Making new public procurement reforms work

Engr. Emeka Ezeh

DOING it right in the award of contracts or procurement inspired the first National Conference on Public Procurement early November in Abuja, where President Goodluck Jonathan directed that only contractors whose records were in the government’s database would be approved for business. Besides, those blacklisted by the World Bank, African Development Bank and other international bodies, are to be barred from public procurement. The presidential fiat will take effect from 2015; and the Bureau of Public Procurement has been ordered to see it through.

The President, who was represented by Vice-President Namadi Sambo at the event, said the actions outlined were “intended to eliminate distortions in bidding costs that tend to create the impression that project costs in Nigeria are higher than in other countries.” It is not just an impression, but a reality that corruption and negation of global best practices have helped to etch in our system.

However, countries that are out of the woods had adopted the United Nations Financial Rules and Regulations, which emphasise best value for money, fairness, integrity and transparency of the bidding process and award of contracts on the basis of the lowest evaluated offer that best meets objective criteria of price, delivery and specifications, without any compromise on quality.

This is not a federal crusade alone, as contract abuses are as widespread in the states as they are at the centre, thus making the delivery of good governance difficult. Only 24 states have so far passed public procurement laws, leaving 12 others behind. Indeed, non-adherence to due process and elevation of selfish interests above that of the state are at the heart of corruption in public procurement. The 11,886 abandoned projects, as documented by the Presidential Projects Assessment Committee in 2011, chaired by Ibrahim Bunu, sign-post this abuse. According to PPAC, N2.696 trillion had been paid to contractors for these failed projects.

When contracts are awarded without designs, contractors conspire with government engineers to obtain jobs’ certificate of completion or collect mobilisation fees and disappear without trace as documented in some National Assembly reports, they underscore the enormity of the challenge. Since 2007, some mechanisms have been put in place to checkmate these abuses. Some obvious examples are the BPP and Public Procurement Act 2007. The Act mandatorily provides for cash-backing of any contract before being awarded, mobilisation of a local contractor with 15 per cent of the fee; and 10 per cent for a foreign contractor.

Yet, cases abound where contracts are awarded without any funds available, thereby making the government to default in payment, and then penalised accordingly. Also, some contractors still collect as high as 50 per cent mobilisation fees in complete breach of the law, while some contracts had been reviewed downwards after the bubble had burst, as it happened in the case of the Abuja Airport’s second runway. Bunu’s panel had advised that it be reviewed, and it was slashed from N64 billion to N49.6 billion.

The Director-General of BPP, Emeka Eze, at the procurement conference, said the organisation had saved N528 billion from projects review since 2009, while it also submitted a list of 180 companies to the Economic and Financial Crimes Commission and the Independent Corrupt Practices and other Offences Commission for trial. But how many of them have been tried and convicted?

What is obvious is that the fraudsters in and outside government involved in our perennial contract scams are ahead of institutional watchdogs in their game. For instance, both the BPP and Procurement Act were in operation in 2011 when the fuel subsidy bazaar of over N2 trillion occurred. A national protest that came in its wake corralled the Federal Government to review subsidy payment downwards to N971 billion annually.

Therefore, enthroning global best practices in public procurement as a tool for good governance will not come by just talking or organising conferences, but by strict compliance with extant regulations. This also means burying cronyism and the patronage system as sub-cultures of governance in Nigeria.

Often, we see the government take measures that are in clear breach of the law and which offend the sensibilities of the public. The Federal Government’s withdrawal of corruption charges against some individuals, some of whom are contractors who defrauded both federal and state governments, certainly negates the new public procurement order being preached by the President.

Also, the EFCC has to be serious in handling contract-related corruption cases. The brief-case contractors involved in the fuel subsidy scandal are still walking the streets free, despite their open admission during the House of Representatives public hearing on the scam in 2012, of their shortcomings as contractors as laid down in the criteria. Without question, this makes nonsense of the envisaged paradigm shift.

Consequently, the President should go beyond rhetoric and make the cleansing total. Contract awards at the weekly Federal Executive Council meetings, which have become routine, should be stopped. FEC meetings are meant for policy formulation. Under the PPA 2007, such contract approvals belong to the realm of duty of National Council on Public Procurement, which the Act also set up to exercise regulatory powers over the BPP.

That the council has yet to be constituted since 2007 beggars belief.
Source: The Punch