ContentslistsavailableatScienceDirect
Sustainable Futures
journalhomepage:www.elsevier.com/locate/sftr
Establishing the connection between successful disposal of public assets and sustainable public procurement practice
Peter Adoko Obicci
a, Godfrey Mugurusi
b,∗, Pross Oluka Nagitta
caEconomics and Managerial Sciences Department, Uganda Management Institute, Kampala, Uganda
bDepartment of Industrial Economics and Technology Management in Gjøvik, Norwegian University of Science and Technology, Norway
cEconomics and Managerial Sciences Department, Uganda Management Institute, Kampala, Uganda
a r t i c le i n f o
Keywords:
Disposal
Public assets disposal Sustainable public procurement Asset life cycle
Uganda
a b s t r a ct
Thedisposalofassetsaftertheirend-of-useisoftenconsideredtheend-stageintheprocurementcycle.Assets disposalinapublicorganizationisitscapacitytoattachreusablevaluetoitsassetsattheirendoflife.Itisanarea wherethefailureofthepublicprocurementprocessismostattributedyethasthemostpotentialforsustainable procurementpractice.Thispaperexaminesthefactorsforthesuccessfuldisposalofpublicassetsandthepublic purchasers’perceptionsofhowthesefactorscontributetoabetterunderstandingofsustainableprocurement practice.
Usingacross-sectionalsurveyamongkeyactorsinthepublicprocurementprocess,threekeysuccessfactors, namelystrategicassetsmanagement,strategicplanningforassetsdisposal,andassetsdisposalmechanismsare identified;theireffectonsuccessfulassetdisposalisexamined.
Theresultsindicatethatthethreebroadfactorsstudiedareallimportantaspectsforeffectiveassetsdisposal.
Yet,theireffectonthesuccessofthedisposalofpublicassetsprocessissomewhatvaried.Basedonthethree factors’statisticalsignificance,weconcludethatstrategicassets’planningisperhapsthemostdominantfactor forasuccessfulassetsdisposalprocessandprovidesthemostpromiseforsustainableprocurementinpublic organizations.
Thisstudyshowsthatstrategicassetsmanagement,strategicplanningforassetsdisposal,andthechoiceof assetsdisposalmechanismsareallcriticalenablersofsuccessfuldisposalofpublicassetsinpublicorganizations andaprecursorforsustainableprocurementpractice.Butatthemicrolevel,disposalplanningisbyfarthe mostsignificantenablerforsuccessfulassets’disposal,andthereforeadirectdriverforsustainableprocurement practice.
Introduction
Mostliteratureonpublicprocurementdescribesassets’disposalas thelastphaseofthepublicprocurementprocess[38,33].Thedisposal ofpublicassets,irrespectiveofthemethodused,ispurposedtomeet theentity’sneeds,promotethebenefitsofassetsvaluerecapture,and maintaintheentity’spathofefficiency,effectiveness,andefficacy[18]. Theurgetodisposeofnon-beneficialpublicassets1inpublicorgani- zationsisoverwhelmingandarguablyanecessaryactivitytoreducethe costofholdingunwantedpublicassetsandtobemoresustainable[12].
∗Correspondingauthor.
E-mailaddress:godfrey.mugurusi@ntnu.no(G.Mugurusi).
1 EndNotes:Publicassets-Theseareresourcesbetheytangibleandintangible witheconomicvaluesthatapublicentityownsorcontrolswiththeexpectation thattheywillprovidefuturebenefitstostakeholders.Wearespecificallyinter- estedontangibleassetsinthisstudy.Non-beneficialpublicassets-Theseareassets whosebenefitsarelongernecessarytoachieveorganizationalobjectives.This canbeduetodepreciation,wearandtear,obsolescesandsuchlike.
YetasAtigaetal.[5]suggest,thedisposalofnon-beneficialpublicas- setsisoftenfrustrating.Theyattributethefrustrationtothecontinued holdingofsuchassetsthathavenoimmediateusablevalue,affecting thetotalcostofownership(TCO)ofthatasset.Therefore,itisessential tounderstandhowpublicorganizationsmanagetheend-of-lifeprocess ofpublicassetsuse,particularlywhatkeyconsiderationsunderpinthe successfuldisposalofpublicassetsinpublicorganizations.
This paper’smainargumentisthatsuccessfulassetdisposaloften showsthelevelofadvancementtowardssustainableprocurementprac- ticeamongstpublicsectororganizations.Agbesietal.[2]showthatthe organizationalfactorsandtheregulatorystructureinpublicprocure- mentoftendeterminethedegreeofsustainableprocurementofpublic organizations.Zaidietal.[45]highlightseveralbarrierstoimplement- ingsustainableprocurement,someofwhichtheyattributetothestrate- gicmanagementofthatpublicorganization.So,thefocusofthispaper aretheorganizationalfactorsinthedisposalofpublicassets.
https://doi.org/10.1016/j.sftr.2021.100049
Received18October2020;Receivedinrevisedform2March2021;Accepted8April2021
2666-1888/© 2021TheAuthors.PublishedbyElsevierLtd.ThisisanopenaccessarticleundertheCCBYlicense(http://creativecommons.org/licenses/by/4.0/)
Wedrawempiricalevidencefromthepublicprocurementsystemin Uganda.ThePublicProcurementandDisposalofPublicAssetsAuthority (PPDA)initsannualreportof2018,thatpublicorganizationsinUganda havemadelittleefforttowardsdisposalofnon-beneficialpublicassets, whichaddstremendouscoststotheGovernment[37].Thegovernment’s annualauditreportbytheAuditorGeneral’sofficecitesseveralcases ofnon-compliancetotheprocurementanddisposallawandneglectof publicassetsintheirpossession[34].
