THE ROLE OF PROCUREMENT CONTRACT MANAGEMENT

IN THE EFFECTIVENESS OF PROJECT MANAGEMENT FOR

THE TELECOMMUNICATION COMPANIES:
A CASE OF tiGO TANZANIA
THE ROLE OF PROCUREMENT CONTRACT MANAGEMENT
IN THE EFFECTIVENESS OF PROJECT MANAGEMENT FOR
THE TELECOMMUNICATION COMPANIES:
A CASE OF tiGO TANZANIA

By
Mohammed Khalfan Amour

A Thesis Submitted in Partial Fulfillment of the Requirements for the Award of

the Degree of Master of Science in Procurement and Supply Chain Management
(MSc-PSCM) to Mzumbe University.

2014
 CERTIFICATION

We, the undersigned, certifies that we have read and hereby recommend for
acceptance by the Mzumbe University, a thesis entitled; The Role of Procurement
Contract Management in the Effectiveness of Project Management for the
Telecommunication Companies: The Case of tiGO Tanzania, in partial
fulfillment of the requirements for award of the degree of Master of Science in
Procurement and Supply Chain Management (MSc-PSCM) of Mzumbe University

_______________
Major Supervisor

________________
Internal Examiner

Accepted for the Board of ……………………

____________________________________________________________
DEAN/DIRECTOR, FACULTY/DIRECTORATE/SCHOOL/BOARD

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 DECLARATION
AND
COPYRIGHT

I, Mohammed Khalfan Amour, declare that this research is my own original work
and that has not been presented and will not be presented to any other institution for
any award.

Signature____________________

Date________________________

© 2014
This thesis is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactment, in that behalf, on
intellectual property. It may not be reproduced by any means in full or in part, except
for short extracts in fair dealings, for research or private study, critical scholarly
review or discourse with an acknowledgment, without the written permission of
Mzumbe University, on behalf of the author.

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 ACKOWLEDGEMENTS

First and foremost, I would like to thanks ALLAH (Subhanahuu Wa’Taalah) MOST
GRACIOUS, MOST MERCIFULS, LORD OF WORLDS, and MASTER OF THE
DAY OF JUDGMENT for keeping me ALIVE, HEALTHY and give me energy and
patience to search for education outside my homeland. I thank God the Almighty for
his love, enablement, and provision. Were it not for Allah, I would be completely
lost and therefore I always praise and thank.

Secondly, I would like to acknowledge my utmost gratitude and great enthusiasm to

my supervisor, Dr Martin Madale for being a dedicated mentor. He was always ready
to provide me with his valuable and constructive suggestions that enabled this project
to run smoothly, for guiding me through every step of the thesis and providing me
direction and insight on numerous occasions during the course of this work.

May I take this opportunity to thank my friends, work mates and others for
supporting me in my effort to complete this thesis especially our Group leader Mama
Cecilia

Last but not least, I am forever indebted to all my family members for their constant
moral support and prayers throughout the entire duration of my studies and
completion of this dissertation. Their words of encouragement, LOVE,
INSPIRATION, and SACRIFICE to me never failed to keep me going even through
the hardest of times and it is here that I am expressing my sincerest gratitude to them.
You are all loved. NAWAPENDA SANA SANA SANA SANA!!!!!!

MAY ALLAH BLESS ME AND YOU ALL

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 DEDICATIONS

In loving memory of my precious MOTHER,

Who, since her passing away on 11th November

2006, has been constantly with me.

Although you are out of my sight, you will

NEVER be erased from my mind.

I will always treasure and pray for you.

‫اﻟﻠﮭﻢ اﻏﻔﺮ ﻟﻲ وﻟﻮاﻟﺪي وارﺣﻤﮭﻤﺎ ﻛﻤﺎ رﺑﯿﺎﻧﻲ ﺻﻐﯿﺮا‬

Yaaa ALLAH please forgive my PARENTS

And
Shower them with your mercy

MAY ALLAH BLESS YOU FOREVER-ameen.

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 LIST OF ABBREVIATIONS

2G - Second Generation Mobile Technology

3G - Third Generation Mobile Technology
ACTS - African Centre for Technology Studies
BSS - Base Station Subsystem
CAPEX - Capital Expenditure
CAR - Capital Approval Request
CIPS - Chattered Institute of Purchasing and Supply
DRC - Democratic Republic of Congo
FSA - Frame Supply/Services Agreement
GPRS - General Packet Radio Services
GSM - Global Systems for Mobile
IACCM - International Association for Contract and Commercial
ICC - International Chamber of Commerce
IN - Intelligent Network
IP - Internet Protocol
ITA - Institute of Tax Administration
JIT - Just-In-Time
KPI - Key Performance Indicator
LLC - Limited Liability Company
Management
MIC - Millicom International Cellular (“MILLICOM”)
MSA - Master Service Agreement
NSS - Network Switching Subsystem
OPEX - Operational Expenditure
PMI - Project Management Institute
PO - Purchase Order
SLA - Service Level Agreement
SSA - Support Services Agreement
TQM - Total Quality Management
TRA - Tanzania Revenue Authority

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UAE - United Arab Emirates
UK - United Kingdom
UMTS - Universal Mobile Telecommunications Systems
UPS - Uninterrupted Power Supply
USA - United States of America
USPS - United State Postal Services
VAS - Value Added Services

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 ABSTRACT

In today’s competitive and hectic global economy, to stay ahead of the pack companies
have to embrace effective project management in order to consistently deliver business
results. As most of projects are complex and multi-disciplinary, to keep them on track
and constantly monitor the results, effective oversight of contracts is critically important.
On the other hand poor management of contracts ensue range of risks; from being forced
to close the projects due to breaking of the law to struggling on with supplier disputes.
There is no doubt, that effective contract management is paramount for it guarantees
organization in realizing its business value by successful delivering projects on time and
within budget.
The aim of this study is to assess the role of procurement contract management in the
effectiveness of project management at MIC-Tanzania. Research was executed by means
of questionnaires and interviews where employees from Supply Chain department and
other project stakeholders were invited to share their experiences of the same.

Literatures acknowledge the importance of contract management for effective contract

management by citing important terms and conditions for good contracts as well as the
essential features of valid contract. They also spell out the basis for supplier selection,
remedies for breach of project contracts, service level agreements, contract as a project
risks management tool as well as supplier relationship matrix.

This research has discovered that there is very high dependency of effective project
management on suppliers’ compliance with terms and conditions, suppliers’ technical
capability and close monitoring of suppliers during project implementation. Therefore,
contract management is essential for effective project management.
The researcher recommends MIC-Tanzania to recruit more experienced and qualified
staff for its contract management function, to have e-contract management solution in
order to have visibility of its active contracts at every stage of the project lifecycle, to
have strong technical supplier evaluation and to secure and enforce penalty clauses for
suppliers’ breach of project contracts. This is because the more MIC-Tanzania improves
its ability to manage its project contracts at practically every stage of project life-cycle,
the more it can transform contracting into a project management competency.

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 TABLE OF CONTENTS
Pages
CERTIFICATION ...................................................................................................... i
DECLARATION........................................................................................................ ii
AND ............................................................................................................................. ii
COPYRIGHT ............................................................................................................. ii
ACKOWLEDGEMENTS......................................................................................... iii
DEDICATIONS ........................................................................................................ iv
LIST OF ABBREVIATIONS ................................................................................... v
ABSTRACT .............................................................................................................. vii
TABLE OF CONTENTS........................................................................................ viii
LIST OF TABLES ................................................................................................... xii
Pages .......................................................................................................................... xii
LIST OF FIGURES ................................................................................................ xiii
CHAPTER ONE ........................................................................................................ 1
INTRODUCTION AND BACKGROUND TO THE STUDY ............................... 1
1.1 Introduction ............................................................................................... 1
1.2 Background Information ........................................................................... 1
1.3 Statement of the Problem .......................................................................... 2
1.4 Research Objectives .................................................................................. 3
1.4.1 General Research Objective ...................................................................... 4
1.4.2 Specific Research Objectives .................................................................... 4
1.5 Research Questions ................................................................................... 4
1.5.1 General Research Question ....................................................................... 4
1.5.2 Specific Research Questions ..................................................................... 4
1.6 Significance of the Study .......................................................................... 5
1.7 Scope of the Study..................................................................................... 5
1.8 Limitations of the Study............................................................................ 6
1.9 Delimitations of the Study......................................................................... 6
1.10 Organization of the Report........................................................................ 6
CHAPTER TWO ....................................................................................................... 8
LITERATURE REVIEW.......................................................................................... 8
2.1 Introduction ............................................................................................... 8
2.2 Theoretical Literature Review................................................................... 8
2.2.1 Definitions of key Terms........................................................................... 8
2.2.1.1 Contract ..................................................................................................... 8
2.2.1.2 Contract Management ............................................................................... 8
2.2.1.3 Effectiveness ............................................................................................. 9
2.2.1.4 Procurement .............................................................................................. 9
2.2.1.5 Project 9
2.2.1.6 Project Contracts ..................................................................................... 10
2.2.1.7 Project Delivery....................................................................................... 10
2.2.1.8 Promise and Promisor ............................................................................. 10
2.2.1.9 Service Level Agreement .......................................................................... 10
2.2.2 Theoretical Perspective ........................................................................... 10
2.2.2.1 Contract Compliance Theory .................................................................. 11

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 2.2.2.2 Contract Management Theory................................................................. 11
2.2.2.3 The Principal-Agency Theory................................................................. 12
2.2.2.4 The Will Theory ...................................................................................... 12
2.2.3 Essential features of valid contract.......................................................... 13
2.2.4 Terms and Conditions of Good Contracts............................................... 14
2.2.5 Basis for Selection of Suppliers .............................................................. 18
2.2.6 Remedies for Breach of Contract ............................................................ 19
2.2.7 The Project Management Triangle.......................................................... 19
2.2.8 The Project Contract Life Cycle.............................................................. 21
2.2.8.1 Contract Establishment.............................................................................. 22
2.2.8.2 Contract Implementation......................................................................... 22
2.2.9 Service Level Agreements ...................................................................... 22
2.2.9.1 Drawing up a Service Level Agreement ................................................. 23
2.2.9.2 Building SLA Periodic Performance Reviews........................................ 24
2.2.9.3 SLAs at tiGO -Tanzania.......................................................................... 24
2.2.10 Types of Project Agreements .................................................................. 24
2.2.11 INCOTERMS 2010................................................................................. 25
2.2.12 Contract as a Project Risks Management Tool ....................................... 26
2.2.13 Kraljic Model and Supplier Relationship Matrix .................................... 28
2.3 Empirical Studies .................................................................................... 31
2.3.1 World Related Studies............................................................................. 31
2.3.2 Local Practices-Tanzania Related Studies .............................................. 33
2.4 Research Gap........................................................................................... 33
2.5 Conceptual Framework ........................................................................... 34
CHAPTER THREE ................................................................................................. 36
RESEARCH METHODOLOGY ........................................................................... 36
3.1 Introduction ............................................................................................. 36
3.2 Area of the Study..................................................................................... 36
3.3 Population of the Study........................................................................... 36
3.4 Research Design...................................................................................... 36
3.5 Sampling Design ..................................................................................... 37
3.5.1 Sample Size ............................................................................................. 37
3.5.2 Sampling Techniques .............................................................................. 37
3.6 Data Collection........................................................................................ 38
3.6.1 Sources of Data ....................................................................................... 38
3.6.2 Data Collection Instruments.................................................................... 38
3.7 Data Processing and Analysis ................................................................. 39
3.8 Reliability and Validity of Data .............................................................. 39
CHAPTER FOUR.................................................................................................... 40
RESULTS AND DISCUSSION .............................................................................. 40
4.1 Introduction ............................................................................................. 40
4.2 General Findings ..................................................................................... 40
4.2.1 Respondents Experience with tiGO PSC Department ............................ 40
4.2.2 Contract Management Recognized as Important Function at tiGO ........ 41
4.2.3 Approvals of Purchases, Availability and Frequency of PC Meetings ... 42
4.2.4 Respondents’ Experience on Disputes with tiGO Tanzania’s Suppliers 43
4.2.5 Visibility of Project Contracts at tiGO-Tanzania.................................... 44

