The Role of Procurement Act 2015 In The Buyer- Supplier Relationships And The Performance of Milk Processing Firms: A Case of Nairobi County, Kenya

Abstract

It is widely acknowledged that Kenya has made steady advances in the administration of public procurement and supply chain processes over the last 15 years. The procurement Act 2015 ensures that it takes a much shorter time to undertake procurement from start to finish provides for greater professional responsibility and accountability thus ensuring procurement outcomes are sound and follow due process. This therefore integrates procurement and supply chain professionals and firms’ key suppliers in the decision-making process. The purpose of the study was to determine the role of procurement Act 2015 in the buyer-supplier relationships and the performance of milk processing firms in Nairobi County. The specific objectives which the study focused on were; to determine the effect of quality dependability, to assess the effect of information sharing, to ascertain the effects of cost control, to determine the effect of reliability of services on the performance of milk processing firms and finally to determine the moderating role of procurement Act 2015 on the buyer-supplier relationships and performance of milk processing firms. The study was guided by Transaction cost, commitment-trust and social exchange theories. The explanatory research design was used which involved 8 large-scale milk processing firms operating in Nairobi County. A target population was 2312 staff drawn from the 8 milk processing firms within Nairobi County. The sample size generated was 375 after adjustment for possible non-responses. The study adopted stratified random sampling and proportionate sampling designs. Pilot study was carried out on 38 employees of New KCC milk processing firm in Kitale, Trans Nzoia County. Data was collected using closed ended questionnaires that were in the form of Likert scale. Validity was examined by getting the opinion of the supervisor an expert in procurement. To test the reliability of the instruments of data collection, the Cronbach alpha test was employed. Data collected was sorted, coded, edited and then analysed using descriptive statistics which involved constructing tables of means, measures of dispersion such as standard deviation, regression analysis was done using SPSS version 25. The findings indicated that there was a significant role of procurement Act 2015 in the buyer-supplier relationships and the performance of milk processing firms. The study concluded that quality dependability perfectly contributed to firms’ performance. On information sharing, the study concluded that information sharing was critical to firms’ performance. In addition, there was a significant contribution of cost control and reliability of services on firm performance. On the procurement Act 2015 it was concluded that that it played a moderating role between buyer-supplier relationships and firm performance of milk processing firms. Thus, it is recommended that Milk processing firms should share their production skills in determining quality with their key suppliers and also embrace timeliness in order to improve performance through buyer supplier relationships.