Abstract
Background: The aim of public procurement is to ensure that procurement and service delivery processes are carried out efficiently in a manner that is fair, equitable, transparent, competitive and cost-effective. The authors have identified barriers to efficiency in public procurement processes at Steve Tshwete Local Municipality (STLM) in Mpumalanga province, South Africa, by performing the analysis of variables such as the level of technical and managerial skills, years of experience, competencies of fellow employees and line function managers, legal frameworks, institutional culture, ability to use appropriate information technology (ICT) procedures.
Objectives: The objective of the study was to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM.
Method: The study was performed by using quantitative methods of data. Data were gathered and analysed, including the exploratory factor analysis (EFA). The exploratory factor analysis was used to identify underlying dimensions affecting procurement service quality.
Results: The results showed that the level of performance of 133 of the 147 employees who were chosen for the study (90.48%) was adequate by the standards, whereas the level of performance of 14 of the 147 employees who were chosen for the study (9.52%) was inadequate by the same standards.
Conclusion: The study found that the quality of procurement services performed by employees of the municipality was undermined by three critical factors.
Contribution: These three factors were knowledge of the market conditions, knowledge of service delivery requirements and ability to assess and verify the credentials of the suppliers.
Keywords: Steve Tshwete Local Municipality; public procurement services; service quality; supply chain management; efficiency.
Introduction
Background
The study was conducted to identify and quantify factors that undermine efficiency and quality in procurement services that are provided at Steve Tshwete Local Municipality (STLM) in Mpumalanga province, South Africa. A review of the literature shows that the quality and efficiency of procurement services are undermined by lack of good leadership, lack of accountability and failure to follow guidelines stipulated in legislated Acts (Uys & Uys 2022). The first such legislated Act is the Public Finance Management Act (PFMA), which is also known as Act No. 1 of 1999 (National Treasury 1999). The second legislated Act is the Municipal Finance Management Act (MFMA), which is also known as Act No. 32 of 2003 (Republic of South Africa 2003). The third legislated Act is the Preferential Procurement Policy Framework Act (PPPFA), which is also known as Act No. 5 of 2000 (Republic of South Africa 2000). The main purpose of these three Acts is to ensure the optimal utilisation of municipal finances by using highly competitive procurement services based on verifiable credentials and merits.
In addition to having to comply with the PFMA, MFMA and PPFA, public sector procurement employees and their stakeholders are also required to follow guidelines stipulated by the South African National Treasury (2022) and the South African Local Government Association (2024), in which various public finance and fiscal discipline issues are stated with detailed clarification. Annecke and Wolpe (2022), Uys and Uys (2022) and Thabang (2022) and Hosoi (2023) have pointed out that in the public sector, several procurement services adjudicated in STLM have not been administered and managed in accordance with the guidelines set out for such tasks. Annecke and Wolpe (2022) stated that the main reasons are a lack of understanding of public sector procurement, auditing, accounting and reporting processes; a lack of specialised skills in auditing, bookkeeping, accounting and financial reporting; a lack of managerial skills; reluctance to involve stakeholders in the assessment and evaluation of public procurement processes and poor leadership at municipal level.
This study aims to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM.
Literature review
An overview of procurement services in the public sector
A preference system was introduced in 1995 as part of the procurement reforms in the South African government focusing on promoting good governance and addressing socioeconomic goals. A number of legislations were introduced to support the procurement reform process, including the National Treasury Instruction No. 1 of 2024–2025.
In accordance with Section 217 of the Constitution of the Republic of South Africa (South African Department of Justice 1996), the PPPFA endorses the implementation of a procurement strategy that provides priority to contracts and avoids unfair discrimination. Preferential Procurement Policy Framework Act stipulates that the Reconstruction Development Programme (RDP) objectives, functionality and pricing must all be taken into account when the government evaluates contracts. To advance the objectives of the Broad-Based Black Economic Empowerment Act ([B-BBEE] Act No. 53 of 2003) and its strategy, the Department of Trade and Industry (DTI) and the National Treasury amended the PPPFA following the approval of the B-BBEE Codes of Good Practice in 2006, as the two legislations were not aligned. As a result of alignment, the Preferential Procurement Regulations (PPR) were amended in the 2024 National Treasury Annual Report (RSA 2024). According to Mnguni and Subban (2022), poor contract management, uncompetitive or unfair procurement processes and awarding of tenders or contracts to employees in the service of the state. The authors posit that there is a need for a fair, equitable, transparent, competitive and cost-effective procurement system in South Africa.