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 4.2.6 Staffing Adequacy in Contract Management Function........................... 44
4.2.7 Penalty Clauses Enforcement for Breach of Project Contracts............... 45
4.2.8 Suppliers’ Delivery Performance at tiGO -Tanzania .............................. 46
4.2.9 Effectiveness of Technical Evaluation of Suppliers ............................... 46
4.2.10Risks Associated With Poor Management of Project Contracts ............. 47
4.3 Findings specific to Objectives of the Study........................................... 47
4.3.1 Suppliers’ Compliance With Terms and Conditions of the Project
Contracts.................................................................................................. 48
4.3.2 Suppliers’ Technical Capability and Effective Project Management ..... 49
4.3.3 Close Monitoring of Procurement Contracts during Project
Implementation........................................................................................ 50
4.4.4 Cost Transparent for not Overcharging of Services of Projects
Performance at MIC-Tanzania ................................................................ 51
4.4.5 The Utilization of Benefits Promised During Contracts of Projects
Performance at tiGO -Tanzania............................................................... 51
CHAPTER FIVE...................................................................................................... 53
DISCUSSION OF FINDINGS ................................................................................ 53
5.1 Introduction ............................................................................................. 53
5.2 Experience of respondents with tiGO -Tanzania’s Procurement
Department .............................................................................................. 53
5.3 Contract Management Recognized as Important Function at tiGO -
Tanzania .................................................................................................. 53
5.4 Approvals of Purchases, Availability and Frequency of PC Meetings ... 54
5.5 Suppliers’ Compliance with Terms and Conditions of the Contracts..... 54
5.6 Suppliers’ Technical Capability and Effective Project Management ..... 54
5.7 Close Monitoring of Procurement Contracts during Project
Implementation........................................................................................ 55
5.8 Respondents’ Experience on Disputes with tiGO Tanzania’s Suppliers 55
5.9 Visibility of Project Contracts at tiGO -Tanzania................................... 56
5.10 Staffing Adequacy in Contract Management Function........................... 56
5.11 Enforcement of Penalty Clauses for Breach of Project Contracts .......... 56
5.12 Suppliers’ Delivery Performance at tiGO -Tanzania .............................. 57
5.13 Effectiveness of Technical Evaluation of Suppliers ............................... 57
5.14 Risks Associated With Poor Management of Project Contracts ............. 57
CHAPTER SIX ........................................................................................................ 58
CONCLUSION AND RECOMMENDATIONS ................................................... 58
6.1 Introduction ............................................................................................. 58
6.2 Conclusion............................................................................................... 58
6.3 Recommendations ................................................................................... 59
REFERENCES......................................................................................................... 61
APPENDICES .......................................................................................................... 65
Appendix 1: Data Gathering Questionnaire to tiGO -Tanzania Procurement and
Supply Chain Personnel .......................................................................... 65
Appendix 2: Interview Questions to Project Owners at tiGO -Tanzania......... 71
RESEARCH ACTIVITIES SCHEDULE .............................................................. 77
Research Activities Schedule..................................................................................... 77
RESEARCH BUDGET............................................................................................ 78

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Research Budget......................................................................................................... 78

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 LIST OF TABLES
Pages
Table 4.1: Respondent's experience in tiGO -Tanzania's PSC Department ........ 41
Table 4.2 :Contract Management Recognized as Important Function at tiGO...... 41
Table 4.3: Availability and Frequency of PC Meetings ...................................... 42
Table 4.4: Respondents Experience on Disputes with tiGO Tanzania’s for……43
Suppliers…............................................................................................................. 43
Table 4.5: Respondents View on Visibility of Project Contracts at tiGO-
Tanzania……….. ................................................................................................... 44
Table 4.6: Respondents’ View on Staffing of Contract Management Function . 45
Table 4.7: Penalty Clause Enforcement for Breach of Project Contracts ........... 45
Table 4.8: Respondents’ View on Suppliers’ Delivery Performance ................. 46
Table 4.9: Effectiveness of Technical Evaluation of Suppliers .......................... 46
Table 4.10: Suppliers’ compliance with terms and conditions of the contracts 48
Table 4.11: Suppliers' Technical Capability and Effective Project................... 49
Management........................................................................................................... 49
Figure 4.3: Likert-scale used to Rate Respondents’ Opinion on Suppliers…...50
Technical Capability .............................................................................................. 50
Table 4.12: Close Monitoring of Procurement Contracts and Effective Project
Management………............................................................................................... 50
Table 4.13: Cost Transparent for Overcharging of Projects does not Occur at
tiGO…………….................................................................................................... 51
Table 4.14: Utilization of Benefits as Per Contracts Management Promised at
TIGO…………… .................................................................................................. 52

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 LIST OF FIGURES
Pages
Figure 2.1: The Project Management Triangle................................................. 21
Figure 2.2: Illustrates the INCOTERMS 2010 Based on Risks and Costs of either
party ....................................................................................................................... 26
Figure 2.2: The INCOTERMS 2010 ................................................................ 26
Figure 2.3: Kraljic Model and Supplier Relationship Matrix........................... 31
Figure 2.4: Conceptual Framework .................................................................. 34
Figure 4.1: Likert-scale used to Rate Participants’ View on Recognition of…….42
Importance of Contract Management Function ..................................................... 42
Figure 4.2: Likert Scale Used To Rate Respondents’ View on Suppliers…….49
Compliance with Terms and Conditions of the Contracts ..................................... 49

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 CHAPTER ONE

INTRODUCTION AND BACKGROUND TO THE STUDY

1.1 Introduction
This part of the study covers background information, statement of the research
problems, research questions, and research objectives, significance of the study,
scope and limitations of the study.

1.2 Background Information

While some projects are delivered using local contractors, these are only few and
small projects. Majority of projects are complex and use outside resources and
contractors. This introduces a series of unique challenges as contracts need to not
only comply with local requirements but also to corporate and international standards
so as to efficiently and effectively conform to internal mandates and governmental
protocols yet optimizing revenues and minimizing risks.This makes the procurement
contract management critical to successful delivery of projects. A poor selection of
suppliers leads to cost overruns, schedule delays, poor quality, and ultimately to
unacceptable results. On the other hand, writing wrong types of contracts, poor
procurement contract management can as well lead to cost overruns, schedule delays,
disputes and litigation, and eventually lost revenue.

Globalization and changes within firm’s supply base have significantly increased
thenumber of business relationships these firm’s manage. While working
exhaustively on sourcing projects with current potential and future suppliers, the
firms have to make sure that the resulting relationships are contractually enforced so
as to ensure that contract risks are managed and negotiated savings are fully realized.

According to Prosidian Consulting LLC (2011), findings of recent international

surveys conducted by Supply and Demand Chain executives on the complexities and
risks of project contracts in today's "flattened globe" which requires firms to adjust
faster and in stable manner to remain competitive shows that there is a significant

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loss of money due to ineffective management of project contracts. For example,
research firm Aberdeen Group, has advocated that enterprises lose some $153 billion
each year due to ineffective project contract management.

A Green Point Global (2013) cited that 60-80% of business transactions are governed
by agreements or contracts and more than 10% of all executed contracts are lost. A
number of problems could be avoided if project contracts are managed well. These
problems include; among others are inappropriate clauses, unexpected costs, and
legal delays, delays in delivering orders and their consequences, getting inferior
quality of goods/services/works, misunderstanding between parties.

This study assesses the role of procurement contract management in the effectiveness
of project management, specifically at tiGO-Tanzania and recommendations on how
to manage different types of procurement contracts better so that the projects are
completed without legal delays and problems.

1.3 Statement of the Problem

The goals of project management are to ensure that organizations invest in the
optimal project portfolios and help them realize business value by delivering projects
on time and within budget (PMI, 2004). Gaikwad (2011) stressed that effective
project management serves as a blueprint to safeguarding company’s resources and
mitigating risks for realizing productivity and accomplishing predetermined goals.
Despite the fact that while MIC-Tanzania spends significant amount of money in its
projects, there is a lack of compliance to terms and conditions, inappropriate scope of
works as well as high cost and time overruns (IACCM, 2012).All of these are
common expressions and sufficient indicators of lack of robust contract management
processes and practices the specific causes of which include poor supplier selection,
lack of key project stakeholder involvement and poor contract execution.These have
led tomany projects delay and some consultants causing network problems when
discharging their roles and no serious actions are taken against respective
suppliers/consultants. When asking some key stakeholders, their responses are that
many suppliers do not adhere to the terms and conditions of the contracts,

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whilemention, while tiGO-Tanzania is running on very tight schedule on its projects
many suppliers do not deliver materials on time as indicated in the POs. This is
disastrous and has financial implications in this world of urgency where time is
firmly scheduled with specific time slots available for activities. They added that to
many suppliers after sales service is not effective; user trainings offered are
inadequate, repair services provision is not effective and online support is very poor
especially in emergency cases.

Records show that there is a good number of poor quality projects and many cross
deadlines and consultancies often causing service interruptions when discharging
their roles due to incompetency issues. In addition, in many projects there is no
fulfillment of project scope. Contract management remains to be widely researched
topics in project disciplines. For example,CIPS (2006)and Aberdeen Group (2006)
have been at the forefrontofguiding professionals tomanage project contracts in order
to help their companies meet their contractual obligations through contract
administration, delivery and relationship management in order to optimize resources
yet meeting project deadlines. It is unlikely however that despite significant research
progress, the effectiveness of project management at tiGO-Tanzania has not been
tracked and published widely. As a result there is a low visibility of operational
consideration. The reason why this study is being undertaken is to assess the role of
procurement contract management in the effectiveness of project management at
tiGO-Tanzania and come up with recommendations to improve performance of
project procurement contracts and make tiGO-Tanzania enjoy its competitive and
comparative advantages.

1.4 Research Objectives

The objectives of this study are to obtain answers to the questions and solutions to
the problems stated in section 1.3 These are translated in to general and specific
objectives as shown below;

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1.4.1 General Research Objective
The primary objective of this study is toassess the role of procurement contract
management in the effectiveness of project management at tiGO-Tanzania.

1.4.2 Specific Research Objectives

Precisely, the objectives of this study are;
(i.) To determineifsupplier’s compliance with terms and conditions of the
contract relates to effectiveness of project management attiGO-Tanzania.
(ii.) To determine whether technical capabilities of suppliers has effects on the
effectiveness of project management attiGO-Tanzania.
(iii.) To determineifclose monitoring of procurement contracts during projects
implementation correlates to the effectiveness of project management at
tiGO-Tanzania.

1.5 Research Questions

This study seeks answers to questions in broad and specific terms necessary for
shaping the direction of the research. To this end, the research questions sat for the
problem above are:

1.5.1 General Research Question

In broad terms, this study seeks answers to the following question;
What are the roles of procurement contracts management in the effectiveness of
project management at tiGO-Tanzania?

1.5.2 Specific Research Questions

Specifically, this study addresses the following research questions;
(i.) Does supplier’s compliance with terms and conditions of the contract relates
to effectiveness of project management at tiGO-Tanzania?
(ii.) Do technical capabilities of suppliers effects the effectiveness of project
management at tiGO-Tanzania?

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(iii.) Does closemonitoring of procurement contracts during project
implementation correlate the effectiveness of project management at tiGO-
Tanzania?

1.6 Significance of the Study

Frequently, the contract management phase of the procurement life cycle receives the
least attention until problems arise. The importance of this phase is emphasized when
we consider where the output of the project occurs. This is true for not only the
client, but also for the supplier, because performance at this stage might have an
influence on whether future business will be won or lost. Not only performance for
delivering the required goods or services in full, on time with regard to
specifications, but also building good relationship with the clients and the added
value the project delivers. The reason why this study is significant can be explained
in the following aspects;

First, its findings will help enlighten procurement and supplies professionals the need
to critically monitor procurement contract management during project execution
(contract life-cycle) so as to mitigate risks associated with project delivery.
Second, the findings will help procurement and supply professionals recognize
technical capabilities of their current and future suppliers and acquire more insights
as regards to monitoring supplier’s performances across all procurement contract
KPIs.

Third, it will also assist to understand the extent to which tiGO-Tanzania suppliers
comply with terms and conditions of project contracts and suggest the way forward
to better management of project contracts.Conclusions and recommendations to be
drawn from this study will come up with suggestions that will help the company to
improve contract management in its project environments more effectively.

1.7 Scope of the Study

This study focused on the primary players in Procurement and Supply Chain,
Planning and Project departments at tiGO-Tanzania. The study is not only limited to

5
Planning, Project as well as Procurement and Supply Chain departments but also to
other project and supply chain stakeholders at tiGO-Tanzania, this include among
others, Power Manager, BSS Manager, NSS Manager, Transmission Manager, IP
Support Manager, IN Manager and VAS Manager. The questionnaires were released
to top management team while the face to face interviews were done on field
engineer’s team.

1.8 Limitations of the Study

This study had limitations which were related to access to secondary data as contract
information were held confidential. Itwasalso unpredictable whether the subjects
would respond to the questionnaires honestly. This could have a bearing on the
validity and reliability of the study (Sullivan and Spilka, 2011).

1.9 Delimitations of the Study

In order to assure validity and reliability of collected data,the researcher had to
request project contract records from contract managers to verify validity of
information provided by respondents and interviewees. The researcher made the best
of his effort to verify the accuracy of information obtained from stakeholders by
evaluating them thoroughly and compared with secondary sources.

1.10 Organization of the Report

This study is organized in six chapters as follows:
Chapter onehas presented the introduction and background to the study which covers
background information, statement of the research problems, research questions,
research objectives, significance of the study, scope, limitations and delimitations of
the study as well as organization of the study.
Chapter two is the presentation of relevant literatures both theoretical and empirical.
This chapter also presents conceptual framework to help researcher to clarify his
research questions and objectives.