Thesereportsandothersconfirmthechallengesindisposingofout- of-usepublicassetsasaconsequenceofthefailureinrecordkeeping, wrongdisposalmethods,poordisposalplanning,andpoorexecutionof disposalplan[37,34].Thesefailuresareorganizationalattributes[40]. Theyaffecttheperformanceoftheseorganizationsandincreaseholding coststotheseorganizationsthatmustservice,maintain,store,andin- suretheassetson anannualbasis.This aloneis notsustainableand underminesgovernments’ capacitytorecapture fairvaluefrom non- beneficialpublicassets.
Theproblemofassets’dispositionisubiquitousandthereforenot uniquetoUgandaalone.Elsewhere,theliteraturereportsthelackofca- pacityatthestrategicandtacticallevelstopreparepublicassetsdisposal registers,thebasisofwhichdisposalplanningismade[8].InMalaysia, Abdullahetal.[1]citethelackofpropermanagementproceduresasone ofissuesaffectinggovernmentassets’useandmanagement.InKenyathe problemhasbeenattributedtothelackofrequireddocumentation,the failuretocreatecompetitioninthedisposalprocessanddisposingoffor selfishpurposes[41].InTanzania,thelackof,amongotherthings,po- licesandprocedures,amanagementplanandtraininghavebeencited inpublicassetdisposition[21].
Againstthisbackground,thepurposeofthisresearchistoexamine thefactorsforthesuccessfuldisposalofout-of-usepublicassetsinpub- licorganizations.Thisisanareaofstudywhereverylittleresearchhas venturedinto.Infact,weidentifiedonlyacoupleofscientificpapers (e.g.[5,8,21,23,41])andahostofnon-scientificliteratureonthissub- ject.Wehopethatthisstudy’sresultswillexplainthelinkbetweenthe disposalprocessandthebenefitsofsustainableprocurement,whichis anareaofsignificantimportanceinthepublicassetsmanagementde- bate[2,45].Inparticular,thedisposalbyauctionmethodorthesaleof out-of-useassetssalecontributestobetterassetsreusabilityandvalue capture:itsavesthetaxpayerlargeamountsofmoneyhencesustainable governance.
Therefore,this papercontributestoabetterunderstandingofthe publicassetsdisposalproblembydelineatingthefactorsforsuccessful publicassetsdisposal.Thepaper’sempiricalresultsareusedtogether withtheavailableliteraturetoarguefortheroleofsuccessfulpublic assetsdisposalprocessesinsustainablepublicprocurementpractice.
Thispaperisorganizedasfollows.First,areviewofrelevantlitera- tureonthesubjectispresented.Thisisfollowedbythemethodssection.
Thentheempiricalresultsofthestudyfollow.Atthetailend,thedis- cussionandconclusionofthestudyisprovidedwithsomelimitations anddirectionforfurtherresearch.
Areviewoftheliterature Assetdisposal
Thedisposalofout-of-usepublicassetsentailstheactofderecogniz- ingapublicassetthathasreachedtheendofusefullifeandhasnofuture economicbenefitorserviceexpectedfromitsuseforthatorganization [42].Thedisposaldisposalprocessis oftenpartofaprotractedpro- curementprocess.Theassetmanagementliteraturesuggeststwobroad areaswhosemisunderstandingoftenresultsinsub-optimalperformance ofanasset,whichdirectlyaffectsthatasset’sdisposition[23].Thesein- cludestrategicassetmanagementon onehandandoperationalasset management.Thestrategicassetmanagementconcernsthegovernance andlong-termutilizationofanasset.Incontrast,operationalassetman- agementinvolvestheasset’son-goingmaintenance
Theassets disposalliteraturefurtherdeconstructs theoperational assetsmanagementintotwophases.Theseinclude:thestrategicplan- ningforassetsdisposalandchoiceofassetsdisposalmechanism[23,41].
RefertoFig.1.Sothisstudyfocusesonthese3mainareas:(1)strate- gicassetsmanagementtoaddresstheon-goingutilityofanasset,(2) thestrategicplanningforassetsdisposaltoaddressthemonitoringand maintenanceofanasset,and(3)thechoiceofassetdisposalmechanism toaddressthevaluerecaptureaspectsofanasset.
Fromthisconceptualization,itappearssuccessfulassetsdisposalre- quiresonetounderstandtheliteratureonthelong-termgovernanceof anassetandtheshort-termviewofwhathappenstotheassetwhenit approachesitsend-of-use(seeFig.1).Thismultidisciplinaryapproach proposedbyAmadi-Echendu,etal.,[3]isusedinthisstudyandaligns withthesustainabilitythinkingthatwediscusslaterinthispaper.