In addition to the procurement reform processes discussed above, a number of legislative measures were introduced to support the procurement reform process. Therefore, MFMA and PPPFA were adopted in support of the procurement reform process (RSA 2022). The purpose of the study is to investigate perceived procurement challenges affecting Steve Tshwete Local Municipality; they are discussed below by different schools of thought.
The lack of suitable processes and procedures has caused procurement performance to suffer, attracting the attention of scholars, practitioners, academics and researchers worldwide. Public procurement performance is affected by various factors, including procurement processes, information technology (ICT) adoption, ethics and supplier relationships. Public procurement has been widely publicised because of the reluctance of current regulations to encourage the use of technology during procurements and long-term relationships between buyers and suppliers. According to the Transparency International Corruption Perception Index (2024), maintaining strong ethical standards in the procurement process has continued to be a challenge, placing the country at number 139 of 174 economies worldwide. According to the research study’s findings, a review of the laws currently in place in Kenya can only help improve its public procurement performance by promoting the extensive use of technology to manage the procurement process, building long-term relationships between buyers and suppliers and engaging the stakeholders through training and awareness campaigns regarding ethical procurement practices.
A growing number of public procurement activities are subject to increasing scrutiny because of the advent of technology, programme reviews and expectations of public and political stakeholders for improved service (Ndebele & Mdlalose 2021). Procurement remains a significant component of the public sector in South Africa because of the unfair and discriminatory procedures used during apartheid (Ndebele & Mdlalose 2021). The three primary barriers that limit the public procurement application in the municipal setting are as follows:
Lack of technical skills among municipal employees
An employee competency is a list of specific skills and behaviours that outline the performance expectations of an organisation for a specific job or an organisation’s culture. The lack of employee competencies emerged as a major and common challenge faced by many municipalities in South Africa. Human resources management faces one of the greatest challenges in modern times: attracting and retaining top performers (Koketso & Braam Rust 2022). According to Luthuli, Nywao and Mashau (2020), the lack of training and development in the municipality leads to demotivated employees and increased labour turnover. Results of study suggested that it is imperative to align training and development programs with employees’ needs to effectively equip and motivate employees. Because of the lack of training among municipal employees, new procurement regulations have been difficult to implement in the municipalities.
According to Thabang, Makhanya and Nel (2022), financial managers try to adapt to new legislation and improve processes on a daily basis, all within the constraints of limited workforces because of retirements and transfers to other positions. Generally, these challenges slow down the contracting and procurement process significantly. As a result, municipalities experience the phenomenon of under-expenditure, and services are delayed.
Thabang et al. (2022) stated that there is a significant need for public sector procurement services to be guided by the National Treasury Guidelines and Acts, such as the PFMA and the MFMA to save scarce municipal resources. Davids et al. (2022) have conducted a survey of public procurement processes in eight South African local municipalities and have found that: (1) A lack of specialised skills required for carrying out essential services at the municipal level, (2) disregard for fiscal guidelines and processes, (3) political interference in procurement processes, (4) a lack of accountability and a lack of transparency and (5) the appointment of politicians into technical positions are main obstacles that fuel the abuse of scarce municipal resources. Other authors stated that it is necessary to procure municipal services from service providers that have adequate capacity as well as a proven track record in the past. Uys and Uys (2022), Thabang (2022) and Hosoi (2023) have provided various examples in which poorly resourced local municipalities failed to obtain services that are commensurate with the budgets they have had to pay for essential procurement services.
Technological skills and infrastructure
Inability to use appropriate technological tools and applications is a main obstacle to effective procurement processes. Technological skills and infrastructure should be adequate for effective procurement processes in municipalities. Processes such as e-procurement, e-governance and e-commerce are highly relevant and valuable for procurement services in municipalities. It is essential to adopt and use e-procurement processes to save municipal resources from waste and corruption (Almanasreh, Moles & Chen 2022). The use of appropriate technology is a critical success factor for e-procurement implementation in all municipalities (Almanasrehet al. 2022).