The study has chapter three describing research methodology which consists of area
of the study, research design, population under the study, sample size and sampling

6
techniques, data collection, data processing and data analysis.Presentation and
analysis of findings is subject of the third chapter. The findings are presented as
general and those as per study objectives.

Chapter five is where the findings from questionnaires and interviews are discussed.
Finally, chapter six incorporates conclusion and recommendations with regard to the
findings of the study.The last pages of this research report are of references and
appendices.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction
While chapter one discusses about the background, scope and justification for the
study, this chapter reviews theoretical and empirical literatures related to the study.
The chapter focuses on the relevant knowledge areas of the thesis which span the
academic disciplines of management of project contracts. The literatures also provide
conceptual framework to help researcher to clarify his research questions and
objectives.

2.2 Theoretical Literature Review

2.2.1 Definitions of key Terms
2.2.1.1 Contract
Hutchison et al. (2009) defined a contract as an agreement entered in to voluntarily
by two or more parties with an intention to create legally enforceable obligation(s). A
contract entails voluntary promises between competent parties to do or not to do
something which is enforceable by law. A contract may obligate a contracting party
before receiving anything from the other side or even after calling the deal off; for
example, after the supplier acknowledges the receipt of the purchase order, he is
liable to deliver materials based on the delivery terms agreed. The same applies to all
parties after contract closures in confidentiality issues where the parties agree not to
disclose confidential matters for number of years after the contract closure.

2.2.1.2 Contract Management

Contract management is a systematic practice for creation, execution, compliance,
and analysis of business contracts in order to maximize operational performance,
reduce costs, and minimize risks (Aberdeen Group, 2006). A procurement contract is
a legally binding agreement between a firm (the buyer) and a supplier to fulfill a set
of agreed terms and conditions. Contract management involves building of good
working relationship between the parties which continues through the contract life-

8
time. One of the key objects of contract management is to obtain goods or services as
agreed in the contract and achieve the best value for money through balancing costs
against risks and proactively managing the relationship. It also aims at continuous
improvement in performance over the contract life time.

2.2.1.3 Effectiveness
CIPS Australia (2005) defines effectiveness as the extent to which objectives have
been met. It is referred to as doing the right thing. That is, to measure effectiveness is
simply to compare goals and results. This is the degree to which objectives are
achieved and the extent to which targeted problems are solved (www.business
dictionary.com).

2.2.1.4 Procurement
Lyson and Farrington (2006) defined procurement as the process of obtaining goods,
works and/or services through buying, borrowing or leasing. It encompasses all
activities involved in establishing essential requirements, sourcing practices such as
market research and vendor evaluation as well as negotiation of contracts to ensure
management of external resources to fulfill organization strategic objectives.
Van Weele (2006) defines procurement as obtaining from external sources all goods,
services, capabilities and knowledge which are necessary for running, maintaining
and managing the company’s primary and supporting activities at the most favorable
conditions.

2.2.1.5Project
Projects differ from types of work. PMI (2004) defines project as a temporary
endeavor undertaken to produce a unique product, service or result. These unique
and temporary characteristics are the ones determining if a particular endeavor is a
project. The temporary nature of projects indicates a definite beginning and definite
ending. The end is reached when the project’s objectives have been achieved, when
the project is terminated, or the need for the project no longer survives. The unique
nature of projects means every project creates a specific product, service, or result

9
that differentials it from other products, services, or results. The duration of a project
is a finite; can range from a week to several years.

2.2.1.6 Project Contracts

These are contracts for construction, manufacturing and/or installation of
equipment’s. These contracts are characterized by having a defined start date and end
date, having a defined end result to be achieved and involving a number of planned
and interrelated activities (PMI, 2004).

2.2.1.7 Project Delivery

Project delivery refers to project execution or implementation (Adu, 2004).

2.2.1.8 Promise and Promisor

As opposed to the promisor who makes the promise to someone, the promise is the
person who has been promised something, For the sake of this study the promisor is
a consultant or supplier while the promisee is the client or purchaser (MIC-
Tanzania).

2.2.1.9Service Level Agreement

A Service Level Agreement is an agreement between client and supplier that
specifies, in measurable terms,the services to be furnished by the supplier and what
penalties the supplier will pay if s/he cannot meet the committed goals (Lammanna et
al., 2003)

2.2.2 Theoretical Perspective

Before driving in to the empirical discussions, it is important to situate the argument
within a theoretical context for they guide the study and it is from these theories that
the researcher will be able to address the role of procurement contract management
in the effectiveness of project management at MIC-Tanzania. While theories provide
the foundation for the study by giving the reader what he/she needs to know in order
to interpret and understand the results and how those results are arrived at, concepts

10
serve as justifying choices which give theoretical background of the choices made
during the course of this work.

To understand the role of contract management in the effectiveness of project

management, we must first understand the underlying theories and concepts of
contract management in the context of project discipline, these include contract
compliance theory, contract management theory, the principal-agency theory, the
will theory, and the reliance theory as explained here under;

2.2.2.1 Contract Compliance Theory

Contract compliance theory is the act of conforming to contract agreements between
buyers and sellers. Generally he purchasing function is held responsible for all
reasons of non-compliance. According Aberdeen Group (2006) compliance may be
internal or external. Internal compliance can be interpreted as either conforming to
the rules in the agreement by purchasing organization such as payment terms and
minimum order requirements or in purchasing from agreement only, that is,
purchasing by using framework agreements for the entire company (Telgen, 2004).
According to Aberdeen Group (2006) the use of framework agreements for the entire
company can assist maintaining high contract compliance and reduction in
purchasing costs. This can in turn increase the probability of project success. As far
as the projects as concerned, external contract compliance can take up several forms
including unavailability of products services or qualified personnel, charging prices
different from the contracted prices, or late delivery or delivering products that do
not meet the contracted specifications.

2.2.2.2 Contract Management Theory

Contract management theory can be interpreted as category management, contract
administration and contracting processes (Knoester, 2005).While category
management is about managing the contracting processes initiation, contract
management is addressed by Knoester (2005) who speaks of contract management as
the management of the engagement administration of all term agreements by which
means a contract is closed. He stressed that this is the contract management process

11
for ensuring that the right information is in the right place at the right time, to support
the whole of the contracting process. In project disciplines, this can be achieved by
distributing contract information to all primary project stakeholders to determine and
assess an optimal supply base.

The contracting process is the third interpretation of contract management and is

where contract realization is managed. This process is connected to both the category
management process and the contract administration process. Contracting processes
are initiated by category management and are from there supported by the contract
administration process. This administration process is necessary during the whole
contracting process in order to assure quality, efficiency and effectiveness (Angelov,
2005).

2.2.2.3 The Principal-Agency Theory

The principal- agent theory can proudly be applied to this study with MIC-Tanzania
as a principal and project suppliers as agents. According to Chiappori and Salanie´
(2003) the underlying principle of the contract theory is that there should be a clear
understanding of the needs of the principal and ability of the agent to meet these
needs competently. The theory becomes significant to the study as it highlights the
need for strategic planning in project contract management. When a project contract
is well defined and planned, the principal and agents will find it easy to meet needs
of each other in an efficient way resulting into timely execution of the projects in
predetermined service level.

2.2.2.4 The Will Theory

The basis of contract is the meeting of the minds of the parties (that is the will of the
parties). Hutchison et al., (2009) narrated that if one party is in fault as regard to one
of the important elements of the agreement there is no real agreement. The result is
neither party is bound nor each party may reclaim whatever it has performed.This
theory maintains that commitments in project contracts are enforceable because the
promisor has "willed" or chosen to be bound by his or her commitment(s). Classical
theories of contract protect the will of the parties, because the will is something

12
naturally worthy of respect; the use of force against a defaulting promisor in project
contracts is ethically justified)

2.2.3 Essential features of valid contract

At the low level, according to Humphries Associates (2004) for a contract to be valid
it mud have the following features among others at its low level;

(i) The Offer

The offer must be communicated and can be canceled at any time before acceptance.
It is important to note that the offer is different from an invitation to treat which is
where a party communicates that it is prepared to enter negotiations with a view to
forming a contract.

(ii) Acceptance
The acceptance must be communicated. This must be of the offer made otherwise it
could be a counter-offer. There is a rule that if the acceptance is mailed, it occurs on
the date posted else if acceptance is by phone, fax, or email, it occurs when received.

(iii) Capacity to Contract

This refers to the power of a natural person to enter into a contract. In it imperative to
note that the following parties do not have the capacity to enter a contract;
(a) Minors- people under 18 years of age except for necessary requirements like
food
(b) Persons under illegal drugs such as heroine or alcohol
(c) Persons of unsound mind.

(iv) Consideration
A contract is not valid without consideration; that is, “quid pro quo” or something
given for something received. In this case, the project contract must clearly state
what is being exchanged between the parties as consideration. Consideration must be
‘valuable’. Something must be supplied in return for the promise made by the offer

13
or, for example, money. Consideration must not be unlawful or gratuitous. It must
also not be something already done or suffered (past consideration).

(i) Intention (Consensus ad idem)

The parties must intend to be bound by the contract. Therefore, it is important to
make sure that accurately and clearly terms and conditions express the intention of
all parties. It is essential to remember that there should be a "meeting of the minds."

(ii) Legality
Legality of a contract refers to an implied warranty that an act, agreement, or
contract strictly abides to the statutes of a particular jurisdiction. Since contracts
require parties to agree to standard terms and conditions it is vital to make sure all
parties read the fine print so that they understand what they are signing up to.

(iii) Enforceability
Despite having all of the essential elements, a contract might still not be enforceable
because of some other issue(s), these include among others, lack of capacity of one
of the parties (for example if one of the parties is a minor), where a mistake is made
about the nature of the contract, where there has been misrepresentation of a
particular fact(s) inducing a person to enter into the contract, where a contract is
illegal or is effected by pressure or undue influence of one party over another.

2.2.4 Terms andConditions of Good Contracts

A contract is good if it caters for the interests of the organization. Precisely, it should
entail what the organization wants to obtain, avoid and gives options if things go
wrong, it should be clear, it should be void of false promises, it should contain
mechanisms for dispute resolution and termination. The following are the basic terms
and conditions for a good contract (www.tigo.co.tz)
(i) Parties
The "parties" are the persons who enter into a legal arrangement. They may be living
or "legal persons" such as a corporation. Thus, all parties to the contract must be
clearly identified. For this case, a supplier and a client should be clearly mentioned.

14
(ii) Preamble
This is a foreword of the scope of work or service to be performed or rendered.

(iii) Definitions
This part defines all terms to be used in the contract. Usually “Annex/Appendix A” is
used for agreement definitions. It encompasses definitions of agreement documents,
fee, services, penalty fee, purchase order, service agreement, and service levels,
among others.

(iv) Scope of Agreement

This describes the work to be performed or the services to be rendered. It describes
tasks, direct procedures to be adopted and spells out the period of performance. The
agreed goods or services should be described in detail so that a reasonable person can
identify the goods or understand the types of services that are to be performed. The
quantity of goods must be stated also.

(v) Term
This part spells out the conditions to be fulfilled for the agreement to come in to
force and effect, for example after dully signed by all parties. It also spells out the
duration of the contract unless terminated on an earlier dates in accordance with the
agreement.

(vi) Fees, terms of payment, invoicing, penalty fees and taxes

This part states the fee and currency to be used together with the validity of the fees.
It also spells out about the payment and invoicing terms such as overdue payments
and penalty fee, as well as taxes, dues and levies.

(vii) Procedures for Purchase Ordering

This speaks about conditions for the client to place POs, ways for sending the POs
and suppliers’ acknowledgement of PO receipt.

15
(viii) General responsibilities of Supplier and client
This is for supplier and client to fulfill obligations set in the terms and conditions;
this includes collaboration and appointment of suitable personnel, information flow,
among others.

(ix) Warranty
Especially for goods supplied, warranty should be granted to remedy the deficiency
in the events or extent where supplied goods have not performed in accordance with
the agreement.

(x) Termination
This part states the rights and conditions for either party to terminate the agreement.
A contract comes to an end when all the responsibilities and obligations under the
contract are no longer required. A contract may end by the following;
(a) Performance- This is the most usual way and there must be complete and
exact performance by the parties involved.
(b) Agreement- Both parties agree to end the contract early therefore they are
free from any legal obligations.
(c) Frustration – When it has been deemed impossible to complete the contract
due to unforeseen circumstances.
(d) Breach of Contract – When a condition has been broken by one of the
parties.

(xi) Force Majeure

This excuses parties for act(s) that are outside performing party’s reasonable control
against non-performance, defective or late performance when performing their
duties. These acts often include, but not limited to, acts of terrorism, strikes and other
labor disputes, fire, explosions, floods, earthquakes, typhoons, epidemics, wars
(whether declared or undeclared), government acts (including failure to act) (de jure
or de facto), riots, revolutions, sabotage or severe weather conditions which the Party
claiming excuse could not have reasonably foreseen the effects of or made
alternative arrangements for.

