on a given company is desired the buyer will often issue a Request for Information (RFI) form to
the prospective companies (Fleming , 2003). It does not consider whether supplier has the resource,
capabilities and processes for more extensive analysis. The information gathered used as a base to
decide who should be invited to respond and specific content to be included on Request for
Proposal (RFP).

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 2.4.3. Solicitation

Solicitation is the process of requesting responses from sellers eventually resulting in procurement
(Fleming , 2003). According to PMBOK (2000), Solicitation involves obtaining responses from
prospective sellers on how project needs can be met. It is also a process of sending out a document
with the desired requirements for potential suppliers (Wysocki, 2014).

According to Wysocki (2014), Request for Proposal (RFP) can be announced via advertising,
renting targeted list, asking previous vendors, and attending trade shows. He recommended for
managing bidders questions and responses via answer questions individually, hold a bidders
conference, and put Request for Proposal (RFP) online to respond questions quickly. Morris et.al
(2007), solicitation process involves developing qualified seller’s lists, contacting prospective
sellers, and conducting a bidders’ conference to receive the sending out proposal from sellers.

PMBOK (2013), Kerzner (2009) and Luckey et.al (2006), suggested bidders’ conference which is
a meeting held between the buyer and all the prospective sellers to prevent no single bidder has
more knowledge than others and no bidder receive preferential treatment. To be fair, buyers should
take great care to ensure that all prospective sellers hear every question from any individual
prospective seller and every answer from the buyer (PMBOK, 2013). In many industries and
countries companies have found it a useful practice (Fleming , 2003).

According to Wysocki (2014), it is also important to answer questions and doubts directly from
individual suppliers as well as conduct pre-proposal or field visits to view the capability of the
market site, production factory, and technical and managerial capability of pre-identified potential
suppliers.

According to PMBOK (2000) and Fleming (2003), Solicitation Process will end with the receipt
of proposals from prospective sellers. It require seller-prepared documents that describe the sellers’
ability and willingness to provide the requested product in accordance with the requirements of
the relevant procurement document prepared at solicitation planning process.

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 2.4.4. Source Selection

Source selection process evaluates seller proposals, and ends with the issuance of a contract award
to a seller (Fleming , 2003). According to PMBOK (2000), the process involves the receipt of bids
or proposals and the application of the evaluation criteria to select a provider. The selected sellers
are those who have been judged to be in a competitive range based upon the outcome
of the proposal or bid evaluation, and who have negotiated a draft contract that will become the
actual contract when an award is made (PMBOK, 2013).

After suppliers respond for the request, the next step is selecting potential seller. According to
PMBOK (2013), it is recommended to move from conducting preliminary screening to more
detailed evaluation of respondents after having short list respondents to select one/more qualified
sellers to perform the work. According to Luckey et.al (2006) and Tayntor (2010), it is
recommended to review proposals, select a short list of vendors, evaluate the qualifications of each
of the short list vendors and make final decision to select the best supplier.

Before evaluating sellers’ response for Request for Proposal (RFP), it is important to establish
sellers’ evaluation criteria (Wysocki, 2014). Such criteria help to choose the best among several
competing suppliers by evaluating their proposal response against the pre-settled standards. Seller
selection process includes application of the evaluation criteria to the contractors’ proposals
(Kerzner, 2009).

Many factors aside from cost and price need to be evaluated in the source selection decision
process which also suggested by scholars. According to Wysocki (2014), among the suggested
qualitative criteria corporate experience with similar work, financial stability, technical approach,
personal experience, skill and competency, risk management process and location shall need to be
considered by applying chosen quantitative models for evaluation and ranking sellers. According
to Luckey (2006), it is important to consider the priorities and requirements of the project as well
as stakeholders while selecting among sellers. Since projects are subject to time, budget and quality
constraint it is advisable to select the best seller that can successfully complete with in time frame,
with in a given cost and promising the best quality. He also recommends considering seller
experience, risk tolerance and provision of warranties for the service they provide. Kerzner (2009),
while several criteria can be used, the most common are time, cost, expected management team of

20
the project (i.e., quality of assigned resources), and previous performance history are majors. They
all suggested that selecting seller is a critical decision since the wrong decision affects the three
pillars of project: time, cost and performance.

Source selection process is leading to a contract award. According to Wysocki (2014) and PMBOK
(2013), awarding contract may be single award, and multiple award. Single award is when a single
seller emerges with the highest evaluation score while multiple award is when there is no single
seller who scored high enough across the listed criteria which require the buyer to assign part of
the work for different sellers. Multiple sources also may require for critical products (PMBOK,
2000). Robert K. Wysocki also states no award scenario when there is none sellers who meet the
minimum requirements of the project (Wysocki, 2014).

Final management approval and even contract award does not always allow a seller to begin work
(Fleming , 2003). According to Kerzner (2009), the award cycle results in a signed contract
between the buyer and the selected sellers’. A contract is a mutually binding legal agreement that
obligates the seller to provide the specified products, services, or results, and obligates the buyer
to compensate the seller (PMBOK, 2013). According to Kerzner (2009), a contact should include
the following four basic elements. First, there must be mutual agreement between the parties
ensuring the offer is accepted. Second, it include consideration which refers to something of value
is exchanged between the parties. Third, contract capability refers the contract will be binding only
if the contractors has the capacity and consent to perform. Finally, the contract must be for a legal
purpose to reflect the contractor’s legal obligation, or lack of obligation, to deliver end products.

2.4.5. Contract Administration

PMBOK (2000), contract administration is a process of ensuring that the sellers’ performance
meets contractual agreement. PMBOK (2013), also referred it as control procurement process
which is about managing procurement relationships, monitoring contract performance, and making
changes and corrections to contracts as appropriate. It manages seller performance, and manages
changes to seller authorized scope (Fleming , 2003). The key benefit of this process is that it
ensures both the sellers and buyers performance meets procurement requirements according to the
terms of the legal agreement. Kerzner (2009), it is a process that make sure for compliance by the
seller to the buyers contractual terms and conditions to make sure that the final product is fit.

21
PMBOK (2013), control procurement use project management plan, procurement documents,
agreements, approved change requests, work performance reports and work performance data as
an input to produce an output on work performance information, change requests, project
management plan and updates, project documents updates and organizational process assets
updates using contract change control system, procurement performance reviews, inspections and
audits, performance reporting, payment systems, claims administration and records management
system as techniques and tools.

Change management, specification interpretation, adherence to quality requirements, inspections

and audits, warranties, performance reporting and records management, Contractor (seller)
management, contractor (seller) performance report, documenting sellers performance (for future
source selection teams), production surveillance, approval of waivers, breach of contract, claims
administration, resolution of disputes, and payment schedules are among basic functions of
administrating contracts (Kezrner, 2009).

It is important to gather performance status from different appropriate stakeholders of the project
to discuss on the progress, risks, problems and ensuing tasks of procurement to monitor and report
the progress and performance status report of sellers (Kerzner, 2009). According to Kuipers, et al.
(2016/2017), it is about the measurement and evaluation of mutually agreed performance
indicators between buyers and sellers. It consists of sending out, collecting, measuring,
aggregating and evaluating performance data based on the predefined performance criteria and
creating specific supplier dashboards.

PMBOK (2013), suggest the use procurement performance technique to review sellers’ progress
to deliver project scope and quality, within cost and on schedule, as compared to the contract. It
can include a review of seller prepared documentation and buyer inspections, as well as quality
audits conducted during seller’s execution of the work. Such reviews may take place as a part of
project status reviews, which would include key suppliers. Project status review meeting can be
used to determine the performance of the project including procurement performance against the
baseline plan (Fleming , 2003).

Changes in project scope are inevitable (Fleming , 2003). If this is the case, it is important to
consider the requirement change request and require project managers to implement process to

22
keep changes managed and controlled (PMBOK, 2013). Kerzner (2009), also added up majority
of contract administrating time spent in handling changes.

Impact analysis required to be conduct before accepting or rejecting any change in requirement to
minimize its influence on the time, cost and performance of the project as a whole (Wysocki,
2014). He also suggested members of both parties must review and agree on change requests for
approval of change, and must be communicated to the prospective stakeholders. According to
Fleming (2003), project procurment require formal change control procedure including
identification of people who have authorization to make change. Approved change requests can
include modifications to the terms and conditions of the contract, including the procurement
statement of work, pricing, and descriptions of the products, services, or results to be provided
which require formally documented in writing and approved before being implemented (PMBOK,
2013).

2.4.6. Contract Closeout

Settles all open contractual issues, claims and closes out each procurement (Fleming , 2003). The
key benefit of this process is that it documents agreements and related documentation for future
reference (PMBOK, 2013). According to Morri et.al (2007), contract closeout function involves
contract documentation, steps in the claims process, termination of contracts, and lessons learned.

Wysocki (2014), point out there should be a clear understanding of when the project is finished,
state what the final product of the project is to be, who is to determine if it has been delivered, and
what is to be done with any open issues. Wysocki (2014) and Fleming (2003), also recommend to
keep all the necessary informations after the contract closed out for future projects.

