• Discussion of the internal and external environment in a given case.
  • Discussion of the types of organizational environments.
  • Discuss the forces affecting the nature or organizations
  • Discuss the types of organizations.
  • Draw various functional organizational models for a purchasing organization
  • Analysis of the types of markets and their structures
  • Discussion of stakeholders in an organization
  • Discussion of the analytical tools used in environmental analysis
  • Discussion of the challenges and opportunities posed by the emerging issues trends in an organizational environment



As a procurement officer of company X, develop specifications for an item of your choice following the guidelines to specifications development. (10marks)


Differentiate between goods, services & works giving relevant examples. (10marks)


Explain 6 objectives that public procurement aims to achieve. (10marks)


The integrated Financial Management Information Systems (IFMIS) is an automated system that enhances efficiency in planning, budgeting procurement, expenditure management & reporting in the National & County governments in Kenya. Explain its advantages. (10marks)


  1. Explain 5 different procurement methods stating how unique they are from each other. (10marks)
  2. Name the various bid documents used in procurement contracts. (6marks)
  3. Name 2 stakeholders involved in evaluation of bid documents & their role. (4marks)


Explain how you could use procurement plan to monitor the purchase of office computers worth Kshs. 1,000,000,000.            (20marks)


Justify an appropriate type of contract & payment terms for managing each of the following:

  1. Procurement of regular supply for a fleet of vehicles. (4marks)
  2. Procurement of a highway construction project. (4marks)
  3. Procurement of short training costing Kshs 20,000. (4marks)
  4. Use of private sector resources to construct & maintain a high way. (4marks)
  5. Construction of a public university hostel. (4marks)


Energy &Transmission Ltd advertised a bid for erection of 500kv transmission line of 100km length. The contract value was Kshs 45,000,000. The tender document stated the following:

The tender would be awarded to the lowest evaluated bidder.

Bidders must have all the necessary equipment of a transmission line.

Bidders must have general experience of at least 3 projects of similar complexity spanning 100km.

Bidders must submit all the list of equipment to be dedicated to the project. The list must include item description.

Delay in completion would attract a penalty of Kshs 2,000,000 daily.

None availability of the equipment dedicated to this project will disqualify any bidder.

Seven bids were received Tyrant, South & Wrangle firms were considered the lowest priced after evaluation.

On close scrutiny the 3 lowest priced bids appeared as follows.

Tyrant did not confirm equipment availability because they couldn’t prove ownership & commitment of the equipment to the project.

South couldn’t demonstrate the ability to handle at one a 100km & couldn’t prove ownership & commitment of the equipment.

Wrangle met the general experience criteria & owned all the necessary equipment but couldn’t indicate ownership & commitment of the equipment to the project. Its past experience was OK but the price was 1 million shillings higher than the lowest bidder.

The rankings of the companies was as follows:

  1. Tyrant – lowest priced bidder
  2. South – second lowest priced bidder
  3. Wrangle – third lowest priced bidder


  1. Which firm would you choose as substantially responsive bidder for the project? Explain. (10marks)
  2. The tender document clause on general experience was somewhat ambiguous. Assuming there were 2 considerations on experience:
    1. Demonstrate experience in similar projects each spanning 100km.
    2. Demonstrate experience in 3 projects of lesser distance which combined will total to 100km.

Which would be most appropriate selection criteria? Explain.           (10marks)

  1. Since past performance was not specified criteria in the bidding document would you agree to its application by the procuring entity in the evaluation process? Discuss. (10marks)
  2. Write short notes on each bidders sustainability to implement the project. (10marks)


  • Differentiation between goods, services and works
  • Development of specifications for goods, services and works
  • Differentiation of procurement of goods, services and works in various sectors.
  • Discussion of the evolution of the public procurement system in Kenya
  • Discussion of the various procurement methods
  • Development of departmental procurement plans
  • Development of consolidated procurement plans
  • Preparation of bid documents
  • Preparation of bid evaluation criteria goods services and works.
  • Process of inspection, receiving and accepting/rejecting goods, services and works
  • Maintenance of contract register for goods, services and works
  • Discussion of inventory storage and issuance of goods
  • Discussion of inventory storage and issuance of goods



  1. Explain the term “procurement planning”. (5 marks)
  2. Identify four factors affecting procurement planning in Nairobi County. (4 marks)
  3. Discuss the differences between Market Survey & Procurement Planning. (6 marks)
  4. Explain below the types of procurement plans citing an example of each. (10 marks)
    1. Consolidated plan.
    2. Individual plan.
  5. Identify two methods of procurement & give situations where each method can best apply. (5 marks)


  • Discussion of the factors affecting procurement planning in a given case.
  • Discuss the differences between Supply Market Analysis and Procurement Planning
  • Discussion of elements of a procurement plan.
  • Application of Supply Positioning Model on procurement planning
  • Illustration of the procurement cycle
  • Role of forecasting in procurement planning
  • Discussion of the characteristics of demand
  • Development of procurement plans for operational and capital requirements
  • Discussion of Strategic Procurement Planning
  • Discussion of techniques used in dependent and independent demand.
  • Discussion on disposal methods for a given scenario.
  • Discussion of challenges and opportunities posed by the emerging issues and trends in Procurement Planning.