This studyapproachesfactorsforsuccessful publicassets disposal throughtwolenses:theassetmanagementlensandthepublicprocure- mentlensasmentionedabove.Boththeselensesarerelevantforsustain- ableprocurementpractice.Ratherthaninvestigateparticularvariables likeratesofdisposalorcompliancetostatutoryrequirementsfromdis- parateliterature,thisstudyfocusesonthethreebroadareasfromthe twoliteraturestreamsasinFig.1,andtheninvestigatestheembedded factorsonthedisposalofpublicassetsasproposedbyLaueetal.,[23]. LikeWahomeandMarendi[42],wecouldnotfindasinglecomprehen- sivetheoreticalframeworkexplainingsuccessfactorsforpublicassets disposalinpublicorganizations.So,thisconceptualizationprovidesa goodstartingpointtothischallenge.
Publicassetsdisposalandsustainableprocurementpractice
Dispositionofassetsorassetsdisposalasusedinthisstudy,refers totheactofsellingordisposingofassetswhoseusageandvaluehas depreciatedovertheirusefullife.Itisofteninthepublicinterestfor publicorganizationstoconductthisprocessinasafeandecologically responsiblemanner[22,45].AccordingtoMihajuetal.[28],publicas- sets disposalis conductedin ordertofree upresources thatapublic entityneedstoperform efficientlybyholding cashin assetsdeemed beneficial toitsoperation.Suchperformancecanbegaugedinterms ofefficiency,effectivenessandefficacytopublicentity[41].Insupport Mensah[46]contendsthatdisposalofnon-beneficialpublicassetscan leadtolowercostofproduction,deploymentofassetsintheproperuse, reductioninnon-beneficialassets,employeemotivationandincreased productivity.Thispaperaddstothisargumentthatthedisposalofassets shouldalsobeseentoadvancethesustainabilitygoalattheorganiza- tionallevel.
Becauseassetmanagementiscloselyassociatedwithanasset’slifecy- cle,thenotionofsustainabilitybecomesvitalinthisdiscussion[7,25].
MaslennikovaandFoley[26]demonstratewithanexampleof Xerox corporationwhereproductsaredesignedwithamechanismforvaluere- captureforusers– throughrecoveryandendoflifeplans.Theysuggest thatsustainabilityandassetsdisposalcanbecloselylinkedconcepts.
Norum[32]showsthatuserbehaviortowardsdisposalofanitem,in thiscaseclothing,dependsonthelevelofknowledgetheyhaveofthat item’sentirevaluechainandwhatdisposalalternativestheyhave.Bab- bitt etal., [7]arguethatdisposalmethodsareoftenpriceandvalue focusedandthereforetendtoincreaseinstitutionalriskbecauseofthe unknownassetusageonceoutoftheirsystem.Inthissense,assetdis- positioncanalsobeseenasreturn-to-lifeofanasset,ratherthanthe end-of-lifeofanasset[39].
Thisdiscussionthereforesuggeststhatassetdisposaliscloselyre- lated tosustainableprocurementpractice, wheredisposalofanasset inherentlyprovidesbotheconomicandenvironmentalbenefitsforthe publicorganization.
Successfuldisposalofpublicassetsfocusesmostonthelastendof theprocurementprocess.Itisarticulatedthroughexecutionofadis- posalplan(e.g.end-of-lifeassessment),definingthemethodtobeused fordisposal(e.g.auction,recycling,donating)andthenimplementing
Strategic asset management
Operational asset management
Plan for end-of-life of an asset Choice of asset disposal method Asset management literature
Procurement and asset disposal literature
Fig.1. Assetsdisposalatconceptualjunctionofassetmanagement literatureandprocurementprocessliterature.
thatmethod (e.g.valueaudit andrecovery).This gray areaisnot a straightforwardprocessandvaries fromorganizationtoorganization [31].SusanandNamusonge[41]reportthatpublicofficersbelievethe disposalprocessisriskerandtakesalongperiodoftimecomparedto doing“nothingaboutthoseassets”.KrentandZeppos[22]agreethat incidencesofabuseandgraftarehighestintheassetdisposalprocess duetothefuzzinessaroundtheprocess.Intheirstudyofthestatutory complianceinassetsdisposalpracticesinGhana,Atigaetal.[5]found legalandmanagementimpedimentsasthemainchallengeinthedis- posalofpublicassets.Yet,asMensah[46]claims,thedisposalprocess’s coherencyiskeytotheeffectivedisposalofpublicassets.Azzietal.
[6]indicatethehighertheconsistencythepublicentityappliesinthe disposalprocess,themorelikelytheentitycansucceedinthedisposal ofpublicassets.However,leftunattendedto,publicassetdisposalcould leadtounsustainableprocurement
Strategicassetsmanagement
Strategic assets managementrefersto anend-to-endprocess that combinesdifferentwaysofefficientlyintegratingtheassetoperations, assetsinformation,theentity’senvironment,andskillsinthelong-term useandmanagementofthatassets[10].Apartfromincreasinglong- termperformanceof anasset,strategicassetsmanagementdrawson thecharacteristicsofanassetinachievinganentity’sobjective.