2.5 Empirical Literature Review of the Study

Karlsson (2011), conducted a study on project management in Sweden and Ethiopia with the
purpose to identify which successful methods of project management in Swedish projects that are
appropriate to implement in Ethiopia operations and vice versa to increase the efficiency and
minimize the risks in construction projects. The study analyzed qualitatively and data was gathered
through informal interviews and observations on construction sites. It used to analysis based on
the nine knowledge areas of project management including project procurement management. The
23
author concluded in Ethiopian construction project experience there is lack of procurement
planning that often causes problems in the production when materials, machines and parts
delivered too late or not at all. Project procurement managers have limited and little influence and
control regards sub-contractors. The researcher recommends priority should need to be given for
the development of procurement plan together with the priority of budget schedule control.

Another study was conducted by Meseret (2016), on project procurement practice in Alemgena
Road Maintenance project. The researcher adopted purposive sampling and employed semi-
structured interview, and questionnaire technique as the research instrument which was analyzed
using descriptive statistics applying SPSS software. The researcher recommended provision
training, to consider risk while on procurement planning, select vendors objectively, to held pre-
bidding meeting and sellers site visit, and to conduct regular review and performance report.

Aliza, Stephen, & Bambang (2011), conducted a study on the importance of project governance
framework in project procurement planning. The methodology applied for the study involved a
comprehensive literature review on Malaysian public sectors experience. They recommend the
importance of implementing project governance framework to ensure that the decision makers are
answerable and accountable, and the decision making is transparent to avoid any ethical issues
arises. They suggest their recommendation on other developing countries to implement similar
method to ensure transparency of the decision making.

Another study was conducted by World Bank (2012), titled diagnosing corruption in Ethiopia on
different sectors of the country such as health, educational, rural water supply, justice,
construction, land, and mining including telecommunication sector of the country named Ethiopian
Telecommunication Corporation (ETC) which later called Ethio Telecom. The study use document
analysis, stakeholder interviews, and census building workshops as a methodology. The study
recommend to enforce minimum standards of procurement consistent with the public procurement
proclamation, establish a working group to validate the appropriateness of procurement
procedures, to appoint an independent assessor to monitor procurement, to ensure greater
transparency through disclosure agreements., to strengthen internal auditing and to create an ETC-
supplier forum in order to protect its procurement procedure from corruption.

24
Martha (2015), conducted study on effective public procurement management in implementation
of successful public projects in Ethiopia which is a case study on Addis Ababa city government
housing development project office. The study examine the impact of current public procurement
practice on construction of condominium housing, procurement planning, procurement method,
procurement contract administration and the procurement policy. The researcher adopted
purposive sampling using interview, and questionnaire technique as the research instrument which
was analyzed using descriptive statistics. The researcher recommends the studied organization to
prepare its own procurement policy, procurement planning with appropriate stakeholders, ensuring
long term relationship and the use of electronic recording to control contract management process.

Studies conducted on the area of project procurement management by different researchers mainly
made a recommendation that will support one of the procurement management areas. The different
studies did not cover up each process of the project procurement. Thus, this study will examine
the whole process of project procurement management according to Wysocki (2014), Morris et.al
(2007), Luckey (2006), Fleming (2003) and PMBOK, (2000), namely procurement planning,
solicitation planning, solicitation, source selection, contract administration and contract closeout.

25
 CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design

The study apply descriptive research design since it attempts to assess the practice of project
procurement management in Ethio Telecom. Descriptive design helps to present a picture of the
specific detail of a situation and describing the characteristics of a particular situation (Neuman,
2007). Since the research purpose was to describe a particular phenomenon at a single point in
time it was a cross-sectional study.

3.2 Population of the Study

The target population used to answer for the planning procurement phase of the study includes 50
staff members who are participated in the planning phase of the Telephone Expansion Program
(TEP). It consists Expertise from Network Division, Information System Division and project
owner departments of the studied company.

The target population of the study for the remaining process from solicitation planning up to
contract closeout were 148 employees who are currently working on Sourcing and Facility
Division at headquarter since the company follow centralized procurement system.

Information System Transition section has 4 departments with their respective managers who act
as both functional and project managers to execute software projects of the Telephone Expansion
Program (TEP) became population for the study. Besides to the software part, the execution of
hardware aspect of the program fall under the Network PRO section in which its manager was also
targeted. In addition 8 Contract Management Program Managers from TEP are also considered.

26
 3.3 Sample Size and Sample Technique

3.3.1. Sampling Technique

The study applied non-probability sampling. According to (Yalew, 2017), it is useful for certain
studies that require the researcher to collect the data from particular individuals that have know-
how about the studied situation. It enables the researcher to choose sample of participants that are
necessarily sufficient for the study.

The sampling type applied in the study was purposive sampling. It is useful when focusing on a
limited number of informants, whom we select strategically so that their in-depth information give
optimal insight into an issue. According to (Neuman, 2007), such type of sampling is appropriate
when a researcher use it to select unique cases that are especially informative, and when it wants
to identify particular types of cases for in-depth investigation. The researcher found it appropriate
due to the total population for this study involves in procurement activities for a project directly
having assignment letter and indirectly on temporary base besides with their operational
responsibility. Following this it is important to use purposive sampling to identify direct
participants on project procurement management practice since they are relevant for the study.

3.3.2. Sample Size

15 of the respondents was approached to collect data about the planning process practice of project
procurement. Data for the remaining process of the study from solicitation planning up to contract
closeout was collected from 45 respondents. 4 Project Managers from software project and 1
project manager from hardware project of the program were approached. Besides, four TEP
contract management program managers are also approached for the study by considering their
responsibility and position in vendors’ contract management section of the program.

3.4 Sources and Instruments of Data Collection

In order to get appropriate data, the study uses both primary and secondary sources of data. Primary
sources of data include questionnaire and semi-structured interview to supply firsthand
information from sample respondents based on the review of related literature important to the
subject of the study. The reviewed literature was made to develop an insight on procurement

27
management practice within the process related with projects. Thus, interview and questionnaires
was designed focusing on the practice of project procurement management and its process. Project
Managers and Contract Management Program Managers were reached via Semi-structured
interviews. While project staff members were reached using questionnaire.

The secondary sources of data emanates from the company policy and procedure documents,
project management working manual, reports, process templates and magazines. In addition
relevant books, journals and empirical research also used.

3.5 Method of Data Analysis

The data collected was analyzed using both quantitative and qualitative methods. The data
obtained from close ended questionnaire was analyzed using SPSS version 20.00 software which
helps to make descriptive analysis of the gathered data to present quantitatively using frequency
and percentage. While the semi structured interview made was analyzed by organizing the
common ideas and concepts of the response into a generalizable format.

3.6 Validity and Reliability of the Instrument

For research data in order to be of value and of use requires validity and reliability measurements.
Both are fundamental bases of scientific method of research. For a research to be reliable, it also
needs to be valid.

Validity

Validity of research refers the degree to which the research findings are true (Walliman, 2006). It
is about finding out if the data collected is relevant to the problem being investigated. The validity
of the research was considered while developing close-ended questionnaires and semi structured
interviews checked by benchmarking the related literature review and questionnaires in order to
generate a valid response. The instrument of data collection validity was checked by asking others
that has know-how on the studied area for feedback and asks my advisor for approval before
conducting collection.

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Reliability

Reliability refers the degree to which the results of the research are repeatable (Walliman, 2006).
It is about absence of difference in the research findings if the research were repeated. In order to
confirm the applied researcher approach is consistent or not, the research has been supported by
using reliable sources of information such as related journals, articles, books, websites, and work
papers and studies related to the studied area.

The reliability of the interviews was also maintained by having 9 interviews with Contract
Management Program Mangers and project managers of the studied company to ensure the
reliability of the information obtained by cross checking the respective responses gained from
them.

The Likert scale questionnaire items reliability was checked by the application of the Cronbach
Coefficient Alpha using SPSS software for the computations of internal consistency. As a rule of
thumb, researchers consider a measure to have adequate reliability if Cronbach’s alpha coefficient
exceeds 0.7 (Leary, 2012). It scored 0.92 and 0.71 for the planning procurement process and for
the remaining process respectively which indicates the presence of good internal consistency
among the items and promise the reliability and acceptability of the items for the study.

3.7 Ethical Consideration

An official support letter from Addis Ababa University School of Commerce was written to Ethio
Telecom. Data collection was undertaken after permission has been obtained from the company.
The researcher followed ethically and morally acceptable processes throughout the research. The
data was collected with the full consent of the participants. Since it could not be ethical to access
some confidential documents of the company, the organization code of ethics also considered. All
the collected data are confidential for both the participants and the company. All documents which
are referred throughout the research are fully acknowledged.