  • Discussion of the main phases in the evolution of e-procurement
  • Differentiate of manual procurement and e-procurement systems.
  • Discussion of the various processes in e-procurement systems
  • Discussion of the technologies and managerial security measures in procurement and supply
  • Development of an e-procurement application selection criteria.
  • Discussion of challenges faced when developing and e-procurement platform
  • Discussion of benefits and limitations of using PIMS in procurement and supply
  • Discussion of the challenges and opportunities posed by the emerging issues and trends in PIMS




  • Discussion of the essential elements of a valid commercial agreement
  • Discussion of the importance of the express terms relating to the time of performance, price, testing,
  • inspection, acceptance, contract variation and extension/renewal
  • Compare and contrast between the implied terms in contracts for supply of goods and contracts for supply of services.
  • Discussion of the circumstances under which money may be laundered and state the specific measures which all the business are required to adopt to prevent the same
  • Discussion of the main features of each type of arrangement
  • Discussion of the contractual provisions for non-performance
  • Discussion of the remedies available in the event of breach
  • Discussion of importance of contract negotiation in supply chain management
  • Discussion of the approaches and techniques in contract negotiations.
  • Choice of resources required for contract negotiation
  • Outlining of the contract negotiation process
  • Discussion of the effective supplier relationships in contract negotiations
  • Discussion of the various types of questions used in negotiation
  • Discussion of the alternative conflict resolution mechanisms used in contract law and negotiations
  • Discussion of unethical behavior in contract negotiation.
  • Discussion of the specific challenges associated with international contracts of procurement and supply
  • Discussion of the challenges and opportunities posed by the emerging issues and trends in Contract Law and Negotiation



  1. Outline 4 advantages that could accrue to a firm from using debt capital over equity capital as a mode of financing. (4 marks)
  2. Discuss 4 goals of a firm in your country. (8 marks)
  3. Delight Ltd.’s capital structure as at 31st December 2014 was as follows:

Ordinary shares at Sh. 0.50 per value


9% preference shares at Sh.1.00 per value

14% Debentures

Additional information

  1. Ordinary shares are quoted at Sh. 0.80
  2. The next ordinary dividend is estimated at Sh. 0.04 growing thereafter at 12% in perpetuity.
  3. The preference shares are quoted at Sh. 0.72 while debentures are quoted at par.
  4. Corporate tax rate is 30%


Weighted average cost of capital using the book value.         (8 marks)


  1. Summarize 5 advantages of preference share capital to shareholders. (5 marks)
  2. With reference to time value of money, explain the following terms: (6 marks)
    1. Present value.
    2. Future value.
    3. Loan administration.
  3. Outline 3 motives of leasing from the point of view of a company. (11 marks)


  1. Explain the term “agency conflict”. (2 marks)
  2. Describe 4 roles of a finance manager. (4 marks)
  3. Analyze 3 motives of holding cash by an organization. (6 marks)
  4. Discuss 4 factors to be considered by an organization when choosing the source of finance. (8 marks)


Initial Cost                  50,000

Cash flows excluding Depreciation & taxes

Year 1                                     10,000

Year 2                                     10,692

Year 3                                     12,769

Year 4                                     13,462

Year 5                                     20,385

Assuming that the tax rate is 30% & the company’s required rate of return is 15%, compute:

  1. Payback Period. (2 marks)
  2. Accounting Rate of Return. (5 marks)
  3. Net Present Value. (8 marks)
  4. Internal Rate of Return. (8 marks)
  5. Profitability Index. (2 marks)



  • Review management reports
  • Compare the various source of finance to determine viability
  • Compute components of costs of capital
  • Calculating the cost of finance
  • Determination of financial market drivers
  • Select financing option
  • Computation of future value of money and present value of money
  • Preparation of loan amortizing schedule
  • Computation of future value of money and present value of money
  • Preparation of loan amortizing schedule
  • Preparation of budgets
  • Choice of project using non-discounted and discounted cash flow techniques
  • Preparation of cash budget
  • Compute working capital of a firm
  • Calculation of ratios
  • Application of ratios to make business decisions
  • Preparation of proforma income statements
  • Computation of various options of mitigating financial risk in international supply chain
  • Discussion of challenges and opportunities posed by issues and trends in finance for procurement.