16
(xii) Indemnity, Exculpatory, Hold Harmless, and Waiver Clauses
These clauses attempt to transfer liability for certain act(s) or omissions to one of the
parties.

(xiii) Limitation of Liability

This states limitations of liabilities of parties; except in cases of intent or gross
negligence, neither party shall be liable to the other party in connection with the
agreement for any indirect or consequential damages, that is loss of production, loss
of business, loss of revenue and loss of goodwill.

(xiv) Trademark and Publicity

A trademark acts as an assurance or guarantee of the quality and origin of a specific
good. A competing supplier must not use another company's trademark, this is
because the owner of a trademark may challenge any use of the mark that infringes
upon his rights.

Also, neither party shall advertise or publish any information related to the
Agreement without the prior approval of the other party.

(xv) Code of conduct

This is for supplier and its’ staff working for client to abide by the client’s code of
conduct, “the Code”.

(xvi) Subcontracting
This article is for limiting supplier not to, without client’s prior approval,
subcontracts its undertakings to other third parties.

(xvii) Notices
This part spells out the addresses for sending notices from one party to another party
as well as the rights to change the addresses. This part also addresses the language to
be used when sending notices.

17
(xviii) Settlement of disputes
This article of the agreement tells how and where controversies are resolved.

(xix) Severability and modification of the agreement

This clause states that the terms and conditions of the contract are independent of
each another; if a term in the contract is deemed unenforceable by a court, the
contract will not be considered unenforceable. This clause actually insists that no
modification, amendment or other change may be made to the Agreement or any part
thereof unless reduced to writing and executed by authorized representatives of both
parties.

(xx) Originals of the Agreement

This clause states number of original copies of the agreement. For example, two
copies of the original documents of which the parties have taken one (1) each. It also
contains the signatures of those executed the contract.

(xxi) Appendices
Last but not least is the appendices (if any) of the agreement; this may include among
others, appendix for agreement definitions, appendix for scope of work, appendix for
fee and penalty fee, appendix for specifications and technical requirements, and
appendix for warranty.

2.2.5 Basis for Selection of Suppliers

Any good contract should involve a good supplier. Hence, one needs to have good
sourcing. Aspects to be considered in selecting a supplier include legal entity,
reliability, machinery/machines, skilled manpower, financial position, ethical
practices, communication, and policy of the country or organization, industrial
relations, progressive management, among others.

18
2.2.6 Remedies for Breach of Contract
According to Roythornes Solicitors (2012), the remedies common for breach of
contract are;
(i.) Damages – Here, a monetary compensation is awarded to the injured party.
The appropriate measure of damage under the reliance principle is the amount
necessary to satisfy the reliance interest.
(ii.) It is the sum necessary to put the plaintiff in the position he would have been
in if he had not entered the contract.
(iii.) Specific Performance- This is a non-monetary remedy which grants the
plaintiff what he actually bargained for in the contract rather than damages
for not receiving it. It is an equitable rather than legal remedy and is granted
only by court.

Rescind the contract- When one party to the contract breaches the contract, the
injured party may rescind the contract. In general, rescission of the contract is
accompanied by a suit for damages. Rescinding a contract means dissolving and
putting the parties in the position they were in before entering into the agreement.

2.2.7 The Project Management Triangle

Commonly known as “The Scope or Iron Triangle” is the triangle showing five
constraints that operate in every project irrespective of project environments, namely;
scope, quality, cost, time, ad resources (Wysocki, 2009). These constraints are very
important for the success or failure of projects and thus form mutually dependent set;
that is, a change in one constraint can require a change in another constraint in order
to restore the equilibrium of the project.

(i) Scope
This is a statement that defines the boundaries of the project. It may also be referred
to as a document of understanding or a scoping statement or a project initiation
document or a project request form. By whatever name called, this document is the
foundation for all project work to follow. Beginning a project on the right foot is
essential, the same as staying on the right foot.

19
(ii) Quality
Wysocki (2009) mentioned two basic types of quality as part of every project:
(i.) Product quality; the quality of the deliverable from the project.
(ii.) Process quality; the quality of the project management process itself.

The focus is on how well the project management process works in intercultural
environments and how can it be improved. Constant quality improvement and
process quality management are the tools used to measure process quality.

(i) Cost
Another variable that defines the project is the dollar cost of doing the project. It is
best thought of as the budget that has been established for the project. This is
specifically important for projects that create deliverables that are sold either
commercially or to an external customer. Cost is a major consideration throughout
the project management life cycle.

(ii) Time
The client/vendor specifies a time frame or deadline date within which the project
must be completed and this is where most of the MIC Tanzania vendors fail. To a
certain extent, cost and time are inversely related to one another. Time is an
interesting resource; it can’t be stocked or inventoried. Whether you use it or not, it is
consumed. Once a project has begun the primary resource available to the project
manager to keep projects on schedule or get it back on schedule is time.

(iii) Resources
Resources are assets such as man power, equipment, facilities, or inventory that have
limited availabilities. Resources can be scheduled or can be leased from an outside
source. Some are fixed and others are variable. Certainly, they are critical to the
scheduling of project activities and the orderly completion of the project. For
telecommunications projects, people are the major resource. Another valuable
resource for telecommunications projects is the availability of proper working tools.

20
Figure 2.1: The Project Management Triangle

Source: Wysocki (2009)

2.2.8 The ProjectContractLife Cycle

Generally telecommunications project contracts,ranging from commercial, technical
and Information technology, take a long period of time, sometimes even years and
have many processes. Therefore, effective and efficient contract management must
be carried out throughout the entire project life period as contract management has
different priorities and tasks. According to Costa et.al (2009), most open tender
project contracts go through two main phases: contract establishment and the
contract implementation phase.

Contract establishment phase has two processes. These are tendering and contract
negotiations. The contract implementation phase has also has two phases. These are
the execution and the maintenance.

21
2.2.8.1Contract Establishment
(i) The Tendering Period
The tendering or bidding period is from preparation of tender documents to tender
opening. This is the initial offer and acceptance between the owner and the supplier.

(ii) Contract Negotiations

This process starts when tender is made and ends when the project contract is signed
by both parties. This second stage of contract establishment can further be divided in
to two stages, namely; the initial evaluation of tenders and the discussion about the
future of the contract.
(a) The initial evaluation of the different tenders including disqualifying
unqualified tenders followed by a comparative analysis among the suppliers
who offer competitive prices and have technical capability to construct the
project and finally choose the best supplier.
(b) Discussion between the project owner and the supplier about the future of the
contract as well as about project completion and finally the signing of the
contract by both parties.

2.2.8.2 Contract Implementation

This is the period from signing the contract to the contract end. In this lapse, all
procurement and engineering works such as installation and commissioning need to
be completed. Suppliers must complete the engineering works and take responsibility
of the warranty with reference to quality, quantity, schedule and technical
specifications written in the contract or functional requirement specifications, or bill
of quantity

2.2.9 Service Level Agreements

According to Lammanna et al. (2003), Service level agreements (SLAs) are contracts
or agreements with suppliers that define the service suppliers must provide together
with the level of service to be delivered. SLAs also set out responsibilities and
priorities.

22
The Service Level Agreements are themselves contractual obligations and are
frequently built into a contract in the form of one or more clauses or as an entire
section of the contract. The Service Level Agreements can be used in any supplier
contract where an organization’s ability to meet its customer needs and wants is
dependent on the supplier’s performance.

For smooth execution, most of the telecommunications projects need SLAs

The Service Level Agreements are complex documents that should be well defined
and cannot be drawn up in an impromptu manner.

2.2.9.1 Drawing up a Service Level Agreement

SLAs are progressively becoming more popular way to manage and improve quality
of services within organizations. It is imperative that client is involved in drawing up
the Service Level Agreement together with the supplier. The typical SLAs set out
include:
(i.) The service being provided;
(ii.) The standards of service;
(iii.) The timetable for delivery;
(iv.) Respective responsibilities of supplier and customer;
(v.) Provisions for legal and regulatory compliance;
(vi.) Mechanisms for monitoring and reporting of service;
(vii.) Payment terms;
(viii.) How disputes will be resolved;
(ix.) Confidentiality and non-disclosure provisions;
(x.) Termination conditions.

If suppliers fail to meet agreed service levels, for compensation, SLAs usually
provide, normally in the form of refunds on monthly service charges. When drawing
up an SLA with supplier, it is important to highlight the most critical components of
the project so that you can apply the severest penalties to these.

23
2.2.9.2 Building SLA Periodic Performance Reviews
Service Level Agreements need continuous discussion and updating. If the needs or
scope of project change, you may require different performance criteria and hence
update the SLA. Likewise, advancement in information and communication
technology should be taken into account when reviewing the Service Level
Agreement with suppliers.
2.2.9.3 SLAs at tiGO-Tanzania
Because of the diversity of its project portfolio, Service Level Agreements are seen
as an appropriate direction for MIC-Tanzania as they ensure agreed minimum
standards of services for its projects. The SLAs also have proved to offer clear locus
to service commitment and accountability, great stability and response to critical
services, have proved responsiveness including quick response to customer service
requests or tickets through offering clear direction for response to service outages,
resolving tickets by due dates as well as minimizing unplanned service outages.

2.2.10 Types of Project Agreements

Theseagreements are basically of three types. The contracts are significant in project
management as they spell out terms and conditions of good contracts which are
necessary for fulfillment of projectsto be pursued.

(i) Frame Supply Agreements or FSA

The subject matter of these agreements isgeneral terms and conditions for all
supplies such as hardware, software and licenses. These products have to be supplied
according to separate purchase orders with regard to specifications, drawings and
other documents such as price schedules as agreed between the client and the
Supplier.

(ii) Frame Services Agreements or FSA

The subject matter of these agreements is general terms and conditions for all
supplies of services such as installation services. Theservices have to be supplied
according to separate purchase orders with regard to scope of works and price
schedules as agreed between the client and the Supplier.

24
(iii) Support Service Agreements or SSA
These are agreements where customer requests services based on previously supplied
products; hardware, software, or licenses by the same supplier. The services POs are
quoted separately from the supply ones.

(iv) Master Service Agreement or MSA

This is an agreement reached between parties in which the parties agree to most of
the terms that will govern future transactions or all future agreements. It is basically a
combination of the Frame Supply agreement and the Support Services Agreement.

2.2.11 INCOTERMS 2010

Published by the International Chamber of Commerce (ICC, 2010), the
INCOTERMS are a set of three-letter standard trade terms used in international
contracts for the sale of goods.Internationally these terms provide accepted
definitions and rules of interpretation for most common commercial contract terms.
As projects have definite beginnings and definite endings, on time delivery is a must.
This can be achieved by encompassing delivery terms in project contracts to effect
Purchase Orders or sales contracts.The INCOTERMS 2010 are grouped in to two
parts, namely; terms for any transport mode and terms for sea and inland water ways.
(a) Terms for any transport mode
(i.) EXW - EX Works (... named place of delivery)
(ii.) FCA – Free Carrier (... named place of delivery)
(iii.) CPT – Carriage Paid To (... named place of destination)
(iv.) CIP – Carriage and Insurance Paid To (... named place of destination)
(v.) DAT – Delivered at Terminal (... named terminal at port or place of
destination)
(vi.) DAP – Delivered at Place (... named place of destination)
(vii.) DDP –Delivered Duty Paid (… named place)

(b) Terms for sea and inland water ways (Maritime – only Terms).
(i.) FAS - Free Alongside Ship (... named port of shipment)

25
(ii.) FOB - Free On Board (... named port of shipment)
(iii.) CFR - Cost And Freight (... named port of destination)
(iv.) CIF - Cost Insurance And Freight (... named port of destination)

The following are important points to consider before using these terms;
(i.) Specify the port or place of destination;
(ii.) Know where the risk of loss transfers;
(iii.) Understand who bears costs for loading and unloading;
(iv.) Determine the significance of supply chain visibility;

Figure 2.2: Illustrates the INCOTERMS 2010Based on Risks and Costs of either
party
Figure 2.2: The INCOTERMS 2010

Source: ICC (2011)

2.2.12 Contract as a Project Risks Management Tool

As mentioned earlier in the literatures that, ineffective control and management of
supply contracts costs business a lump of US dollars per year (Prosidian Consulting,

26
2011). As a corner stone to any business transaction, when effectively used, contracts
can be of great importance in managing project risks.

Before driving to risk management it is important to understand the project contract

risks and why there risks arise. Very often, the following are the contract related
project risks:

(a) Lack of Transparency between Parties

This is fundamental problem which is caused when one party is reluctant to provide
important information, unskilled personnel to oversee the contract commitments or
inadequate system to generate the required information.

(b) Lack of Recognition of the Importance of Contract Management

Lack of recognition that contract is the foundation of project management, by either
party, is another source of project contract risks.