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 CHAPTER FOUR: RESULTS AND DISCUSION

Introduction

The objective of this chapter is to provide the findings and results from the data collected through
close ended questionnaire and semi structured interview which is analyzed using SPSS statistics
version 20.0 in order to assess the practice of Ethio Telecom project procurement management
practice and to provide adequate recommendations for the identified gaps. In addition the
researcher reviewed different templates, validated process, policy and procedures which are used
for project procurement management practice in the company in order to crosscheck and validate
the findings by using multiple sources. The reviewed documents include; project management
process, TEP supply chain management process, procurement management process, TEP vendor
payment process, TEP reporting management process, template of project change request, and the
company sourcing policy and procedure.

4.1 General Information of the Respondents

This section summarizes and presents the demographic characteristics of the respondents such as
age, level of education, year of work experience and current work position.

Table 4.1: General Characteristics of the Respondents

Frequency Percent Valid Percent Cumulative Percent

20-30 13 21.7 21.7 21.7
31-40 27 45.0 45.0 66.7
Age of the
41-50 13 21.7 21.7 88.3
Respondents
Above 50 7 11.7 11.7 100.0
Total 60 100.0 100.0
Frequency Percent Valid Percent Cumulative Percent
Diploma 4 6.7 6.7 6.7
Level of Degree 35 58.3 58.3 65
Education Postgraduates 21 35.0 35.0 100.0
Total 60 100.0 100.0

30
 Frequency Percent Valid Percent Cumulative Percent
Less than 5
3 5.0 5.0 5.0
Year
Year of Work 5-10 18 30.0 30.0 35.0
Experience 11-15 28 46.7 46.7 81.7
Above 15 11 18.3 18.3 100.0
Total 60 100.0 100.0
Frequency Percent Valid Percent Cumulative Percent
Supervisor 5 8.3 8.3 8.3
Expert 9 15.0 15.0 23.3
Current Work
Specialist 19 31.7 31.7 55.0
Position
Administrator 27 45.0 45.0 100.0
Total 60 100.0 100.0
Source: Own Survey, 2018

The above table depicts that 21.7% of respondents holds age between 20–30, 45% of them holds
age between 31– 40, 21.7% holds between 41–50 and the remaining 11.7% holds age above 50.
The above table also reveals that 6.7% of the respondents’ holds diploma, 58.3% of the respondents
are degree holders and the remaining 35% are postgraduates. The finding reveals that Ethio
Telecom has well educated employees for the study area. In respect to year of work experience
5% of the respondents has less than 5 years’ of experience. While 30% of the respondents holds
between 5–10 years’ of experience and most of the respondents (65%) have above 11 year of
experience. This shows the respondents can understand the process of the study area and respond
for the questionnaire clearly. The above table also depicts 8.3% of the respondents were on
supervisory position, 15% of the respondents are expertise, 31.7% of them are specialists and the
remaining 45% are on administrator position. From the above information the researcher
accredited respondents’ qualifications, experiences and positions that they hold allow them to
knowledgably and reasonably put their extent of agreement, so that, it has positive contribution on
the validity of the study.

4.2 Analysis of Data Collected From Respondents

The researcher applied five point Likert scale questionnaire where (1 =Strongly Disagree, 2 =
Disagree, 3 = Uncertain, 4 = Agree and 5 = Strongly Agree) to collect data from respondents. 60
questionnaire were distributed to the target group of respondents and all of them are filled and
returned. Part of the questionnaires related to general information of the respondents and training

31
related questions are distributed to all of the 60 respondents. Questions related to planning
procurement are distributed only for 15 of the respondents and the rest 45 respondents fill questions
related to the process of procurement starting from solicitation planning up to contract close out.
This is due to respondents lack complete know-how about the whole process of the study area.
The data was analyzed and presented using SPSS software program while semi structure interview
results have been analyzed qualitatively.

Table 4.2 Provision of training related to project and project procurement management

Response Frequency Percent

Did you take any training related to project Yes 18 30.0
management provided by your company? No 42 70.0
Total 60 100.0
Did you take any training related to project Response Frequency Percent
procurement management provided by your Yes 9 15.0
company? No 51 85.0
Total 60 100.0
Source: Own Survey, 2018

From the above table 4.2 data, 70% and 85% of the respondents answers that they do not take
training related to project management and project procurement management respectively. TEP
program managers and project managers also insist the company failed to provide formal training
for project staff members via interview. Instead the company has been used giving mentoring about
the program and its sub projects. It also allow project staff members close work especially with
service and foreign suppliers for knowledge sharing purpose. The researcher realize less priority
is given for provision of training related to project and project procurement management issues.

4.2.1. Project Procurement Planning

This part of the study discussed on the first step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from participants
through questionnaire, semi structured interviews and relevant document review.

32
 Table 4.3 Make-or-buy analysis for planning procurement

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree - - - -
Disagree 2 13.3 13.3 13.3
Uncertain 2 13.3 13.3 26.7
Valid Agree 8 53.3 53.3 80
Strongly Agree 3 20 20 100
Total 15 100 100
Source: Own Survey, 2018

The above table 4.3 reveals that out of the total respondents, 13.3% disagree, 13.3 uncertain, 53.3%
agree and the remaining 20% agree that there is consideration make-or-buy analysis before
deciding to buy from outside vendors to meet the project procurement need of the company.
Furthermore, interview made with the Contract Management Program Managers also confirmed
that the analysis is made to identify what the company cable to make, what is available from local
suppliers and what to acquire from foreign suppliers. The project management process of the
company also states it is important to identify whether to acquire or not at the planning phase of
the project.

Table 4.4 Expert judgment for planning procurement

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree - - - -
Disagree - - - -
Uncertain 2 13.3 13.3 13.3
Valid
Agree 7 46.7 46.7 60.0
Strongly Agree 6 40.0 40.0 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

According to table 4.4, 13.3% of the respondents are uncertain while 46.7% agree and 40%
strongly agree that the use of expert judgement for planning project procurement. To triangulate
the data, interview conducted with project managers and contract managers also reveals that there
is establishment of Expert Group for the entire planning phase of the project who are selected
based on their past experience, skill and ability, work experience and participation in previous
projects of the company. In addition to expertise within the company, external experts are used

33
who are providing consultancy service in requirement selection, technology selection and contract
preparation.

The company also form Technical Sourcing Committee having members from Network PRO
Section, Information Transition Section, sourcing expertise as well as managers from user business
units of the company. Members from Network PRO Section are expertise in their position helps
to identify infrastructural requirement for the project and members from Information Transition
Section are also expertise in their position helps for identification of business requirement of the
project. User business units are departments or division of the company who are direct
beneficiaries and became owner after the project completed. Following this, their managers are
members of the Sourcing Committee for providing input for requirement selection process at
planning phase.

Table 4.5 Conducting market research for planning procurement

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 6.7 6.7 6.7
Disagree 2 13.3 13.3 20.0
Valid Uncertain 1 6.7 6.7 26.7
Agree 4 26.7 26.7 53.3
Strongly Agree 7 46.7 46.7 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

The above table 4.5 illustrates, out of the whole respondents 6.7% strongly disagree, 13.3 disagree,
6.7% uncertain, 26.7% agree and 46.7% strongly agree about conducting market research for
planning procurement.

Data obtained from interview also confirms that the company use market assessment as its
sourcing policy element for its project and operational procurement. The market information
consists of product list and portfolio, supplier profile, price offer and other related information and
update the data periodically and as needed. It helps to view supply and demand within the market,
identify the power of suppliers, and level of competition.

The company also collect information about suppliers and there products online on its official
website. New suppliers both from local and foreign market register and update their information

34
accordingly. The required information includes company profile, recent consecutive three years
financial audit report, product or service portfolio, recommendation letter, and valid license and
certificates.

Table 4.6 Consideration of past project procurement documents

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree - - - -
Disagree 2 13.3 13.3 13.3
Uncertain 4 26.7 26.7 40.0
Valid
Agree 1 6.7 6.7 46.7
Strongly Agree 8 53.3 53.3 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

Table 4.6 depicts that more than half of the respondents (53.3%) strongly agree that consideration
of past project procurement documents for making future decision while the remaining 13.3%
disagree, 26.7% uncertain and 6.7% agree.

Interview with Contract Management program Managers also confirms there is reference of past
project procurement documents to review issues such as suppliers profile and performance, type
of goods and/or services provided, content of the contract, contract management issues, risks
incurred, claims and way of solving, issues related to contract change and contract audit report.
Such reference helps to identify possible threats, and opportunities as well as learn from past
mistakes for making better decision.

Table 4.7 Activity resource and cost estimation consideration

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree - - - -
Disagree - - - -
Uncertain 3 20.0 20.0 20.0
Valid
Agree 8 53.3 53.3 73.3
Strongly Agree 4 26.7 26.7 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

35
Table 4.7 reveals 20% of the respondents are uncertain while the remaining 53.3% and 26.7%
agree and strongly agree respectively about consideration of activity resource and activity cost
estimation for planning procurement for projects.