MunyaoandMoroonge[30]arguethatanorganizationmustcon- siderstrategicassetsmanagementasacoreactivitybecausethefunc- tions inherent in strategic assets management areoften essential in successfully disposingof publicassets.They concludedthat thesuc- cessof publicassets’ disposalis mostly dependenton payingpartic- ularattentiontomanaginglong-termutilityofthoseassets,develop- ingmaintenanceplansfortheassets,settingassetsperformancestan- dards,andcarefulmanagementofriskinstrategicassetsportfolio.Laue etal.,[23]listthefollowingprocessactivitiesofstrategicassetmanage- ment:assetmanagement,assetmanagementpolicy,assetmanagement strategy,assetmanagementplans,assetperformancemeasurement,and managementreview,andaudit andreporting. Kaganova,[19]found thattherightmixofthestrategicassetmanagementactivitiesiscritical tosuccessfullyimplementingpublicassetsdisposaloutcomes.[15]con- tendthatstrategicassetsmanagementisthesureststrategythathelps improveavailability,safety,reliability,andlongevityofassets,which maintainsthequalityoftheasset.Therefore,itisevidentthatthesuc- cessfuldisposalofpublicassetsdependsonthequalityofthatasset’s management over its lifetime which infers a higher asset recapture value.Basedonthisview,wehypothesizethat:
H1. Strategic assetsmanagement is significantlyassociated withthe successofthepublicassetsdisposalprocess.
Strategicplanningforassetsdisposal
Strategicplanningforassetsdisposalreferstoastructuredprocess thatensuresanorganization’sassetsportfoliocomprisesonlythoseas- setsthatcaneffectivelymeetitscurrentneedsandservicedeliveryre- quirements[16].Itinvolvestheoperationalimplementationoftheor- ganization’sstrategyonassets.Whileassetsdisposalinitselfrefersto themeansthroughwhichnon-beneficialassetsaredisposedof,thegoal ofstrategicplanningforthedisposalofanassetistoprovideadequate andequalopportunitytoachievebestreturntothepublicorganization throughproperidentificationofnon-beneficialassetswithadoptionof appropriatestrategiesfortheirdisposal[14].
Strategicplanningforassetsinitselfentailsdefiningpolicies(com- mitment and principles to do), strategies (approach to be taken to achievetheobjectivesinthelongterm),goal(whatistobeachieved), andaspecificplan(determiningwhoshoulddowhat,whenandwhere) [24].However,problemsinassetsdisposalhaveemergedasaresultof poorplanningandinsufficientfinances,extendingtoalackofqualified personnelandinadequateresourcesthatderailtheplanningcomponent of thedisposalprocesses [16].Someotherproblemsnotedinearlier studiesincludeincreasedplanningcosts,incorrectandinadequatedis- posalneedsidentification,reducedscrutiny,andtimelinessinreviewing [41].Thus,severalmistakesarecitedintheassetsdisposalplanningpro- cessesthatthreatenpublicassetsdisposal’slong-termsuccessinpublic organizations[42].SusanandNamusonge[41]showinthecaseofthe Kenyanpublicsector,thatlowlevelofstrategicassetsdisposalplanning inpublicorganizationscreateslittlesuccessduetocontradictoryassets managementobjectives,lackofinformationonpublicassets,thelackof disposalplan,andthelackofskilledpersonnel.
Assuch,itappearsthatthesuccessofassetsdisposalprocessesde- creaseswhentheplanningprocessesforthoseassetsinthefirstplaceare notrobust.Alternatively,whenthedisposal-planningprocessmissesthe keyplanningcomponents,thedisposalprocessesbecomeproblematic.
We,therefore,proposethat;
H2. Thesuccessofpublicassetsdisposalprocessissignificantlyassoci- atedwithrobuststrategicassetsdisposalplanning.
Choiceofanappropriateassets’disposalmechanism
Organizationshavemanymethodstheyusetodisposeofassetsthat no longergenerate utility value.Theliterature mentionsformssuch as donations, sale,reuse, redeploy,partexchange,refurbish, return, or destroy/discard as some of the most popular methods out there [17,20,27,43].XiongandXiang[43]haveargued thatthechoiceof methodsusedfordisposalhasapositivecorrelationwithdisposaleffi- ciency.Thechoiceofanasset’sdisposalmechanismallowsanorgani- zationtoadequatelyselectadisposalmethodthatsuitsthegoalthey seektoattain[14].UsingtheTanzania’sprocurementsystemasanex- ample,Kamili[20]suggeststhatthechoiceofanassetdisposalmethod
canresultinlossofrevenues,theft,anddevaluationofpublicproperty.
