There is a major problem with government ministries in Kenya in managing unserviceable assets. A preliminary visit to the office complexes, compounds, stock yards, parking lots and main stores of most government ministries reveals unserviceable stores strewn all over the yard, unserviceable motor vehicles lining up the parking lots, and unserviceable office equipment and furniture piling in the main stores. This problem has been so severe in government ministries that government has incorporated asset management in Cabinet Secretaries performance contracts as a key performance indicator. When any equipment is unserviceable its keeping through maintenance costs, storage, parking insurance, etc., may well exceed the returns that can be derived from that piece of equipment and the investment of additional monies. Disposal is thus one of the prudent elements of managing procurement, supply and distribution in any sector, private or public in enhancing its performance. It is estimated that inefficiencies in the processes of public procurement and disposal cost Kenya about Kshs. 30 Billion annually. This is due to poor procurement and disposal planning. The objective of this study was to determine the effect of unserviceable asset disposal on the performance of government ministries in Kenya, a case of the National Treasury. The target population was the three hundred and forty members of staff at the ministry of The National Treasury in top, middle and lower management. A sample size of 51 was picked through stratified simple random sampling. The instrument of data collection was a questionnaire with open ended and closed questions. Primary data was collected through questionnaires from respondents while secondary data was collected from books, journals, reports, conference papers and other academic literature through literature review. The data collected was analyzed and presented in frequency tables. The findings from the study running the linear regression analysis indicated that if adequate control in inventory was used then the performance of government ministries would improve. The study recommended that frequent disposal of unserviceable assets would help reduce unnecessary costs whereas at the same time generate some additional revenue that could be used for alternative development agendas thereby improving the performance of government ministries.

Key Words: Unserviceable Assets, Performance 

Full Text:



African Development Bank, Organization for Economic Cooperation and Development, United Nations Development Programme, United Nations Economic Commission for Africa. (2012). African economic outlook. Retrieved on 20th January 2015 from

Applied Industrial Technologies. (n.d.). White paper, reducing inventories and costs of operations which improve customer support. Cleveland, Ohio, U.S.A. Retrieved on 25th January 2015 from

Arrowsmith, S., Anderson, D. R. (2011). The WTO regime on government procurement: challenge and reform. Cambridge, U.K: Cambridge University Press.

Azzi, A., Battini, D., Faccio, M., Persona, A., & Sgarbossa, F. (2012). Inventory holding costs measurement: A multi-case study. The International Journal of Logistics Management. 25(1), 109 – 132, DOI 10.1108/IJLM

Baily, P., Farmer, D., Crocker, B., Jessop, D., & Jones, D. (2008). Procurement principles and management (10th ed.). Essex, England: Pearson Education.

Ballou, R.H. (2004). Business logistics; Supply chain management, planning, organizing, and controlling the supply chain (5th ed.). New York, U.S.A: Pearson Education.

Barbole, A.N., Yuvraj, D.N., & Santosh, D.P. (2013). Impact of cost control and cost reduction techniques on manufacturing cost. Indian Streams Research Journal. 3(5).

Bernath, U., Vidal, M. (2007). The theories and theorist: why theory is important for research. Distances et saviors. 5(3), 427 – 458.

Borowiec, P., Liedberg, C. (2009). Benefits and challenges with coordinated inventory control at Volvo parts. Germany: Lund University.

Brookings Institute. (2009). Procurement systems in sub-saharan African countries, hindering or helping improve public spending? Retrieved from

Camp, W. (2001). Formulating and evaluating theoretical frameworks for the career and technical education research. Journal of Vocational Education Research, 26 – 30.

Chandrashekar, A., Dougless, T. C. (1996). Commodity indexed surplus asset disposal in the reverse logistics process. The International Journal of Logistics Management. 7(2), 59 – 68.

Cohen, L,. Manion, L., & Keith, M. (2007). Research methods in education (6th ed.). United Kingdom: Routledge.

Comptroller and Auditor General. (2007). Improving the disposal of public sector information, communication and technology equipment. London, U.K: National Audit Office.

Creswell, J. (2003). Research design: Qualitative, quantitative and mixed methods. London, England: Sage Publishers.

Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics; A supply chain perspective (7th ed.). Canada: Thonson-Learning.

Dawson, J. (2003). The impact of corporate governance on procurement, supply chain management: A procurement perspective. Melbourne, Australia: Hargreen Publishing.