According to the company project management process document and TEP project charter, there
is activity definition to identify specific activities to be performed to produce the various project
deliverables and sequencing them to support for the development of an achievable schedule. This
helps for resource estimation to identify the type and quantity of resources require to accomplish
each activities. After estimating the required resources, an approximation of the costs of the
resources needed to complete the project activities is estimated. According to project management
process of the company its states activity cost must be estimated for all resources (people, services,
material, hardware and software) that will charged to the project. According to Contract
Management Program Managers such estimation helps to decide on what to acquire at what cost.

Table 4.8 Associated risks and mitigation plan identification

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 6.7 6.7 6.7
Disagree 3 20.0 20.0 26.7
Valid Uncertain 3 20.0 20.0 46.7
Agree 5 33.3 33.3 80.0
Strongly Agree 3 20.0 20.0 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

Table 4.8 depicts that 6.7% strongly disagree, 20% disagree, 20% uncertain, 33.3% agree and the
remaining 20% of respondents strongly agree. Most of the respondents reveals the company
identify associated risks and prepare mitigation plan for its projects. The issue is confirmed via
interview and by reviewing TEP project charter. Project risk management activity of the company
not only involves in identification of risks and develop risk responses but also implement and track
the risk responses.

36
Table 4.9 Identification of overall procurement need of the project

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 2 13.3 13.3 13.3
Disagree 1 6.7 6.7 20.0
Uncertain 2 13.3 13.3 33.3
Valid
Agree 6 40.0 40.0 73.3
Strongly Agree 4 26.7 26.7 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

Table 4.9 reveals that 13.3% strongly disagree, 6.7% disagree, 13.3% uncertain, 40% agree and
26.7% agree on the identification of overall procurement need for the project. According to
interview with the program contract mangers and project managers, at the end of procurement
planning issues such as whether to acquire, what to acquire, how to acquire, how much to acquire
and when to acquire is determined.

Table 4.10 Separate procedure followed for managing project procurement

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 6.7 6.7 6.7
Agree - - - -
Uncertain 2 13.3 13.3 20.0
Valid
Agree 5 33.3 33.3 53.3
Strongly Agree 7 46.7 46.7 100.0
Total 15 100.0 100.0
Source: Own Survey, 2018

From the above table 4.10, 6.7% strongly disagree, 13.3% uncertain, 33.3% agree and the
remaining 46.7% of the respondents strongly agree on the presences of separate procedure used
for managing project procurement in Ethio Telecom.

To triangulate the data the researcher review TEP project charter which includes separate project
procurement management section and develop its own governance such as TEP-Vendor's payment
process, TEP- supply chain management, TEP- vendor’s performance reporting process and TEP-
contract close out Process. The process documents includes inputs used, process steps, expected
output, owner of the process, process flow chart, activity table, supporting tools, systems and
documents.

37
Based on the data gathered using interview with the program contract managers, they confirmed
that the company follow separate procedure and process which is different from corporate sourcing
mainly on the nature of the contract, monitoring and controlling procedure, level of flexibility, and
on the number of participant for approval.

Table 4.11 Aggregate Mean and Standard Deviation for Project Procurement Planning Process

Items N Mean Std. Deviation

There is a separate procedure to be followed for managing
15 4.13 1.13
project procurement
Make-or-buy analysis is made before deciding to buy
15 3.80 0.94
from outside vendors
Expert judgment is used for planning 15 4.27 0.70
Market research is conducted. 15 3.93 1.34
There is consideration of past procurement documents for
15 4.00 1.19
making future decision
Activity resource and cost estimation is ensured 15 4.07 0.70
Associated risks and mitigation plan is identified while
15 3.40 1.24
planning procurement
Overall procurement need of the project is identified at
15 3.60 1.35
the end of planning.
Aggregate Mean and Standard Deviation 3.9 1.07
Source: Own Survey, 2018

As shown in table 4.11, the respondents overall mean regarding to the project procurement
planning scores 3.9 which implies project procurement planning practice were high. Individual
items mean also lied between 3.41 -4.2 which indicates most of respondents agree on the above
listed items.

The SD for presence of separate procedure, conduction of market research, consideration of past
project procurement document, identification of risk and mitigation plan, and identification of
overall need of the project lies between 1.13 and 1.35 in which the variables have highest SD
which indicates the individual response were a little over 1 point away from a mean. For the
remaining items the standard deviation is less than one and the individual response did not deviate
at all from the mean.

38
 4.2.2. Solicitation Planning

This part of the study discussed on the second step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from respondents
through questionnaire and semi structured interviews.

Table 4.12 Standardize procurement document to obtain bid/proposal from suppliers

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 2.2 2.2 2.2
Disagree 2 4.4 4.4 6.7
Valid Uncertain 4 8.9 8.9 15.6
Agree 10 22.2 22.2 37.8
Strongly Agree 28 62.2 62.2 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

Table 4.12, reveals more than half of the respondents (62.2%) strongly agree on the preparation of
standardize procurement document to obtain bid/proposal from suppliers. The remaining 2.2%
strongly disagree, 4.4% disagree, 8.9% uncertain and 22.2 agree on the issue.

The result is confirmed by Contract Management Program Managers on the preparation of

standardized procurement document called Request for Information (RFI) and Request for
Proposal (RFP) which is prepared by two committees called technical and commercial. The
technical committee is responsible to identify detailed requirements and description of the item,
mandatory requirement, optional requirement, specific features of the item, the solution it
provides, environmental effect the item has on use and mention if there is a need for certification
such as ISO. The financial committee is responsible to prepare but not limited to minimum
acceptable amount of unit price, and total cost of ownership.

First, there is preparation of Request for Information (RFI) which is used to obtain information
about product and services offered by potential suppliers for the purpose of preparing RFP which
is used to obtain response from suppliers.

39
Table 4.13 Accurateness, relevance and completeness of information obtained from
RFP&RFI documents

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 2.2 2.2 2.2
Disagree 1 2.2 2.2 4.4
Uncertain 6 13.3 13.3 17.8
Valid
Agree 18 40.0 40.0 57.8
Strongly Agree 19 42.2 42.2 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

According to respondents from the above table 4.13, 2.2% strongly disagree, 2.2% disagree, 13.3%
disagree, 40% agree and the remaining 42.2% strongly agree about the information gathered from
RFP & RFI documents helps to get accurate, relevant and complete information.

Data from interview reveals the justification for obtaining such information is due to the
involvement of experts from internal and external as well as involvement of concerned
stakeholders in preparation of procurement document. Besides, there is revision and approval of
the document by Steering Committee before communicated to suppliers. The steering committee
consists of members from different background such as project managers, project costing
managers, program managers, chief executive officers of Network, chief executive officers of
Information System, chief executive officers of Sourcing and Facility Divisions, TEP program
director and chief executive officer of the company. From this point, it can be concluded that the
prepared procurement documents helps to obtain accurate, relevant and complete information from
suppliers.

Table 4.14 Aggregate Mean and Standard Deviation for Solicitation Planning Process
Items N Mean Std. Deviation
Standardize procurement document is used to obtain
45 4.38 0.98
bid/proposal from vendors
The prepared document (RFP/RFI/IFB) helps to get
accurate, relevant and complete information from 45 4.18 0.91
vendors
Aggregate Mean and Standard Deviation 4.28 0.95
Source: Own Survey, 2018

40
As shown in table 4.14, the respondents overall mean regarding to the project procurement
planning scores 4.28 which implies solicitation planning process practice were very high.
Individual items mean also consists of 4.38 and 4.18 which indicates most of respondents strongly
agree on the above listed items. The SD for the above listed items on Table 4.14 contains 0.98 and
0.91 which is less than one which can be concluded that individual response did not deviate at all
from the mean score.

4.2.3. Solicitation

This part of the study discussed on the third step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from respondents
through questionnaire, semi structured interviews and relevant document review.

Table 4.15 Appropriateness of procurement documents way of communication

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 3 6.7 6.7 6.7
Disagree 2 4.4 4.4 11.1
Uncertain 3 6.7 6.7 17.8
Valid
Agree 17 37.8 37.8 55.6
Strongly Agree 20 44.4 44.4 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

The above table 4.15 depicts that 6.7% strongly disagree, 4.4% disagree, 6.7% uncertain, 37.8%
agree and the remaining 44.4% strongly agree about appropriateness of the way used to
communicate the prepared procurement documents for the target suppliers.

Data obtained from Contract Management Program Managers reveals that the prepared documents
were communicated for potential suppliers by any means available. The communication tools
includes online announcement via the company website, newspapers, television, radio and social
networks. The prepared procurement documents communicated especially by sending out for pre-
identified potential suppliers; for products and services which are available only on foreign market,
for wide range nature of product portfolio, for urgency need, for requirement of mass purchase and
when large investment required. From the above data, the way of communication used for
announcement of procurement document is valid.