In a survey conducted in Italy, Aldrighetti et al. (2023) pointed out the benefit of using appropriate digital technological processes. The main benefits are transparency, the ease of verification of credentials and reaching out to a wide audience in procurement processes. The authors pointed out that the use of appropriate technology enables the procurement employees and stakeholders to follow processes easily in a transparent and inclusive manner, which is accountable to all stakeholders. The list of essential requirements identified by the authors includes knowledge of market conditions, knowledge of service delivery requirements and the ability to assess and verify the credentials of competitors.
Bhandal et al. (2022) stated that digital technology and online systems are helpful for ensuring transparency and inclusivity in the procurement processes. The use of digital platforms simplifies the task of sharing valuable information among all relevant stakeholders. It is helpful to empower local municipalities to use digital and online systems and processes. It is necessary to mentor and coach civil servants who work in South African Local Municipalities on how to use e-governance and digital processes. This need has been pointed out in reports published by the South African Auditor-General (2024) to South African Local Municipalities.
Ye, Suleiman and Huo (2022) pointed out the benefits of e-procurement services in developing municipalities. The benefits included effective procurement, the ease of checking progress and decisions taken, the ease of verification of credentials and the ease of inclusion of all stakeholders at various stages of the procurement process. The use of e-procurement processes requires awareness education, organisational support, infrastructural investment, training, control measures, monitoring and technical training. The authors inform us that it is possible to save huge sums of money and resources by adopting e-procurement in municipalities. The report also shows that South African municipalities can enhance their service delivery outputs by adopting e-procurement techniques and applications.
Wobers, Kuipers and Boin (2021) have conducted a survey in the Netherlands, which they have identified common risk factors in public procurement processes. Failure to use appropriate digital technology, failure in transparency, the exclusion of stakeholders from verification processes, inability to conduct market research, political interference and lack of willingness to be guided by experts on technical aspects of projects are common risk factors.
Moshtari et al. (2021) stated that ethical considerations are highly applicable to public procurement processes. This is because public procurement processes inherently assume that procurement employees and officials look after the best interest of the public in identifying the most suitable service providers. The authors state that procurement processes should be guided by the highest ethical standards. The adoption of e-procurement processes is highly valuable for promoting transparency and easy verification of credentials and past track records of competitors. Key areas of relevance are: seeking approval for procurement based on verifiable and transparent processes; a fair, transparent and objective bidding process; the approval of contracts based on verifiable processes and ensuring the delivery of contracts by transparent and verifiable processes (Uys & Uys 2022).
Mongale (2022) has conducted surveys in Gauteng and KwaZulu-Natal provinces and has found that failure to adjudicate public procurement processes in a transparent and objective manner leads to public protests. Transparency, the use of e-governance, accountability and the inclusion of all stakeholders in procurement processes are vital for avoiding protests and clashes between municipal employees and residents living in local municipalities. The authors state that procurement employees and officials should acquire appropriate digital skills to be more efficient and transparent at the workplace. The annual report published by Steve Tshwete Local Municipality (2024) for the financial year 2022/2023 shows that the municipality has received various remarks, comments and suggestions from the South African Auditor-General on efficient methods and processes of administering public procurement processes. In order to accommodate the various remarks, comments and suggestions given to it by the South African Auditor-General, the municipality should empower employees working on procurement and supply chain management processes in terms of utilising appropriate e-governance processes and digital technology.
Efficiency in supply chain management
Supply chain efficiency refers to a company’s ability to use resources, technology and expertise to minimise logistics costs and maximise profits (Heim 2022). Davey and Gtaenby (2023) stated that it has been difficult to use public resources effectively because of the lack of efficiency in supply chain management processes. Helpful measures are training, close supervision, the implementation of internal control processes, awareness campaigns, mastery of markets and compliance with ethical guidelines. All municipalities are required to use their financial and human resources according to the integrated development plans (IDPs). Failure in this regard is the main cause of failure in South African municipalities (Ambe & Badenhorst-Weiss 2024).
