Genuine concerns were soon expressed about how / Fiscal policy is done in Nigeria and how best citizens can hold their leaders accountable for the use of taxpayers’ money.
Before 2001, the process for regulating public expenditure and procurement in Nigeria was under the control of the Ministry of Finance. The initial stage of the procurement process was the use of registration lists. In order to be eligible to bid for procurement contracts, it was a precondition to be registered at the Tender Board/Registration Board.
Once suppliers put in bids, the process for bid opening was not regulated, bid opening in many cases was done in closed sessions. Also, the bid evaluation and award criteria were not usually described in detail in bidding documents, therefore there was a lack of transparency. There were no specific instructions on how bid evaluation should be organised and carried out.
This state of affairs of poorly regulated procurement processes in government carried on unabated in the ensuing years, and as at the year 1999, it has been estimated that 60 kobo out of every ₦1.00 spent by government is being lost to corruption and procurement fraud. The Federal Government has lost an estimated $10 billion to fraud annually in the award and execution of government contracts.
Therefore, the government took an action. Between July and December 1999, a team comprising of members of the World Bank, and a Government Task conducted a Country Procurement Assessment Report (CPAR) on Nigeria, with the primary objective of reviewing the public sector procurement structure, making a general assessment of the risks associated with the procurement process, and to develop a detailed action plan for reform to achieve institutional improvements.
The CPAR recommended the introduction of the following
A public procurement law,
The establishment of a public procurement regulatory body which would be independent of the tender boards with responsibility for the efficiency and effectiveness of the procurement function across the public sector.
The FGN in June 2003 set up the Budget Monitoring and Price Intelligence Unit (BMPIU), as an operationally independent body headed by a Senior Special Assistant to the President. The BMPIU was charged with the responsibility of overseeing the process for award of government contracts and procurements of goods and services, and in effect it acted as a sort of clearing-house. The BMPIU was headed by Dr Obiageli Ezekwesili.
The BMPIU was never set up to be a permanent institution or agency, it was always envisaged that it would be a transition agency that would be charged with midwifing a more comprehensive procurement regime, and to this end the BMPIU enforced Due Process procedures as precursors to the implementation of a new procurement regime.
That is why Dr Ezekwesili is known as ‘Madam Due Process’
In 2007, the National Assembly passed the Public Procurement Act, (PPA) 2007, this was Nigeria’s first legislation dedicated solely to the procurement process and it revolutionised the procurement process in Nigeria.
Methods of Public Procurement in Nigeria is an open competitive bidding is the process by which a procuring entity based on previously defined criteria effects public procurements by offering to every interested bidder, equal simultaneous information and opportunity to offer the goods and works needed.
Contracts are meant to be awarded to the lowest evaluated substantially responsive bid. This means a bid a bid most closely conforming to evaluation criteria and other conditions specified in the bidding document, having lowest evaluated cost.
The PPA also allows sets out other types of tendering in specific circumstances, these include:
two stage tendering where it is not feasible for the procuring entity to formulate detailed specifications for the goods/works/services to be procured, where the character of the goods or works to be procured are subject to rapid technological advances, or where the procuring entity seeks to enter into a contract for research, experiment, study or development;
restricted tendering where the goods/works/services to be procured are available only from a limited number of suppliers or contractors, or the time and cost required to examine and evaluate a large number of tenders is disproportionate to the value of what is to be procured;
direct procurement – is procurement from a single supplier or source. It entails no competition and can only be used in certain exceptional circumstances, (the PPA lists about 8 of these circumstances).
emergency procurement – is also a form of single source procurement where there is no competition, however it can only be done in emergency situations (the PPA defines what an emergency means)
Framework Agreement – this is a long-term arrangement with one or more suppliers for the supply of goods or services over a specified period. It provides flexibility for the government to make purchases as needed within the agreed terms.
The PPA also sets out what constitutes an offence, and in most cases what we see in the news is cases of alleged procurement fraud are enforced by the EFCC and the Police, and in some rare cases by the DSS.
Your guess is as good as mine about whether the PPA has reduced the level of fraud in government contracts in Nigeria. How do you think we are faring?
Parting shot is procurement fraud still a major problem in Nigeria?