STRATEGIC CONTRACTING PRACTICES AND SUPPLIER PERFORMANCE IN

HEALTH FACILITIES: A CASE OF MULAGO NATIONAL

REFERRAL HOSPITAL

BY

ANNET NAMPALA
18/MPP/KLA/WKD/0005

A DISSERTATION SUBMITTED TO THE DEPARTMENT OF ECONOMICS

AND MANAGERIAL SCIENCE IN PARTIAL FULFILMENTOF THE
REQUIREMENTS FOR THE WARD OF THE MASTERSDEGREE
IN PUBLIC CONTRACT OF UGANDA
MANAGEMENT INSTITUTE
JUNE, 2023

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 DECLARATION
I, ANNET NAMPALA, declare that this dissertation entitled “Strategic contracting practices
and supplier performance at health facilities: a case study of Mulago national referral
hospital.” is my own original work and it has not been presented and will not be presented to
any other institution for any academic award. Where other people’s work has been used, this
has been duly acknowledged.
SIGNATURE........................................ DATE........................................
ANNET NAMPALA
18/MPP/KLA/WKD/0005

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 APPROVAL
This is to certify that this dissertation by ANNET NAMPALA entitled, “Strategic contracting
practices and supplier performance at health facilities: a case study of Mulago national referral
hospital” has been submitted for examination with our approval as Institute supervisors.
SIGNATURE........................................ DATE........................................
Dr Oluka Prosy
Supervisor (UMI)

SIGNATURE........................................ DATE........................................
Dr Stella Kyohairwe
Supervisor (UMI)

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 DEDICATION
This dissertation is dedicated to my family members most especially my dear husband, my
children and my parents for their support and moral encouragement.

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 ACKNOWLEDGEMENT
I am deeply indebted to my research supervisors Dr. Oluka Pross Nagita and Dr Stella
Kyohairwe for their patience with my inadequacies as they guided me through the research
process. Without your parental and professional input, this research would have been difficult to
elevate to its current level.

I acknowledge with gratitude the contributions and co-operation made by the respondents from
Mulago National Referral Hospital for their willingness to provide the necessary information
when I visited the institution during the research process. Without their cooperation, this study
would have been impossible to accomplish.

I also thank my colleagues at Uganda Management Institute, persons who dealt with secretarial
work and those who read through the questionnaires and perfected the draft report.

I deeply treasure the contributions of all the above persons and ask God Almighty to richly bless
them.

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 TABLE OF CONTENTS

DECLARATION............................................................................................................................i

APPROVAL...................................................................................................................................ii

DEDICATION..............................................................................................................................iii

ACKNOWLEDGEMENT...........................................................................................................iv

TABLE OF CONTENTS..............................................................................................................v

LIST OF TABLES......................................................................................................................xiii

LIST OF FIGURES....................................................................................................................xiv

LIST OF ACRONYMS AND ABBREVIATIONS...................................................................xv

ABSTRACT................................................................................................................................xvi

CHAPTER ONE............................................................................................................................1

INTRODUCTION.........................................................................................................................1

1.1 Introduction................................................................................................................................1

1.2 Background of the study............................................................................................................1

1.2.1 Historical Background............................................................................................................1

1.2.2 Theoretical Background..........................................................................................................3

1.2.3 Conceptual Background..........................................................................................................4

1.2.4 Contextual Background..........................................................................................................6

1.3 Statement of the Problem...........................................................................................................7

1.4 Purpose of the Study..................................................................................................................8

1.4.1 Specific Objectives of the Study.............................................................................................8

1.5 Research Questions....................................................................................................................8

1.6 Research Hypothesis..................................................................................................................8

1.7 Conceptual Framework..............................................................................................................9

1.8 Justification of the study..........................................................................................................10

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1.9 Significance of the study.........................................................................................................10

1.10 Scope of the Study.................................................................................................................11

1.10.1 Geographical Scope............................................................................................................11

1.10.2 Content scope......................................................................................................................11

1.10.3 Time Scope.........................................................................................................................11

CHAPTER TWO.........................................................................................................................12

LITERATURE REVIEW...........................................................................................................12

2.1 Introduction..............................................................................................................................12

2.2 Theoretical Review..................................................................................................................12

2.3 Review of related literature.....................................................................................................13

2.3.1 Risk control and supplier performance in health facilities...................................................13

2.3.2 Contract planning and supplier performance in health facilities..........................................15

2.3.3 Contracts administration and supplier performance in health facilities...............................17

2.4 Summary of Literature.............................................................................................................18

CHAPTER THREE.....................................................................................................................20

METHODOLOGY......................................................................................................................20

3.0 Introduction..............................................................................................................................20

3.1 Research Design......................................................................................................................20

3.2 Study Population......................................................................................................................20

3.3 Sample size and selection........................................................................................................20

3.4 Sampling Techniques...............................................................................................................21

3.5 Data collection methods..........................................................................................................21

3.5.1 Survey Method......................................................................................................................21

3.5.2 Interview Method..................................................................................................................22

3.6 Data Collection Instruments....................................................................................................22

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3.6.1 Questionnaire........................................................................................................................22

3.6.2 Interview guide.....................................................................................................................22

3.7 Data quality control.................................................................................................................23

3.7.1 Validity of instruments.........................................................................................................23

3.7.2 Reliability of instruments.....................................................................................................23

3.8 Data collection procedure........................................................................................................24

3.9 Data analysis............................................................................................................................25

3.9.2 Qualitative analysis...............................................................................................................25

3.10 Measurement of variables......................................................................................................25

3.12 Ethical considerations............................................................................................................26

CHAPTER FOUR.......................................................................................................................28

PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS.........................28

4.1 Introduction..............................................................................................................................28

4.2 Response rate...........................................................................................................................28

4.3 Findings on background information of the respondent..........................................................28

4.3.1 Sex characteristics of the Respondents.................................................................................28

4.3.2 Age bracket of the Respondents...........................................................................................29

4.3.3 Respondents by highest level of education...........................................................................30

4.3.4 Years of service....................................................................................................................30

4.4 Empirical findings...................................................................................................................31

4.4.1 Supplier performance in health facilities..............................................................................31

4.4.1 Risk control and supplier performance in health facilities...................................................35

4.4.2 Contract planning and supplier performance in health facilities..........................................39

4.4.3 Contracts administration and supplier performance in health facilities...............................42

CHAPTER FIVE.........................................................................................................................46

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SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS...................46

5.1 Introduction..............................................................................................................................46

5.2. Summary of major findings....................................................................................................46

5.2.1: Risk control and supplier performance in health facilities..................................................46

5.2.2 Contract planning and supplier Supplier performance in health facilities..........................46

5.2.3 Contracts administration and supplier performance in health facilities...............................47

5.3. Discussion of Findings...........................................................................................................47

5.3.1 Risk control and supplier performance in health facilities...................................................47

5.3.2 Contract planning and supplier performance in health facilities..........................................48

5.3.3 Contracts administration and supplier performance in health facilities...............................49

5.4 Conclusions..............................................................................................................................50

5.4.1 Risk control and supplier performance in health facilities...................................................50

5.4.2 Contract planning and supplier performance in health facilities..........................................50

5.4.3 Contracts administration and supplier performance in health facilities...............................50

5.5 Recommendations....................................................................................................................51

5.5.1 Risk control and supplier performance in health facilities...................................................51

5.5.2 Contract planning and supplier performance in health facilities..........................................51

5.5.3 Contracts administration and supplier performance in health facilities...............................51

5.6. Areas for future Research.......................................................................................................52

REFERENCES............................................................................................................................53

APPENDICES.................................................................................................................................i

APPENDIX I: QUESTIONNAIRE FOR THE SERVICE PROVIDERS................................i

SECTION B: QUESTIONS ON THE STUDY VARIABLES..................................................ii

APPENDIX II: INTERVIEW GUIDE FOR THE CONTRACT STAFF................................v

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 LIST OF TABLES
Table 3.1: Sample size and sampling techniques used..................................................................21
Table 3.2: Results of content validity for research tools...............................................................23
Table 3.3: Reliability test results of research instruments.............................................................24
Table 4.4: Likert Scale...................................................................................................................26
Table 4.5: Response Rate..............................................................................................................28
Table 4.6: Sex of the respondents..................................................................................................29
Table 4.7: Supplier performance in health facilities......................................................................32
Table 4.8: Descriptive statistics on risk control and supplier performance...................................35
Table 4.9: Pearson correlation matrix for risk control and supplier performance.........................38
Table 4.10: Descriptive statistics on contract planning in health facilities...................................39
Table 4.11: Pearson correlation matrix for contract planning and supplier performance.............42
Table 4.12: Descriptive Statistics on the contracts administration in health facilities..................43
Table 4.13: Pearson correlation matrix for contracts administration and supplier performance...45

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 LIST OF FIGURES
Figure 3.1: Relationship between strategic contracting practices and supplier performance in
health facilities.................................................................................................................................9
Figure 4.2: Age of the respondents................................................................................................29
Figure 4.3: Highest Level of Education.........................................................................................30
Figure 4.4: Years of service...........................................................................................................31

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 LIST OF ACRONYMS AND ABBREVIATIONS
BOQs: Bills of Quantities
CMS: Central Medical Store
ERP: Enterprise Resource Planning
NDA: National Drug Authority
NMS: National Medical Stores
OAG: Office of the Auditor General
P2P: Purchase to Pay
PDU: Procurement Disposal Unit
SOR: Statement of requirement
TCE: Transaction Cost Theory
TORs: Terms of references
WHO: world health organization

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 ABSTRACT
The purpose of the study was to examine the impact of strategic contracting practices and
Supplier performance in health facilities. The objectives of the study were; to examine the
relationship between risk control and supplier performance at Mulago referral hospital, to
examine the relationship between contract planning and supplier performance at Mulago referral
hospital and to examine the relationship between contracts administration and supplier
performance at Mulago referral hospital. The study adopted a cross-sectional survey design
where both quantitative and qualitative approaches were used. In this study, out of the 66
questionnaires administered, 57 were returned correctly filled representing 95%. Out of the 10
respondents that were targeted for interviews, only 08 were actually interviewed implying a
response rate of 80%. The study revealed that there was positive relationship between risk
control and supplier performance, thus, it is important that Mulago National Referral Hospital
conduct assessments to identify and avoid risks in their contracts for deliver better services.
Findings of this study revealed that contract planning plays an important role in Mulago National
Referral Hospital’s supplier performance. The positive relationship between contracts
administration and supplier performance emphasizes that activities after a contract has been
awarded to determine should be performed well for the contracting organizations and the
contractor to meet the contract requirements. The study recommended that Mulago National
Referral Hospital should improve its contract risk management for better supplier performance. It
can achieve this by assessing the contracting process to ensure reliable inputs, and identifying
and prioritizing a company’s risks for the formulating effective risk responses. It should also
assess its stakeholders to minimize self-conflicts and interest in its contracting process. Mulago
National Referral Hospital should improve its contracts planning to provide better service to the
Kampala community. It can achieve this through setting clear, measurable and achievable
contracts objectives within the available resources, knowledge and time. Apart from improving
its contract planning, its contract administration should also be improved for better supplier
performance. Issues that need to be addresses by Mulago National Referral Hospital include
improving its relationship with its service providers, making the formal governance of the
contract more convenient by reducing on the bureaucracy and clearly specifying expectations,
obligations, responsibilities and processes for dispute resolution in the contracting process.

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 CHAPTER ONE
INTRODUCTION
1.1 Introduction
Supply Chain Management is an increasingly important organizational concern, and proper
management of supplier relationships constitutes one essential element of supply chain success.
The single most important task of the purchasing function is to find and/or develop the best
possible supplier who serves the ultimate goals of a company for any given purchase
requirement. Suppliers can play a central role in driving revenues (top-line) as well as being
critical to the bottom line. For instance, putting together the best supply chain can support firms
in winning tenders themselves, or being granted exploration rights in a competitive situation in
an energy or mining industry context. Suppliers can provide innovation, ideas and access to new
markets and technology and increased capabilities. Many leading firms have realized that a well-
run supply chain can be a source of distinct competitive advantage in the marketplace, and have
been in the forefront in adopting practices that deliver superlative efficiencies in their supply
chain functions (Mose, Ombui, & Iravo, 2018). This chapter presents the background of the
study, statement of the problem, general objective of the study, specific objective of the study,
research questions, hypothesis of the study, significance of the study, conceptual framework,
justification of the study, scope of the study and operational definitions.

1.2 Background of the study

This section gives insight about the topic under investigation. It looks at the historical,
theoretical, conceptual and contextual background of the study.
1.2.1 Historical Background
The history of supplier performance can be traced back before the industrial revolution era that
was dependent on trading in agricultural commodities and crafts. At the time, most farmers sold
their merchandise directly in the open markets. Supplier performance was then largely attributed
to how best one would honour the promise they made. During this period, acceptable supplier
performance was associated with the aesthetic quality of goods supplied (Feltwell, 1991).
Similarly, purchasing firms in Africa are building strong relationships with suppliers. These
relationships have seen a steady improvement in supplier performance, which has also benefited
relating firms to achieve their strategic goals. The foundations of strong business relationships on
a greater part involve presence of mutual trust and existence of perpetual engagements. These
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kinds of associations have been seen to influence a number of specific business indicators such
as lead-time flexibility among others (Maram, et al, 2015).