41
Table 4.16 Arrangement of pre-proposal visits

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 5 11.1 11.1 11.1
Disagree 26 57.8 57.8 68.9
Valid Uncertain 4 8.9 8.9 77.8
Agree 5 11.1 11.1 88.9
Strongly Agree 5 11.1 11.1 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

From the above table 4.16, more than half of the respondents (57.8%) disagree on the arrangement
of pre-proposal visit. While the remaining 11.1% strongly disagree, 8.9% uncertain, 11.1% agree
and 11.1% also strongly agree. The interviewees also admits the company fail to conduct pre-
proposal market visits.

Table 4.17 Usage of bidders’ conference for answering prospective suppliers questions

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 5 11.1 11.1 11.1
Disagree 6 13.3 13.3 24.4
Uncertain 3 6.7 6.7 31.1
Valid
Agree 21 46.7 46.7 77.8
Strongly Agree 10 22.2 22.2 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

Table 4.17 depicts 11.1% strongly disagree, 13.3% disagree, 6.7% uncertain, 46.7% agree and the
remaining 22.2% of the respondents strongly agree on the use of bidders’ conference/pre-bid
meeting to give answer for the asked questions and doubts to all prospective sellers.

Data from Contract Management Program Managers interview also reveals the company use
bidders’ conference to provide clarification for project procurement bidders’. The bidders’ provide
their questionnaire in written format and the program contract management team members replies
such queries in written format by reading the queries without mentioning the name of the supplier
who asked the question but not about cost estimate of the project procurement. A full set of a
minutes of the conference sent to all bidders’ if they want within a reasonable time frame.

42
Table 4.18 Respond for questions and doubts raised by prospective suppliers individually

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 2.2 2.2 2.2
Disagree 2 4.4 4.4 6.7
Valid Uncertain 4 8.9 8.9 15.6
Agree 15 33.3 33.3 48.9
Strongly Agree 23 51.1 51.1 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

The above table 4.18 depicts more than half of the respondents (51.1%) strongly agree that the
company respond for questions and doubts raised by prospective sellers individually. The
remaining 2.2% strongly disagree, 4.4% disagree, 8.9% uncertain and 33.3% agree on the issue.

The interviewees also confirmed that for any individual help the bidders’ can contact the project
procurement team members via their cell phone and email while the team members are expected
to respond accordingly except some confidential information. The company also provide free
calling minute and unrestricted internet for its project procurement team members to encourage
them providing any needed help for bidders’ boldly.

Table 4.19 Aggregate Mean and Standard Deviation for Solicitation Process

Items N Mean Std. Deviation

Procurement documents such as RFP/RFI/IFB are announced
45 4.09 1.15
for targeted vendors using appropriate way of communication.
Pre-proposal visits is arranged. 45 2.53 1.179
The company use bidders’ conference/pre-bid meeting to give
answer for the asked questions and doubts to all prospective 45 3.56 1.289
sellers.
The company respond for questions and doubts raised by
45 4.27 .963
prospective sellers individually.
Aggregate Mean and Standard Deviation 3.61 1.144
Source: Own Survey, 2018

43
As shown in table 4.19, the respondents overall mean regarding to the solicitation process scores
3.61 which implies solicitation practice were high. Individual items mean also lied between 3.56 -
4.27 which indicates most of respondents agree on the above listed items except for pre-proposal
visit arrangement which scores mean of 2.53.

4.2.4. Source Selection

This part of the study discussed on the fourth step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from respondents
through questionnaire, semi structured interviews as well as by reviewing relevant documents.

Table 4.20 The presence of standardize pre-defined proposal evaluation criteria

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 2.2 2.2 2.2
Disagree 2 4.4 4.4 6.7
Uncertain 4 8.9 8.9 15.6
Valid
Agree 28 62.2 62.2 77.8
Strongly Agree 10 22.2 22.2 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

From the above table 4.20, out of the whole respondents more than half (62.2%) agree the presence
of standardize pre-defined proposal evaluation criteria. The remaining 2.2% strongly disagree,
4.4% disagree, 8.9% uncertain and 22.2% strongly disagree. The researcher has supported the
above responses by referring project management process document of the company.

In line with this, the referred documents states that the procurement evaluation criteria should be
defined at the planning stage of project procurement to ensure that the procurement meets the
project requirement. The process justify the need for evaluation criteria is that the suppliers can
then be evaluated against the predefined evaluation criteria.

44
Table 4.21 Preliminary screening used before making detail evaluation of proposal

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 5 11.1 11.1 11.1
Disagree 8 17.8 17.8 28.9
Uncertain 3 6.7 6.7 35.6
Valid
Agree 17 37.8 37.8 73.3
Strongly Agree 12 26.7 26.7 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

From the above table 4.21, 11.1% strongly disagree, 17.8% disagree, 6.7% uncertain, 37.8% agree
and 26.7% strongly agree about the company conduct preliminary screening before making detail
evaluation of proposal.

The interview made with Contract Management Program Managers also confirmed that the
company uses preliminary screening before making detail evaluation of the received proposal.
Screening is made by checking whether the received proposals from suppliers comply with
preliminary and eligibility requirements asked by the company. Mostly the requested information
includes licenses, certifications, financial report, and bid security.

Table 4.22 Cost and estimated delivery date are the main factors used for evaluating proposal

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 2 4.4 4.4 4.4
Disagree 1 2.2 2.2 6.7
Uncertain 3 6.7 6.7 13.3
Valid
Agree 8 17.8 17.8 31.1
Strongly Agree 31 68.9 68.9 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

Table 4.22 reveals that more than half of the respondents (68.9%) strongly agree on consideration
cost and estimated delivery data as main factor to evaluate bidders’ proposal since it is important
to consider the priorities of the project. The remaining 4.4% strongly disagree, 2.2% disagree,
6.7% uncertain and 17.8% agree on the issue.

The interview conducted also confirmed the company give priority consideration for those
suppliers that considered the project time schedule and budget in there proposal provision.

45
According to Dvir et.al (2003) meeting schedule and budget goals are the major success measures
of project which is also repeatedly said by Contract Management Program Managers of the
company during interview.

Cost and estimated delivery date are considered under commercial evaluation of the proposal.
There is consideration of two types of cost in the case of TEP named total cost of ownership and
life span cost. Total cost of ownership comprises the following but not limited to; base price,
payment cost, price variation factors, packaging charges, maintenance cost, spare parts cost and
recurring cost. The life span cost computes cost of the purchased item for the next five years which
is beyond the schedule of the TEP. Such financial feature of the procurement were applicable
especially for foreign purchased items and such feature distinguish it from corporate procurement
of the company.

Table 4.23 Consideration of other factors for selecting suppliers’ proposal

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 2 4.4 4.4 4.4
Disagree 2 4.4 4.4 8.9
Financial Uncertain 4 8.9 8.9 17.8
Stability Agree 17 37.8 37.8 55.6
Strongly Agree 20 44.4 44.4 100.0
Total 45 100.0 100.0
Frequency Percent Valid Percent Cumulative Percent
Strongly Disagree 1 2.2 2.2 2.2
Disagree 2 4.4 4.4 6.7
Technical Uncertain 3 6.7 6.7 13.3
Requirement Agree 17 37.8 37.8 51.1
Strongly Agree 22 48.9 48.9 100.0
Total 45 100.0 100.0
Frequency Percent Valid Percent Cumulative Percent
Strongly Disagree 8 17.8 17.8 17.8
Disagree 19 42.2 42.2 60.0
Risk Uncertain 3 6.7 6.7 66.7
Management Agree 8 17.8 17.8 84.4
Issue
Strongly Agree 7 15.6 15.6 100.0
Total 45 100.0 100.0

46
 Frequency Percent Valid Percent Cumulative Percent
Strongly Disagree 2 4.4 4.4 4.4
Disagree 3 6.7 6.7 11.1
Past Uncertain 1 2.2 2.2 13.3
Experience Agree 12 26.7 26.7 40.0
Strongly Agree 27 60.0 60.0 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

The above table 4.23 reveals consideration of financial stability, technical requirement, risk
management issue and past experience to evaluate and select among suppliers’.

From the table, 4.4% strongly disagree, 4.4% disagree, 8.9% uncertain, 37.8% agree and the
remaining 44.4% strongly agree about consideration of financial stability while selecting among
suppliers’. To triangulate the data, interview conducted with the Contract Management Program
Managers reveals that the company most importantly give prior consideration on the financial
stability aspect of the suppliers in order to maintain confidence on their financial system and make
sure they are cable of honoring the contract. Suppliers’ financial report, monetary stability, and
operation with their respective financial institution are also considered.

Especially foreign suppliers are expected to provide the required product and services on credit
with convenience means of reimbursement, interest rate and grace period. Suppliers with less
capacity to provide credit purchase were disqualified and not able to go through further evaluation
process. Some suppliers that have capacity to provide credit are also disqualified because they ask
change in some country wide policy than dealing with what the company can do. Shortage of
foreign currency at country wide is the justification behind for consideration of credit purchase.