(c) Failure to act on Supplier Underperformance

This is when supplier fail to achieve the desired and agreed goals and the client fail
to act accordingly. This includes poor quality of works and non-adherence to service
levels, among others.
(d) Failure to provide contract deliverables on time, to agreed quality
standards
As projects are bound to time and scope, late delivery and poor specifications are
may be termed as another source of project risks.

(e) Failure to Comply With All Contract Provisions

Compliance to contract terms and conditions is of the greatest importance for
successful project delivery. For example, failure to adhere to privacy, security,
warranty, recordkeeping, among others increases the likelihood of project risks.

27
(f) Fraud and/or inefficient conduct by the supplier
Despite increasing awareness of risks that are embedded in the supply chain,
inefficient conduct and use of false representations to gain unfair advantage by
supplier is another source of project risks.

To manage project risks from beginning to end whilst ensuring all obligations,
milestones and compliance requirements, contracts can be treated as sources of
information rather than texts or images. This is by streamlining contract creation
from standard clauses and tracking changes and eventually managing risks.
According to Australia National Audit (2011), some of the project risk treatments in
contract management phase include recruiting staff with relevant skills, providing
training to addressing skills gaps, discussing and establishing roles and
responsibilities of each stakeholder to make sure that all stakeholders understand
their responsibilities in relation to performance management, establishing and
maintaining a win-win relationship with the suppliers, establishing a shared
understanding of the contract, monitoring supplier performance regularly including
of deliverables and all contract terms and conditions, conducting specific
performance review meetings, payments only for satisfactory performance, ensuring
risk assessment specifically addressing fraud and/or discussing alleged fraud as well
as reviewing the need to end the contract for suppliers’ breaches of terms and
conditions or non-performance.

2.2.13 KraljicModel and Supplier Relationship Matrix

Gelderman and Van Weele (2003) deployed Kraljicmatrix model to manage supplier
relationship. The model would assist organizations to know which suppliers are
important, where should the organization focus their effort, are the organizations
going to cultivate similar relationships across all supply base?This model has
customer profile as horizontal axis, and supplier’s strategic potential as the other
axis.

Customer profile refers supplier’s perception on you. This depends on how large the
supplier is. For example, $ 30,000 spent with local supplier brings more influence

28
than the same amount going to Microsoft. Strategically, client is not advised to invest
significant effort in promoting desperate supplier whose is simply not interested and
whose attitude is unlike to change.

On the other hand, supplier strategic potential refers to supplier contribution to client
business improvement.The Kraljic Matrix/Model creates four combinations of
relationships, namely; control, leverage, rethink and strategic as depicted in figure
2.3

(a) Control
Here client has low profile with supplier in whom the client does not see strategic
potential. This can be alternatively termed ‘business as usual’; the items or services
purchased from that supplier may be important, but it does mean there is little point
in developing a deeper supplier relationship. In this case, clients do not need to stress
strong terms and conditions in their agreements with suppliers, they just have to
ensure they obtain the best available deal and that deliverables are met using standard
purchasing techniques using standard terms and conditions.

(b) Leverage
This quadrant combines a low supplier strategic potential with a high client
profile,meaning that client has, potentially, a one-sided relationship with the supplier;
that is, the client matters a lot to the supplier, but do not see much benefits in
developing strategic potential with them. This is the area of some profit as the
suppliers have good perception of us which reflects a potential risk on supplier part,
therefore, there is a great demand to consider and reduce contract risks from these
suppliers as the client is taking an excessively high proportion of their turnover.

(c) Rethink
Here the client hasa low profile with the supplier with whom the client thinks there
could be strategic potential with regard to his projects. The biggest problem is that
the client is not sure that he has supplier’s attention. In this tricky area clients have
three options;

29
(i.) Raising profile by increasing spend on project deliverables;
(ii.) Marketing more actively to the suppliers through other means. This might
include changing old contract negotiating habits;
(iii.) Switching to suppliers with whom clients would have a higher profile.

(d) Strategic
This quadrant is clearly the area of greatest potential in that clients have suppliers to
whom they matter the most, and who clients believe offer them the potential to
deliver their projects efficiently and effectively. This part demands very high
attention where effort and resources should be targeted. The contracts should be
structured to manage relationship which is to be integrated into both organizations.

The following are areas which clients might look to develop when working with
suppliers:
(i.) Innovation in products, services or processes;
(ii.) Helping clients to differentiate their own products or services so as to reduce
competitive pressures;
(iii.) Helping clients to reduce the time it takes to deliver new products to market;
(iv.) Improved service levels;
(v.) Improved quality levels;
(vi.) Outsourcing / offshoring;
(vii.) Reduced capital requirement;
(viii.) Cost reduction;
(ix.) Risk reduction / elimination;
(x.) Joint forecasting;
(xi.) Joint design

30
Figure 2.3: KraljicModel and Supplier Relationship Matrix

Source: Gelderman and Van Weele(2003)

2.3 Empirical Studies

2.3.1 World Related Studies
Several initiatives have been taken by procurement and contract management
practitioners to ensure that contracts are delivered within agreed quality. In attempt
to understand the major causes of project failures, Amponsah (2012) conducted a
research among Ghanaian companies and found that one of the major reasons
forproject failures is the poor contract implementation and management. In their
research on procurement processes and performance conducted in Uganda, Kakwezi
and Nyeko (2010) advocated that to ensure purchasing performance quality of
procured goods and services as well as timely delivery should not be ignored as they
are directly linked to terms and conditions of the project contracts. To stress the
importance of project contract management, the international survey conducted by
Aberdeen group among 36 companies in the world found that ineffective control and
management of supply contracts costs business $ 153 billion per year (Prosidian
Consulting, 2011).

31
As most of telecommunication projects like servers and UPs need after sales
services, Forooz and Rostamidehbaneh (2006) conducted a research at Sarir
International Company on the necessity and effectiveness of after sales services and
concluded that for today’s environment of computer components, companies have to
use after sales services as a marketing tool for them to remain competitive. The
increasing recognition of improving contractual processes has enforced Elsey (2007)
to address the importance of contract management by addressing the critical success
factors for successful contract management namely; on-time delivery, value for
money, cooperation and responsiveness, fulfillment of one’s obligations, no
controversies as well as proper change management. These factors are indeedcritical
for effective project management where projects are bound by scope, quality, cost,
time and resources irrespective of project type and environment(Wysocki, 2009).To
emphasize the role of contract management, the Republic of South Africa’s national
Treasury (2010) conducted a research for enhancing service delivery and suggested
that when a contract is effectively managed it has the capacity to increase revenue
opportunities, decrease costs and enhance service delivery.

The role of contract management in effective project management is also seen in

where TQM and JIT philosophies areadopted to ensure on time deliveryforgood
quality of services and meeting deadlines. This is in agreement with Guiffrida and
Nagi (2004) who conducted their study in Cost Characterization of Supply Chain
Performance in New York and found that contract management is essential for JIT-
effective project environments.In emphasizing on robust contract management,
Garcia (2012) conducted a research at the European Journal of Legal Studies where
he strongly insisted on the need to secure enforcement of penalty clauses in
international commercial contracts. This would help all actors in the supply chain
have quality goods and services as well as ensure on time delivery of goods.

In attempt to make contracts alive and healthy, Jukka (2003) described three
processes for implementation of contract management, namely; to establish the basic
contract management operation such as competent contract personnel, defining
proactive alarms, for contracts and templates, the second step is to make the contract

32
alive that is being part of the business such as deeper involvement of stakeholders,
and finally, the third is the strategic step of contract management. Although this can
take time to implement but once implemented can be a corner stone to project
management.

2.3.2 Local Practices-TanzaniaRelated Studies

A number of researchers and professionals of contract management have addressed
the role of contract management. For the case of Tanzania, few of them which are
relevant to contract management are discussed hereunder. Since its establishment,
the University of Dar es Salaam has been a forefront in delivering courses to cater for
national, regional and global interests. In supporting professionalism in contract
management, the University of Dar es Salaam School of Law (2013) has started
providing specialized postgraduate diploma in law covering all aspects of contract
management whose major target is to enable contract experts to manage well all
aspects of contracts including project discipline.

In an attempt to address the importance of managing contracts, the Procurement and

Supplies Professionals and Technicians Board in its framework of continuous
transfer of know-how, offers variety of trainings in all contract disciplines to enable
its professionals understand legal aspects of contracts, be familiar with contract terms
and conditions as well as risks, rules and relationship management across the
contract life time (PSPTB, 2013).

Guided by TRA’s core values, The Institute of Tax Administration (ITA) has been a
catalyst in making contract management personnel securing their organizational
interests in the area of tax administration by offering courses related to customs,
taxation, and related fields (ITA, 2013).

2.4 Research Gap

Despite attracting great attention from practitioners, academicians and researchers,
the role of contract management in the effectiveness of project management
specifically at tiGO-Tanzania has not been addressed. We can see from abroad and

33
Tanzania cases that majority of the studies focus on public institution which focuses
on value for money instead of cost effectiveness as in private sectors where majority
have limited funds to spend on projects. Moreover, the studies are smoothly
practicable in developed countries where technologies are high and level of
bureaucracy is low for practicing TQM and JIT philosophies with the aim to ensure
quality inputs and zero lead time. This paper assesses the role of contract
management in the effectiveness of project management at MIC-Tanzaniain order to
optimize the existing as well as adding value to upcoming projects.

2.5 Conceptual Framework

This is a set of ideas (sort of map) used to structure the research. According to
educational researcher Smyth (2004), the conceptual framework is structured from a
set of broad ideas and theories that help a researcher properly identify the problems,
frame research questions and find relevant literatures. The conceptual framework
assisted the researcher to clarify his research question and objectives as well as in
data collection and analysis. Fig 2.4 depicts the conceptual framework of this study.

Figure 2.4: Conceptual Framework

Source: Researcher’s idea (2013)

34
While the outcome/dependent variable of this study is the project success,
independent variables used to control the outcome variable are supplier’s compliance
with terms and conditions of the contract, supplier’s technical capability and closely
monitoring of procurement contracts. Mediating variable of the study is the effective
project management. It can, from figure 2.4 be said that project success depends on
effective project management which in turn depends on supplier’s compliance with
terms and conditions of the contracts, supplier’s technical capability as well as close
monitoring of project contracts.

That is. “Independent variables  mediating variable  dependent variable”.

35
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction
This chapter describes research methods which were used to address objectives of
the study. It contains the following areas; area of study, research design, population
under the study, sample size and sampling techniques, data collection, data
processing and data analysis with the aim of assessing the effectiveness of
procurement contract management in tiGO-Tanzania’s project environments.

3.2 Area of the Study

Millicom is an International company operating in North and Central America,
Europe (UK), Asia (UAE), USA and Africa. In Africa it operates in Chad, Congo
DRC, Ghana, Mauritius, Rwanda, Sierra Leone, Senegal and Tanzania. The area of
the study was at the tiGOTanzania headquarter located at the Derm Complex , Plot
Number 11, Block 45A, New Bagamoyo Road, Kijitonyama, Dar es Salaam.

3.3 Population of the Study

The population of this study was all members of Procurement and Supply Chain
department and primary project stakeholders at MIC-Tanzania. A total of 50
employees were involved in this study as a population.

3.4 Research Design

According to Kothari (2004), a research design is the arrangement of conditions for
collection and analysis of data in a manner that aims of combining relevance to the
research purpose with economy in procedure. He added that the function of research
design is to provide for the collection of relevant evidence with minimal expenditure
of effort, time, and cash.In this study, since the theme of the study is the description
of the state of affairs as it exists at present, a descriptive design was used. Kothari
(2004) defines descriptive research studies as those studies which are concerned with

36
describing the characteristics of a particular individual, or of a group the major
purpose of which is to get information on the current status of situation.

This is in agreement with Robson (2002) who pointed out that the main objective of
descriptive research design is to portray an accurate profile of situations. The main
characteristic of this design is that the researcher has no control over the variables; he
can only report what is happening at present.The descriptive design has advantage
that the subject is observed in a completely natural environment, it is less expensive
and less time consuming as compared to quantitative experiments and it also has an
opportunity to fuse both qualitative and quantitative data.

3.5 Sampling Design

When we want to collect data on a population, there are different techniques to go
about. In some cases, it is possible to measure the entire population to get an accurate
picture of the population at hand (the exhaustive survey) and in some cases however,
sub-group of the population is feasible. This sub-group is called “sample” and can be
chosen following probabilistic or non-probabilistic sampling techniques.

3.5.1 Sample Size

The sample is simply a subset of a population. According to Mugenda and Mugenda
(2003), researcher may use 50 percent of the target population to represent the
characteristics of the entire population. For the sake of this study, a sample size of
38employees was drawn; this sample included all 28employees from Procurement
and Supply Chain department and other 10 primary project stakeholders from other
departments.

