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Abstract

Abstract Procurement effectiveness remains a persistent challenge in development partners funded development projects, despite growing investments in procurement reforms and market intelligence systems. Drawing on transaction cost economics (TCE) and dynamic capabilities theory (DCT), this study investigates the relationship between tender negotiation (TN) and project procurement performance (PPP), and examines how supply market intelligence (SMI) moderates this relationship in World Bank financed projects in Tanzania. Using a quantitative cross sectional design, data were collected through structured questionnaires from 181 project implementation units (PIUs) based in Dodoma and Dar es Salaam. Purposive sampling was employed to select completed projects where tender negotiation process are commonly involved and respondents involved in the process. The hypothesised relationships were tested using Partial Least Squares Structural Equation Modelling (PLS-SEM). Findings indicate that tender negotiation significantly associates with project procurement performance. However, supply market intelligence exhibits a negative moderating association, implying that excessive or misaligned intelligence gathering corresponds to elevation of transaction and information processing costs, thereby constraining the performance benefits of negotiation. Study findings reflects diminishing marginal utility of negotiation under conditions of high supply market intelligence, under which supply market intelligence is associated with weaker, rather than stronger relationship between tender negotiation and procurement performance. It offers important implications for the design and deployment of supply market intelligence capabilities in complex public and development partners procurement contexts.