In East Africa, Ahimbisibwe et al., (2014) argue that a number of organization’s have embraced
the crucial role relationship management plays in assisting suppliers to achieve superior Supplier
performance. Companies in this region that are seen to operate on modern business fundamentals
often work with a wide range of suppliers. The availability of medicine in health facilities is a
substantial contributory factor to quality health care. However, achieving quality care presents a
significant challenge, especially in low-income countries (Khuluza & Heide, 2017). Malaria has
remained one of the oldest and deadliest diseases of humankind (Shretta, et al., 2017), especially
among children under five and expectant mothers (Damien, et al., 2018). Currently, international
efforts focus on malaria eradication by rolling out new technologies, and through substantial
growth in the political and financial commitment by countries, regions, and their global partners
by 2050 (Feachem, et al., 2019), especially in Africa (Alonso, 2016).

In Uganda, Ahimbisibwe et al., (2014), further alludes that, in today’s contract management
environment, Uganda government Parastatals are engaged in numerous contractual agreements
with several suppliers. However, this strategy is still faced with challenges of meagre contract
relationship management leading to poor supplier performance and ultimately leading to low
supplier performance. Supplier performance problem that cuts across both macro and market
levels (Nagitta & Mkansi, 2015). The embedded complex coordination problem is tied to the
unavailability, under stock, and or overstock of ACTs in some hospitals. Although previous
studies have provided platforms for understanding the factors affecting the levels of medicine
stock, unfortunately, there is recognition in the discipline that SCM studies are skewed towards
either the positivist paradigm (Singh & Shankar, 2013) or normative (literature reviews and
theoretical models) and quantitative (modeling and surveys) (Flint, et al., 2012).

At the same time, the environment in which the supply chain phenomena are located is becoming
increasingly complex, especially in the public health sector (Yadav, 2015), necessitating
balancing the different conflicting goals and interests of politicians, health workers, patients, and
citizens (Singh, Kumar, and Kumar, 2016). Hospitals often face the dilemma of designing new
appropriate decision-making models that try to find a balance between the different supply chain

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players (Saltman & Duran, 2015) without compromising quality standards through policy shifts,
if one research approach is used. In order to accurately describe, truly understand and begin to
explain these complex phenomena (such as market and macro supply chain coordination
dimensions (SCCD), research streams should include more studies using multiple methods.
1.2.2 Theoretical Background
The study adopted the Transaction Cost Theory by (Rundquist, 2007). Transaction costs refer to
explicit fees associated with a transaction as well as implicit fees of monitoring and controlling a
transaction. Transaction cost includes the costs of information, search, negotiation in addition to
contracting and enforcement. The economic implication is decision-makers have to weigh costs
associated with performing an activity in-house against that of strategic contracting practices it to
the market. Thus, if the transaction cost of using the market is higher, the transaction should be
executed by the firm (in-sourcing). One of the assumptions of TCE is that transaction
characteristics determine transaction costs and the optimal buyer–supplier governance structure
(Wynstra et al., 2018). Therefore, service-buying organizations should craft governance
arrangements to match the exchange conditions that accompany the specific type of service
acquired (Ramanathan and Gunasekaran, 2014).
According to the TCE perspective, three transaction characteristics determine transaction costs:
asset specificity, measurement difficulty and uncertainty (Peterson et al., 2015). Asset specificity
relates to the relationship-specific investment in resources. This investment can generate hazards
of hold-up behaviour because one party in the relationship may seek to appropriate gains, such as
reducing service quality or raising prices, from the other party’s specific investments (Donato,
2010). Difficulty in measuring the service supplier performance also generates hazards. When
Supplier performance is difficult to measure, suppliers may limit their efforts to fulfil the
agreement. For example, the supplier may cut corners since the buyer cannot measure it.

With regard to the choice of governance structure by decision-makers, human and environmental
factors influences the decision makers attributed. Human factors include bounded rationality and
opportunism. Bounded rationality comes from limited capacity of shareholders and managers to
process all the available information and consider every possible outcome associated with any
transaction. This exposes the contracting parties to some level of risk, for instance, employees or
vendors may take advantage of the owners. In order to prevent such an outcome, owners may
incur costs related to gathering such information. Meanwhile opportunism is an assumption that
3
human behaviour is “self-interest seeking with guile”. This means that principals and agents have
different goals and will pursue their own self-interest. For example, problems may arise when
agents do not deliver as promised (moral hazard) or misrepresent themselves (adverse selection)
(Williamson, 1998). Transaction Cost Theory will give insights into the costs of contractual
exchange, which determines the type of contractual governance arrangements to minimize the
costs of transacting (Donato, 2010). Contracts are explicit (usually written, often detailed) and
formal arrangements that stipulate the legally binding obligations and roles of both parties in a
relationship. In this sense, contracts are essential transaction mechanisms in service operations.
Also, contracts provide a formal governance structure for the interactions between buyers and
suppliers, and they may prevent opportunistic behaviour in the transaction (Wacker et al., 2016).
1.2.3 Conceptual Background
The study was tailored on the conceptualization that strategic contracting practices affect
supplier performance in health facilities. Strategic contracting practices was analysed in terms of
risk management contract planning and contracts administration. Supplier performance was
analysed in terms of timely delivery value for money and quality of service.
Risk control is a plan-based business strategy that aims to identify, assess, and prepare for any
dangers, hazards, and other potentials for disaster both physical and figurative that may interfere
with an organization's operations and objectives (Motaleb, 2020). The core concepts of risk
control include; avoidance is the best method of loss control. For example, after discovering
that a chemical used in manufacturing a company’s goods is dangerous for the workers, a
factory owner finds a safe substitute chemical to protect the workers’ health. Avoidance,
however, is not always possible. Loss prevention accepts a risk but attempts to minimize the
loss rather than eliminate it. For example, inventory stored in a warehouse is susceptible to
theft. Since there is no way to avoid it, a loss prevention program is put in place ( Park et al.,
2019). The program includes patrolling security guards, video cameras and secured storage
facilities. Insurance is another example of risk prevention that is outsourced to a third party by
contract. Loss reduction accepts the risk and seeks to limit losses when a threat occurs. For
example, a company storing flammable material in a warehouse installs state-of-the-art water
sprinklers for minimizing damage in case of fire and separation involves dispersing key assets
so that catastrophic events at one location affect the business only at that location. If all assets
were in the same place, the business would face more serious issues. For example, a company

4
utilizes a geographically diverse workforce so that production may continue when issues arise at
one warehouse.
Contract planning is concerned with identifying and executing the structure, format and content
of the contracting mechanism the organization needs with their partners (Kongsong, 2021). Good
contract planning formalizes relations between parties within a robust legal framework, but is
much more besides; it is an opportunity to define the arrangements that encompass every aspect
of what outcomes the organization wants from the supplier and how it wants the relationship to
work (Oluka & Basheka, 2019). This means that the organization needs to take an active role in
the development of the contractual mechanism early on; it should not be left as a supplementary
activity post negotiation.
Contracts administration
Contract administration referred to the formal governance of the contract and was concern with
the mechanics of the relationship between the Mulago and the service providers, the
implementation of procedures defining the interface between them, and the smooth operation of
routine administrative and clerical functions (Nawi, Rahman, & Abdullah, 2021). Contract
management is about the managing of contracts associated with procurement or purchasing as
part of legal documentation shared with partners, suppliers or even customers (Nawi, Rahman &
Abdullah, 2021). Contract management is important because it creates, executes, and analyzes
the contract to maximize financial and operational Supplier performance. Effective contract
management can create a powerful business relationship that will pave the road to greater
profitability opportunities. Creating an efficient contract is only possible if it is managed
effectively. Additionally, it is a good idea to hire a lawyer or a legal advisor in contract
management discussions (Komakech, 2020).

Supplier performance  is a measure of how well a supplier meets the requirements specified in
the contract. The requirements can be quality, delivery, cost, or other measures.
A supplier’s Supplier performance is important to the customer because it can affect the quality
of the product, the price, and the delivery time (Aunyawong, Wararatchai, & Hotrawaisaya,
2020). It is also important to the supplier because it can affect whether they get repeat business.
There are many ways to measure supplier performance. Some common methods are: On-time
delivery, Product quality, Cost per unit, Lead time and Order accuracy. On-time delivery is the
most important factor in supplier performance. A supplier that consistently delivers goods or
5
services late is not meeting the needs of their customer. Quality is also an important factor
in supplier performance (Asamoah et al., 2021). A supplier that consistently produces goods or
services of inferior quality is not meeting the needs of their customer. Cost is also an important
factor in supplier performance. A supplier that consistently charges more for goods or services
than their competitors is not meeting the needs of their customer. Flexibility is also an important
factor in supplier performance. A supplier that is inflexible in terms of pricing, delivery, or other
terms is not meeting the needs of their customer.

Mohammad (2020) also describes Supplier performance as the level of achievement of a set
expectation. Although supplier performance relates to the pre-arranged goals or objectives
which form the task parameters, widely used indicators of supplier performance include the
extent to which the supplier meets the quality, time and cost expectation of the procurement.

1.2.4 Contextual Background

Founded in 1913, Mulago Hospital is an epitome of the healthcare system in Uganda and over
the years it grew to become the flagship of the Uganda hospitals, becoming the only national
referral hospital in the year 2000 it was the largest public hospital in the country, with 1,500
beds. The hospital relies on a vast array of suppliers, both government and private sector based,
to provide drugs, medical and non-medical equipment to enable them carry out their services on
clients (MoH, 2019). While different national contract models exist across developing countries,
contract of essential medicines to serve many of these populations remains largely centralized in
the Ministry of Health and/or a Central Medical Store (CMS) and relies heavily on public
monies, international funding mechanisms, and donor funding. Indeed, supply Supplier
performance remains a problem at the hospital especially when it comes to drug supplies.
Mulago’s Supplier performance rating for 2019 was 38% against a national average of 64%
among public hospitals in the country. Several studies have suggested a considerable leakage of
drugs from public health facilities (MoH, 2019).
Despite the above, Mulago National Referral hospital continues to face challenges whereby
leakage of supplies is at 78%, Supplier performance rating for the year 2019 was 38% against a
national average of 64% and the suppliers continue to be embroiled in corruption related
scandals. For the year under review UGX.11, 366,157,000 was allocated to National Medical
Stores (NMS) to procure, store and distribute essential medicines and health care supplies to the

6
hospital. However, details at the hospital showed that medicines worth UGX.5,607,963,285 were
requisitioned and only UGX.4,125,495,171 were received from NMS leaving a balance of
UGX.7,240,661,829 worth of drugs. Of the orders placed, medicines worth UGX.1, 482,468,115
were not delivered by NMS (MoH, 2019). Mulago National Referral Hospital on the other hand
performed poorly at 44%, late initiation of procurements for works and supplies leading to low
absorption and poor supplier performance and under delivery of Drug Supplies from National
Medical Stores (Budget Monitoring Report Financial Year 2019/20).
Surprisingly, all these top-expiring medicines are either essential (with a high turnover because
they are used by the majority of the population) or vital (without them, the patient would die)
(Akiteng and Schwartz, 2020). Corruption and bribery is another serious challenge facing the
health supplier performance in the hospital and this has also permeated into the supply chain
which has led to provision of poor quality drugs, non-delivery, inflated costs, all of which have
affected Supplier performance negatively. All these show an underlying problem in the supplier
management at the hospital. It is not clear to what extent the current situation is aggravated by
poor strategic contracting, but there is need to investigate the possible link whereby poor
contracting or lack of enforcement thereof might be enabling factors in the current situation.
1.3 Statement of the Problem
Mulago National Referral Hospital has embraced recruitment of administrators with leadership
skills, encouraging administrators to go for further studies, introducing refresher courses to
enhance their leadership competences and bringing in experts to train workers in leadership
(Mulago Hospital Administration Department Annual Report, 2016). According to one study by
McPake et al. (2018) the mean leakage at health facility level is estimated at 78% whereby
several scandals have rocked two of the institutions in the pharmaceutical system of Uganda, the
National Medical Stores (NMS) and the National Drug Authority (NDA).