Table 4.23 also reveals that 2.2% strongly disagree, 4.4% disagree, 6.7% uncertain, 37.8% agree
and the remaining 48.9% strongly agree about consideration of technical requirement for
evaluating and selecting among suppliers proposal. Interview with Contract Management Program
Managers also confirmed that consideration of technical requirements. Evaluation panel held to
conduct technical evaluation while expertise from Network PRO and Information Transition
Sections meet to check out the received proposals considered the predetermined requirements.

47
Table 4.23 also depicts that, 17.8% strongly disagree, 42.2% disagree, 6.7% uncertain, 17.8%
agree and the remaining 15.6% strongly agree about consideration of risk management issue for
selecting among proposals. The results shows that the company is not considering the risk
management process of suppliers. Contract Management Program Managers also illustrates that
suppliers are not requested to provide their risk management process.

From table 4.23, more than half of the respondents (60%) strongly agree that the company
considered past experience of suppliers for selecting among the received proposals. The remaining
4.4% strongly disagree, 6.7% disagree, 2.2% uncertain and 26.7% agree of the issue. To triangulate
the result, the conducted interview also reveals that suppliers expected to bring recommendation
letter from different international telecom operators to consider their past performance and
reputation. There is reference of past performance document for suppliers which are previously
work with the company.

Interview with Contract Management Program Managers reveals that the evaluation report needs
to be approved and signed by the delegated committee members to precede for negotiation. Then
negotiation panel held with selected bidders to reach on mutual agreement which later became part
of the contract and bidders for the contract selected as per the negotiation result. The company
follow multiple contract award for project procurement in order to minimize possible risks.

Table 4.24 Consideration of future requirement change in procurement contract

Frequency Percent Valid Percent Cumulative Percent
Strongly Disagree 4 8.9 8.9 8.9
Disagree 9 20.0 20.0 28.9
Valid Uncertain 2 4.4 4.4 33.3
Agree 14 31.1 31.1 64.4
Strongly Agree 16 35.6 35.6 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

The above table 4.24 reveals that 8.9% strongly disagree, 20% disagree, 4.4% uncertain, 31.1%
agree and the remaining 35.6% strongly agree on raised issue. Most of the respondents agree that
the terms and conditions of the contract are open to consider future requirement change.

48
Change is inevitable; therefore requires some type of change management plan as mandatory for every
project (PMBOK, 2013). Since this is the case it is important for the terms and conditions of the contract
to consider future possible change management and open for amendment.

Table 4.25 Aggregate Mean and Standard Deviation for Source Selection

Items N Mean Std. Deviation

There is standardize pre-defined proposal evaluation
45 3.98 0.84
criteria.
Preliminary screening is used before making detail
45 3.51 1.36
evaluation of proposal.
Cost, estimated delivery date and performance are the
main factors used for selecting project procurement 45 4.44 1.04
proposal.
Consideration of Financial Stability 45 4.13 1.06
Consideration of Technical Requirement 45 4.27 0.94
Consideration of Risk Management Issue 45 2.71 1.38
Consideration of Past Experience 45 4.31 1.10
The terms and conditions of the contract are open to
45 3.64 1.38
consider future requirement change
Aggregate Mean and Standard Deviation 3.87 1.14
Source: Own Survey, 2018

As shown in table 4.25, the respondents overall mean regarding to the Source selection scores 3.87
which implies source selection practice were high. Individual items mean also lied between 3.51 -
4.44 which indicates most of respondents agree on the above listed items except for consideration
of risk management issue to evaluate suppliers documents since it scores mean of 2.71.

The SD for presence of standardize pre-defined proposal evaluation criteria, and consideration of
technical requirement scores less than 1which implies individual response did not deviate at all
from the mean. But for the remaining listed items on table 4.25, SD lies between 1.04 and 1.38
which indicates the individual response were a little over 1 point away from a mean.

49
 4.2.5. Contract Administration

This part of the study discussed on the fifth step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from respondents
through questionnaire, semi structured interviews as well as by reviewing relevant documents.

Table 4.26 Monitoring and controlling of suppliers performance

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 2 4.4 4.4 4.4
Disagree 7 15.6 15.6 20.0
Uncertain 2 4.4 4.4 24.4
Valid
Agree 12 26.7 26.7 51.1
Strongly Agree 22 48.9 48.9 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

Table 4.26 reveals that, 4.4% strongly disagree, 15.6% disagree, 4.4% uncertain, 26.7% agree and
48.9% agree that the company monitor and control if suppliers performance meets project
procurement requirements according to terms of the contract.

The Contract Management Program Managers also confirms that the company tracks and ensures
the delivery of the product and services as per the contract using supporting documents such as
goods shipment letter, inspection letter, goods arrival note, surveyor report, and test report.

According to the company TEP-supply chain management process, procured products are required
to arrive at central or regional warehouse of the company for inspection. Expertise from Network
Division and/or Information System Division of the company inspect the product and the
warehouse team prepare inspection report for TEP contract management team members. The
interviewed managers also confirms that for products which directly arrive at project sites are not
subject to inspection by expertise and suppliers are not questioned if any defect is found.

The interviewed managers reveals that contract related to service procurement monitored and
controlled using release of payment when suppliers complete the agreed upon phase of the project
by getting the signature of the project managers.

50
Communication plan section of TEP project charter states project status meeting shall be made
once in a week among its program mangers’, director, chief executive officers’, and project
managers to discuss on the progress of the project as a whole. According to the Contract
Management Program Managers and project managers, weekly meeting with foreign suppliers
held to discuss on the progress of the signed contract.

Table 4.27 Suppliers’ performance status gathered from concerned stakeholders

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 12 26.7 26.7 26.7
Disagree 13 28.9 28.9 55.6
Uncertain 3 6.7 6.7 62.2
Valid
Agree 6 13.3 13.3 75.6
Strongly Agree 11 24.4 24.4 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

Table 4.27 reveals that most of the respondents strongly disagree and disagree that suppliers’
performance status is gathered from stakeholders such as project managers and project team
members. The data depicts 26.7% strongly disagree, 28.9% disagree, 6.7% uncertain, 13.3% agree
and the remaining 24.4% strongly agree on the raised issue.

Interview conducted with project managers also confirmed that the company did not ask for
feedback and recommendation about the performance of suppliers. They recommend if project
procurement team ask their feedback on issues such as cooperative nature of service suppliers,
quality of item, durability, and if training is required or not on usage of the purchased product and
services. According to Kerzner (2009), it is important to gather performance status from different
appropriate stakeholders of the project.

Table 4.28 Presence of formal procedure to accept/reject project requirement change

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 9 20.0 20.0 20.0
Disagree 7 15.6 15.6 35.6
Uncertain 2 4.4 4.4 40.0
Valid
Agree 14 31.1 31.1 71.1
Strongly Agree 13 28.9 28.9 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

51
The above table 4.28 reveals 20% strongly disagree, 15.6% disagree, 4.4% uncertain, 31.1% agree
and 28.9% strongly agree on the issue of presence of formal procedure to accept/reject project
requirement change. Most of the respondents agree that the company follow formal procedure to
accept/reject project requirement change.

Interview conducted with project managers and Contract Management Program Managers
confirmed that the company prepared formal procedure for accepting or rejecting project
requirement change by mentioning who initiate the request, valid template for request, who
approves and whom participate in the process. They confirmed that minor change in the scope of
procurement that do not impact the overall quality, time, cost and related terms of the contract is
not acceptable for amending the whole contract.

Table 4.29 Aggregate Mean and Standard Deviation for Contract Administration
Items N Mean Std. Deviation
The company monitor and control that vendors
performance meets project procurement requirements 45 4.00 1.26
according to terms of the contract
Vendors’ performance status is gathered from stakeholders
45 2.80 1.58
such as project managers and project team members
The company follow formal procedure to accept/reject
45 3.33 1.54
project requirement change.
Aggregate Mean and Standard Deviation 3.376 1.46
Source: Own Survey, 2018

As shown in table 4.29, the respondents overall mean regarding to the contract administration
scores 3.38 which implies contract administration practice were high. Individual items mean also
includes 4.00 and 3.33 which indicates most of respondents agree on the above listed items except
for performance status gathered from the concerned stakeholder since it scores mean of 2.80. The
SD for the above listed items lies between 1.26 and 1.58 which indicates the individual response
were a little over 1 point away from a mean.

4.2.6. Contract Closeout

This part of the study discussed on the last step of the project procurement management. The
analysis has been conducted and presented depending on the responses collected from respondents
through questionnaire, and semi structured interviews.

52
Table 4.30 Identification of contract closeout activities

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 2 4.4 4.4 4.4
Disagree 3 6.7 6.7 11.1
Uncertain 2 4.4 4.4 15.6
Valid
Agree 11 24.4 24.4 40.0
Strongly Agree 27 60.0 60.0 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

From table 4.30, more than half of the respondents (60%) strongly agree on contract closeout
activities are clearly identified. The remaining 4.4% strongly disagree, 6.7% disagree, 4.4%
uncertain and 24.4% agree.