3.5.2 Sampling Techniques

Commonly, two methods exist for selecting a sample; probability and non-
probability sampling methods. In this research only non-probability sampling was
applied to select research respondents.Judgmental/purposive non-probabilistic
sampling was used because a limited number of individuals possess the trait of
researcher’s interest. More specifically a “total population” purposive sampling

37
wasemployed to examine the entire population of Procurement and Supply Chain
department and “expert” purposive sampling was adopted to gather knowledge from
individuals that had particular expertise from user departments. The entire (total)
population was chosen because the size of the population that had particular set of
traits that a researcher was interest in was small.

3.6 Data Collection

3.6.1 Sources of Data
In conducting this study, the researcher collected data from both primary and
secondary sources.While secondary data were collected from contract records, raw
data were collected from procurement and supply chain staff. The responses and
opinions were collected, analyzed and assembled comprehensively.

3.6.2 Data Collection Instruments

Research includes a wide range of methods for obtaining data. When the research
involves the opinions or experiences of individuals, there are two common methods
implemented these are interviews and questionnaires. In this study, the researcher
usedboth interviews and questionnaires as major instruments for data collection.

Questionnaires
Questionnaires are general term to include all techniques of data collection in which
each person is asked to respond to the same set of questions in a predetermined order
(Saunders, 2009). In this study questionnaires were both open and close-ended which
were prepared and distributed to Technical & It procurement team, Commercial
procurement team, Contract management team, Logistics team as well as Inventory
management team. The researcher adopted this method because large amount of
information were collected in a short period of time and in a relatively cost effective
way and also easily kept anonymous.
Interviews
Interview is a systematic way of talking and listening to people to collect data as well
as to gain knowledge from individuals (http://www.who.int). Oral interviews were
administered to project managers and heads of user departments.

38
This method provided a room for clarification to both the researcher and respondents,
it guaranteed a good return rate, and provided more information in detail. It also
helped the researcher reduce time in his data collection process.

3.7 Data Processing and Analysis

Both quantitative data collected with questionnaires and qualitative data collected
with interviews were processed and analyzed. Quantitative data were processed,
analyzed and presented in tables, bar charts, graphs and other tools. The quantitative
aspects were supported by qualitative analysis and presentation of the opinions and
views raised by research respondents.

3.8 Reliability and Validity of Data

Reliability
To ensure dependable, trustworthy, genuine, authentic and reputable data, the
researcher used research instruments to collect data from reliable sources only. This
was done by using purposive sampling to ensure that research instruments were only
administered to individuals who possessed the trait of researcher’s interest.

Validity
To ensure that the data collection instruments allow the researcher to hit “the bull’s
eye” of his research objectives, the researcher ensured that data were from the right
source and were collected at the right time in order to ensure accuracy to guarantee
the correct results. The researcher also analyzed the data collected to ensure its
accuracy, adequate and suitable to answer the research questions.

39
 CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Introduction
In this part the researcher attempted to make assessment of the role of contract
management in the effectiveness of project management at tiGO-Tanzania by
determining if supplier’s compliance with terms and conditions of the contract,
technical capabilities of suppliers and monitoring of procurement contracts during
projects implementation relate to effectiveness of project management at MIC-
Tanzania.

The data were gathered through interviews and questionnaires from thirty eight (38)
respondents out of which twenty eight (28) responded to questionnaires and ten (10)
responded to interview questions.The findings are presented as general findings and
those as per study objectives.

4.2 General Findings

These findings are closely related to those findings specific to the study. They are
presented to support specific objectives of the study.

4.2.1 Respondents ExperiencewithtiGOPSC Department

The researcher wanted to know how long have respondents worked in Procurement
and Supply Chain Department at tiGO. The following table depicts the respondent’s
view. This question was specific to Procurement and Supply Chain Department staff:

40
Table 4.1: Respondent's experience in tiGO-Tanzania's PSC Department
Duration of observation Frequency Percent Gross Percentage

Less than 3 years 9 32.14 32.14

3 to 5 years 14 50.00

5 Years and above 5 17.86 67.86

Total 28 100.00
Source: Find data (2014)

Table 4.1 shows respondents’ experience in tiGO-Tanzania's Procurement and

Supply Chain Department of which14 respondents (50% of respondents) have
worked between 3 to 5 years, 5 respondents (17.9% of respondents)have worked for
5 years and above while9 respondents (32.1% of respondents) had worked for less
than 3 years respectively. This implies that majority of respondents have experience
with Millicom Tanzania’s procurement and Supply Chain Department.

4.2.2 Contract Management Recognized as Important Function at tiGO

Respondents were asked to give their opinion on the significance of Contract
Management function. The findings are presented in the table 4.2

Table 4.2:ContractManagement Recognized as Important Function at tiGO

Recognized as significant Frequency Percent Gross Percentage
Very important 33 86.84
Important 5 13.16 100.00
Moderately important 0 0
Of little importance 0 0 0
Unimportant 0 0 0
Total 38 100.00 100.00

Source: Find data (2014)

From table 4.2we see that, 33 respondents (86.8% of

respondents)recognizedContract Management as a very important function in the
organization, 5 respondents (13.2% of respondents) recognized it as important while
none of the respondents and interviewees recognized it as unimportant or of

41
moderate or little unimportant function in the organization. These findings justify
that contract management function is of exceeding importance at tiGO-Tanzania.

The following Likert-scale was used to rate respondent’s and interviewees’ views;

Figure4.1:Likert-scale used to Rate Participants’ View on Recognition of

Importance of Contract Management Function

Source: Researcher’s Innovation (2014)

4.2.3 Approvals of Purchases, Availability and Frequency of PC Meetings

To determine whether or not purchase committee meetings are conducted and if
conducted to know the frequency of occurrence at MIC Tanzania, the researcher
conducted his research and the following were the findings from thirty eight (38)
participants who responded to questionnaires as presented in table 4.3 below

Table4.3: Availability and Frequency of PC Meetings

Response Availability of PC Frequency of MC Personnel approving
Meetings | % meetings in a week purchases

Yes 38 100% 2 1. Head of Procurement and

7 Supply Chain
No 0 0 N/A 2. Chief Financial Officer
3. Head of Operations

I don’t know 0 0 N/A

Total 38 100 N/A

Source: Find data (2014)

Table 4.3 shows that 38 respondents (100% of respondents) and interviewees agreed
that purchase committee meetings are conducted at tiGO-Tanzania.

42
Moreover, they all pointed out that the PC meetings are conducted twice a week and
purchases are approved by relevant authorizedofficials of the company, these are
Head of Procurement and Supply Chain, Chief Executive Officer and Head of
Operations. This implies that purchase committee meetings are important as they are
conducted twice a week and purchases are approved by authorized personnel of the
organization.

4.2.4 Respondents’ Experience on Disputes with tiGOTanzania’s Suppliers

The researcher was curious to know whether or not respondents have experienced
any disputes with MIC-Tanzania’s suppliers, causes of those disputes and measures
taken to resolve them. Table 4.4below depicts the respondents’ response.

Table4.4: Respondents Experience on Disputes with tiGO Tanzania’s for

Suppliers
Response Frequency Percentage Causes of disputes Measures taken by MIC
to resolve disputes

Yes 13 34.21 1.Late delivery 1. Cancellation of POs

2.Poor quality of and awarding the tender to
No 25 65.79 installation works the second best award
3.Poor specifications

Total 38 100 4.Technical incapability

Source: Find data (2014)

The numerical part of table 4.4 can be alternatively shown in the bar chart as in
figure 4.4

Table 4.4 outlines respondents’ experiences on project disputes at tiGO Tanzania. Of

all respondents 13(34.2% of respondents) have experienced disputes related to
projects where as 25 (65.8% of respondents) have not. This infers that at Millicom
Tanzania, disputes are of significant amount.

43
4.2.5 Visibility of Project Contracts at tiGO-Tanzania
Because of suppliers’ problems encountered during project execution, researcher
wanted to know if there is a visibility of project contracts at MIC-Tanzania and
measures taken by management to ensure consistent contract visibility. Only thirty
five (35) out of thirty eight (38) respondents and interviewees responded to this
question. Their responses are shown in table 4.5

Table 4.5: RespondentsView on Visibility of Project Contracts at tiGO-

Tanzania
Response Frequency Gross percentage Measures taken
Yes 13 37.14 1. Engaging consultant for one year
No 19 54.29 2. Employing new specialist for contract

I don’t know 3 08.57 database

3. Designing up to date contract summary
Total 35 100
Source: Find Data (2014) that is to be signed by all heads of

Table 4.5 reveals respondents’ view on visibility of project contracts at MIC-

Tanzania. 13 respondents (37.1%) of respondents agreed that there is contract
visibility whereas 19 respondents (54.3%) were in view that MIC-Tanzania has no
visibility of its contracts. 3 respondents (8.6%) had no idea regarding this question.
The results suggest that MIC Tanzania has no visibility of its contract processes.

4.2.6 Staffing Adequacy in Contract Management Function

Due to sensitivity of the contract management function, researcher wanted to know if
the function is properly staffed and if not the way forward to empower this crucial
function. Table 4.6below depicts respondents’ view of the same

44
Table 4.6: Respondents’View on Staffing of Contract Management Function
Response Frequency Percentage Measures Taken
Yes 10 26.32 1. Engaging consultant for one year
No 28 73.68 2. Plan to employ new staff
I don’t know 0 0
3. Automating contract database
Total 35 100
Source: Find data (2014)

As per table 4.6, of all respondents 10 (26.3% of respondents) were in opinion that
contract management staff are adequate while 28 (73.7% of respondents) were in
opposing view that the function has staff inadequacy. The results from table 4.6
predict that there is no staff adequacy at MIC Tanzania’s contract management
function.

4.2.7 Penalty Clauses Enforcement for Breach of Project Contracts

Respondents were asked to give their opinion on the enforcement of penalty clause
for breach of project contracts and table 4.7 below represents respondents’ opinion.

Table 4.7: Penalty Clause Enforcement for Breach of Project Contracts

Response Frequency Percentage Discharging the penalty
Penalty clause enforced 5 13.16 1. Counter offers
Penalty clause not enforced 18 47.37
Don’t know 15 39.47
Total 38 100
Source: Field Data (2014)

It can, from table 4.7, be declared that 15 respondents (39.5% of respondents) have
no idea about enforcement of penalty clause for breach of project contracts. Five
respondents (13.2% of respondents) narrated that penalty clause is enforced while 18
respondents (47.3% of respondent) reported that the clause is not enforced upon
breach of project contracts. The results suggest that little attention is paid to
enforcement of penalty clause at tiGO Tanzania.

45
4.2.8 Suppliers’ Delivery Performance at tiGO-Tanzania
This part was special to ten (10) primary project stakeholders. Interviewees were
requested to give their opinion on MIC-Tanzania’s delivery performance and table
4.8 reveals their responses.

Table 4.8: Respondents’ View on Suppliers’ Delivery Performance

Response Frequency Percentage Notification to responsible
Procurement/contract specialists

Late delivery 4 40.00 Yes

On time delivery 6 60.00 N/A

Total 10 100 N/A

Source: Field Data (2014)

Primary project stakeholders had different view on suppliers’ delivery performance.

Four respondents (40% of interviewees) were in opinion that suppliers do not deliver
materials on time whereas the remaining 6 (60%of interviewees) believed that MIC-
Tanzania’s suppliers observe delivery schedules as per the project contracts. This can
be generalized that delivery performance of tiGO-Tanzania’s suppliers is not of
satisfactory.

4.2.9 Effectiveness of Technical Evaluation of Suppliers

Respondents were asked to give their opinion on how technically are suppliers
evaluated at tiGO Tanzania. Table 4.9 below reveals respondents’ view on the same

Table 4.9: Effectiveness of Technical Evaluation of Suppliers

Respondents’ opinion Frequency Percentage Gross Percentage
Strongly Agree 5 13.16
Agree 13 34.21 47.37
Neither Agree nor Disagree 0 0 0
Disagree 20 52.63
Strongly Disagree 0 0 52.63
Total 38 100.00 100.00
Source: Field Data (2014)

46
Required was to evaluate the effectiveness of technical evaluation of supplier and of
all respondents 18 (47.4 % of respondents) agreed that tiGO-Tanzania suppliers are
effectively evaluated while 20 (52.6% of respondents) claimed that tiGO-Tanzania
suppliers are not effectively evaluated. The results imply that there is inefficient
supplier evaluation at tiGO-Tanzania. To overcome this issue, the suppliers to be
well understood the value of money and time. The supplier needs to deliver materials
at right time, right quality and quantity as well as at right place. Doing this will make
the projects to be well organized and well executed. Failure to do so, will make bad
impressions to customers etc.