Dempsey, B. (2003). Research methods. New York, U.S.A: Pearson Education Publishers.

Department of Treasury and Finance, Government of Western Australia. (2005). Asset disposal policy. Australia: Author.

Durlinger Consultancy. (2012). Inventory and holding costs, a white paper approach for managers. Netherland: Author.

Fu, K., Chen, W., Hung, L., & Peng, S. (2012). An abc analysis model for the multiple products inventory, a case study of company x. Proceedings of the Asia Pacific Industrial Engineering and Management Systems Conference.

G.o.K. (2005). Public procurement and disposal Act. Nairobi, Kenya: Government Printer.

Harlow, K.V. (n.d.). Asset management: The life cycle approach. Irvine, California. Retrieved from

Hatch, G. (2012). Disposal of unneeded federal buildings: legislative proposals in the 112th Congress. Washington D.C., U.S.A: Congress Research Service.

Hillier, Frederick S., & Lieberman, G.J. (1995). Introduction to operations research. United States of America: McGraw-Hill, Inc.

Hugo, W.M.J. (2002). Purchasing and supplies management. Cape Town, South Africa: Van Schaik.

Institute for Supply Management (ISM). (2007). Supply management glossary. Tempe, AZ: Author.

Jabareen, Y. (2009). Building a conceptual framework: Philosophy, definitions and procedure. International Journal of Qualitative Methods, 8(4).

Jacobs, R., Chase, R. (2013). Operations and supply chain management (14th ed.). U.S.A: McGraw-Hill Higher Education.

Jose, T.V., Jayakumar, A., & Sijo, M.T. (2013). Analysis of inventory control techniques; A comparative study. International Journal of Scientific and Research Publications, 3 (3), 2250 - 3153.

Kabadayi, N. (2012). Comparison of periodic-review inventory control policies in a serial supply chain. POMS 23rd Annual Conference, Chicago, Illinois, U.S.A.

Kenya Forest Service. (2011). Kenya forest service draft procurement and disposal manual. Nairobi: Government Press.

Knutz, D. (n.d.). Investment recovery role in the supply chain. Tacoma, U.S.A. Retrieved on 6th August 2014 from

Kothari, C.R. (2008). Research methodology: Methods and techniques. New Delhi: New Age International Publishers.

Kothari, C.R. (2004). Research methodology: Methods and techniques (2nd ed.). London, England: New Age International Publishers.

Leenders, M.R., Johnson, P.F., Flynn, A.E., & Fearon, H.E. (2006). Purchasing and supply management (13th ed). New York, USA: McGraw Hill Irwin.

Life Cycle Engineering. (2009). Life cycle asset management. Retrieved from

Lysons, K., Farrington, B. (2003). Purchasing and supply chain management (7th ed). Essex, England: Prentice Hall.

Ministry of Defense. (2013). Ministry of defense annual report and accounts 2012 – 2013. London: The Stationery Office.

Ministry of East African Affairs, Commerce and Tourism. (2014). Performance contract between the government of Kenya and ministry of east African affairs, commerce and tourism. Nairobi, Kenya: Author

Ministry of Ingrastructure. (2012). Building together; Guide for municipal asset management plans. Ontario, Canada: Queen’s Printer for Ontario.

Moorthy, M.K., Yew, N.G., & Chelliah, M.K. (2010). The impact of inventory control on cost and profitability. Retrieved from

Morse J. M., Hupcey, J. E., Penrod, J., Spiers, J. A., Pooler, C., & Mitcham, C. (2002). Symposium conclusion: Issues of validity—Behavioral concepts, their derivation and interpretation. International Journal of Qualitative Methods, 1(4), 68-73.

Muckstadt, J.A., Sapra, A. (2010). Principles of inventory management: When you are down to four, order more. Springer Series in Operations Research and Financial Engineering. Retrieved from

Mpwanya, M.F. (2005). Inventory management as a determinant for improvement o customer service. Pretoria, South Africa: University of Pretoria.

Mugenda, A., Mugenda, O. (2003). Research methods; Quantitative and qualitative approaches. Nairobi, Kenya: Africa Centre for Technology (ACTS).

Muller, M. (2003). Essentials of inventory management. U.S.A: AMACOM.