Jing (2021) and Mabaso (2021) suggested a series of steps that need to be followed to minimise public sector resources. The steps included baseline research to assess what needs to be done, estimation of the cost of services, conducting market research to identify the most suitable qualified and experienced potential service providers and a study of common causes of failure in the implementation of projects. The authors state that procuring services without conducting baseline research exposes public sector entities to loss and failure. This research was carried out to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM. The research has the potential to point out and identify common causes of failure and wasteful expenditure in the Municipality.
Koketso and Braam Rust (2022) stated that public procurement services need to be efficient enough in terms of cost and quality to be of value to local municipalities that procure the services. Quality and efficiency should be above board without escalating the cost of services. Procurement services should be sought from the most suitable service providers at the lowest possible cost without lowering service level agreements and the quality of products, goods and services. Mabaso (2021) stated that the ethical aspect of procurement services is crucially important for ensuring value for money. The author pointed out that procurement employees and officials should be motivated and committed enough to find service providers who are ideally positioned to render the best possible services for the money municipalities offer. Ofori and Fuseini (2020) conducted a procurement survey in Ghana and found that success factors include good leadership, accountability, transparency and respect for the rule of law by elected officials. The authors pointed out that there is a need for public transparency in front of all stakeholders and competitors. Shortlists should be drawn out in a transparent manner in front of all interested parties. Doing so minimises corruption and the abuse of public sector funds.
Talwar et al. (2021) stated that research work should be carried out in the markets to identify the most suitable service provider. This task can best be carried out by way of gathering data from the market through stakeholders. Procurement employees should possess the ability to identify the best possible service provider at the lowest possible cost of service delivery. Bhardwaj and Ketokivi (2021) pointed out the need to fully understand factors that are likely to undermine efficiency in procurement services before awarding contracts. That is, the knowledge of potential causes of failure enables local municipalities to avoid losses and minimise the likelihood of making wrong decisions at municipal level.
Abutabenjeh (2021) pointed out the strategic management requirements that are essential for ensuring value for money in public procurement processes. These requirements include adherence to good leadership principles and commitment to choosing the most suitably qualified service provider from the market. The author states that failure to abide by these guiding principles often results in the loss of public finances and resources. Ketokivi and Mahoney (2020) stated that such problems are a common cause that undermines the quality of public procurement processes in developing nations. The authors have found a significant relationship between the ability of procurers to follow internal control measures and the minimisation of wasteful expenditure. Examples of main obstacles to efficiency are: inability to follow instructions, failure to follow internal control measures, lack of understanding of product specifications and local markets and inability to critically examine markets.
Objective of the study
The overall objective of the study was to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM in Mpumalanga province, South Africa, by employees of the municipality. The study had the following specific objectives:
- Assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM.
- To determine socio-economic factors that undermine the performance by procurement employees working at STLM.
- To construct a practical framework that could be performed to enhance the level of performance of procurement employees working at STLM.
- To draw up feasible recommendations that are helpful for enhancing the level of performance of procurement employees working at STLM.
Research hypotheses
A research hypothesis is vital for finding out the validity of an assumption or prior belief held by researchers. By testing the validity of a research hypothesis, it is possible to determine whether or not a prior belief or assumption is correct. Research hypotheses are usually tested for validity at the 5% level of significance. A null hypothesis is rejected at the 5% level of significance if the probability value falls below 5%. A null hypothesis cannot be rejected at the 5% level of significance if the probability value is greater than or equal to 5%. This research was carried out to test the following three research hypotheses:
H1: The quality of procurement services performed by the municipal employees is not associated with the extent to which there is a lack of technical skills among them.
H2: The quality of procurement services performed by the municipal employees is not associated with the extent to which the municipal budget is aligned with the procurement plan of the municipality that causes inefficiency in supply chain management.
H3: The quality of procurement services performed by the municipal employees is not associated with the extent to which they are capable of utilising electronic public procurement procedures effectively.