Despite the above, Mulago National Referral hospital continues to face challenges whereby
leakage of supplies is at 78%, Supplier performance rating for the year 2019 was 38% against a
national average of 64% and the suppliers continue to be embroiled in corruption related
scandals. For the year under review UGX.11, 366,157,000 was allocated to National Medical
Stores (NMS) to procure, store and distribute essential medicines and health care supplies to the
hospital. However, details at the hospital showed that medicines worth UGX.5,607,963,285 were
requisitioned and only UGX.4,125,495,171 were received from NMS leaving a balance of
7
UGX.7,240,661,829 worth of drugs. Of the orders placed, medicines worth UGX.1, 482,468,115
were not delivered by NMS (OAG, 2015). Mulago National Referral Hospital on the other hand
performed poorly at 44%, late initiation of procurements for works and supplies leading to low
absorption and poor supplier performance and under delivery of Drug Supplies from National
Medical Stores (NMS, FY2020/21). These suppliers’ performance has been negatively affected
and this could also have a bearing on the supplier performance of the hospital. What is not clear
is whether the root cause is poor strategic contract management whereby resources are not well
leveraged; there is poor risk allocation as well as lack of long-term planning at the hospital. It is
against this backdrop that the study will investigate how the strategic contracting practices affect
supplier performance in health facilities, a case of Mulago referral hospital.
1.4 Purpose of the Study
To examine the relationship between strategic contracting practices and supplier performance in
health facilities, a case of Mulago referral hospital
1.4.1 Specific Objectives of the Study
The study was guided by the following specific objectives;
i. To examine the relationship between risk control and supplier performance at Mulago
referral hospital
ii. To examine the relationship between contract planning and supplier performance at
Mulago referral hospital
iii. To examine the relationship between contracts administration and supplier performance
at Mulago referral hospital
1.5 Research Questions
The following research questions were used in the study;
i. What is the relationship between risk control and supplier performance at Mulago referral
hospital?
ii. What is the relationship between contracts planning and supplier performance at Mulago
referral hospital?
iii. What is the relationship between contracts administration and supplier performance at
Mulago referral hospital?
1.6 Research Hypothesis
The following hypothesis guided the study;

8
H1: There is a significant relationship between risk control and supplier performance at Mulago
referral hospital
H2: There is a significant relationship between contract planning and supplier performance at
Mulago referral hospital
H3: There is a significant relationship between contracts administration and supplier performance
at Mulago referral hospital
1.7 Conceptual Framework
According to Swaen and George (2022), conceptual framework illustrates the expected
relationship between study variables. It defines the relevant objectives for your research
process and maps out how they come together to draw coherent conclusions. In this case the
independent variable is strategic contracting practices and the dependent variable is supplier
performance in health facilities
Strategic Contracting Practices (IV)
Risk control
 Risk identification
 Risk analysis
 Risk evaluation
Contract planning Supplier performance health facilities (DV)
 Developing contracting strategies  Timely delivery
 Setting of overall objectives  Value for money
Contracts administration  Quality of service
Source: (Adopted from Rundquist, 2007 and
 Formal governance of the
Wacker et al., 2016, and modified by the
contract
researcher, 2023)
 Implementation of procedures
Figure 3.1: Relationship between strategic
contracting practices and supplier performance
in health facilities
The framework above highlights the major variables as: strategic contracting practices and
supplier performance, modified by the researcher. Strategic contracting is the independent
variable and it is measured by indicators such risk control with sub themes like (risk analysis,
risk evaluation and risk identification), Contract planning with sub themes like (developing
contracting strategies and setting of overall objectives) and Contracts administration with sub

9
themes like (formal governance of the contract and implementation of procedures). These same
indicators are recognised by (Broekhuis & Scholten, 2018). On the other hand, supplier
performance as the dependent variable is measured by timely delivery, value for money and
quality as supported by (Cao & Lumineau, 2015). The assumption is that good strategic
contracting practices will result into better supplier performance while poor contracting practices
will result into poor supplier performance.

1.8 Justification of the study

Several studies have been done on strategic contracting and supplier performance. However, no
study has specifically targeted health service provision in the context of Uganda, such as Mulago
National Referral Hospital. Others have also come to mixed conclusions where some aspects of
strategic contracting are considered more important than others. This study seeks to close this
controversial issue once and for all with definitive and logical empirical evidence.
1.9 Significance of the study
The study was relevant in several ways and to different stakeholders:
To Mulago National Referral Hospital: This study will help the organisation to improve on the
Supplier performance of the hospital, which is also affected by the supplier performance of their
suppliers. The study is expected to reveal underlying causes of late delivery of drugs, poor
quality as well as lack of value for money in their supplies. In this way, it enabled management,
staff and other stakeholders to understand which areas to focus on while ensuring better supplier
performance levels.

To future researchers: The study was a resourceful material for academic research because it will
form a basis for further research in supplier performance by academia like researchers and
students because it has not been widely studied in Uganda. The study will provide a more up to
date and richer source of debate into the subject matter, for the benefit of all stakeholders.

Policy makers: These include the Government of Uganda and its Agencies such as the various
Ministries. This study is expected to furnish them with more information on the importance of
customer satisfaction, thereby arriving at enabling policy environments to achieve desired key
outcomes through encouraging better levels of supplier performance.

10
To private entities: Most companies rely on timely delivery, price reduction and service quality
offered by their suppliers in order to gain more profit. As a result, the successful management
of supplier performance directly affects the quality of the whole supply chain.
1.10 Scope of the Study
1.10.1 Geographical Scope
The study was carried out at Mulago National Referral Hospital which is the main National
Referral and Teaching Hospital in the country and which sources its services from a wide array
of suppliers, whose supplier performance is important to enable serve its critical function.
1.10.2 Content scope
The study will investigate the two variables conceptualised under section 1.7 the conceptual
framework. Interrelationships between these variables will also be looked into, especially how
the strategic contracting practices might be related to supplier performance.
1.10.3 Time Scope
The research focused on a period of five years (2015 to 2022) for obtaining information about
strategic contracting practices and supplier management. This is because it is recommended that
any research should obtain information of not less than five years to be authentic (Amin, 2005).

11
 CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
According to Amin (2005), literature review involves the systematic identification, location and
analysis of documents containing information related to the research problem. This chapter
provides the review of literature on strategic contracting practices and supplier performance. It
includes the theories to be used as well as the key concepts of the study and their
interrelationships.
2.2 Theoretical Review
The Transaction Cost Theory (TCT) proposes that organizations may buy from the market, or
develop in-house, and decisions are based on the relative cost, composed of the costs of
production, and costs of the transaction, of the exchange (Rundquist, 2007). According to this
theory, managers must compare the sum of production and transaction costs associated with
executing a transaction within their firms against the sum of production and transaction costs
associated with executing the transaction in the market (contracting) and then decide which
option is best to realize improved supplier performance.

Similarly, Cheon, Grover and Teng (1995) propose that the Transaction based theory puts into
consideration both the transaction and production costs. They assert that contracting leads to
lower production costs due to economies of scale enjoyed by an outside provider, but in many
cases, higher transaction costs, from negotiating, monitoring and enforcing contracts. TCT has
been subjected to multiple criticisms. The most common criticism is that the central assumptions
of TCT are flawed. For example, the assumption of opportunism has been criticized for ignoring
the contextual grounding of human actions and therefore presenting an under socialized view of
human motivation and over socialized view of institutional control. The criticisms on the
assumption of bounded rationality and uncertainty still exist. Williamson’s model views people
as being passive and defensive when confronted with the vagaries of an uncertain environment.
The TCT has been further criticized as only looking into two relative extremes methods of
facilitating transactions that do not really exist.
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Thus from the above, the study combines all the above theories in one theory - Transaction Cost
Theory (TCT) to explain how contracting may affect the supplier Supplier performance of a
firm in a number of ways. Transaction Cost Theory (TCT) suggests that there is no one best way
to make a decision or organize an operation, but that any way of decision-making or organizing
is not equally good/relationship (Rundquist, 2007). Every specific situation affects which way is
best. It depends on the context and the circumstances of the situation. Scott (in Rundquist, 2007)
also concludes that Transaction Cost Theory (TCT) suggests that the best way to make a
decision/organize depends on the nature of the environment to which the organization relates.

According to TCE, a detailed contract limits opportunistic behaviour by stipulating mutual

expectations (Chang et al., 2017). In service procurement, the contextual characteristics of
services increase complexity and uncertainty, and thus neither buyers nor service providers have
complete information to specify all the necessary safeguards and contingencies due (Roehrich &
Lewis, 2014). This contractual incompleteness may allow opportunistic suppliers to exploit
contracts to their own advantage at the expense of service supplier performance. This leads to
demanding service contract design processes in order to ensure good service Supplier
performance with the minimal transaction costs.

The other weakness is in applying the idea of human interactions and exchanges as based on the
contractual approach so that its most fundamental concept (contractual relations) remains
undefined and does not lead to a dynamic perspective. While providing a number of important
insights regarding the most efficient means to govern a particular transaction, TCE has been
developed and tested under a set of restrictive assumptions that ignore the potential relationship
between that an extant governance form, a firm’s existing portfolio of transactions or other firm
specific asset and capability stocks may have on a focal transaction (Leiblein & Miller, 2003).
Furthermore, the empirical work on successful measurement of transaction costs has mostly been
treated at the conceptual rather than at the measurement level.
2.3 Review of related literature
In this section, literature was reviewed according to the research objectives
2.3.1 Risk control and supplier performance in health facilities
Pereira et al (2020) confirms that, risk identification is organized through methods to discovering
real risks associated with a project so that one can come up with appropriate intervention to

13
moderate the relationship between of the known risks. Pournader, Mehrdokht, Andrew Kach &
Talluri, 2020) argued that if risks are managed effectively especially by identifying carefully, it
enables obtaining consistent, understandable, operational risk measures which increases the
firm’s ability to achieve intended objectives. However this was a theoretical observation, while
this was an empirical study on how risk identification impacts on supplier performance.
Aghajanian, Shara & Shevchenko-Perepy, Radyslava (2018) identified that different methods are
used to identify possible risks which helps to solve critical risks as much as possible. This helps
to enhance supplier performance in one way or the other. On the other hand Humaid Abdulaziz
Jasim Alzaabi, Nurazmallail Marni, Miftachul Huda (2020) in a study about risk management on
Supplier performance revealed that risk identification affects Supplier performance in a positive
direction. It was found out that once risks are identified they are worked on immediately
resulting into high supplier performance. Kakobe and Gemechu (2016) showed that risk
identification helps to analyse risks at the implementation stage. Through this strategy risks that
would be deadly to the survival of the institution are solved.

Additionally, Pereira et al (2020) stress that risk management process through analysis risk helps
to eliminate problems that affect the project leading to proper supplier performance of the firm.
Hence risk analysis helps to provide information to business owners to help make decisions
regarding practices leading to high supplier performance. However in the previous review it was
not indicated whether Pearson’s Correlation Co-efficient method was applied. In addition, Dias,
de Oliveira, Lima, Fernandes (2021) argue that in the course of risk analysis, necessarily relevant
and reliable information is collected and mapped with present needs. Once this is done
compliance with supplier performance needs is possible. However this was a theoretical view
from a developed world while the current study was in Uganda (CREEC Project) which is a
developing world.

Brynhildsvoll (2018) noted that risk analysis especially through cost benefit analysis plays an
important role in determining high profit margins. This is mainly done through several
qualitative and quantitative techniques. They further noted that risk analysis through establishing
the cost benefit analysis plays an important role in improving business supplier performance. An
active management is required for analysing risks and this should begin as early as possible
through identifying, prioritizing and during risk selection stage. In the line with above study risk

14
analysis involved qualitative and quantitative techniques but form the context of CREEC project.
Dias et al (2021) in their study about risk management techniques’ and financial Supplier
performance of insurance companies revealed that identifying risks has a potential of
significantly improving on Supplier performance of insurance companies. However the
proposed study dealt with CREEC an energy sector not insurance company. This study covered
the research gaps.
Altanashat, Al Dubai and Alhety (2019) stated that risk assessment is the basis for building plans
in the face of danger. The aim of this process is control produce risk from occurring. This
assessment is of great importance to the organisations and entrepreneurs in terms of making high
profits. However, their study was a descriptive analysis while the current study was
Correlational. Abubakar et al (2020) argued out that risk monitoring as a routine reporting
management process is essentially important in realizing project goals. This is because as a
continuous evaluation tool, feedback on the risk management process and supplier performance
is possible. Aghajanian et al (2018) in a study about management as a tool enhancing Supplier
performance revealed that risk management especially through evaluation did not significantly
relate with Supplier performance in conventional and Islamic banks. However the reviewed
study was in the banking sector and applied different theories from that of the utility theory this
study applied.
2.3.2 Contract planning and supplier performance in health facilities
Contract planning is the primary function that sets the stage for subsequent contract activities
and, it fuels and then ignites the engine of the contract process. Efficient public contract systems
are essential to the best Supplier performance of public contract units within public institutions.
However, public contract needs assessment is a key element to the overall efficiency of public
sector management because it can contribute to a better allocation of resources and improved
supplier performance in the public sector. Weak and corrupted contract plan often lead to a waste
of public financial resources, time wastage and higher transaction costs and, therefore,
undermine development efforts. Contract planning should acknowledge complexity, identify the
right needs and organize the work, manage timetable relationship, follow sound bid evaluation
method and develop a smart, fair contract. Contract planning requires organized teamwork:
authorities, responsibilities, schedule, and resources (KOFA, 2018).