InUganda,forexample,therelevantdisposalauthorities(e.g.,account- ingofficers,userdepartments,contractscommittees,andprocurement units)needtimetodefinethedisposalmechanismanddevelopaplan withcostestimates[9].Theuserdepartmentsmustbuildtheirstrategy forperformingtheworkofpublicassetsdisposalina favorableway toalleligiblebiddersandthenmustestimatethecoststoperformthe tasks.Theprocurementdepartmentneedstimetoconductmarketre- search,developanappropriatedisposalstrategy,andgeneraterequests foroffers.Suchacomprehensiveprocesssuggeststhattheassetdisposal mechanisms,oftentargetedtowardsthebestvalueoutofanasset,are suchanimportantcontributortothedisposalprocess’sefficacy.Relating tothisclaim,weproposethat;
H3. Thechoiceofanappropriateassetdisposalmechanismormethod issignificantlyassociatedwiththesuccessofthepublicassets’disposal process
Methods Studydesign
Thecross-sectionalsurveydesignwasdeployedamongactorsinthe publicprocurementsysteminUganda.Thedatacollectiontargetedtheir perceptionofstrategicassetsmanagement,strategicplanningforassets disposal,andchoiceofassetsdisposalmechanism.Wetargetedall221 employeesoftheMinistryofPublicServiceaccordingtotheMinistry’s departmentaldatabases.Wespecificallyselected125employeeswithin thesalaryscalesofU1–U4workingintheMinistry.Theselectedem- ployeesaretheonesinvolvedininitiatingandexecutingcriticalpublic assetdisposaldecisions.Equally,theyhavethetechnicalknowledgeand skillsofpublicassetsdisposallegislationandprocesses.Wesampleda totalof120employeesusingconveniencesampling.
Datacollection
Wedistributedaself-administeredquestionnairetoallthesampled employees.Onehundred eighteenwerereturned:twoquestionnaires werepartiallyfilled,soonehundredsixteenwereusedforanalysis.The collecteddataconstitutedasizablesamplesizeandthereforerecom- mendedforfactoranalysis[11].
Validityandreliabilityoftheinstrument
We derived questionnaire items from previous studies published injournalswithin thepublicprocurementdomain,includingAmadi- Echenduetal.,[3],SusanandNamusonge,[41],Kamili,[20]andWa- homeandMarendi,[42].Wepretestedthequestionnaireitemstodeter- minetheirvalidityandreliabilityusingcontentvalidityindex(CVI)and Cronbachalpha,respectively.Resultsfromthepreteststudyrevealed thattheCVIratedbythefiveexpertswasat0.95,higherthantherecom- mended0.70percentforaninstrumenttobevalid[35].Thetestresults forthereliabilityofeachofthevariableswereat0.756forstrategic assetmanagement(12items),at0.743forstrategicplanningforasset disposal(12items),at 0.707for choiceofassetdisposalmechanism (11items),andat0.860forpublicassetsdisposal(11items).Allthe obtainedCronbachalphavaluesforthevariableswereeachabovethe recommended0.70.Bothvalidityandreliabilitytestresultsindicatethe instrumentwasvalidandreliableforwhichweusedinthestudy.
Considerableemphasisinquantitativeresearchisgiventothecodi- ficationandclassificationofthedatatomakeitmorereliableandvalid.
Soweputalotofeffortintopresentingtheresultsclearlyandsystemat- ically.WeanalyzedthecollecteddatawiththeaidofSPSSver.17.The analysesfocusedondescriptivestatistics,normalitytest,factoranalysis andChi-squaretest,andregressionanalysiswhichwepresentedinthe nextsection.
Table1 Normalitytest.
Kolmogorov-Smirnov a
Public assets disposal Statistic Df Sig.
1.994 116 .001
Results
Thissectionhassetoutourfindingsinfoursectionsrelatedtothe dataanalysiscomponentsidentifiedinthesectionabove.Theobjective istoprovideanswerstothepaper’sresearchquestionoutlinedearlier thepurposeofthispaper.
Normalitytest
AccordingtoGhasemiandZahedias[13],tofitalinearmodelto somegivendata,thedependentvariablehastobenormallydistributed.
Here,thepurposeofthenormalitytestwastoevaluatethedatatode- terminewhethertheywerenormallydistributedandthatthesample wasdrawnfromanormalpopulation.Itaimedtoremoveoutlieritems tohaveonlyfactorsrelevanttothestudy[13].Fordatatobenormally distributed,theobservedvaluesshouldbespreadalongthestraightdi- agonalline.Wethenusedthequantile-quantile(Q-Q)plottesttospecify modelsthatresembleddatacollectedorobservedfromtheprocessesas presentedinFig.2.
Since most of the observed values are spread very close to the straightline,thereisahighlikelihoodthatthedataarenormallydis- tributed. This finding is confirmed by the Kolgomorov-Smirnov test whichteststheunderlyingdistributionofagivenrandomvariable.The Kolgomorov-Smirnovtestisanon-parametrictestthatcanbeusedto testtheunderlyingdistributionofagivenrandomvariable.Itwasused toconfirmwhetherthedependentvariablefollowedanormaldistribu- tion.ResultsarepresentedinTable1.
FromTable1,theKolgomorov-Smirnovstatistic1.994hasap-value of0.001,whichislessthan0.05with95%confidence.Thestudycon- cludedthatthedependentvariable(i.e.successofpublicassetsdisposal) followedanormaldistribution.Fittingalinearmodeltothedatawas thusjustified.