According to the interviewed Contract Management Program Managers, there is identification of

major activities to consider for closing contract. There is documentation of major issues and
pending issues tracker to consider whether to close the contract or not. The company provide
acceptance letter for suppliers if list of activities on major issues are completed and ongoing follow
up effort made on activities that are listed in pending issue tracker. Suppliers are also obliged to
handover warranty documentation including expiration date.

Table 4.31 Lesson learned documentation

Frequency Percent Valid Percent Cumulative Percent

Strongly Disagree 1 2.2 2.2 2.2
Disagree 3 6.7 6.7 8.9
Uncertain 1 2.2 2.2 11.1
Valid
Agree 7 15.6 15.6 26.7
Strongly Agree 33 73.3 73.3 100.0
Total 45 100.0 100.0
Source: Own Survey, 2018

From table 4.31, more than half of the respondents (73.3%) strongly agree on the presence of
lesson learned documentation. The remaining 2.2% strongly disagree, 6.7% disagree, 2.2%
uncertain and 15.6% agree on the issue.

According to data collected from interviewees reveals that there is documentation of lesson leaned
after each projects are completed and compiled centrally for program report at large. The identified

53
problems, risks identified, solutions undertaken, threats and opportunities are documented and
supported by pictures and videos.

Table 4.32 Aggregate Mean and Standard Deviation for Contract Closeout

Items N Mean Std. Deviation

The identified problems, solution undertaken, threats
and opportunities during the overall procurement 45 4.29 1.12
process is documented.
There is lesson learned documentation. 45 4.51 0.99
Aggregate Mean and Standard Deviation 4.4 1.06
Source: Own Survey, 2018

As shown in table 4.29, the respondents overall mean regarding to the contract closeout scores 4.4
which implies contract closeout practice were very high. Individual items mean also includes 4.29
and 4.51 which indicates most of respondents strongly agree on the above listed.

54
CHAPTER FIVE: SUMMARY, CONCLUSIONS & RECOMMENDATIONS

Introduction

This study aims to assess project procurement practice of Ethio Telecom. To accomplish the
objectives of the research, the researcher applied descriptive approach and both quantitative and
qualitative data were collected through questionnaire, semi structured interview and document
review. Thus, this section reports the summary of findings, conclusions and recommendations of
the study

5.1. Summary of Findings

The sampling technique used was purposive. 60 questionnaires were prepared and distributed for
60 samples, out of which 15 samples fill out for questionnaire related to planning procurement
process of the study area. The remaining 45 respondents fill out for the rest of the project
procurement process. All participants’ responses for closed ended questions. To triangulate the
findings, interview was conducted with 5 project managers and 4 Contract Management Program
Managers. The data gathered through semi structured interviews were compiled and well
maintained with the data gathered with questionnaire. Thus, findings retrieved from the data
presented in this section are:

 More than half of the respondents (70%) reveals that they do not take any training related
project management provided by the company on table 4.2. The table also reveals 85% of
the respondents do not take any training related to project procurement management
provided by the company.
 Majority of the respondents agree that Ethio Telecom considered make-or-buy analysis,
expert judgment, and market research as tools and techniques for planning project
procurement.
 Respondents from table 4.6 reveals 53.3% strongly agree and 6.7% agree on consideration
of past project procurement documents Ethio Telecom. Interviewees (Contract
Management Program Managers) also confirms such reference helps to identify possible
threats, and opportunities as well as learn from past mistakes for making better decision.

55
 From table 4.7, most of the respondents agreed on the issue of consideration activity
resource and cost estimation while planning procurement process to identify what to
acquire at what cost.
 Most of questionnaire respondents and interviewees with Contract Management Program
Managers agreed that Ethio Telecom identify associated risks and prepare mitigation plan
while planning its project procurement.
 Most of questionnaire respondents and interviewees also agreed that overall need of the
project are identified after planning procurement process. The data is confirmed by
referring Ethio Telecom project management process which states whether to acquire, what
to acquire, how to acquire, how much to acquire and when to acquire should be determined
after planning project procurement management.
 Ethio Telecom follows separated procedure for managing its project procurement from its
corporate procurement. The data has confirmed by the agreement of most of the
respondents and by reviewing process documents only used for project procurement
practice.
 Most of the respondents (62.2%) from table 4.14 strongly agree that Ethio Telecom prepare
standardize procurement document such as RFI and RFP to obtain bid/proposal from
suppliers. Most of the respondents also agree that prepared procurement documents helps
to get accurate, relevant and complete response from prospective suppliers. Interviewees
(Contract Management Program Managers) reported the company able to collect such
information because of participation of concerned stakeholders, involvement of expertise
within and outside the company, and approved by a committee before the documents are
released.
 Table 4.15 reveals most of the respondents agreed on the appropriateness of the way of
communication used to communicate the prepared procurement document. According to
the interviewees (Contract Management Program Managers) the communication tools
includes online announcement, newspapers, television, radio, social networks and sending
out for prospective suppliers.
 From table 4.16, more than half of the respondents (57.8%) disagree and 11.1% strongly
disagree on arrangement of pre-proposal visit by Ethio Telecom.

56
 Most of the respondents from table 4.17 and table 4.18 agreed on the usage of bidders’
conference, and respond individually for questions and doubts raised by prospective
suppliers.
 Ethio Telecom uses standardized pre-defined proposal evaluation criteria for evaluating
the received proposals from suppliers. More than half of the respondents (62.2%) from
table 4.20 agree and the company project management process also support the raised issue.
 Ethio Telecom conduct preliminary screening before making detail evaluation of the
received procurement proposals documents from prospective suppliers. The idea is
supported by interviewees (Contract Management Program Managers) and by most of the
respondents from table 4.21.
 From table 4.22, more than half of the respondents (68.9%) strongly agree on the usage of
cost and estimated delivery date as major factors for evaluating bidders’ proposal. Table
4.23, reveals the company also consider financial stability, technical requirement and past
experience of suppliers to evaluate suppliers’ proposal. But it fails to consider risk
management process of suppliers. The data is confirmed by 42.2% disagreement and 17.8%
strongly disagree with the idea of risk management issue consideration for evaluating the
received proposals.
 Most of the respondents agree that the terms and conditions of the contract are open to
consider future requirement change. The data is confirmed by most of the respondents from
table 4.24 in which 31.1% of them agree and 35.6% of them strongly agree with the idea.
 Most of the respondents from table 4.26, agreed with the idea of monitoring and controlling
of suppliers performance by Ethio Telecom. The company hire inspectors, uses reporting
templates, preparing follow up process documents, held project status meeting and make
payment based on completion of the agreed upon phase of the project as monitoring and
controlling tools. Interviewee Contract Management Program Managers reveals for
products arrived directly at project sites are not subject to inspection by expertise and
suppliers are not questioned if any defect is found.
 Most of the respondents from table 4.27 reveals that the company failed to collect
suppliers’ performance report from the concerned stakeholders such as project managers
and project team members. The result is supported by conducting interview with project
managers.

57
  Most of questionnaire respondents and interviewees reveals the company uses formal
procedure to accept or reject project requirement change. The interviewees (Contract
Management Program Managers) depicts the company determine who initiate the request,
prepare valid template for request, mentions who approves the requested change and whom
participate in the process.
 From table 4.31, more than half of the respondents (60%) strongly agree that the company
identifies major activities which need to be considered for closing a contract. 73.3% of the
respondents from table 4.32 also strongly agree on the idea that the company uses lesson
learned documentation while closing contract.

5.2. Conclusions

This research aimed at assessing project procurement practice of the company which is composed
of six processes identified by reviewing related literature of the study area. Data obtained from
analysis and major findings of the research are concluded here below.

Ethio Telecom fail to provide formal training related to project and project procurement
management. The company considers make-or-buy analysis, expert judgment, market research,
past project procurement documents, and activity and cost estimation for planning project
procurement. At the end of planning procurement; associated risks and mitigation plan as well as
overall procurement need of the project are identified. The company also follows separate project
procurement procedure.

Ethio Telecom prepares standardize procurement document to obtain bid/proposal from suppliers.
The prepared documents help the company to get accurate, relevant and complete response. It also
uses appropriate means of communication to announce its procurement documents for its
prospective suppliers. It prepares bidders’ conference and individually approaches its suppliers to
answer and clarify their questions and doubts. But the company fails to arrange pre-proposal visit.

The company uses pre-defined proposal evaluation criteria and prefers to conduct preliminary
screening before making detail evaluation the received proposals. Cost and estimated delivery
dates are the major factors used for evaluation proposals. The company also considers financial

58
stability, technical requirement and past experience of suppliers for evaluation. But it fails to
consider suppliers risk management issue.

Contract is signed between Ethio Telecom and its selected suppliers after reaching an agreement
by preparing negotiation panel. The terms and conditions of the contract are open consider future
possible requirement change. The company monitor and control that suppliers’ performance meets
project procurement requirements according to terms of the contract using different methods, any
project requirement change is welcomed or rejected by following formal procedure. But the
company failed to gather suppliers’ performance status from main stakeholders such as project
managers and project team members. Besides there is week monitoring and controlling of products
which are directly arrived at project site. The company clearly identifies contract closeout activities
and prepare lesson learned document for its future reference.