15
Jain et al., (2020) argue that societies are inter-institutional systems, with each of the institutional
orders having their own central logic. In any society, at any given point in time, different
‘Leitideen’ or ‘substances’ provide value-orientations and criteria of rationality with complex
interdependencies and overlapping domains of jurisdiction. (Khera & Mukherjee, 2019) strongly
endorse the institutional logics perspective, but take issue with the predominant field-level
approach of most current work along these lines. Instead, they encourage the studying of
differences between organizations and to ‘compare across institutions in order to identify the
differences in their archetypal organizational forms’.

While the researcher is convinced that much value lies in such theorizing, he believes that
restricting research to the institutional level with PDUs as dependent variable deprives this
perspective of its full potential to provide insights into the interrelationship of contract planning
and supplier performance as institutions. Especially the literature on institutional complexity has
inspired a plethora of studies that focus on coexisting or competing logics in public contract
planning (Khera & Mukherjee, 2019). In fact, it has inspired scholars to such an extent that we
currently face a vast and increasingly confusing mound of research on divergent issues and
phenomena in public contract, from differing institutions and settings. Recent elaboration of the
institutional theoretical framework has certainly contributed to more clarity; nonetheless,
‘institutional logic’ has become the new buzzword in institutional research especially in the
public contract field (Jain et al., 2020). What is however, missing, is an encompassing
systematization that would help to accumulate findings and knowledge. Achieving efficiency in
public contract planning is an ambitious task, as contract faces numerous challenges, especially
due to the market structure, the legal framework and the political environment that procurers
face. Poor contract planning has been one of the major stumbling blocks to the economic
development of Africa and it has been clear that a number of African countries have not paid
adequate attention to the proper management of public resources (Basheka, 2018).

According to KOFA, 2018), the basic principles of good contract practice include accountability,
where relationship mechanisms must be in place in order to enable procuring entities spend the
limited resources carefully, knowing clearly that they are accountable to members of the public;
competitive supply, which requires the contract be carried out by competition unless there are
convincing reasons for single sourcing; and consistency, which emphasizes the equal treatment

16
of all bidders irrespective of race, nationality or political affiliation. The process should also
uphold integrity by ensuring that there are no malpractices; informed decision-making, which
requires public bodies to base decisions on accurate information and ensure that requirements are
being met. More still, the contract practice should be responsive to aspirations, expectations and
needs of the target society. Finally, there is need for transparency to enhance openness and
clarity on contract policy and its delivery.

2.3.3 Contracts administration and supplier performance in health facilities

Contract administration involves those activities performed by organizational officials after a
contract has been awarded to determine how well the organization and the contractor performed
to meet the requirements of the contract (Harris et al, 2018). It encompasses all dealings between
the organization and the contractor from the time the contract is awarded until the work has been
completed and accepted or the contract terminated, payment has been made, and disputes have
been resolved (Nucharee, 2019). As such, contract administration constitutes that primary part of
the contract process that assures the organization gets what it paid for. In contract administration,
the focus is on obtaining supplies and services, of requisite quality, on time, and within budget.
While the legal requirements of the contract are determinative of the proper course of action of
organizational officials in administering a contract, the exercise of skill and judgment is often
required in order to protect the service beneficiaries’ interest (Burstein, Guy & Zuckerman,
2023).
The importance of contract administration to the success of the contract, and to the relationship
between customer and provider, should not be underestimated. Clear administrative procedures
ensure that all parties to the contract understand who does what, when, and how to ensure better
supplier performance (Nucharee, 2019). Good contract administration assures that the end users
are satisfied with the product or service being obtained under the contract. Contract
administration to ensure better Supplier performance requires appropriate resourcing. It may be
that the responsibility falls on a nominated individual (Belhadi et al., 2021). If not, and the
responsibility is shared across a contract management team, it is important that all members of
the team deal promptly with contract administration tasks, particularly during the early stages of
implementation if better supplier performance is to be realized.
Several weaknesses have been identified in contract administration practices used by
organizations. The principal problem is that contracting officials often allocate more time to
17
awarding contracts rather than administering existing contracts (Morgan & Hunt, 2017). This
often leads to problems in contractor supplier performance, cost overruns, and delays in
receiving goods and services. Several other deficiencies have been noted such as unclear roles
and responsibilities of the contracting officer's technical representatives, excessive backlog in
contract closeout and incurred costs audits, improperly trained officials performing contract
oversight, unclear statements of work that hinder contractor Supplier performance , and
inadequate guidance on voucher processing and contract closeout (Kannan & Tan, 2016).

According to Dmaidi, Dwaikat and Shweiki (2013), there are two broad objectives of contract
management. The first is the definition of the parties’ roles with a view of achieving the
contractual obligations while the second is the development of a mutually rewarding relationship
between parties involved in contract. Aluonzi, Oluka and Nduhura (2019) noted that contract
management involves three diverse aspects; achievement of product quality, delivery on time
and within the budget. In this context, they indicated that contract management is divided into
the upstream/pre contract award activities and downstream/post contract award activities.

Beaulieu and Bentahar (2021) found that Supplier performance of Referral Hospitals involves
the manner in which procurement function is able to reach the objectives and goals with
minimum costs. The study examined supplier performance of Referral Hospitals in terms of
efficiency, competitiveness of services procured, quality of goods procured, and reduction of
conflict of interests within the procurement activities. Armstrong-Hough M et al (2020) found
that supplier performance of Referral Hospitals can be measured using two metrics; relationship
and efficiency. Relationship between in supplier performance of referral hospitals involves
achievement of procurement values such as transparency, accountability and value for money.
The efficiency aspects of procurement involve aspects such as adequate consideration of the user
needs, efficiency in utilization of public resources and risk management. On the other hand, the
study by Kamotho (2018) used metrics such as costs management, inventory levels, and time
taken to complete procurement process, delivery of best-value contracted goods and service,
stronger vendor-buyer relationship, and assured supply to measure the effectiveness of
procurement contract management.

18
2.4 Summary of Literature
The body on knowledge in Contract planning consideration of problem definition and supplier
performance reveals scanty studies in the public sector which has created a literature gap.
Similarly, studies on selection criteria and supplier performance in public procurement are very
scanty while studies on supplier qualification and supplier performance in the public sector are
equally scanty. To fill the knowledge and practice gaps, this study examines the relationship
between strategic contracting practices and supplier performance in Mulago referral hospital a
public entity.
Other studies depict that there are a number of benefits of supplier appraisal; some of the benefits
include the ability to harness the strengths and skills of suppliers to the advantage of buyers. This
does not adequately relate contract planning and evaluation to supplier performance, which this
study intends to address. Literature revealed that strategic contracting practices affects supplier
performance of hospitals however these scholars do not reflect the extent to which contract
management affects the Supplier performance of referral hospitals which this study intends to
address.

19
 CHAPTER THREE
METHODOLOGY
3.0 Introduction
This chapter has been developed basing on authentic scholars that have applied such methods in
other research environments and it describes the procedure used in gathering data and analysis.
This chapter presents research, study population, sample size determination, sampling
techniques, data collection methods and instruments, Data quality control, procedure for data
collection, data analysis, measurement of study variables and ethical consideration.
3.1 Research Design
The study adopted mixed method research design. Shorten & Smith (2017) observes that mixed
methods research design involves the collection, analysing and mixing of both qualitative and
quantitative data in a single study in order to understand a research phenomenon. This research
design enabled the researcher answer research questions with sufficient depth and breadth (Poth
& Munce, 2020) in order to generalize findings and implications of the research issues to the
whole population. Using the quantitative method, the researcher collected data from a large
number of participants; thus, increasing the possibility to generalize the findings to a wider
population. The qualitative approach, on the other hand will provide a deeper understanding of
the issue being investigated, honouring the voices of its participants. The quantitative results
were triangulated with qualitative findings and vice versa. Triangulation, as a qualitative research
strategy will involve the use of multiple methods or data sources to develop a comprehensive
understanding of a research problem or to test validity through the convergence of information
from different sources (Žukauskas et al., 2018).
3.2 Study Population
Hair (2019) define a population as a complete set of items, individuals, cases or subjects having
common observable characteristics or features. In this study, the actual study population will
include 80 respondents who are employees within Mulago National Referral Hospital and service
providers. These will include the top management, contract management committee and service
providers (Mulago, HR Manual, 2018).
3.3 Sample size and selection
The researcher using Krejcie and Morgan (1970) table of sample determination as cited in Amin,
(2005), 5 top management staff and 5 contract staff . Out of total population of 90 employees at

20
MULAGO NATIONAL REFERRAL HOSPITAL heath care units, only 76 respondents
participated in the study as given in table 3.1
Table 3.1: Sample size and sampling techniques used

Category Target population Sample size Sampling technique

Top management 5 5 Purposive sampling
Contract staff 5 5 Purposive sampling
Service providers 80 66 Simple random sampling
Total 90 76
Source: Primary data
3.4 Sampling Techniques
The study used purposive sampling technique to select 5 top management staff and 5 contract
staff. This technique was preferred because it is very informative and it also reaches targeted
population sample quickly by providing a researcher opportunity to select a sample that has
typical characteristics and knowledge of the topic under investigation (Thomas, 2020). In
addition, the researcher used simple random sampling technique which is a probability technique
to randomly pick 52 service providers. This technique was used because it ensures that every
person within the sample population has equal opportunity of being selected to participate in the
study and reduces risks of bias from the researcher (Creswell & Plano Clark, 2018). He further
noted that selection of an individual respondent does not necessary relationship between the
processing of selecting other participants for the study and these individuals are assumed to have
typical characteristics and knowledge of the study under investigation.

3.5 Data collection methods

The study used two methods for data collection and these include questionnaires, and interviews
as detailed below:
3.5.1 Survey Method
In this method, a self-administrated questionnaire (SAQ) was employed to gather information
from the from service providers. Amin (2005) stress that the questionnaire helps in gathering
information that ensures that adequate data and accurate one is collected. This method was used
because it helps to gather information in numerical form and from a large population within

21
shortest period which will supplement the information that was collected using other methods
(Amin, 2005).
3.5.2 Interview Method
The method was employed to collect data using face-to-face conversation between the researcher
and purposely-selected key-informants specifically top management staff and contract staff from
Mulago Referral Hospital. This method was used because it helps in collecting qualitative data
which was used to supplement information from other methods (Creswell & Plano Clark, 2018).
In addition, Amin, (2005), stresses that interviewing method helps in generating detailed data
especially if probing is adequately done. This method will involve preparing questions that are
asked to each key informant without diverting from the key study variables.
3.6 Data Collection Instruments
In line with different methods of collecting information, different data collection instruments
were adopted and these include; Self-administered questionnaires and Interview guide.
3.6.1 Questionnaire
The questionnaire was both close-ended questions which provide options from which the
respondents tick the most appropriate option or open-ended questions where respondents are
requested provide their own views in the spaces provided. These well-designed questions allow
respondents to give out their detailed views about the study variables in question. Most of
closed-ended questions were in form of a 5-Likert scale with codes 1 representing ‘strongly
disagree, 2 Disagree, 3 not sure, 4 agree and 5 strongly agree,’ which required the respondents to
tick in the answer that best suited their option on each of the items designed in questionnaire.
The questionnaires were selected because it is less expensive to administer and could be sent
through email, filled by a person at leisure and provides timely data quickly.
3.6.2 Interview guide
David et al, (2018) indicate that this research instrument helps in structuring the interview and
ensuring that respondents are asked similar questions so as to allow comparison of the data
obtained. An interview guide as tool for collecting primary data was formulated according to the
specific objectives and was used to gather information from the from top management staff and
contract staff.