Factoranalysisandchi-squaretest
Thestudyadoptedfactoranalysistoreducethenumberofindicators orfactorsundereachresearchvariable.Thepurposewastoretainin- dicatorscapableofexplainingthesuccessfuldisposalofpublicassetsin publicorganizationsinUganda.Afactorloadingabove0.5isconsidered acceptable,irrespectiveofsamplesizeforinterpretativepurposes[44]. Table2displaysthefactoranalysisresultsofthestudy,whereresults fortheChi-squareisalsopresented.
AsshownintheTable2,alltheexaminedfactorscouldberetained forfurtheranalysis.Thisisbecauseallofthemhavefactorloadingval- uesofabove0.5andthereforeconsideredgoodforinterpretivepurposes [44].Thus,theresultindicatesacceptablefit.Also,theresultsofChi- squaretestwassignificantforthemeasurementmodel.Thisisshownby (x2=25.852,x2=22.304,andx2=34.011)forStrategicAssetsManage- ment,StrategicPlanningforAssetsDisposalandChoiceofAssetsdis- posalMechanism,respectively.Thisindicatesthatsuccessfactorsand publicassetsdisposalwereassociated.
Regressionanalysis
RegressionanalysiswasdonewiththeaidofSPSSver.17.Itspurpose wastotestpropositionsearlieronidentified.Thefollowingresultswere producedaspresentedinTable3.
Table3showstheCoefficientsaoftheregressionresultsofthestudy variables.Forthefirstvariableofstrategicassetsmanagement,withthe
Fig.2. NormalQ-QPlotofdatafromthequestionnaire.
Table2
Factoranalysisresults.
Success factors Sub Success Factors Analysis N Factor loadings Cronbach’s alpha Chi square Sig.
Strategic As- sets management
Trained assets managers 116 .728 .756 25.852 .361
Adequate funds for assets management 116 .742 Transparent assets information 116 .686 Easy access to information 116 .765
Single data base 116 .662
Cost of valuation 116 .575
Supervision and monitoring 116 .515 Clear assets management objectives 116 .579 Specialization in assets management 116 .701
Functional audit unit 116 .651
Strategic Plan- ning for As- sets Disposal
Annual disposal plan 116 .606 .743 22.304 .561
Adequate funds for disposal planning 116 .674 Independent valuation of stores 116 .626 Budget for disposal proceedings 116 .553 Resource availability for disposal plans 116 .542
Increasing assets value 116 .750
Stakeholders involvement 116 .638
Statutory disposal options 116 .588
Market survey 116 .728
Choice of As- sets Dis- posal Mechanism
Reserve price 116 .541
Disposal methods 116 .603 .707 34.011 .419
Disposal cycle 116 .642
Nature of assets 116 .558
Location of assets 116 .596
Approval of disposal award 116 .515
Operational policies 116 .703
Selection of Right assets 116 .763
Supervision cost 116 .643
Records of money received 116 .695 Remittance of revenue to treasury 116 .581
Average Cronbach Alpha .735
ExtractionMethod:PrincipalComponentAnalysis.
Goodness-of-fittest:MaximumLikelihood.
Table3
Regressionresults.
Model Unstandardized Coefficients Standardized Coefficients t Sig. 95.0% Confidence Interval for B
B Std. Error Beta Lower Bound Upper Bound
1 (Constant) 47.367 6.080 7.790 .000 35.322 59.411
Strategic assets management 1.850 .137 .784 13.487 .000 1.578 2.122
1 (Constant) strategic planning for assets disposal 42.021 4.937 8.511 .000 32.240 51.801
1.979 .112 .857 17.718 .000 1.758 2.200
1 (Constant) Choice of assets disposal mechanism 42.155 6.261 6.733 .000 29.751 54.599
2.098 .151 .794 13.924 .000 1.800 2.397
aDependentVariable:Publicassetsdisposal.
What is it that users want?
What can the market provide?
Select the procurement
strategy
Make the purchase
Manage the contract
Delivery or Installation Commission
the asset Dispose of
asset Maintain Operate
asset
Donate Sale or
Auction
Trade-in or
upgrade Recycle Destruction
Procurement process
Asset disposal methods
Asset utility
& disposal process
Fig.3. AssetsdisposalprocessandMethods.
tvalueofthestatisticsof13.487,usingthe0.05levelofsignificance, becauset=13.487˃2.122andabetacoefficientof0.784,H1:Strategic assetsmanagementissignificantlyassociatedwiththesuccessofpublicas- setsdisposalprocesswasaccepted.Likewise,forthesecondvariableof strategicplanningforassetsdisposal,giventhetvalueof17.718˃2.200 withbetacoefficientof0.857,weacceptedH2:Thesuccesspublicassets disposalprocessissignificantlyassociatedwithstrategicassetsdisposalplan- ning.Lastly,onthevariableofassetsdisposalmechanism,thetvalue obtainedwas 13.924˃2.397showingapositive relationshipwiththe dependentvariableandwithabetacoefficientof0.794,weaccepted H3:Thechoiceofanappropriateassetdisposalmechanismormethodissig- nificantlyassociatedwiththesuccessfulofthepublicassets’disposalprocess.
