The importance of Corporate Tenders has increased significantly in recent times as a key business process. It was originated as a means to integrate buying into supply chain management at a time when many big firms were struggling to accomplish their functioning costs. The activities of procurement are often divided into two distinct categories based on the consumption purposes of acquired goods and services: direct, production-related procurement and indirect, non-production-related procurement.
In Kenya, it is through procurement the government uses revenue which is being raised yearly, for the execution of public service delivery. A public procurement system that is economically unproductive consistently challenges the government programs which are meant for economic development. Promoting transparency is very beneficial for everyone in the process of public procurement in Kenya. An open procurement process will offer better value for money for the government and lessen the losses experienced from delayed and below-average projects. The fair competition enabled by transparent public deals will also benefit the private sector. People, who are the main recipients of government projects, will get advantage from higher quality products and public services delivered by the Kenyan government.
Direct procurement in Kenya is the means of obtaining raw materials and goods for production. These are generally purchased from a group of suppliers at the best affordable cost, value, and trustworthiness. These purchases are done regularly and are essential for key business practices. If direct procurement discontinues its functioning or faces problems, firms are no longer able to produce and generate revenue. Historically, direct procurement is linked to manufacturing and originates from it.
Indirect procurement in Kenya is the means of availing services or supplies essential to keep the day-to-day business ongoing. It does not add to the bottom of any business. This includes repairing equipment, purchasing office supplies or getting services. Businesses would not be able to function smoothly without indirect procurement. Indirect procurement comprises 15-27 percent of a firm’s total revenue.