22
3.7 Data quality control
The researcher used both validity and reliability tests to ensure that instruments appropriateness
and consistency in yielding research results and these are given in details below:
3.7.1 Validity of instruments
Validity is often defined as the extent to which a research instrument is used to measure what it
asserts to measure and validity of a research instrument assesses the extent to which a research
instrument measures what it is designed to measure (Yusoff, 2019). In another words, it
measures the degree to which the results are truthful and therefore it requires research instrument
(questionnaire) to correctly measure the concepts under the study.
The formula for validity test is given below:
CVI = n/N
n = is the number of questions deemed valid
N = Total number of questions in the questionnaire
Table 3.2: Results of content validity for research tools

Dimensions No of Items Relevant CVI

Risk control 10 08 0.8
Contract planning 08 07 0.875
Contracts administration 09 06 0.67
Supplier performance 07 07 1
Source: Primary Data (2023)
Table 3.2 presents averages of 0.836 and (0.8, 0.875, 0.67 & 1 respectively) on all four variables
had a CVIs that were above 0.7, imply that the tool was validity since it was appropriately
answering / measuring the objectives and conceptualization of the study. According to Mugenda
& Mugenda (2003), the tool can be considered valid where the CVI value is 0.7 and above as is
the case for all the four variables provided above.
3.7.2 Reliability of instruments
In addition to the validity testing, a reliability test for the questionnaire was done by first
conducting a pilot study involving 20 respondents and subjecting the findings to a Cronbach’s
alpha coefficient test of reliability using the following formula presented by Amin (2005).
According to Yusoff (2019) the Cronbach Alfa coefficient to be considered relevant, it should be

23
0.7 or above for research instruments to be used. The reliability of instruments was established
using Cronbach Alpha Coefficient which tests internal reliability.
Table 3.3: Reliability test results of research instruments.
Study variables Cronbach’s Alpha
Risk control 0.745
Contract planning 0.986
Contracts administration 0.876
Supplier performance 0.765
Average Cronbach Alpha coefficient for variables 0.843
Source: Primary Data (2023)
The reliability of instruments was established using Cronbach Alpha Coefficient which tests
internal reliability and the average reliability test result for research was 0.84 which is
recommended as given table 3.3 above.
3.8 Data collection procedure
The researcher developed a research proposal with guidance from my supervisors. After,
designed tools for data collection and for this case involved open ended questions. The
researcher made a pre-test of the tools at Mulago referral hospital and collections were made.
After the approval by the supervisors, an introduction letter from Uganda Management Institute
was got. The purpose of the letter was to introduce the researcher to the area of study. After, the
researcher proceeded to seek permission from administration of Mulago referral hospital. After
getting approval, the researcher met the targeted participants who gave their responses after
being informed on the objectives of the study and accept to participate in the study. Thereafter,
schedules for interviews were made. The interviews were held at Mulago referral hospital
premises because the participants felt that this venue was very convenient to them. By average,
one hour and 30 minutes were used to engage each participant in the interview process. A period
of one week was used in conducting interviews. After data collection, the researcher analysed the
data qualitatively and quantitatively.

24
3.9 Data analysis
The information collected from the respondents was analysed using both quantitative and
qualitative approaches as explained in detail below:
3.9.1 Quantitative analysis
Quantitative data was collected mainly from close ended questions. Data was arranged,
scrutinized, edited, word processed to eliminate errors and ensure accuracy of data collected to
avoid misinterpretation of information (Mehrad & Tahriri, 2019). Further data was reduced into
frequencies and percentages as units of measures using SPSS and descriptive statistics was used
to describe the population sampled. Correlation analysis was applied to establish the relationship
between the study variables. Correlation coefficient was used to indicate the degree to which
variables are related to one another. This enabled the researcher to find out the direction whether
positivity or negativity. Pearson Correlation Coefficient was carried out to establish the linear
relationship between the dependent and independent variables.

3.9.2 Qualitative analysis

Rabovsky (2020) defined qualitative data analysis as a process of examining of non-numerical
data using content and thematic analysis. Qualitative data analysis was done through analysing
richly detailed information in a systematic way from interview transcripts in order to come to
some useful conclusions and recommendations (Brewer & Walker, 2019). The researcher will
obtain detailed information about the study and then try to establish patterns, trends and
relationships from information gathered. Information was paired down to represent major themes
or categories that describe the study (Brinkerhoff & Wetterberg, 2019). This study will use
thematic analysis whereby patterns of experiences were listed from the interview notes and build
a valid argument for choosing the themes (Clinton, Lewis & Selin, 2020).
3.10 Measurement of variables
All the variables under study were measured using a five-Likert scale that has five categories to
respond to 1 = Strongly Disagree, 4 = Disagree, 3 =Not sure, 4 = Agree and 5 = Strongly Agree.
According to Olsen (2019) five- Likert scale were suitable for measuring responses that relate to
risk control, contract planning, contracts administration and supplier Supplier performance in
health facilities
Table 4.4: Likert Scale

25
 Scale Mean Range Response Mode Interpretation
5 4.20-5.00 Strongly Agree Very satisfactory
4 3.40-4.19 Agree Satisfactory
3 2.60-3.39 Not Sure Fairly satisfactory
2 1.80-2.59 Disagree Unsatisfactory
1 1.00-1.79 Strongly disagree Very unsatisfactory
Source: Dubnick and Yang (2021)
From the above table 3.3 shows that mean range 4.20-5.00 were interpreted as Strongly Agree,
mean range 3.40-4.19 were interpreted as Agree, mean range 2.60-3.39 were interpreted as Not
Sure mean range 1.80-2.59 were interpreted as Disagree and lastly mean range 1.00-1.79 were
interpreted as Strongly disagree.
3.12 Ethical considerations
It is important to note that the code of ethics was approached during this study via three main
themes namely ethical treatment of research participants, competence and honesty. These themes
will form the basis upon which the researcher will conduct the research (Bell et al., 2018).

This will include respect for persons as well as their beneficence that is the process of ensuring
that the well–being of participants and justice which is equity are ensured in a professional
research.
The researcher avoided discrimination while conducting the research. All procedures and
conduct in the study were scrutinized and approved by the school and department at the UMI.
Consent for the inclusion of subjects in this study was sought through a consent form that was
read and presented to the informants for their approval or disapproval.

Privacy and confidentiality of the information was guaranteed and there was voluntary
participation and withdrawal from the study at any stage without victimization. The study results
were made available to the world of academia in the university libraries.

26
 CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Introduction
This chapter presents analyses and interprets results. The findings are presented according to the
objectives of the study. The study investigated the relationship between of strategic contracting
practices on the supplier performance. The objectives of the study were to examine the
relationship between risk control and supplier performance at Mulago referral hospital, to
examine the relationship between contract planning and supplier performance at Mulago referral
hospital and to examine the relationship between contracts administration and supplier
performance at Mulago referral hospital.
4.2 Response rate
The response rate of the study is presented in Table 4.4 below
Table 4.5: Response Rate
Instrument Target Actual Response Response rate
Questionnaire 66 57 95
Interview 10 8 80
Targeted 76 65
Source Primary Data (2023)
From Table 4.4 above, out of the 60 distributed 57 were returned correctly filled representing
95%. Out of the 10 respondents that were targeted for interviews, 08 were interviewed implying
a response rate of 80%. The overall response rate, therefore was 92%. This response rate was
deemed well enough since it was over and above the 50% recommended by Amin (2005).
4.3 Findings on background information of the respondent
The demographic characteristics (education level, sex, among others) for the 68 respondents
were examined and findings are presented in the next subsection.
4.3.1 Sex characteristics of the Respondents
The sex characteristics of respondents were investigated for this study, and findings are
presented below.

27
Table 4.6: Sex of the respondents
Category Frequency Percentage
Valid Male 30 52.6
Female 27 47.4
Total 57 100.0
Source: Primary Data (2023)
From Table 4.6 above, the majority of the respondents were male 53% and females were 47%.
The study was representative of both sexes. The implication of this finding was that no matter
the disparity in percentage of males and females who attended the study, at least views of both
males and females were captured. In other words, gender bias did not distort the findings of the
study.
4.3.2 Age bracket of the Respondents
The study looked at the distribution of the respondents by age using frequency distribution. The
results obtained on the item are presented in Figure 4.2 below.
50
45
40
35
30
25
20 Percentage
15
10
5
0
18-25 26-30 31-35 36-40 41 and
above

Source: Primary Data (2023)

Figure 4.2: Age of the respondents
From the Figure 4.2 above, It was revealed that the majority of respondents were between 36-40
years implying 47%, 2% were between 18-25years, those between 26-30 years were 11% and
those that were 41 and above were 19%. This indicated that all categories of respondents in

28
reference to different age groups were represented in this study. This implies that all categories
of respondents in reference to different age groups were represented in this study.
4.3.3 Respondents by highest level of education
The respondents were asked about their education to determine whether the sample that
participated in the study understood the questions presented to them and thus provided the
required information. Findings are presented in Figure 4.3.

certificate Diploma Degree Masters Phd

2% 5%
7%

40%

46%

Source: Primary Data (2022)

Figure 4.3: Highest Level of Education
The findings from Figure 4.3 above indicate that majority of the respondents were degree holders
making a total percentage of 46%, the respondents with diploma were 40.4%, those with
certificate were 5%, those Master’s degree 7% and PhD holders were 2%. This implies that the
respondents had good academic qualifications and the right skills and knowledge to deliver.
Besides, the respondents were able to understand, read, interpret the questionnaire and gave
relevant responses.
4.3.4 Years of service
By examining the years of service of the study respondents, the researcher wished to ascertain
whether there were substantial differences in the responses as indicated in the Figure 4.4 below;

29
 10 years and
above
Source:
Primary
7-9 years
Data (2022)
Figure 4.4:
4-6 years
Years of
service
1-3 years From the
Figure 4.4
0 10 20 30 40 50 60
above, it
indicate that majority of the respondents 68% had worked 4-6 years years, 12% 1-3 years and
32% 7-9 years respectively. This meant that majority of the respondents had a working
experience of 5 years and above, thereby having enough knowledge to provide relevant
information on the relationship between of strategic contracting practices and supplier
performance in health facilities.
4.4 Empirical findings
This section presents the empirical findings of the study according to the objectives. The
empirical findings are analysed using descriptive statistics, qualitative analysis and testing
hypotheses for the respective findings.
4.4.1 Supplier performance in health facilities
The items on supplier performance were structured basing on the objective of the study. Items
were measured on a five-point Likert scale where code 1 = strongly Disagree, 2 = Disagree, 3 =
Not sure, 4 = Agree and 5 = strongly Agree. Seven (7) Items which are statistically tabulated and
presented in the table below with the frequencies and percentages according to the responses
collected.

Table 4.7: Supplier performance in health facilities

Item Responses Frequency Percent Mean Std D

30
Services are usually Strongly Disagree 19 33% 3.210 1.097
delivered on time at Mulago Disagree 02 04% 5 6
National Referral Hospital Not sure 30 53%
Agree 04 07%
Strongly Agree 02 04%
Mulago National Referral Strongly Disagree 01 02% 3.8246 1.8246
Hospital service coverage is Disagree 17 30%
satisfactory Not sure 07 12%
Agree 29 51%
Strongly Agree 03 05%
Mulago National Referral Strongly Disagree 01 02% 3.410 1.097
Hospital supplier Disagree 22 37% 5 6
performance is efficient Not sure 02 04%
Agree 28 49%
Strongly Agree 04 07%
Mulago National Referral Strongly Disagree 01 02% 3.34 1.00
Hospital supplier Disagree 21 37%
performance is effective Not sure 04 07%
Agree 28 49%
Strongly Agree 03 05%
Services are delivered to the Strongly Disagree 02 04% 3.510 1.097
right places Disagree 19 33% 5 6

Not sure 06 11%

Agree 27 47%
Strongly Agree 02 4%
Mulago National Referral Strongly Disagree 01 02% 3.193 1.059
Hospital services are easily Disagree 21 37% 0 6
accessed Not sure 04 07%

31
 Agree 28 49%
Strongly Agree 03 05%
Mulago National Referral Strongly Disagree 02 04% 3.175 1.087
Hospital delivers quality Disagree 20 35% 4 6
services Not sure 04 07%
Agree 28 49%
Strongly Agree 03 05%
Source: Primary Data (2023)

As to whether services are usually delivered on time at Mulago National Referral Hospital,
majority of the respondents, 53% were not sure of the statement, 19% strongly disagreed, 07%
disagreed and 04% disagreed and 04% agreed with the statement respectively. The mean = 3.21
corresponding to disagree indicated the majority of the respondents were not in agreement with
the statement that services are usually delivered on time at Mulago National Referral Hospital,
and the standard deviation of 1.0976showed the deviating responses from respondents.

Responses to the question as to whether Mulago National Referral Hospital service coverage is
satisfactory, majority of the respondents, 51% agreed with the statement, 05% strongly agreed,
12% were not sure, 30% disagreed and 02% strongly disagreed respectively. The mean = 3.8246
indicated that the majority of the respondents agreed with the statement and the standard
deviation of 1.8246 indicating the deviation from the response.

As to whether Mulago National Referral Hospital supplier performance is efficient, 49% of the
respondents agreed with the statement, 07% strongly agreed, 04% were not sure, 37% disagreed
and 02% strongly disagreed. The mean of 3.4105 indicated fairly satisfactory. The standard
deviation of 1.0976 indicated those respondents with deviating responses. The findings above are
supported by the key informants who shade more light on Mulago National Referral Hospital’s
supplier performance in terms of it being efficient, effective and reliable:
All managers were of the view that Mulago National Referral Hospital’s supplier
performance was poor in all aspects but expressed hope that there are some
improvements taking place with the new management. In response, one the

32
 contracts manager summed up the supplier performance that Mulago National
Referral Hospital’s supplier performance is still poor despite some improvement.
The continuous complaints about almost all service Mulago National Referral
Hospital offers raised in various media is evident that there is a long way to go.
However, in the same media, some appreciation has also been extended to
Mulago National Referral Hospital for what it has done so far.
(KII/001/17/05/2023)
As to whether Mulago National Referral Hospital supplier performance is effective, 49% of the
respondents agreed with the statement, 05% strongly agreed, 07% were not sure, 37% disagreed
and 02% strongly disagreed with statement respectively. The mean = 3.34 indicated the majority
of the respondents were fairly satisfied with the services offer. The standard deviations of 1.00
indicated those with deviating responses. This implies that Mulago National Referral Hospital
compromised in terms of service effectiveness. This is because most user department staff and
service providers were opposed all items about service effectiveness.