4.2.10 Risks Associated With Poor Management of Project Contracts

Researcher wanted to know the risks associated with poor management of project
contracts in telecommunications environments, specifically at tiGO-Tanzania. The
following were respondents’ suggestions;
(i.) Project management uncertainty
(ii.) Contractor relationship risks
(iii.) Poor quality of works or services
(iv.) Late deliveries
(v.) Termination penalties especially when the contract is in auto prolongation
mode and there is no exit clause
(vi.) Conflicts
(vii.) Loss of revenue and goodwill

4.3 Findings specific to Objectives of the Study

To recall, the study objectives are specifically to determine if supplier’s compliance
with terms and conditions of the contract relates to effectiveness of project
management, to determine whether technical capabilities of suppliers reveal the
effectiveness of project management and to determine if monitoring of procurement
contracts during projects implementation correlates to the effectiveness of project
management at tiGO-Tanzania.
The findings of the study are presented as per specific objectives as follows;

47
4.3.1 Suppliers’Compliance With Terms and Conditions of the Project
Contracts
Recall that the first specific objective of the study was specifically to determine if
supplier’s compliance with terms and conditions of the contract relates to
effectiveness of project management. Table 4.10 presents the findings in the context
of the study objectives.

Table 4.10: Suppliers’ compliance with terms and conditions of the contracts
Extent of dependency Frequency Percentage Gross Percentage

Strongly Agree 22 57.89 92.10

Agree 13 34.21
Neither Agree nor Disagree 3 07.90 7.90
Disagree 0 0
Strongly Disagree 0 0 0
Total 38 100.00 100.00
Source: Field Data (2014)

As shown in table 4.10, thirty five respondents (92.1% of respondents)agreed that

effective project management depends on suppliers’ compliance with terms and
conditions of the contracts while three respondents (7.9% of respondents) neither
agreed nor disagreed. No respondent (strongly) agreed thateffective project
management does not depend on suppliers’ compliance with terms and conditions of
the contracts at tiGO Tanzania.

These results imply that effective project management strongly correlated to

effective management of project contracts.

48
The following Likert-scale was used to rate respondent’s views;

Figure 4.2: Likert Scale Used To Rate Respondents' View on Suppliers’

Compliance with Terms and Conditions of the Contracts

Source: Researcher’s Innovation (2014)

4.3.2 Suppliers’ Technical Capability and Effective Project Management
Recall that the second specific objective of the study was to determine whether
technical capabilities of suppliers reveal the effectiveness of project management.
Table 4.11 depicts the extent to which respondents agree or disagree on the matter.

Table 4.11: Suppliers' Technical Capability and Effective Project

Management
Extent of dependency Frequency Percentage Gross
Strongly Agree 29 76.32
Agree 7 18.42
94.74
Neither Agree nor Disagree 2 05.26 05.26
Disagree 0 0
Strongly Disagree 0 0
0
Total 38 100.00 100.00
Source: Field Data (2014)

Table 4.11 reveals that 36 respondents (94.7% of respondents) agreed that effective
project management depends on suppliers’ technical capability while 2 respondents
(5.3% of respondents) neither agreed nor disagreed. No respondent (strongly) agreed
that effective project management does not depend on suppliers’ technical capability.
This implies that effective project management depends on effective management of
project contracts.

49
The following Likert-scale was used to rate respondent’s views;

Figure 4.3: Likert-scale used to Rate Respondents' Opinion on Suppliers'

Technical Capability

Source: Researcher’s Innovation (2014)

4.3.3 Close Monitoring of Procurement Contracts during Project
Implementation
Recall that the third objective of this research study was specifically to determine if
monitoring of procurement contracts during projects implementation correlates to the
effectiveness of project management at MIC-Tanzania.

Table 4.12below offers respondents’ opinion for the same.

Table 4.12: Close Monitoring of Procurement Contracts and Effective Project

Management
Extent of dependency Frequency Percentage Gross Percentage

Strongly Agree 8 21.05

Agree 12 31.58 52.63
Neither Agree nor Disagree 5 13.16 13.16
Disagree 13 34.21
Strongly Disagree 0 0 34.21
Total 38 100.00 100.00
Source: Field Data (2014)

From table 4.12 it can be said that 20 respondents (52.6 % of respondents)agree that
effective project management depends on close monitoring of project contracts while
13 respondents (34.2% of respondents) argue that effective project management has
no relationship with close monitoring of project contracts. Five respondents (13.2%

50
of respondents) neither agree nor disagree that effective project management depends
on close monitoring of project contracts. These results infer that effective project
management depends largely on close monitoring of project contracts during project
implementation.

4.4.4 Cost Transparent for not Overcharging of Services of Projects

Performance at MIC-Tanzania
Respondents were asked to give their opinion on the cots transparent for
overcharging of services of projects. The findings are presented in the table 4.13
Table 4.13: Cost Transparent for Overcharging of Projects does not Occur at
tiGO
Recognized as significant Frequency Percent Gross Percentage

Strongly Agrees 33 86.84

Agrees 5 13.16 100.00
Disagrees 0 0
Neutral 0 0 0
Total 38 100.00 100.00

Source: Researcher’s Database (2014)

From table 4.13 we see that, 33 respondents (86.8% of respondents) strongly agrees
that cots transparent are much enough so that the overcharging does not occur during
the projects in the organization, 5 respondents (13.2% of respondents) on agrees
recognized it as important while disagree and neutral are none . These findings
justify that at MIC the cots transparent are more enough and they make sure that no
overcharging occur during the projects.

4.4.5 The Utilization of Benefits Promised During Contracts of Projects

Performance at tiGO-Tanzania
Respondents were asked to give their opinion on the utilization of benefits as per
contracts said. The findings are presented in the table 4.14

51
Table 4.14: Utilization of Benefits as Per Contracts Management Promised at
TIGO
Recognized as significant Frequency Percent Gross Percentage
Strongly Agrees 33 94.29
Agrees 2 5.71 100.00
Disagrees 0 0
Neutral 0 0 0
Total 35 100.00 100.00
Source: Field Data (2014)

From table 4.14 we see that, 33 respondents (94% of respondents) strongly agrees
that MIC utilizes the benefits as per contracts said while 2 agrees that the benefits are
fully utilized as per contracts terms. And the rest they are neutral and disagrees.This
concludes that the tiGO utilized effectively the benefits of contracts as per said on
contracts.

52
 CHAPTER FIVE

DISCUSSION OF FINDINGS

5.1 Introduction
The purpose of this research is to assess the role of contract management in the
effectiveness of project management at tiGO-Tanzania. This section discusses the
research findings from questionnaires and interviews in relation to research questions
based on responses from both respondents and interviewees.

The conceptual framework of the literature (Figure 2.1) groups the literature in to
three parts; suppliers’ compliance with terms and conditions, suppliers’ technical
capability and closely monitoring of project contracts.It was from these parts that
research questions emerged from which the research design was focused.

5.2 Experience of respondents with tiGO-Tanzania’s Procurement

Department
The findings advocate that greater percentage (about 68 percent) of respondents is
well experienced with tiGO-Tanzania’s Procurement department (i.e. 3 years and
above) and therefore are able to give accurate information. This is in accord with
many scholars who narrated that in the real world there is no perfect substitute for
experience; the more you have the better. Respondents are, therefore, assumed to
have sufficient knowledge to respond accurately to the questionnaires and interviews.

5.3 Contract Management Recognized as Important Function at tiGO-

Tanzania
This reflects respondents’ suggestions on significance of contract management
function. All respondents consider contract management function as significant to the
organization.It can be said that, contract management function has value addition to
the entire organization. This is in agreement with Green Point Global (2013) who
reported that managing contracts is managing risks. This argument is supported by
Republic of South Africa’s national Treasury (2010) as earlier seen in the literatures,

53
that good contract management has the capacity to increase revenue opportunities,
decrease costs, and enhance service delivery.

5.4 Approvals of Purchases, Availability and Frequency of PC Meetings

From the findings we see that purchase committee is conducted twice a week and
approvals of projects are heads of operations, procurement and finance departments
who control the budgets of the company. Since all projects are approved in the
purchase committee after being financially and technically evaluated by project
owners, procurement specialists and heads of operations, procurement and finance
departments with regard to background and scope of particular project, it is from this
committee that the basis of contract formation starts and hence contract management
which will, in turn, lead to effective project management. This in deed answers the
general research question of the report.

5.5 Suppliers’ Compliance with Terms and Conditions of the Contracts

This part reflects the respondents’ opinion on the dependency of project management
on suppliers’ compliance with terms and conditions of the contracts. Almost 92 % of
respondents were in view that there is really dependency between the two. As seen
from section 2.2.4 of the literatures,amongst other things, contract terms and
conditions are the prerequisite requirements for enforcement of contracts. This has
been supported by Humphries Associates (2004) who proclaimed that the terms and
conditions of the contracts are the basis for all purchase orders. This fact answers the
first research question of this study.

5.6 Suppliers’ Technical Capability and Effective Project Management

Findings from research reveal that there is strong correlation between effective
project management and suppliers’ technical capability. Since telecommunication
industry is a project oriented, selection of suppliers is critical to the organization.
Right supplier selection increases the likelihood of organization to have high quality
and innovative products or services, reduces risks and determines whether the
supplier has the technical ability and capacity to perform the work. These are vital
for the success completion of projects. This fact is in accord with (USPS, 2013) who

54
argued that technical supplier analysis confirms the reasonable type and amount of
resources proposed by the supplier which covers the proposed types, quality and
quantities of materials, processes, labor andtools as set forth in the proposal.
The suppliers needs to understands the importance of such projects to there
cusomers. Also needs to make sure that the materials are delivered on right time,right
amount,at right place and right quality and quantity so that the value of money and
projects are well executed
Moreover, technical capability of suppliers is important for effective project
management because product or service quality is a direct result of production
workforce and suppliers. Therefore, technically capable suppliers are important
element of effective project management and this suffices as the answer to the
second research question.

5.7 Close Monitoring of Procurement Contracts during Project

Implementation
While some participants indicated that close monitoring of procurement contracts has
no significance toeffective project management, majority (52.63%) of respondents
agreed that effective contract management depends on close monitoring of
procurement contracts.It can generally, from respondents’ observation, be deduced
that effective project management depends on close monitoring of procurement
contracts. The findings are consistent with Hinton (2003) who asserted that close
monitoring of project contracts ensures that vendors adequately perform their
respective contracted works or services.

5.8 Respondents’ Experience on Disputes with tiGOTanzania’s Suppliers

Apparently, analysis shows that at MIC-Tanzania there are disputes related to
projects majority of which are caused by suppliers’ late delivery, poor quality of
works and/or services, vague specifications and technical incapability. These
findings, coupled with Sharma et.al. (2011)’s research show that these are common
problems with suppliers.

55
Droge et al. (2004), supports the argument by adding that these supplier issues are
caused bypoor supplier involvement in product development, in quality programs,
long term relationship and frequency of schedule changes. This apparently answers
the general research question.

5.9 Visibility of Project Contracts at tiGO-Tanzania

Research analysis shows that little attention is paid to contract visibility at tiGO-
Tanzania. This makes contract and hence project difficult to manage. Poor contract
monitoring and control has been named as one of the most contract management
issues to most companies. IBM (2013) stated thatdespite advancement in Information
and Communication Technology, to most companies, most contracts are still
flagging in file cabinets, being managed manually or with very limited technologies,
there is no visibility into what is virtually happening in the active contracts at every
stage of the contract and project life cycle.

5.10 Staffing Adequacy in Contract Management Function

Analysis indicates that there is staffing inadequacy at tiGO-Tanzania’s contract
management function. This might be the cause of poor contract visibility in the
organization as seen in section 5.9.This is consistent with general view that
efficiency and productivity of organization depends heavily on effective recruitment
and maintaining proper staffing levels (Skuturna, 2006).

5.11 Enforcement of Penalty Clauses for Breach of Project Contracts

Research analysis reveals that tiGO-Tanzania has been slack on enforcement of
penalty clauses for suppliers’ breach of project contracts. The respondents’ opinion
on how the penalty is discharged was that instead of paying a specified sum in
comparison with the loss, the dischargewas mainly through counter offers
specifically to major suppliers where a consultant is provided for free or training
programs are offered for free of charge.As supported by the insertions of Hatzis
(2003) who asserted that having penalty clauses and not enforcing them is like
“having a cake and not eating it”. This suggests that lack of enforcement of penalty
clauses against suppliers might be the reason why there is lack of compliance to

56
terms and conditions, project delays, late deliveries, poor after sales services, poor
quality of works.

5.12 Suppliers’ Delivery Performance at tiGO-Tanzania

Although the results show that majority of participants agree that tiGO-Tanzania’s
suppliers observes delivery schedules but still there is increased laxity. According to
respondents at tiGO-Tanzania delivery issues mostly are experienced with local
suppliers. This shows that at tiGO-Tanzania, there is no strong supplier performance
measurement specifically delivery performance. This point was supported by
Aberdeen Group (2006)in their supplier benchmarking project which provided strong
evidence that most enterprises have inconsistent strategies and insufficient
infrastructure for managing and measuring supplier performance.

5.13 Effectiveness of Technical Evaluation of Suppliers

Majority (52.63 %) of respondents agree that at tiGO-Tanzania there is no strong
technical evaluation of suppliers. This shows that at MIC-Tanzania there is no
effectivetechnicalevaluation of suppliers. This might be the reasons why at tiGO-
Tanzania some projects fail as supported by Sharma et.al (2011) for smooth
execution of projects, it is necessary to consider technical, managerial and financial
criteria in supplier prequalification process.