Research methods and design
Materials and methods
The study was quantitative in nature and was conducted by using positivism and deductive reasoning (Creswell 2021). Quantitative research is used to test hypotheses, establish cause-and-effect relationships and generalise findings to larger populations by collecting and analysing numerical data, often through statistical methods. Positivism and deductive reasoning allow the researcher to test the validity of assumptions by gathering empirical data from the field. The research of Rahman (2022) informs us that a research design explains the purpose, expected outcomes and the methods to be applied during research for achieving the intended outcomes of the research. The research design outlines how the information will be collected and evaluated (Babbie 2025). This study adopts a cross-sectional research approach. A descriptive design will be used to collect quantitative data on the procurement challenges faced by the municipalities in South Africa. According to Babbie (2025), descriptive and cross-sectional research methods can be used as the purpose of the study is to observe how procurement challenges affect the efficiency of the procurement process. To establish variable relatedness and temporality, reject alternative hypotheses and offer premise, a cross-sectional design is used. Quantitative tools are appropriate for conducting exploratory research. Examples of such methods are frequency tables, bar charts, pie charts, cross-tabulated tests exploratory factor analysis (Bell, Harley & Bryman 2022).
Results of data analysis
The research was conducted to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed in STLM in Mpumalanga province, South Africa, by employees of the municipality. Quantitative data were gathered from 147 employees of Steve Tshwete Municipality who worked on procurement services in the local municipality by using a questionnaire of study. The number includes the end users. End users identified their needs and are responsible in drafting the specification. The study was performed by using quantitative methods of data gathering and analyses, including EFA.
Table 1 shows a pie chart illustrating the level of performance of the 147 participants selected for the research. The pie chart indicates that the performance level of 133 out of 147 employees (90.48%) who were chosen for the study was deemed adequate according to the standards of Aldrighetti et al. (2023), whereas the performance level of 14 out of 147 employees (9.52%) who were chosen for the study was considered inadequate by the same standards.
| TABLE 1: Assessment of the performance of procurement employees (N = 147). |
Table 2 presents the frequency counts and percentages for the socioeconomic characteristics of the respondents. Female participants accounted for 42.18% of the participants, male participants accounted for 52.38% and those identified as others accounted for 5.44%. Participants aged 21–30 years made up 10.20% of the total participants. The corresponding figure for participants aged 31–40 years made up 46.26%. While the corresponding figure for participants aged 41–50 years accounted for 31.97%. The proportion of participants aged 51–60 years was 11.56%.
| TABLE 2: Gender and age distribution of participants of research (N = 147). |
Table 3 presents the job categories of the 147 research participants. The table shows that Administrators accounted for 29.33% of participants; Assistant Directors accounted for 17.01% of participants; Deputy Directors accounted for 12.24%; Clerks accounted for 10.88% and Directors accounted for 8.84%. These respondents were involved in participating in the procurement of services or goods, either as end users or as committee members.
| TABLE 3: Job categories of the participants involved in the research (N = 147). |
Table 4 presents a frequency distribution for the highest level of formal education and employment duration of the participants. This table assesses the level of policy understanding by the respondents. Participants with National Qualifications Framework (NQF) Level 1 account for less than 1% (0.68%). Those with NQF Level 5 account for 5.44%. NQF Level 6 accounts for 27.89%. NQF Level 7 accounts for 32.65%. NQF Level 8 accounts for 23.13%. NQF Level 9 accounts for 10.20%.
| TABLE 4: Level of education and employment duration of the participants (N = 147). |
In terms of employment duration, employees who served for 1–5 years account for 27.21%; employees who served for 6–10 years account for 35.37%; employees who served for 11–15 years account for 17.01%; employees who served for 16–20 years account for 12.93% and employees who served for 21 years or more account for 3.40%.
Results from the exploratory factor analysis
Based on estimates obtained from bivariate analysis, the EFA was performed. The process led to the identification of three influential factors that undermined the quality and efficiency of procurement services. Table 5 shows estimates obtained from the EFA.
| TABLE 5: Estimates obtained from the exploratory factor analysis (N = 147). |
All the three predictor variables displayed in Table 5 are useful. This is because they have Eigenvalues that are more than 1. The above three factors jointly account for 80.238% of the total variability in the ability of employees to render quality procurement services at the local municipality. The fact that this figure exceeds the cut-off figure of 75% indicates that the fitted factor analysis model is adequate.