Responses to the question as to whether services are delivered to the right places, majority of the
respondents, 47% agreed with the statement, 04% strongly agreed, 11% were not sure, 33%
disagreed and 4%strongly disagreed with the statement. The mean = 3.5105 indicated that the
majority of the respondents agreed with the statement and the standard deviation of 1.0976
indicating the deviation from the response. Contrary to the findings above, one of the key
informants indicated that Mulago National Referral Hospital's supplier performance was
ineffective, services were not delivered to the right places, there was no value for money in
Mulago National Referral Hospital's supplier performance, services were not easily accessed and
service coverage was unsatisfactory.
As to whether Mulago National Referral Hospital services are easily accessed, the majority of
the respondents, 49% agreed with the statement, 05% strongly agreed, 07% were not sure, 37%
disagreed and 02% strongly disagreed. The mean of 3.1930 indicated that the respondents fairly
agreed with the statement and the standard deviation 1.0596 indicated those with deviating
responses.
As to whether Mulago National Referral Hospital delivers quality services, the majority of the
respondents, 49% agreed with the statement, 05% strongly agreed, 07% were not sure, 37%
disagreed and 04% strongly disagreed. The mean of 3.1754 indicated that the respondents fairly
33
agreed with the statement and standard deviation of 1.0876 indicated those with deviating
responses. From this analysis, the implication is that Mulago National Referral Hospital specified
the desired quality levels of products and services from service providers and its contracts always
had clauses to ensure for any eventuality in the contracting process. Thus, from this analysis, the
following is the interpretation. Findings show that sometimes Mulago National Referral
Hospital’s contracts were written to limit opportunistic behaviour by parties involved in
contracting and there was a penalty-system in place to opportunistic behaviour by parties
involved in contracting.

4.4.1 Risk control and supplier performance in health facilities

The first objective in the study was to examine the relationship between risk controls on supplier
performance in health facilities. To observe the relationship, 08 question items were
administered to respondents to establish the extent to which they agreed with them.
Table 4.8: Descriptive statistics on risk control and supplier performance

Item Response Freq % Mean Std D

Mulago National Referral Hospital Strongly Disagree 03 05% 3.0702 .99749
contracting practices protects its self Disagree 14 25%
from supplier events that can negatively Not sure 19 33%
impact hospital operations Agree 18 32%
Strongly Agree 03 05%
Mulago National Referral Hospital Strongly Disagree 02 01% 3.1754 .86855
integrates risk management in the Disagree 11 19%
supply chain agenda Not sure 25 44%
Agree 17 30%
Strongly Agree 03 05%
Mulago National Referral Hospital Strongly Disagree 00 00% 3.4035 .96102
monitors risk at each stage of the Disagree 14 25%
procurement process Not sure 11 19%
Agree 27 47%
Strongly Agree 05 09%
Mulago National Referral Hospital Strongly Disagree 01 02% 3.2632 .83509

34
 conducts healthy supply chain risk
identification Disagree 10 18%
Not sure 20 35%
Agree 25 44%
Strongly Agree 01 02%
Mulago National Referral Hospital Strongly Disagree 01 02% 3.6667 .96590
identifies priority risks are always traced Disagree 17 30%
to their root causes Not sure 12 21%
Agree 25 44%
Strongly Agree 02 04%
Mulago National Referral Hospital Strongly Disagree 02 04% 3.2632
involves supplier’s opinion during risk Disagree 23 40% 5.6770
planning Not sure 10 18% 9
Agree 19 33%
Strongly Agree 01 02%
Mulago National Referral Hospital Strongly Disagree 00 00% 3.4912 5.3729
developed risk mitigation strategy Disagree 21 37% 9
Not sure 17 30%
Agree 17 30%
Strongly Agree 1 02%
Monitoring and control of risks are Strongly Disagree 2 3.5 3.9474 1.01985
highly carried out in this organization Disagree 11 19.3
Not sure 6 10.5
Agree 33 58
Strongly Agree 5 8.8
Source Primary Data (2023)
As to whether Mulago National Referral Hospital contracting practices protects its self from
supplier events that can negatively impact hospital operations, majority of the respondents 33%
were not sure, 32% of the respondents agree with the statement, 25% disagreed with the
statement and 05% strongly disagreed with the statement. The mean = 3.0702 indicated that the

35
respondents fairly agreed with the statement. The standard deviation .99749 indicated those with
deviating responses.
Responses to the question as to whether Mulago National Referral Hospital integrates risk
management in the supply chain agenda, 44% of the respondents were not sure of the statement,
30% agreed with the statement, 05% disagreed with the statement, 19% disagreed with the
statement respectively. The mean = 3.1754 indicated that respondents fairly agreed with the
statement.

With respect to whether Mulago National Referral Hospital monitors risk at each stage of the
procurement process, 47% of the respondents agreed with the statement, 09% strongly agreed,
19% not sure, 25% disagreed with the statement respectively. The mean = 3.4035 indicated the
majority of the respondents strongly agreed with the statement. The standard deviation of .96102
indicated those with deviating responses.
Responses to the question as to whether Mulago National Referral Hospital conducts healthy
supply chain risk identification, the majority of the respondents 44% agreed with the statement,
02% strongly agreed, 35% were not sure, 18% disagreed and 02% strongly agreed. The mean =
3.2632 indicated the respondents fairly agreed with the statement. The standard deviation of
.83509 indicated those with deviating responses. This implied that risk identification plays a vital
role in enhancing supplier performance at Mulago National Referral Hospital result implied that
risk analyses are carried on as anticipated. From this analysis, the findings show that in most
case, Mulago National Referral Hospital’s contracting was a process with a clear purpose, well-
designed activities, value-added outputs and Mulago National Referral Hospital’s process risk
assessment spanned the entire organization. The findings are supported by the key informants
who assert that:
The ability to identify the risks helps to plan well so that all foreseen problems are
managed. Findings further indicated that the contractors did not have risk
management plans in place and therefore they could not easily identify the risks
that were involved in the healthy supply chain in the health facility.
(KII/001/17/05/2023)

36
As to whether Mulago National Referral Hospital identifies priority risks are always traced to
their root causes, the respondent’s responses indicated that the majority of the respondents 44%
agreed with the statement, 04% strongly agreed, 21% not sure, 30% disagreed and 02% strongly
disagreed with the statement. The mean = 3.6754 indicated that the respondents were fairly
satisfied with the statement. The standard deviation of 0.96590 indicated those with deviating
responses. This implies that Mulago National Referral Hospital’s assessment process did identify
and prioritize risks for the formulating effective risk responses for the health facility.

As to whether Mulago National Referral Hospital involves supplier’s opinion during risk
planning, 40% of the respondents disagreed with the statement, 33% agreed, 18% not sure, 04%
disagreed and 24% strongly disagreed with the statement. The mean = 3.1754 indicated that the
respondents disagreed with the statement. The standard deviation of 5.67709 indicated those with
deviating responses. This finding implied that Mulago National Referral Hospital gives priority
to competent personnel to conduct risk assessment; this can help to enhance Supplier
performance. The ability to identify possibilities for loss incurring implies that measures can be
designed in advance so as to avert the likely risks, thereby enhancing supplier performance. This
implied that employees are trained on what to consider when carrying out risk evaluations which
reduces the possibility of risk to occur.

As to whether Mulago National Referral Hospital developed risk mitigation strategy, the
respondent’s responses indicated that the majority of the respondents 37% disagreed with the
statement, 02% strongly agreed, 30% not sure, 30% agreed with the statement. The mean =
3.4912 indicated that the respondents were fairly satisfied with the statement. The standard
deviation of 5.37299 indicated those with deviating responses.

As to whether Monitoring and control of risks are highly carried out in this organization, the
respondent’s responses indicated that the majority of the respondents 58% agreed with the
statement, 09% strongly agreed, 11% not sure, 19% disagreed and 04% strongly disagreed with
the statement. The mean = 3.9474indicated that the respondents were satisfied with the
statement. The standard deviation of 1.01985 indicated those with deviating responses.

37
Table 4.9: Pearson correlation matrix for risk control and supplier performance
Pearson Correlation coefficients Risk control Supplier performance
Risk control Pearson Correlation 1 .488**
Sig. (2-tailed) .000
N 57 57
Supplier performance Pearson Correlation .488** 1
Sig. (2-tailed) .000
N 57 57
**. Correlation is significant at the 0.01 level (2-tailed). Source: Primary Data (2023)
From the Table 4.9, Pearson correlation results depicts a moderate and positive correlation
(r=.488) between risk control and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0.05).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. Thus, the
implication of the analysis is that contract risk management had a significant effect on supplier
performance by Mulago National Referral Hospital. The moderate correlation implied that a
change in contract risk management was related to a moderate change in supplier performance.
The positive nature of the correlation implied that the change in contract risk management and
supplier performance was in the same direction whereby more contract risk management was
related to better supplier performance and vice versa.

38
4.4.2 Contract planning and supplier performance in health facilities
The second objective in the study was to examine the relationship between contract planning on
supplier performance. To observe the influence, 07 question items were administered to
respondents to establish the extent to which they agreed with them.
Table 4.10: Descriptive statistics on contract planning in health facilities
Item Responses Frequency Percent Mean Std D
Mulago National Referral Strongly Disagree 00 00% 3.61 .9775
Hospital always sets clear Disagree 12 21% 0
contracts objectives Not sure 6 11%
Agree 31 54%
Strongly Agree 8 14%
Mulago National Referral Strongly Disagree 02 34% 3.73 .9359
Hospital contracting Disagree 06 11% 2
objectives are measurable Not sure 04 07%
Agree 38 67%
Strongly Agree 07 12%
Mulago National Referral Strongly Disagree 01 02% 3.71 .9014
Hospital contracting Disagree 08 14% 7
objectives are Not sure 03 5%
achievable/attainable
Agree 39 68%
Strongly Agree 06 11%
All Mulago National Strongly Disagree 3 05% 4.24 5.186
Referral Hospital Disagree 7 12% 8
stakeholders are consulted Not sure 6 11%
during the contracting
Agree 35 61%
objectives
Strongly Agree 5 09%
Mulago National Referral Strongly Disagree 01 02% 4.59 .9794
Hospital contracts objectives Disagree 15 26% 2

39
 are always within the Not sure 03 05%
available resources, Agree 36 63%
knowledge and time Strongly Agree 02 04%
Mulago National Referral Strongly Disagree 01 02% 3.40 7.367
Hospital establishes Disagree 19 33% 54
governance and contract Not sure 06 11%
management team
Agree 25 44%
Strongly Agree 04 07%
Mulago National Referral Strongly Disagree 02 44 3.40 .9794
Hospital contract strategy Disagree 17 30 2
assists determining the type Not sure 10 18
of management to be adopted
Agree 23 40
for the subsequent supplier
Strongly Agree 5 09
performance
Source: Primary Data (2023)
Mulago National Referral Hospital always sets clear contracts objectives, majority of the
respondents, 54% agreed with the statement 14% strongly agreed with the statement, 11% were
not sure, 21% disagreed and 00% strongly disagreed. The mean = 3.614 indicated that majority
of the respondents agreed with statement and the standard deviation of .97750 showed the
deviating responses from respondents.

Responses to the question as to whether Mulago National Referral Hospital contracting

objectives are measurable, majority of the respondents, 67% agreed with the statement, 12%
strongly agreed, 07% were not sure, 11% disagreed and 04% strongly disagreed. The mean =
3.736 indicated that the majority of the respondents agreed with the statement the standard
deviation of .93592 indicating the deviation from the response.
As to whether Mulago National Referral Hospital contracting objectives are
achievable/attainable, the majority of the respondents, 68% agreed with the statement, 11%
strongly agreed, 05% were not sure, 14% disagreed and 02% strongly disagreed. The mean of

40
3.719 indicated that the respondents agreed with the statement. The standard deviation of .90147
indicated those with deviating responses.

With respect to whether all Mulago National Referral Hospital stakeholders are consulted during
the contracting objectives, the majority of the respondents 61% agreed with the statement, 09%
strongly agreed, 05% strongly disagreed, 11% were not sure, 12% disagreed with the statement.
The mean = 4.245 indicated that majority of respondent were satisfied with statement. This
implies that stakeholders are involved to avoid problems of implementation and that it has
enabled management to concentrate on core activities and it has led to attainment of targets and
some costs are reduced thus some savings are realized. The Interview findings shade more light
about:
Mulago National Referral Hospital involve stakeholders are consulted during the
contracting objectives and top management also conducts an internal and
external analysis to identify functions to contract, benchmark with other
organizations that contract similar functions, and then confirm budget for the
contracting to start (KII/001/17/05/2023)
With respect to whether Mulago National Referral Hospital contracts objectives are always
within the available resources, knowledge and time, the majority of the respondents, 63% agreed
with the statement, 04% strongly agreed, 05% were not sure, 26% disagreed and 02% strongly
disagreed. The mean = 4.596 indicated the majority of the respondents agreed with the statement.