Discussionandconclusion
Thisstudysoughttoexaminethekeyfactorsforsuccessfuldisposal ofpublicassetsinUganda,andfurthermakesenseofthesefactorswith regardtounderstandingassetsdispositionasanenablerofsustainable procurementpractice.Theliteratureprovideduswiththreebroadar- eas:(1)strategicassetsmanagement,(2)strategicplanningforassets disposaland(3)choiceofanappropriateassets’disposalmechanism.
Fromthefindings ofthis study,itwasfoundthatstrategicassets management(p=.784,x2=25.852),strategicplanningforassetsdis- posal(p=.857,x2=22.304)andassetsdisposalmechanism(p=.794, x2=34.011)arepositivelyassociated.Thesefindingseventhoughposi- tivedosuggestthatstrategicplanningforassetsdisposalisperhapsthe strongestdimensionofthisstudy.Twothingscanexplainthis.
Firstly,unlikemost traditionalprocurement processes,thepublic procurementprocessfocusesonplanninganddefiningusers’needsfirst [29].Itthefirstinitialstep,planningmustcascadeintotheassetdisposal processshowninFig.3.Therein,thelong-termutilityoftheasset,i.e.
strategicassetmanagement, isconsideredatuserlevelandtherefore aspectsofsustainabilityandhowtheassetwillbedisposedofarecon- sideredtoo[7,9].AccordingtoPPDA(DisposalofPublicAssets)Regu- lations(2014),whenthepotentialusersoftheassetinitiateaprocure- ment,theymustideallyreflectonthatasset’sentirelifecycleoverits lifetime.This includes,amongotherthings – thegovernanceof that asset(strategicassetmanagement)aswellastheoperationalusageof thatasset.Thisstudydemonstratesthatthepublicpurchasersbelieve thisisimportant,butwecouldn’tclearlyestablishiftheyunderstood thisislinkwell.Partlybecausethelegislationthatguidesusageanddis- posalofpublicassetsisoftenthesameasthepublicprocurementlaws:
theserarelychange[41,42,20].AstheTCOliteraturehasarguedover theyears,strategicassetsplanningconsidersboththeassetsacquisition assetsprocessandtheoperationalusageprocessofthatassetasshown
in Fig.3,wherethemeasureofsuccessofthosetwoprocesses isthe totalcostimpacttheassetutilityhashadontheorganization[23].
Secondly,withinstrategicassetsplanning,themechanismsfordis- posalof anassetareplanned – even ifnot in detail[23].Although thisstudy,asaguidedbytheliteraturedistinguishedstrategicassets planningfromthechoiceofmethodusedassuccessfactors,publicpur- chasersmustincorporatedisposalmethodsintheirprocurementplans [5].Typicalassetdisposalmethodsincludedonationtootherentities, saleorauctionoftheasset,trade-inorupgradeorrecycleanddestruc- tion[36,40,43].Theseareallcontractualdecisionsthatarepreplanned duringtheacquisitionoftheassetorduringtheasset’soperationaluse (seeFig.3).Thus,strategicassetsplanningisaprecursorforthepossible outcomeoftheassetdisposalprocessthroughthedefinitionofdisposal methods.Theexpectedoutcomeorvaluesignificantlydependsonthe asset’s condition;theearlier planningensures thatthefinaloutcome doesnotvarysignificantlyfromtheplan[10].
Therefore,theseresultssuggestthatwhilethethreekeysuccessfac- torsforassetsdisposalarebothindependentandcloselyinterconnected, onecanarguethatstrategicassetsplanningisbyfarthemostdominant factor.Strategicassetplanning,eventhoughalower-orderconceptthan strategicassetsmanagement,playsamoresignificantroleinthesuccess oftheassetdisposalprocess[23].Inaddition,strategicassetsplanning defines,evenifvaguely,thechoiceofmethodofassetdisposalbecause itprovidesthelong-termviewoftheassetoveritslifetime.Mostchal- lengesoftheassetsdisposalprocesscouldbetracedbacktowardsplan- ning[1,29,41].
Uncoveringthelinkbetweenassets’disposalandsustainableprocurement practice?
Thefindingsofthisstudysuggestthatthechoiceofdisposalmech- anism hasasignificantimpactontheassetdisposalprocess’ssuccess (p=.794,x2=34.011).Allthemethodsormechanismsofassetdisposal suchassale,recycle,destroyetc.haveimplicationsforsustainablepro- curementpractice.Sustainableprocurementinvolvesembeddingenvi- ronmental andsocialconsiderationsintheprocurementcontractsfor goodandservicesthatpublicorganizationsbuyanduse [2,4,12].As Marlowetal.,[25]explain,itentailsintegratingsustainabilityintoan asset’swholelife,whichmeansthatthedecisionsandactionsacrossthe entirelifecycleoftheassetfrompurchasetodisposalreflectthisgoal.
ThThus,thesuccessofassetdisposalprocessis translatabletobetter sustainableprocurementpractices.Forexample,thesalethroughauc- tionseekstorecaptureasmuch valueoftheassetaspossible,which canberedistributedtoothersocietyneeds[2,29].Thesameeffecton societycanbemadeaboutdonationasamethod,whichinaddition, enhancessocialinclusion.Eventhenon-price-baseddisposalmethods
suchasrecyclingandupgrademethodstargetensuringthatorganiza- tionsusetheleastamountofresourcesaspossibleforthesameneed [26].Thedestructionmethodispopularwhenpublicauthoritiesseek toprotectthepublicagainstharmfulafter-usehazards[7,32].Consis- tentwithZaidi[45],sustainableprocurementtranslatesintosustainable development.ChandimaRatnayake andMarkeset[10]showthatthe managementofanasset’sintegritytranslatestosustainablevalueinan organization’slongtermperformance.Theliteraturedemonstratesthat successfulassetsdisposalprocesscontributesdirectlytosustainablepro- curementpracticesforpublicorganizations.