Discussion
The research was conducted to assess and evaluate obstacles that undermine the perceived quality of public procurement services that are performed by employees of the STLM in Mpumalanga province, South Africa. A total of 147 employees of Steve Tshwete Municipality who worked in procurement services in the local municipality participated by using a questionnaire of study. The study was performed by using quantitative methods of data collection and analyses, including EFA. The results showed that the level of performance of 133 out of the 147 employees (90.48%) who were chosen for the study deemed adequate according to the standards of Aldrighetti et al. (2023), whereas the level of performance of 14 out of the 147 employees (9.52%) who were chosen for the study was considered inadequate by the same standards.
Results obtained from EFA showed that the ability of employees and officials to provide quality procurement services at STLM was significantly influenced by the following three factors: awareness of employees about changes that are made to procurement policy on a regular basis, the ability of municipal employees to work with electronic procurement systems and alignment of procurement budget with the procurement plan.
Conclusion
The survey was carried out by collecting quantitative data from 147 procurement employees and officials working at STLM in Mpumalanga province, South Africa. The research work has confirmed that the quality of municipal-level procurement services at STLM is undermined by three factors. These three factors are a lack of awareness about changes made to procurement processes and policy at the municipal level by procurement employees and their line function managers, the alignment of the municipal budget with procurement plan and the extent to which employees could work on electronic public procurement systems.
The research has produced significant results. The research has shown that 90.48% of the 147 participants of research performed adequately by standards defined by Aldrighetti et al. (2023), whereas the remaining 9.52% of the 147 participants did not perform adequately. Results achieved from the bivariate analysis identified nine useful factors that affect the quality of procurement services rendered by municipal procurement employees and officials. These nine variables were: the level of awareness of employees about changes that are made to procurement policy on a regular basis, the alignment of procurement budget with procurement plan, the ability of municipal employees to work with electronic procurement systems, the position held by participants of the survey in the local municipality, commitment to punish employees who fail to follow guidelines, the provision of training opportunities to procurement employees, the availability of enough operating cost for procurement services, the treatment of all procurement employees and officials equally and the availability of a procurement policy that covers all aspects of procurement services.
Framework of study
Based on the findings from factor extraction, different recommendations for the study are well outlined in Figure 1. Results achieved from the research work carried out in this survey are used for constructing a framework of study for STLM. The framework constructed is displayed in Figure 1 as shown below. The framework is similar to the framework constructed by Ambe and Badenhorst-Weiss (2023) in a similar study.
 |
FIGURE 1: Framework for ensuring efficiency in procurement services in Steve Tshwete Local Municipality. |
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The framework consists of the critical assessment of awareness and competence, identifying gaps, filling identified gaps and monitoring and evaluating the performance. The implementation of the framework will enable STLM to ensure the five pillars of procurement services in the public sector. These five pillars are: the ability to ensure value for money, open and effective communication, respect for ethical principles and commitment to fairness, accountability in reporting and ensuring equity. These five pillars must be met for public procurement processes to be effective and successful in the long term.
Acknowledgements
The authors would like to acknowledge participants of the survey for taking part in the study. This article originates from the first author’s (K.A.H.) Master’s dissertation, entitled ‘Perceived procurement challenges affecting Steve Tshwete Local Municipality’ at the Department of Marketing, Supply Chain and Sport Management, Tshwane University of Technology, South Africa, with supervisor Dr Tshisikhawe Baldwin Phume and Dr Lawson Naidoo, received December 2024.
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
K.A.H. wrote the full article from his Master’s dissertation, under the supervision of T.B.P. and L.N. The full article was reviewed by T.B.P., who made substantial changes to the initial draft, while L.N. read the final version and approved it for submission.
Ethical considerations
Ethical clearance to conduct this study was obtained from the Tshwane University of Technology, Research Ethics Committee on 16 September 2024 (No. REC2024/05/010).
Funding information
No specific grant from any funding agency in the public, commercial or not-for-profit sector.
Data availability
Data were collected from the respondents using the questionnaire, and they were stored on the external hard drive by the supervisor.
Disclaimer
The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings and content.
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