As to whether Mulago National Referral Hospital establishes governance and contract

management team, the majority of the respondents, 44% agreed with the statement, 07% strongly
agreed, 11% were not sure, 33% disagreed with the statement and 01% strongly disagreed. The
mean = 3.403 indicated that majority of the respondents agreed with the statement. The standard
deviation of 7.36754 indicated those with deviating responses. The findings above are supported
by the key informant who indicated that:
The functions to be contracted are determined on the basis of whether it is costly
for Mulago National Referral Hospital to execute them by itself or by engaging
contractors. The cost is sometimes in terms of expenses incurred or avoided by
Mulago National Referral Hospital. If the expenses are believed to be favourable
to Mulago National Referral Hospital, then the functions are contracted. In

41
 addition, costs are in terms of time devoted to execute the non-core functions and
the outcome of this. For example, functions may be found to be time consuming to
execute and yet when contracted time can be devoted to core activities that matter
to make a big difference in achieving Mulago National Referral Hospital’s
objectives (KII/001/17/05/2023)
As to whether Mulago National Referral Hospital contract strategy assists determining the type
of management to be adopted for the subsequent supplier performance, the majority of the
respondents, 40% agreed with the statement, 09% strongly agreed, 18% were not sure, 30%
disagreed and 04% strongly disagreed with the statement. The mean of 3.403 indicated that the
respondents agreed that with the statement. The standard deviation of .97942 of indicated those
with deviating responses. The interpretation from this analysis is that in most cases, Mulago
National Referral Hospital did not develop its contract strategy in harmony with the
organization’s overall procurement strategy, Mulago National Referral Hospital’s contract
strategy did not establish the form of the procurement and Mulago National Referral Hospital’s
contract strategy did not assist in determining the formulation of the contract and the award of
the contract. In addition, Mulago National Referral Hospital’s contract strategy did not assist in
determining the type of management to be adopted for the subsequent supplier performance and
the relationship between management and contract administration.
Table 4.11: Pearson correlation matrix for contract planning and supplier performance
Contract planning Supplier performance

Contract planning Pearson correlation 1 .769**

Sig.(2-tailed) .000
N 57 57
Supplier performance Pearson correlation . 769** 1
Sig.(2-tailed) .000
N 57 57
*Correlation is significant at 0.01 level (2-tailed) Source: Primary Data (2023)
From the Table 4.11 Pearson correlation results depicts a strong and positive correlation (r=.769)
between contract planning and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. The
42
implication of these findings is that contract planning had a significant effect on supplier
performance by Mulago National Referral Hospital. The strong correlation implied that a change
in contract planning was related to a big change in supplier performance. The positive nature of
the correlation implied that the change in contract planning and supplier performance was in the
same direction whereby more contract planning was related to better supplier performance and
vice versa.
4.4.3 Contracts administration and supplier performance in health facilities
The third objective in the study was to examine the relationship between contracts administration
and supplier performance. To observe the influence, 6 question items were administered to
respondents to establish the extent to which they agreed with them were measured on a five-
point Likert scale where code 1 = Strongly Disagree, 2 = Disagree, 3 = Not sure, 4 = Agree and 5
= Strongly Agree. The findings are presented in the table 4.7 below
Table 4.12: Descriptive Statistics on the contracts administration in health facilities
Item Responses Frequency Percent Mean Std D
Mulago National Referral Strongly Disagree 01 02% 4.5088 6.505
Hospital formal governance Disagree 13 23%
of the contract is not an Not sure 14 25%
inconvenience in the
Agree 22 39%
contracting process
Strongly Agree 05 09%
Mulago National Referral Strongly Disagree 03 05% 3.6667 2.836
Hospital contract formal Disagree 15 26%
agreements clearly specify Not sure 04 07%
expectations in the
Agree 29 51%
contracting process
Strongly Agree 05 09%

Mulago National Referral Strongly Disagree 01 02% 3.4211 .9626

Hospital contract formal Disagree 12 21%
agreements clearly specify Not sure 10 18%
processes for dispute
Agree 30 52%
resolution in the contracting
Strongly Agree 04 07%

43
 process
Mulago National Referral Strongly Disagree 16 28% 3.35 1.00
Hospital has a plenty system Disagree 08 14%
put in place to limit Not sure 30 53%
opportunistic behaviour by
Agree 02 04%
parties involved in
Strongly Agree 01 02%
contracting

Mulago National Referral Strongly Disagree 02 04% 4.210 6.776

Hospital has a good Disagree 13 23%
relationship with its service Not sure 08 14%
providers
Agree 30 53%
Strongly Agree 03 05%
Mulago National Referral Strongly Disagree 01 02% 3.964 4.075
Hospital always clarifies its Disagree 17 30% 9 0
expectations for its service Not sure 03 06%
providers
Agree 32 56%
Strongly Agree 02 04%
Source Primary Data (2023)
With respect to whether Mulago National Referral Hospital formal governance of the contract is
not an inconvenience in the contracting process, 39% agreed with the statement, 09% strongly
agreed, 25% were not sure, 23% disagreed and 02% strongly disagreed with the statement. The
mean of 3.29 which indicated that respondents fairly agreed with the statement. The standard
deviation of 6.5058 indicated those with deviation responses.

As to whether Mulago National Referral Hospital contract formal agreements clearly specify
expectations in the contracting process, 51% agreed with the statement, 09% strongly agreed,
07% not sure, 26% disagreed and 05% strongly disagreed with the statement. The mean of 3.66
indicated those that were satisfied with the statement. The standard deviation of 2.836 indicated
those with deviating responses.

44
With respect to whether Mulago National Referral Hospital contract formal agreements clearly
specify processes for dispute resolution in the contracting process, the majority of the
respondents 52% agreed with the statement, 07% strongly agreed, 18% were not sure, 21%
disagreed and 02% strongly agreed. The mean = 3.8211 indicated that the majority of the
respondents agreed with the statement. The standard deviation of .9626 indicated those with
deviating responses.
As to whether, Mulago National Referral Hospital has a plenty system put in place to limit
opportunistic behaviour by parties involved in contracting, the majority of the respondents, 52%
were not sure of the statement, 28% strongly disagreed with the statement, 14% disagreed with
the statement and 06% agreed with the statement respectively. The mean = 3.35 indicated that
the majority of the respondents were fairly satisfied with the statement. The standard deviation of
1.00 indicated those with deviating responses. Findings show that sometimes Mulago National
Referral Hospital’s contracts were written to limit opportunistic behavior by parties involved in
contracting and there was a penalty-system in place to opportunistic behavior by parties involved
in contracting.
As to whether Mulago National Referral Hospital has a good relationship with its service
providers, majority of the respondents, 53% agreed 05%% strongly agreed, 14% were not sure,
23% disagreed with the statement, 18% strongly disagreed. The mean = 4.210 indicated the
majority of the respondents agreed. The standard deviation 6.776 indicated those with deviating
responses. From this analysis, the implication is that in overall, Mulago National Referral
Hospital had a good relationship with its service providers, its relationship with its service
provider was positive and beneficial for both sides and it clarified its expectations for its service
providers.

Table 4.13: Pearson correlation matrix for contracts administration and supplier
performance
Pearson Correlation coefficients

45
 Contracts Supplier
administration performance
Contracts Pearson correlation 1 .875
administration Sig.(2-tailed) .000*
N 57 57
Supplier Pearson correlation .875 1
performance Sig.(2-tailed) .000*
N 57 57
*Correlation is significant at 0.01 level (2-tailed) Source: Primary Data (2023)
From the Table 4.13 Pearson correlation results depicts a strong and positive correlation (r=.875)
between contracts administration and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0.05).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. Thus, the
implication of the findings was that contract administration had a significant effect on supplier
performance by Mulago National Referral Hospital. The strong positive correlation implied that a
change in contract administration was related to a big change in supplier performance. The positive
nature of the correlation implied that the change in contract administration and supplier performance
was in the same direction whereby more contract administration was related to better supplier
performance and vice versa.

46
 CHAPTER FIVE
SUMMARY, DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
The study investigated the relationship betweens of strategic contracting practices on the supplier
Supplier performance , Uganda. This chapter provides summaries of the findings from the study,
discusses the empirical results in view of the research objectives, and draws conclusions and
finally recommendations.
5.2. Summary of major findings
The summary of the major findings is presented based on the study objectives as laid out chapter
one of this report.
5.2.1: Risk control and supplier performance in health facilities
From the Table 4.9, Pearson correlation results depicts a moderate and positive correlation
(r=.488) between risk control and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0.05).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. Thus, the
implication of the analysis is that contract risk management had a significant effect on supplier
performance by Mulago National Referral Hospital. The moderate correlation implied that a
change in contract risk management was related to a moderate change in supplier performance.
The positive nature of the correlation implied that the change in contract risk management and
supplier performance was in the same direction whereby more contract risk management was
related to better supplier performance and vice versa.
5.2.2 Contract planning and supplier Supplier performance in health facilities
From the Table 4.11 Pearson correlation results depicts a strong and positive correlation (r=.769)
between contract planning and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. The
implication of these findings is that contract planning had a significant effect on supplier
performance by Mulago National Referral Hospital. The strong correlation implied that a change
in contract planning was related to a big change in supplier performance. The positive nature of
the correlation implied that the change in contract planning and supplier performance was in the

47
same direction whereby more contract planning was related to better supplier performance and
vice versa.
5.2.3 Contracts administration and supplier performance in health facilities
From the Table 4.13 Pearson correlation results depicts a strong and positive correlation (r=.875)
between contracts administration and supplier performance. The study results further indicated a
significant statistical relationship between the study variables given that P-value (P=0.000<0.05).
Therefore, the alternative hypothesis that was earlier stated in chapter one is upheld. Thus, the
implication of the findings was that contract administration had a significant effect on supplier
performance by Mulago National Referral Hospital. The strong positive correlation implied that a
change in contract administration was related to a big change in supplier performance. The positive
nature of the correlation implied that the change in contract administration and supplier performance
was in the same direction whereby more contract administration was related to better supplier
performance and vice versa.
5.3. Discussion of Findings
This sections explains the discussion of the findings in relation to the study findings
5.3.1 Risk control and supplier performance in health facilities
The study established that risk control had a positive significant relationship with supplier
performance. In this regard, the study findings are in agreement with Pereira et al (2020) who
affirm that risk identification is organized through methods to discovering real risks associated
with a project so that one can come up with appropriate intervention to moderate the relationship
between of the known risks. Further still, Pournader, Mehrdokht, Andrew Kach and Talluri,
(2020) argued that if risks are managed effectively especially by identifying carefully, it enables
obtaining consistent, understandable, operational risk measures which increases the firm’s ability
to achieve intended objectives. However this was a theoretical observation, while this was an
empirical study on how risk identification impacts on supplier performance.

The study findings concur with Brynhildsvoll (2018) who noted that risk analysis especially
through cost benefit analysis plays an important role in determining high profit margins. This is
mainly done through several qualitative and quantitative techniques. They further noted that risk
analysis through establishing the cost benefit analysis plays an important role in improving
business supplier performance. An active management is required for analysing risks and this
should begin as early as possible through identifying, prioritizing and during risk selection stage.
48
Dias et al (2021) in their study about risk management techniques’ and financial supplier
performance of insurance companies revealed that identifying risks has a potential of
significantly improving on supplier performance of insurance companies. However the proposed
study dealt with risk control and supplier performance in health facilities. This study covered the
research gaps.

Altanashat, Al Dubai and Alhety (2019) stated that risk assessment is the basis for building plans
in the face of danger. The aim of this process is control produce risk from occurring. This
assessment is of great importance to the organisations and entrepreneurs in terms of making high
profits. However, their study was a descriptive analysis while the current study was
Correlational. Abubakar et al (2020) argued out that risk monitoring as a routine reporting
management process is essentially important in realizing project goals. This is because as a
continuous evaluation tool, feedback on the risk management process and supplier performance
is possible. Findings by Aghajanian et al (2018) in a study about management as a tool
enhancing supplier performance revealed that risk management especially through evaluation did
not significantly relate with supplier performance in conventional and Islamic banks. However
the reviewed study was in the banking sector and applied different theories from that of the
utility theory this study applied.
5.3.2 Contract planning and supplier performance in health facilities
The study established that risk control had a positive significant relationship with supplier
performance. The study findings are consistent with KOFA (2018) who revealed that contract
planning is the primary function that sets the stage for subsequent contract activities and, it fuels
and then ignites the engine of the contract process. Efficient public contract systems are essential
to the best supplier performance of public contract units within public institutions. However,
public contract needs assessment is a key element to the overall efficiency of public sector
management because it can contribute to a better allocation of resources and improved supplier
performance s in the public sector. Weak and corrupted contract plan often lead to a waste of
public financial resources, time wastage and higher transaction costs and, therefore, undermine
development efforts.