Overall,itcanbeconcludedthatsuccessfulstrategicassetsmanage- ment,strategicplanningforassetsdisposalandthechoiceofanappro- priateassets’disposalmechanismarecriticalforsuccessfuldisposalof publicassetsdisposalinpublicorganizationsinUganda.Ofthethree broadfactors,strategicplanningforassetsdisposalhasthemostsignif- icantimpactontheassetsdisposalprocessandtopublicorganizations assetperformancedespiteonlybeinganoperationalconstruct.
Thechallengesinthedisposalofassetsasseenintheliterature(e.g.
[1,5,20,31,41)includingthelackoftraining,graftandprocessabuse, thelackofskillsandknowledgeaboutdisposal,andthelackofman- agementsupportormirrorthefindingsofthefactoranalysis– butina positiveway.Themostsignificantsuccessfulassetdisposalsub-factors inTable2mirrorthechallengeswefoundintheliterature.Theseinclude bettertrainingofassetmanagers,betterfundingtoassetmanagement, increasedaccesstoinformationontheconditionandvalueoftheassets, marketsurveystoknowthevalueoftheassets,andprofessionalismin assetmanagement.
Mostnotablythroughstrategicassetsplanning,successfulassetsdis- posalmanagementcontributesdirectlytopublicorganizations’sustain- ableprocurementpractices.
Managerialimplications
Thestudyfindingsprovidemanagerswithtwoareasofreflectionin thedisposalprocessofpublicassets.First,itappearspublicmanagers, especiallyintheeraofnewpublicmanagement,focusmostonstrategic assetsmanagement,i.e.long-termassetgovernancesuchasthelegaland complianceaspectsoftheassetsacquisitionprocess.Thefindingshere demonstratethatstrategicassetmanagementisimportant,butstrategic assetplanningisevenmorecriticalforassetsdisposal.Althoughopera- tional,strategicassetplanningforassetshasfarmoreimpactonvalue formoneyoutcomesbecausethemostvitaloperativeissuessuchasasset installation,usertraining,useoftherightconsumables,assetefficiency, andperformancearedefinedatthatlevel.Throughstrategicassetsplan- ning,publicorganizationscanablydefineuserandoperationalexpec- tationsoftheasset’sutilityongoalssuchastheasset’smaintenanceand obsolescence,whichsignificantlyimpacttheassetdisposaloutcomes.
Besides,strategicassetplanningprovidestheenvironmentalconsidera- tionsontheasset’simpactduringutilizationandthechoiceofasuitable environmentalmechanismofdisposal.
Secondly,thelinkbetweentheassetdisposalprocessandsustain- ableprocurementpractice,althoughdirectandapparent,hasnotbeen emphasizedduringthepublicprocurementprocesses.Wecould only speculatethatthisisbecausetheboundariesofthepublicprocurement processtendtobelimitedtotheacquisitionprocessonly,specifically, thefearthatanasset’swholelifecostperspectiveextendsprocurements roletowardstheassetengineeringandfacilitiesmanagementrole.Thus, thelimitedunderstandingofpublicpurchasers’assetlifecyclemanage- mentspaceisunfortunateandinhibitssustainableprocurementimple- mentation.Therefore,strengtheningpublicorganizations’capacityin assetdisposalmanagementandpublicassets’disposaltowardssustain- ableprocurementshouldbepublicorganizations’primarygoal.Wean- ticipatethatunderstandingthefactorsthatdrivepublicassetdisposal successwillbetterinformpublicassetdisposalprocesses,improveman- agement,assistservicedelivery,andenhancesustainableprocurement developmentofpublicorganizations.
Limitationsandfurtherstudies
Thisstudy’smainlimitationistheempiricaldatausedtodevelopthe linkbetweenassetdisposalandsustainableprocurementpractice.We conceptuallyuse thefindingsonsuccessfulassetdisposaltoestablish theargumentforsustainableprocurementpractice.
Ifasimilarstudywereconductedfromanempiricalperspective,we recommendthatthis“directandapparent” linkbetestedempirically, preferablywithquantitativedata.Besides,thefactthatparticipantsin thisstudyareemployeeswhoworkinonepublicentityinUgandacanbe alimitation.Thismaynotbesorepresentativeofallthepublicorgani- zationsinUganda.Therefore,furtherstudiesshouldfocusonempirical examinationandextendthestudytoabroaderpublicorganizationin Ugandaasawholeoreventotheregional,continentalandgloballevel.
DeclarationofCompetingInterest None
Supplementarymaterials
Supplementarymaterialassociatedwiththisarticlecanbefound,in theonlineversion,atdoi:10.1016/j.sftr.2021.100049.
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