The Public Procurement Act of 2007 is without doubt a huge success in terms of its experimentation on government savings, transparency and accountability in the public procurement process by the Nigerian government. However, this is not without its shortcomings. The existing procurement law and process does not have sufficient mechanism to checkmate the numerous frauds ongoing in the system. Without doubt, over eighty percent of Nigeria’s corruption case arises from the award of contracts and therefore begins with the procurement process. I therefore wish to bring to your notice for action the need to review the public procurement act.
The Public Procurement Act of 2007 is without doubt a huge success in terms of its experimentation on government savings, transparency and accountability in the public procurement process by the Nigerian government. However, this is not without its shortcomings. The existing procurement law and process does not have sufficient mechanism to checkmate the numerous frauds ongoing in the system. Without doubt, over eighty percent of Nigeria’s corruption case arises from the award of contracts and therefore begins with the procurement process. I therefore wish to bring to your notice for action the need to review the public procurement act.
A parent company of mine of which I was its lead negotiator was commercially close to getting a four hundred and fifty million Naira contract with a South-South State government. You wouldn’t believe what the deal was. 25% off the total contract sum was for settlement of middlemen! And even with the other 75%, we were bound to still make a 15% profit from this project despite the fact that over 40% of the entire contract sum had been shared! How we compete with other contractors, submit our technical and commercial bid and become the preferred bidder is not our business. When the time is right, we will be called to pick up our award letter and possibly the upfront payment as stipulated by the procurement act.
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How this is possible is not my business, I have a genuine contract with this government and I will get my payments each time I achieve the agreed milestone. How are all these maneuvers possible in the midst of an effective procurement act? The logic is simple, in-house estimated quantity survey project figures are bloated prior to the bidding stage and invited contractors are systematically directed on figures to quote and even before the bids are declared open, the winners have longed emerged! This is an attestation that the procurement act is flawed and can always be manipulated especially amongst state and local government authorities.
There are other smarter methods I wouldn’t risk to mention here but let it be known that this practice of manipulating the procurement act is a common practice among most states government, LGA councils, MDAs, and even the Federal Government. The process has become so rampant that it is depriving younger contractors from keying into the system. I have personally indirectly benefited from this process and I must confess, I know how it works and how to curb its continuation. When you look at the fact that over a one hundred million Naira has been removed and shared by just three persons in a contract of four hundred and fifty million, you become bridled at what must be happening at Abuja where contracts are being awarded in billions!
The procurement act is flawed and I wish to point out some divergences.
Like it is practiced by the multinationals, the procurement section of every corporation ought to display a level of independence as to the pre-qualification, selection and award of contracts without any external or internal interference or compromise. Every arm of government ought not to have its own power on the award of its contracts notwithstanding whatever magnitude of urgency, worth or priority involved. This is not the case with the Nigerian system. For example, why should INEC have the power to award contracts for the supply of electoral materials? Will this not lead to a compromise of duty as to who gets what rather than how and when will elections be conducted? Was INEC by law mandated to award contracts or conduct elections? Will giving INEC the power to award its own contract not compromise its duties especially when not just billions of Naira but also politics and controversies are involved in most processes of contract awards?
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Why can there not be a specific agency whose sole objective will be to manage a database of contractors and determine the award-of-contract for every Government agency, Ministry, etc that spends tax payers money? A common practice and model, like it is practiced by the multinationals is quite simple to adopt. If any arm of government, be it Ministry of Works or even Mr. President’s office wishes to purchase a set of computers or construct a kilometer road. All it needs do is to raise an internal request to the sole procurement department and it ends there. The manner in which the contractors are selected, pre qualified, shortlisted and contracts awarded should be of no concern to whatever ministry that needs this set of computers or kilometer of road. In as much as the Procurement Department ensures that the end user department gets its demand (goods or services) in due time, all becomes a perfect practice.
It is better explained this way, INEC Chairman, through its technical committee writes to the procurement agency or department demanding for a number of electoral items and gives them a specific time frame for delivery. It is the duty of INEC here to provide all technical details of the required goods or services. The procurement agency or department (which already has a database of pre-qualified contractors for specific specializations and also accepts open bids) invites suitable contractors to submit technical and commercial bids and upon which a lowest bidder emerges. The room for open participation will still be included despite an internal selection method of shortlisting registered contractors by categorization. It is that simple and also reduces the stress of the EFCC running after various MDA’s, Ministries, etc when it can just focus its attention on a sole agency knowing well that one and only one agency now has the power to award government contracts without interference from the end users. The existing procurement act becomes a basic principle guiding the affairs of this sole Procurement Department.
I see no reason why State Governors, Commissioners, LGA Chairmen and Ministers should have power over who gets whatever contracts in their various parastatal! A specific Agency should be set up to handle all contract issues. With this kind of arrangement, every government owned institution; Ministry, corporation, MDA, State Government, etc should be stripped of their powers to award contracts. Only then will you see how much is been wasted in the name of percentage and also how the procurement act is currently been smartly manipulated.
Establishing a single department to handle all government contracts and delivering on time might be quit challenging. It is possible. Looking at the billions of Naira lost from bloated contracts and without a trace, one will only come to a conclusion that the time is now for an urgent review of Nigeria’s procurement process so as to further strengthen the process and provide equal participation for all qualified contractors in the building of the Nigerian project. With an effective procurement system in place, at least five of every ten qualified Nigerian contractor should at least have a project to execute once annually without necessarily having any Abuja connection or loyalty to any Minister or Commissioner. With an effective process, the time in which a contractor will have twenty ongoing projects at a stretch while his fellow qualified contractors are yet to receive even an invitation to tender will be long gone.
There is need to review the procurement act and establish a sole department to handle the award of every government contracts in Nigeria.
I pray you consider my recommendation and put into force a team of reviewers to back up this position while you begin the full implementation process while awaiting legislative backing. If we can control our procurement process, we can control the massive fraud involved and recover our country’s name from the list of corrupt nations.
Thanks in anticipation as I look forward to hear from you soon.
By: Ossai, Tony Osborg
300 Level Philosophy Student,
University of Port Harcourt,
Port Harcourt, Nigeria.
Tel: +234 81 34941730
[email protected]
@tonyosborg
The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters
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