Influence of Framework Contracting on Procurement Performance of Geothermal Development Company, Kenya

Framework arrangements represent a way of purchasing involving placing one-off' orders for recurrent contracts for works or supplies by optimizing volume purchasing discounts and minimizing repetitive purchasing tasks. As such, the general objective of this study was to investigate the influence of framework contracting on procurement performance at Geothermal Development Company. The study used descriptive survey research design and targeted a population of 127 employees attached to procurement, administration and finance departments thereafter 96 were sampled for the study. The data for this study was obtained using questionnaires which were structured in form of closed ended questions. The analysis of data was conducted using SPSS program. Findings of this study were considered significant in enhancing strategies towards effective implementation of framework contracting in attempt to improve the performance of the procurement function at Geothermal Development Company. It was established that framework contracting techniques had a moderate positive relationship with procurement performance (r=0.357). Further, it was found out that Early Supplier Involvement and Supplier Relationship Management had moderate to strong positive relationship with procurement performance as indicated by (r=0.404) and (0.681) respectively. The study established that framework contracting was adopted as a strategic technique (mean=4.39) at Geothermal Development Company and was frequently applied (mean=3.66). The study findings led to the conclusion that procurement performance at Geothermal Development Company was measured with regard to the role of framework contracting. Consequently, it was concluded that implementing framework contracting reduced cost and promoted procurement performance in the Company. The study recommends increased awareness towards adoption of framework contracting as a means of cutting on total procurement costs.