5.3. Recommendations

The practice of project procurement management in Ethio Telecom shows a deviation with that of
theoretical aspect of the knowledge area. On which the company should recognize and give greater
emphasis to the identified gaps and ensure the effective management of its project procurement
practice. Thus, the researcher provides the following recommendations pinpointing focal points
that would be helpful to the company project procurement management in fruitful directions.

 The company should provide adequate training on project and project procurement
management area for project team members since it increases their knowledge and skill.
The training also help them for better understanding of the three constraints of project while
they make decision.
 The company should arrange pre-proposal visit especially for its large procurement
decisions in order to view the capability of the market site, production factory, and
technical and managerial capability of pre-identified potential suppliers.
 The finding of the study reveals the company is financially dependent on its suppliers for
procuring foreign products and services, and more emphasis is given on financial aspect of
suppliers for evaluating and selecting among them. The researcher recommends the
company not to neglect and consider their risk management practice as well as check how
they redistribute in satisfactory manner.

59
 The company should gather performance status report from the concerned stakeholders
about the following information but not limited to; the quality of the received products and
services, on time delivery of resources, and if training is needed. This will help to take
early appropriate measures for the identified gaps before things getting worse.
 The finding of the study reveals Ethio Telecom uses tight monitoring and controlling
system for products arrived at regional and central warehouse but fail for products arrived
directly at project site. Following this, the researcher recommends the company should
develop tight monitoring and controlling system on those products directly arrived at
project site.

60
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APPENDIX

64
 Addis Ababa University College of Business and Economics
School of Commerce Masters of Art in Project Management

Dear Respondents:

My name is Kidist Dagnachew, I am a graduating class student of Masters Program in Project

Management at Addis Ababa University School of Commerce. As part of the Masters program
now I am conducting a project work entitled Assessment of Project Procurement Management
Practice in Ethio Telecom.

I kindly request you to participate in this research study by completing the attached questionnaire.
In order to ensure that all information will remain confidential please do not include your name
anywhere in the questionnaire. I also sincerely request you to respond to the questions as honestly
as possible and return the completed questionnaires.

In case of any question or dilemma please contact me via ―kidistdagnachew55@gmail.com

Thank you for your cooperation!

65
Part I: General Information

1. Your age ………………...

2. Level of education

Diploma Postgraduates

Degree Other, please specify

3. Year of work experience…………………………….

4. Your current work position
Manager
Supervisor
Expert
Specialist
Administrator Other, please specify…………………………
5. For how many years have you worked on issues related with project procurement? ................

Part II: This section is to find out your opinion about the project procurement practice at
Ethio Telecom. Please circle your answer for multiple choice questions and indicate your
opinion by putting (√) on the appropriate number for the five point scale questions where:
Strongly Disagree=1, Disagree=2, Uncertain=3, Agree=4, and Strongly Agree=5

1. Did you take any training related to project management provided by your company?
A) Yes B) No
2. Did you take any training related to project procurement management provided by your
company?
A) Yes B) No

66
Procurement Planning

No. Question 1 2 3 4 5

1 Make-or-buy analysis is made before

deciding to buy from outside vendors.
2 Expert judgment is used for planning.
3 Market research is conducted.
4 There is consideration of past
procurement documents for making
future decision.
5 Activity resource and cost estimation is
considered while planning.
6 Associated risks and mitigation plan is
identified while planning procurement.
7 Overall procurement need of the
project is identified at the end of
planning.
8 There is a separate procedure to be
followed for managing project
procurement.

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 Addis Ababa University College of Business and Economics
School of Commerce Masters of Art in Project Management

Dear Respondents:

My name is Kidist Dagnachew, I am a graduating class student of Masters Program in Project

Management at Addis Ababa University School of Commerce. As part of the Masters program
now I am conducting a project work entitled Assessment of Project Procurement Management
Practice in Ethio Telecom.

I kindly request you to participate in this research study by completing the attached questionnaire.
In order to ensure that all information will remain confidential please do not include your name
anywhere in the questionnaire. I also sincerely request you to respond to the questions as honestly
as possible and return the completed questionnaires.

In case of any question or dilemma please contact me via ―kidistdagnachew55@gmail.com

Thank you for your cooperation!

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Part I: General Information

6. Your age ………………...

7. Level of education

Diploma Postgraduates

Degree Other, please specify

8. Year of work experience…………………………….

9. Your current work position
Manager
Supervisor
Expert
Specialist
Administrator Other, please specify…………………………
10. For how many years have you worked on issues related with project procurement? ................

Part II: This section is to find out your opinion about the project procurement practice at
Ethio Telecom. Please circle your answer for multiple choice questions and indicate your
opinion by putting (√) on the appropriate number for the five point scale questions where:
Strongly Disagree=1, Disagree=2, Uncertain=3, Agree=4, and Strongly Agree=5

3. Did you take any training related to project management provided by your company?
B) Yes B) No
4. Did you take any training related to project procurement management provided by your
company?
B) Yes B) No

Solicitation Planning
No. Question 1 2 3 4 5
1 Standardize procurement document is
used to obtain bid/proposal from
Suppliers.

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2 The prepared document (RFP&RFI)
helps to get accurate, relevant and
complete information from suppliers.

Solicitation

No. Question 1 2 3 4 5

3 Procurement documents such as

RFP/RFI/IFB are announced for
targeted vendors using appropriate way
of communication.
4 Pre-proposal visits is arranged.
5 The company use bidders’
conference/pre-bid meeting to give
answer for the asked questions and
doubts to all prospective suppliers.
6 The company respond for questions and
doubts raised by prospective sellers
individually.

Source Selection

No. Question 1 2 3 4 5
7 There is standardize pre-defined
proposal evaluation criteria.
8 Preliminary screening is used before
making detail evaluation of proposal.
9 Cost and estimated delivery date are the
main factors used for evaluating project
procurement proposal.
10 The following points are considered for
selecting suppliers proposal;

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  Financial stability
 Technical requirement
 Risk management issue
 Past experience
11 The terms and conditions of the contract
are open to consider future requirement
change (the contract is open for
amendment).

Contract Administration

No. Question 1 2 3 4 5
12 The company monitor and control that
suppliers’ performance meets project
procurement requirements according to
terms of the contract.
13 Suppliers’ performance status is
gathered from stakeholders such as
project managers and project team
members.
14 The company follow formal procedure
to accept/reject project requirement
change.

Contract Closeout

No. Question 1 2 3 4 5
15 Contract closeout activities are clearly
identified.
16 There is lesson learned documentation.

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INTERVIEW GUIDE FOR PROJECT MANGERS

Dear Interviewee,

First of all I would like to thank you for your willingness to respond to my questions. My name is
Kidist Dagnachew, I am a Masters of Art student in Project Management at Addis Ababa
University School of Commerce. As part of my MA project work, I am studying Assessment of
Project Procurement Management Practice in Ethio Telecom. This interview is made so as to
have more in depth on the matter under study.

Thus, I kindly request you to answer all the questions assuring you that all responses will be used
only as an input for this study.

1. Did you believe that the project procurement planning is made with the integration of
appropriate stakeholders?
2. Did you believe the project procurement process consider the three pillars of project: cost,
schedule and quality?
3. Would you list if you face any procurement related problems which have an effect on the
performance of the project?
4. Does the project procurement department request you about the current performance status of
vendors?
5. On project status meeting, does the issue of project procurement raised?
6. Does justifiable project requirement change welcomed?

72
INTERVIEW GUIDE FOR CONTRACT MANAGEMENT PROGRAM MANAGERS

Dear Interviewee,

First of all I would like to thank you for your willingness to respond to my questions. My name is
Kidist Dagnachew, I am a Masters of Art student in Project Management at Addis Ababa
University School of Commerce. As part of my MA project work, I am studying Assessment of
Project Procurement Management Practice in Ethio Telecom. This interview is made so as to
have more in depth on the matter under study.

Thus, I kindly request you to answer all the questions assuring you that all responses will be used
only as an input for this study.

1. Is there separate documented procedure for project procurement?

2. Is there a systematic process to identify project procurement requirement?
3. What are the major outputs of procurement plan?
4. How did the company announce procurement document such as RFI/RFP/IFB to the
perspective vendors?
5. What are the situations that led to no/single and/or multiple contract awards?
6. What are the major factors used to evaluate vendors’ proposal for project procurement?
7. What kind of mechanism used to monitor and control the performance of vendors?
8. Is there a documented and well understood project procurement change management plan
clearly defining what go through the change management process, who brings the change
request forward, how change requests are documented, who is involved in decision making
and who approves changes?
9. When is to say the contract is close out?
10. Is there referencing system for past procurement files?
11. Is there any related training provided for staff members participated in project procurement?

73