E-PROCUREMENT SYSTEMS AND COST EFFICIENCY IN SELECTED LAGOS STATE MDAS: A STRUCTURAL EQUATION MODELLING APPROACH

This study examined the effect of e-procurement systems on cost efficiency in selected Lagos State Ministries, Departments and Agencies using a Structural Equation Modelling approach. The study was anchored on Transaction Cost Economics Theory, which explains how digital procurement systems reduce search, documentation, monitoring, coordination and administrative costs. A descriptive survey research design was adopted, and data were collected through a structured four-point Likert scale questionnaire administered to staff of selected Lagos State MDAs. Krejcie and Morgan's formula determined a sample size of 495, and 476 questionnaires were returned, representing a 96.2% response rate. Findings showed that E-Evaluation had a positive and significant effect on cost efficiency (β = 0.268, t = 6.457, p = 0.000), E-Notification also significantly influenced cost efficiency (β = 0.190, t = 3.949, p = 0.000), while E-Tendering had a weaker but significant effect (β = 0.101, t = 1.991, p = 0.047). Leadership Commitment recorded the strongest effect (β = 0.300, t = 6.261, p = 0.000). The model explained 48.0% of the variation in cost efficiency. The study recommends full utilisation of e-procurement platforms, improved vendor onboarding, staff training, automated evaluation systems and supportive leadership.