In fact, it has inspired scholars to such an extent that we currently face a vast and increasingly
confusing mound of research on divergent issues and phenomena in public contract, from

49
differing institutions and settings. Recent elaboration of the institutional theoretical framework
has certainly contributed to more clarity; nonetheless, ‘institutional logic’ has become the new
buzzword in institutional research especially in the public contract field (Jain et al., 2020). What
is however, missing, is an encompassing systematization that would help to accumulate findings
and knowledge. Achieving efficiency in public contract planning is an ambitious task, as contract
faces numerous challenges, especially due to the market structure, the legal framework and the
political environment that procurers face. Poor contract planning has been one of the major
stumbling blocks to the economic development of Africa and it has been clear that a number of
African countries have not paid adequate attention to the proper management of public resources
(Basheka, 2018).
5.3.3 Contracts administration and supplier performance in health facilities
The study established that risk control had a positive significant relationship with supplier
performance. The study findings are supported by Harris et al (2018) who indicated that contract
administration involves those activities performed by organizational officials after a contract has
been awarded to determine how well the organization and the contractor performed to meet the
requirements of the contract. It encompasses all dealings between the organization and the
contractor from the time the contract is awarded until the work has been completed and accepted
or the contract terminated, payment has been made, and disputes have been resolved. As such,
contract administration constitutes that primary part of the contract process that assures the
organization gets what it paid for. Contract administration to ensure better supplier performance
requires appropriate resourcing. It may be that the responsibility falls on a nominated individual
(Belhadi et al., 2021). If not, and the responsibility is shared across a contract management team,
it is important that all members of the team deal promptly with contract administration tasks,
particularly during the early stages of implementation if better supplier performance is to be
realized.
Contrary to the study findings, several weaknesses have been identified in contract
administration practices used by organizations. The principal problem is that contracting officials
often allocate more time to awarding contracts rather than administering existing contracts
(Morgan & Hunt, 2017). This often leads to problems in contractor supplier performance, cost
overruns, and delays in receiving goods and services. Several other deficiencies have been noted
such as unclear roles and responsibilities of the contracting officer's technical representatives,

50
excessive backlog in contract closeout and incurred costs audits, improperly trained officials
performing contract oversight, unclear statements of work that hinder contractor Supplier
performance , and inadequate guidance on voucher processing and contract closeout (Kannan &
Tan, 2016).
The study findings are in agreement with Beaulieu and Bentahar (2021) who found that supplier
performance of Referral Hospitals involves the manner in which procurement function is able to
reach the objectives and goals with minimum costs. The study examined supplier performance of
Referral Hospitals in terms of efficiency, competitiveness of services procured, quality of goods
procured, and reduction of conflict of interests within the procurement activities. Armstrong-
Hough M et al (2020) found that Supplier performance of Referral Hospitals can be measured
using two metrics, relationship and efficiency. Relationship between in supplier performance of
referral hospitals involves achievement of procurement values such as transparency,
accountability and value for money. The efficiency aspects of procurement involve aspects such
as adequate consideration of the user needs, efficiency in utilization of public resources and risk
management. On the other hand, the study by Kamotho (2018) used metrics such as costs
management, inventory levels, and time taken to complete procurement process, delivery of best-
value contracted goods and service, stronger vendor-buyer relationship, and assured supply to
measure the effectiveness of procurement contract management.
5.4 Conclusions
Study conclusions were drawn based on the study findings.
5.4.1 Risk control and supplier performance in health facilities
Given the positive relationship between risk control and supplier performance, findings of this
study demonstrate that the crucial role of risk control in supplier performance. Thus, it is
important that Mulago National Referral Hospital conduct assessments to identify and avoid risks
in their contracts for deliver better services.
5.4.2 Contract planning and supplier performance in health facilities
Findings of this study revealed that contract planning plays an important role in Mulago National
Referral Hospital’s supplier performance. The positive relationship indicated that good contract
planning leads to better supplier performance while poor contract planning leads to poor supplier
performance. This shows that if contract planning is well handled in Mulago National Referral
Hospital, supplier performance were poor.

51
5.4.3 Contracts administration and supplier performance in health facilities
This study like other studies conducted elsewhere demonstrates the importance contract
administration in supplier performance of organizations. The positive relationship between
contracts administration and supplier performance emphasizes that activities after a contract has
been awarded to determine should be performed well for the contracting organizations and the
contractor to meet the contract requirements.

5.5 Recommendations
In light of the study conclusions, the following recommendations were made in line with the
objectives of this study.
5.5.1 Risk control and supplier performance in health facilities
Mulago National Referral Hospital should also improve its contract risk management for better
supplier performance. It can achieve this by assessing the contracting process to ensure reliable
inputs, and identifying and prioritizing a company’s risks for the formulating effective risk
responses. It should also assess its stakeholders to minimize self-conflicts and interest in its
contracting process.
Mulago National Referral Hospital must first ensure that there are enough resources basically the
finances and the human resources before they can embark on any project to avoid frustrations on
the side of the contractors which finally lead to poor supplier performance as the real costs tend
to be high in the long run.
Leadership at Mulago National Referral Hospital should ensure that risk analysis is prioritized
through holding regular reviews, and assessment to reduce on the possibility of risks to occur.
Finally in the policy statement of Mulago National Referral Hospital audits, risk controls should
be clearly emphasized to ensure compliance with supplier performance goals
5.5.2 Contract planning and supplier performance in health facilities
Mulago National Referral Hospital should improve its contracts planning to provide better service
to the Kampala community. It can achieve this through setting clear, measurable and achievable
contracts objectives within the available resources, knowledge and time. It should also consult all
its stakeholders and develop its contract strategy in harmony with the organization’s overall
procurement strategy to ensure the supplier met the minimum supplier performance criteria.
Furthermore, clear lines of responsibility and authority in contracting including clear contracting

52
tasks and contracting schedules should be spelt out and sufficient authority should delegated
along with responsibility during contracting.
5.5.3 Contracts administration and supplier performance in health facilities
Apart from improving its contract planning, its contract administration should also be improved
for better supplier performance. Issues that need to be addresses by Mulago National Referral
Hospital include improving its relationship with its service providers, making the formal
governance of the contract more convenient by reducing on the bureaucracy and clearly
specifying expectations, obligations, responsibilities and processes for dispute resolution in the
contracting process. Lastly, it should limit opportunistic behavior by parties involved in
contracting by having a penalty-system in place. Supplier performance also had a low mean and
therefore is need for Mulago National Referral Hospital management to embark on other factors
influencing supplier performance that should be put into consideration.
5.6. Areas for future Research
This study focused on a few dimensions of Strategic contracting practices in relation to supplier
performance. Other studies may be conducted to establish the effect of other dimensions of
contract management on supplier performance. The other dimensions of contract management
that can be investigated include contract implementation, contract coordination, and contract
negotiation.

53
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 APPENDICES
APPENDIX I: QUESTIONNAIRE FOR THE SERVICE PROVIDERS

Dear Respondent,
I am ANNET NAMPALA REG 18/MPP/KLA/WKD/0005 is a student at Uganda
Management Institute pursuing a Master’s Degree in Public Procurement Management. As one
of the requirements for being awarded with this qualification, I am conducting a study on,
“Strategic contracting practices and supplier performance at health facilities: a case study of
Mulago National Referral Hospital”. You have been identified as one of the resourceful people
to participate in this study. You are requested to answer the questions as honestly as possible to
enable reliable conclusions and recommendations. All your responses were used strictly for
research purpose and treated with anonymity and utmost confidentiality.
SECTION A: DEMOGRAPHIC CHARACTERISTICS
Individual Characteristics
Please tick the option that best describes you.
Indicate your Sex
Male Female
1 2
In which age bracket do you fall?
18-25 years 26-30yrs 31-35yrs 36-40 years 41 years and above

1 2 3 4 5
Highest Education Level
Certificate Diploma Degree Masters PHD
1 2 3 4
Years of Service
1-3years 4-6 years 7-9 years 10 years and above
1 2 3 4

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 SECTION B: QUESTIONS ON THE STUDY VARIABLES
You are required to answer the following statements using the key presented to you. Key: 5
Strongly Agree (SA), 4- Agree (A), 3- Not sure (NS), 2- Disagree (D) and 1 represents Strongly
Disagree (SD).

STATEMENT SA A NS D SD
RISK CONTROL

Risk analysis

RC 1 Mulago National Referral Hospital contracting is a process with

value-added outputs
RC 2 Mulago National Referral Hospital consults its stakeholders to
make informed contract decisions
RC 3 Mulago National Referral Hospital contract practices protect its
business from supplier events that can impact negatively the
hospital operationally
RC 4 Mulago National Referral Hospital contract practices protect its
business from supplier events that can impact negatively the
company’s reputation
Risk identification
RC 5 Mulago National Referral Hospital assessment process
identifies and prioritizes a company’s risks for the formulating
relationship risk responses
RC 6 Mulago National Referral Hospital identified priority risks are
always traced to their root causes
Risk evaluation

RC 7 Mulago National Referral Hospital contract practices protect its

business from supplier events that can impact negatively the
company legally
RC 8 Monitoring of risks is done using either internal or external
experts

ii
RC 9 Risks assumptions are identified and evaluations done follow
them closely
RC10 Monitoring and control of risks are highly carried out in this
organization

CONTRACT PLANNING
SETTING OF OVERALL OBJECTIVES
CP1 Mulago National Referral Hospital always sets clear contracts
objectives
CP2 Mulago National Referral Hospital contracting objectives are
measurable
CP3 Mulago National Referral Hospital contracting objectives are
achievable/attainable
CP4 All Mulago National Referral Hospital stakeholders are
consulted during the contracting objectives
CP5 Mulago National Referral Hospital contracts objectives are
always within the available resources, knowledge and time
DEVELOPING CONTRACTING STRATEGIES
CP6 Mulago National Referral Hospital develops its contract strategy
in harmony with the organization’s overall procurement strategy.
CP7 Mulago National Referral Hospital contract strategy assists
determining the type of management to be adopted for the
subsequent supplier performance
CP8 Mulago National Referral Hospital contract strategy assists in
determining the relationship between management and contract
administration

iii
 CONTRACTS ADMINISTRATION
Formal governance of the contract
CA1 Mulago National Referral Hospital formal governance of the
contract is not an inconvenience in the contracting process
CA2 Mulago National Referral Hospital contract formal agreements
clearly specify expectations in the contracting process
CA3 Mulago National Referral Hospital contract formal agreements
clearly specify processes for dispute resolution in the contracting
process
CA4 Mulago National Referral Hospital contract formal agreements
clearly specify
Implementation of procedures
CA5 Overall, Mulago National Referral Hospital has a good
relationship with its service providers
CA6 Mulago National Referral Hospital contracts are written to limit
opportunistic behaviour by parties involved in contracting
CA7 There is a penalty-systems in place to opportunistic behaviour by
parties involved in contracting
CA8 Mulago National Referral Hospital relationship with its service
provider is positive and beneficial for both sides
CA9 Mulago National Referral Hospital always clarifies its
expectations for its service providers

SUPPLIER PERFORMANCE
Timely delivery
SP1 Services are usually delivered on time at Mulago National
Referral Hospital
SP2 Mulago National Referral Hospital service coverage is
satisfactory
Value for money

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 SP 3 Mulago National Referral Hospital supplier performance is
efficient
SP 4 Mulago National Referral Hospital supplier performance is
relationship
Quality of service
SP 5 Services are delivered to the right places
SP 6 Mulago National Referral Hospital services are easily accessed
SP 7 Mulago National Referral Hospital delivers quality services

Thanks for your time & cooperation

APPENDIX II: INTERVIEW GUIDE FOR THE CONTRACT STAFF

TOP MANAGEMENT
Dear Sir/ Madam,
I am ANNET NAMPALA REG 18/MPP/KLA/WKD/0005 is a student at Uganda Management
Institute pursuing a Master’s Degree in Public Procurement Management. As one of the

v
requirements for being awarded with this qualification, I am conducting a study on, “Strategic
contracting practices and supplier performance at health facilities: a case study of Mulago
National Referral Hospital”. You have been identified as one of the resourceful people to
participate in this study. You are requested to answer the questions as honestly as possible to
enable reliable conclusions and recommendations. All your responses were used strictly for
research purpose and treated with anonymity and utmost confidentiality.
i. Is there contract planning at Mulago National Referral Hospital? If no, why? If yes, what
is involved in Mulago National Referral Hospital s contract planning?
ii. Are you satisfied with Mulago National Referral Hospital contract planning? If no, why?
If yes, why?
iii. How has Mulago National Referral Hospital contract planning affected contract
planning?
iv. Is there contract administration at Mulago National Referral Hospital? If no, why? If yes,
what is involved in Mulago National Referral Hospital contract administration?
v. How has Mulago National Referral Hospital contract administration affected contract
administration?
vi. Are you satisfied with Mulago National Referral Hospital contract risk management? If
no, why? If yes, why?
vii. How has Mulago National Referral Hospital contract risk management affected contract
risk management?

Thanks for your time & cooperation

vi