National Institute of Governmental Purchasing (NIGP). (1996). Dictionary of purchasing terms. Herndon, Virginia : Author.

New South Wales Treasury. (2006). Total asset management guideline, asset disposal strategic planning. Retrieved from

New South Wales Government. (2007). Disposals. Retrieved from

Ngugi, J.K., Mugo, W.H. (n.d.). Internal factors affecting procurement process of supplies in the public sector; a survey of Kenya government ministries. Retrieved on 4th July 2014 from

OECD. (2005).Dac guidelines and reference series, harmonizing donor practices for effective aid delivery. Paris, France: Author.

Office of Government Commerce (OGC). (2005). Guide for disposal of surplus property. Norwich, U.K: Author.

Ogot, M., Nyandemo, S., Kenduiwo, J., Mokaya, J., & Iraki, W. (2009). The long term policy framework for public procurement in Kenya (draft zero). Nairobi, Kenya: PPOA.

Onawumi, A.S., Oluleye, O.E., & Adebiyi, K.A. (2011). An economic order quantity model with shortages, price break and inflation pp.1-2.

Ondiek, B.A, Ochieng, D.F. (2013). Effectiveness and efficiency of public procurement and disposal Act in shaping competitive purchasing and disposal in the civil service in Kenya. International Journal of Innovative Research and Development, 2(6), 2278 – 0211.

Opperman, C., Ogola, J., Kapila, S. (2008). Procurement and supply in Kenya, the market for small and medium enterprises. Nairobi, Kenya: FSD Kenya.

Ordho, C. (2003). Elements of education and science research methods. Kanezja Publishers

Public Procurement Oversight Authority. (2008). Final report, ministry of health procurement review. Nairobi, Kenya: Author.

Public Procurement Oversight Authority. (2009). Public procurement and disposal manual (1st ed.). Nairobi, Kenya: Author.

Public Procurement Oversight Authority. (2009). Final report, ministry of roads procurement review. Nairobi, Kenya: Author.

Public Procurement Oversight Authority. (2009). Final report, ministry of education procurement review. Nairobi, Kenya: Author.

Saleemi, N.A. (1997). Purchasing and supplies management simplified. Nairobi, Kenya: N. A. Saleemi Publishers.

Sekaran, U. (2010). Research methods for business: A skill building approach (5th ed.). New Jersey, USA: John Wiley & Sons Publishers.

Silver, E.A., Peterson, R. (1995). Decision systems for inventory management and productionplanning (2nd ed.). New Jersey, USA: John Wiley & Sons.

Stanley, L., Matthews, D. (2007). Logistics and transportation. Herndon, Virginia: National Institute of Governmental Purchasing.

Stock, J.R., Lambert, D.M. (2001). Strategic logistics management (4th ed.). U.S.A: McGraw – Hill.

Susan, A.M., Namusonge, G.S. (2014). Factors affecting the rate of disposal of assets in public sector organizations: A case of Yatta Sub – County – Kenya. International Journal of Academic Research in Business and Social Sciences, 4(5), 2222 – 6990.

Tanwari, A., Qayoom, L.A., & Shaikh, Y.G. (2000). Abc analysis as an inventory control technique. Quaid-E-Awam University research journal of engineering, science and technology, 1(1).

Thai, K.V. (2009). International handbook of public procurement. Boca Raton: CRC Press, Taylor & Francis Group.

Trionfetti, F. (2000). Discriminatory public procurement and international trade. World Economy, 23, 57–76. DOI: 10.1111/1467-9701.00262

Uckun, C., Karaesman, F., & Savas, S. (2008). Investment in improved inventory accuracy in a decentralized supply chain. International Journal of Production Economics, 113, 546 - 566

Waters, D. (2004). Introduction to supply chain management, (2nd ed.). Britain, U.K: Pal grave Macmillan.

Wild, T. (2002). Best practice in inventory management (2nd ed.). London, U.K: Butterworth – Heinemann.

Williams-Elegbe, S. (2013). The World Bank’s influence on procurement reform in Africa. African Journal of International and Comparative Law, 21(1), 95 – 119.

Yusuf, A.M. (2003). Inventory control and economic order quantity in National Electric Power Authority (NEPA). Taiwan: NEPA.

Zappone, J. (2006). Inventory theory. Retrieved on 11th July 2014 from


  • There are currently no refbacks.