5.14 Risks Associated With Poor Management of Project Contracts

Analysis reveal that, due to improper contract management, tiGO-Tanzania is
exposed to a lot of risks ranging from project management uncertainty, contractor
relationship risks, poor quality of works or services, late deliveries, termination
penalties especially when the contract is in auto prolongation mode and there is no
exit clause, conflicts as well as loss of revenue and goodwill.

57
 CHAPTER SIX

CONCLUSION AND RECOMMENDATIONS

6.1 Introduction
In chapter one, the main and specific research were listed; these objectives were
addressed during the course of this research and will therefore, be properly
concluded. Lastly, recommendations with regard to the role of contract management
in the effectiveness of project management at tiGO-Tanzania will be made.The
chapter comprises three sections: introduction, conclusion and recommendations on
the role of contract management in the effectiveness of project management at tiGO-
Tanzania.

6.2 Conclusion
The objective of this research study wereto assess the role of procurement contract
management in the effectiveness of project management at tiGO-Tanzania,
specifically, to determine if supplier’s compliance with terms and conditions of the
contract relates to effectiveness of project management, to determine whether
technical capabilities of suppliers reveal the effectiveness of project management and
to determine if monitoring of procurement contracts during projects implementation
correlates to the effectiveness of project management at tiGO-Tanzania.

The findings reveal that there is very high dependency of effective project
management on suppliers’ compliance with terms and conditions, suppliers’
technical capability and close monitoring of suppliers during project implementation.
Although at tiGO-Tanzania contract management function is considered significant
and all projects are approved by heads of operations, procurement and finance
departments in the purchase committee is twice a week, there is staffing inadequacy
in contract management function, there are disputes related to projects majority of
which are caused by suppliers’ late delivery, poor quality of works and/or services,
vague specifications, supplier’s technical incapability and little attention is paid to
making contract visible which makes contract and hence project difficult to

58
manage.MIC-Tanzania has also been slack on enforcement of penalty clauses for
suppliers’ breach of project contracts; instead discharge is mainly done through
counter offers. There is also lack of efficient technical evaluation of suppliers and
increased laxity in supplier monitoring especially on delivery KPI for local suppliers.
These have exposed MIC-Tanzania is to a lot of risks ranging from project
management uncertainty, supplier relationship risks, poor quality of works or
services, late deliveries, conflicts as well as loss of revenue and goodwill.

6.3 Recommendations
In order to assess the role of procurement contract management in the effectiveness
of project management at tiGO-Tanzania, reliable and valid instruments were
developed, the results were analyzed and thoroughly discussed, conclusion was
reached and the following are recommendations arising from the study objectives;
First and foremost, to administer compliance with terms and conditions of project
contracts, MIC-Tanzania shall secure and enforce penalty clauses for suppliers’
breach of project contracts instead of discharging it through counter offers. These
offers are normally provided at prices which cannot compensate the loss incurred.
Moreover, enforcement of penalty clauses would help suppliers to match
specifications, deliver materials and high quality of projects and services on time
which would guarantee the efficient and effective delivery of project. For avoidance
of doubt, the organization shall require a supplier to submit reports in advance of or
concurrent with its invoices. These reports should be directly related to the terms and
conditions of project contracts.

Because tiGO-Tanzania is a project oriented organization, price alone should not be

the determining factor for supplier qualification; strong technical supplier evaluation
is highly recommended to ensure that suppliers deliver projects at excellent
standards. This shall include previous experience in similar field and with same type
of requirements, available capability and equipment to undertake the project as well
as qualifications and experience of proposed personnel. RFPs should also
communicate evaluation criteria that are relevant for the project to be undertaken and
at the end of the contract period tiGO-Tanzania should evaluate the supplier’s

59
delivery performance and provide a report to the supplier on its performance. This
would technically enhance efficiency in delivery of projects.

Last but not least, to enhance contract and project management, tiGO-Tanzania shall
have a contract management solution (e-contract management) so as to have
visibility into what is happening in its active contracts at virtually every stage of the
project lifecycle. The automated solution should be able, at minimum and at any
time, to provide information related to contract number, contract scope, parties
involved, addresses of the contact person, whether new or amendment, contract start
date, expiry note, contract value, contract term, approval date, automatic renewal
details, extension period, business department under agreement, whether competitive
or single source, invoicing terms, payment terms, purchase committee approval date,
currency, contract value, funding type; whether OPEX or CAPEX, CAR number,
commercial terms, termination clause, taxes and warranties as well as Service Level
Agreement and insurance. For effective project management, this should be
consistent from contract creation through to tracking milestones and contract
renewal. This solution should be designed to provide alerts and reporting systems for
all project contracts. Moreover, due to growth of business and increasing risks
associated with the increase in supplier base, tiGO-Tanzania has to recruit and retain
more experienced and qualified staff for contract management function to cope with
increased demand of project management. This would increase the likelihood of
close monitoring of project contracts during projects implementation.

60
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Droge, C., Jayaram, J., Vickery, S.K., 2004. The effects of internal versus external
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performance. Journal of Operations Management 22, 557–573.

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Elsey, D. R., 2007. Contract Management Guide. CIPSForooz, F. &
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IACCM, 2012. Poor Contract Management Costs Companies 9% — Bottom Line:
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management-costs-companies-9-bottom-line/[accessed 09 June 2014].

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Prosidian Consulting LLC, 2011. Managing contract risks.The increased importance
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64
 APPENDICES

Appendix 1: Data Gathering Questionnaire to tiGO-Tanzania Procurement

and Supply Chain Personnel

Dear Respondent,

I am requesting your favor to use your valuable time to respond to questions

enclosed to this questionnaire. This will help me conduct my research on the
assessment of the role of procurement contract management in the effectiveness of
project management at tiGO-Tanzania.

This questionnaire is intended to be used for academic purposes only and be assured
that all responses will be kept secure.

Kindly, tick the appropriate answer according to your view and give brief
explanations whenever requested.

A. Personal particulars
1. What is your position/role at tiGO-Tanzania?
…………………………………………………………………………………
………………………………………………………………………………….

2. For how long have you worked in tiGO-Tanzania’s procurement and Supply
Chain department? (in years)
…………………………………………………………………………………
………………………………………………………………………………….

65
B. Interview questions

1. How important do you consider the Contract Management function in the

effective delivery of project contracts? Kindly cycle the correct answer in the
following Likert-scale.

2. Do you agree that effective project management depends on supplier’s

compliance with terms and conditions of contract? Kindly tick the correct
answer.

3. Do you agree that effective project management depends on supplier’s

technical capability? Kindly tick the correct answer.

4. Do you agree that monitoring of procurement contracts during project

implementation correlates the effectiveness of project management at MIC-
Tanzania? Kindly tick the correct answer.

66
5. Are purchase committee board meeting conducted? Kindly tick the correct
answer.
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

6. If “Yes”, how often are these PC meeting conducted? (number of times a

week)
…………………………………………………………………………………
………………………………………………………………………………….

7. Who authorise(s) the purchase of project requisitions in the purchase

committee? (Designations only)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

8. Have you experienced any dispute(s) with tiGO-Tanzania’s suppliers in

delivering projects? Kindly tick the correct answer.
(i.) Yes ( )
(ii.) No ( )

9. If your answer is “Yes” kindly state what was it (were they) related to?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

10. What measures has tiGO-Tanzania taken to resolve those disputes?

---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------

67
11. Do you think tiGO-Tanzania has visibility of its project contracts? Kindly
cycle the correct answer
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

12. If “No”, what measures are being taken by management to ensure that there is
consistent contract visibility?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

13. In your opinion, do you think tiGO-Tanzania’s contract management function

is properly staffed? Kindly tick the correct answer.
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

14. If “No”, what measures are being taken by management to ensure that the
function is properly staffed?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

15. Are penalty clauses enforced for breach of project contracts? Kindly tick the
appropriate answer
(i.) Yes( )
(ii.) No( )
(iii.) I don’t know( )

68
 If your answer is “No” kindly state how it is discharged
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

16. Kindly state the risks associated with poor management of project contracts?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

17. Are the cost transparent enough to ensure the overcharging of services during
the projects ordering does not occur?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

18. Are the benefits promised by contracts management are fully utilized and
realized by tiGO-Tz?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

19. Does the purposes and scope of the contracts are well defined and
communicated in prior of the final dates?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

69
20. Is there any information management system that can supports contracts
manager
(i.) Yes ( )
(ii.) No ( )
(iii.) Neutral ( )

21. Is the total spend during the contracts are well understood by both parties?
(i.) Yes ( )
(ii.) No ( )
(iii.) Neutral ( )

22. Additional comments and suggestions

---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

Thank you very much for your time

70
Appendix 2: Interview Questions to Project Owners at tiGO-Tanzania

Dear Respondent,

I am requesting your favor to use your valuable time to respond to questions

enclosed to this questionnaire. This will help me conduct my research on the
assessment of the role of procurement contract management in the effectiveness of
project management at tiGO-Tanzania.

This questionnaire is intended to be used for academic purposes only and be assured
that all responses will be kept secure.

Kindly, tick the appropriate answer according to your view and give brief
explanations whenever requested.

C. Personal particulars

1. What is your position/role at tiGO-Tanzania?

---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

2. For how long have you worked in MIC-Tanzania’s procurement and Supply
Chain department? (in years)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

71
D. Interview Questions

4 How important do you consider the Contract Management function in the

effective delivery of project contracts? Kindly cycle the correct answer in the
following Likert-scale.

5 Do you agree that effective project management depends on supplier’s

compliance with terms and conditions of contract? Kindly tick the correct
answer.

6 Do you agree that effective project management depends on supplier’s

technical capability? Kindly tick the correct answer.

7 Do you agree that monitoring of procurement contracts during project

implementation correlates the effectiveness of project management at MIC-
Tanzania? Kindly tick the correct answer.

72
8 Are purchase committee board meeting conducted? Kindly tick the correct
answer.
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

9 If “Yes”, how often are these PC meeting conducted? (number of times a

week)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

10 Who authorize(s) the purchase of project requisitions in the purchase

committee? (Designations only)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

11 Have you experienced any dispute(s) with tiGO-Tanzania’s suppliers in

delivering projects? Kindly tick the correct answer.
(i.) Yes ( )
(ii.) No ( )

12 If your answer is “Yes” kindly state what was it (were they) related to?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

13 What measures has MIC-Tanzania taken to resolve those disputes?

---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

73
14 Do you think tiGO-Tanzania has visibility of its project contracts? Kindly
cycle the correct answer
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

15 If “No”, what measures are being taken by management to ensure that there is
consistent contract visibility?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

16 In your opinion, do you think tiGO-Tanzania’s contract management function

is properly staffed? Kindly tick the correct answer.
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

17 If “No”, what measures are being taken by management to ensure that the
function is properly staffed?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------

18 Are penalty clauses enforced for breach of project contracts? Kindly tick the
appropriate answer
(i.) Yes ( )
(ii.) No ( )
(iii.) I don’t know ( )

74
 If your answer is “No” kindly state how it is discharged
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

19 Kindly state the risks associated with poor management of project contracts?
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

20 Are the cost transparent enough to ensure the overcharging of services during
the projects ordering does not occur?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

21 Are the benefits promised by contracts management are fully utilized and
realized by tiGO-Tz?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

22 Does the purposes and scope of the contracts are well defined and
communicated in prior of the final dates?
(i.) Strongly Agrees ( )
(ii.) Agrees ( )
(iii.) Disagrees ( )
(iv.) Neutral ( )

75
23 Is there any information management system that can supports contracts
manager
(i.) Yes ( )
(ii.) No ( )
(iii.) Neutral ( )

24 Is the total spend during the contracts are well understood by both parties?
(i.) Yes ( )
(ii.) No ( )
(iii.) Neutral ( )

25 Additional comments and suggestions

---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------

Thank you very much for your time

76
RESEARCH ACTIVITIES SCHEDULE

The following table shows expected time frame for research activities.

Research Activities Schedule

ACTIVITY DURATION
LIST FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV
Topic YES
selection
Consultation YES
with
supervisor
Preparation of YES
st
1 draft
proposal
Final draft YES
proposal and
submission
Data collection YES YES YES
Data YES YES
processing,
analyzing and
presentation
Preparation of YES YES
first draft
research report
Final report YES YES
draft and
submission
Source: Researcher’s idea (2014)

77
RESEARCH BUDGET

Depicts the research budget from topic selection through to thesis submission.

Research Budget

ACTIVITY BASIS TOTAL COST

Drafting, typing, photocopying and

Preparation of proposal
binding TZS 300,000.00

Supervision expenses
Editing documents and other inputs TZS 150,000.00

Contingency Emergency funds TZS 100,000.00

Total TZS 550,000.00

Source: Researcher’s idea (2014)

78