BPP? What is in a name? Few years ago, the words ICPC, EFCC and NEITI would have sounded gibberish. Today they are the anticorruption watchdogs created by the administration of President Olusegun Obasanjo. Their activities might have influenced the improved rating of Nigeria in the recent Corruption Perception Index (CPI). Though Nigeria is ranked 147 out of the 180 countries assessed, it is not amongst the 10 highly corrupt nations considering its first position as the most corrupt nation in 2003, second in 2004 and third in 2005.
The Public Procurement Bill was the first assented to by President Umar Musa Yar’Adua on assumption of office, precisely on June 4, 2007 which was the last bill passed by the previous National Assembly in May 2007. The Act establishes the National Council on Public Procurement and the Bureau of Public Procurement (BPP).
The passage of the bill is one of the success stories of the collaboration of media and civil society groups most especially through the Civil Society Legislative Advocacy Centre (CISLAC) which has been in the forefront in the campaign for the enactment of transparency laws in the country including the latest Act and that of NEITI. The effect of the Act may soon down on many Nigerians when they realized the implication of the law as it has maximum penalties for fraudulent contractors and public officers in the award and execution of contracts ranging from jails terms without option of fine and exclusion from engaging in any procurement business in Nigeria for a number of years.
While its Council is chaired by Finance Minister to consider and approve policies on public procurement, the Bureau is headed by Director General to formulate the general policies and guidelines relating to the public procurement. Essentially the functions of the Bureau is to monitor the prices of tendered items and keep a national database of standard prices; publish the details of major contracts; prevent fraudulent and unfair procurement and where necessary apply administrative sanctions while maintaining a national database of the particulars, classification and categorization of federal contractors and service providers.
The Bureau is created to establish pricing standards and benchmarks. It would ensure the application of fair, competitive, transparent, value-for-money standards and practices for the procurement and disposal of public assets and services. These are for attaining transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.
The Bureau is empowered to issue certificate of “No Objection” for Contract Award; cause to be inspected or reviewed any procurement transaction to ensure compliance with the provision of the Act; debar any supplier, contractor or service provider that contravenes any provision of the Act and regulations and publish the list of defaulters… It may call for information in respect of any breach, wrongdoing, mismanagement and collusion against procuring entity or service provider. It may also recommend to the council the suspension of officer concerned; replacement of head or Chairperson of tenders Board, discipline of Accounting Officer, temporary transfer of procuring and disposal function of an agency of government to a third party agency or consultant and/ or any other sanction that the Bureau may consider appropriate.
One of the major fundamental principles of the Act is that henceforth all procurement would be conducted based only on procurement plans supported by prior budgetary appropriations and no procurement proceedings shall be formalized until the public institution has ensured that funds are available to meet the obligation after obtaining a certificate of no Objection. The service provider may be a natural person, a legal person or a combination. All bidders in addition to requirement contained in solicitation document shall possess professional/technical qualification, financial capability, relevant infrastructure, adequate personnel and legal capacity. It should not be in receivership or any form of bankruptcy, obligation to pay taxes and that they don’t harbor convicted criminals as directors.
The Act also provides that a contract shall be awarded to the lowest evaluated responsive bid from the bidders substantially responsive to the bid solicitation. It must also be conducted by open competitive bidding.
In an effort to encourage competent local contractors and manufacturers, a government institution may grant a margin of preference in the evaluation of tenders when comparing tenders from domestic bidders with foreign bidders. This is also applicable to goods produced locally.
There is a condition on mobilization fee as only 15% may be granted on the provision of unconditional bank guarantee or insurance bond. There is also penalty for non-prompt payment to contractors after the execution of job. Any payment due for more than sixty days from the date of submission of invoice and valuation certificate shall attract interest at the rate specified in the contract document.
The law provides ten stages before a contract award could be considered. The processes are in this order: advertisement and solicitation for bids; invitation of credible persons as observers that may include private sector professionals, and NGOs working in transparency areas; receipt and evaluation of the bids; obtaining approval; debriefing the bid losers; resolving complaints; obtaining and confirming the validity of performance guarantee; obtaining a Certificate of No Objection; executing all contract agreements and announcing the award.
The law has a provision that promotes principles of freedom of information as it states that all unclassified procurement records shall open to inspection by the public at the cost of copying and certifying the documents and every agency shall maintain both file and electronic records of all procurement proceeding for a period of ten years from the date of the award. This provision gives the public right access to records on the proceedings.
Probably the area that some agencies may exploit to cut corner is the provision for Direct or Emergency Procurement where the processes can be ignored. The essence of this is to patronize a company that has exclusive or the only provider in respect of goods or service. Another consideration for the direct and emergency procurements is where delay or through longer processes may cause hazards and waste of funds.
The Act has a Code of Conduct for public officers involved in public procurement. It states that the officer: ” shall maintain the highest standards of ethics in their relationships with persons real or corporate who seek government commerce… by developing transparent, honest and professional relationships with such person.” The implication is that the officer shall not engage in commercial transaction where his capacity as public officer is likely to confer any unfair advantage – pecuniary or otherwise on him.” In nutshell this is just to guard against a conflict of interest.
Accounting Officers, mostly the Permanent Sectaries, Directors General or Officers of coordinate responsibility would be held accountable and liable for prosecution for any lapse in the procurement.
The Bureau has the power to review or recommend for investigation any suspected fraudulent act in the procurement process as there is tougher penalties against defaulters. For instance it provides that any person who contravenes any provision of the act commits an offence and is liable on conviction to a term of imprisonment not less than 5 calendar years but not exceeding 10 calendar years without AN OPTION OF FINE. The offences here include fraudulent collusive agreement, splitting of tenders for evasion of monetary thresholds set, bid rigging, alteration of procurement document, and using of fake documents amongst others.
While public officers have a minimum of five years and summary dismissal from the service as punishments, a company who commits an offence is liable on conviction to a cumulative penalty of debarment from all public procurements for a period of not less than 5 calendar years and a fine equivalent to 25% of the value of the procurement in issue. It specifically added that “where any legal person shall be convicted… every director of the company as listed on its records at the corporate affairs Commission shall be guilty of an offence and is liable on conviction to a term of imprisonment not less than 3 calendar years but not exceeding 5 calendar years without an option of fine.
The only exception of the Act is that it would not apply to procurements at the other tiers of government (i.e. states and local governments) and services involving national defence or security unless with the express approval of the President.
The Bureau for Public Procurement may be a new agency; it is actually a transformation of the Due Process Office, which would assume the new statutory status with more powers. The only problem I envisaged are if the conditions of service and remunerations of officers are not protected and adequate enough, it may be extremely difficult to guard them against the temptation of connivance for corrupt practices.
This reality needs to be addressed while we commend the new administration for rushing the promulgation of the law and hoping its implementation would not be politicized in sparing the sacred cows. I won’t say whether legislative arm at the federal level is exempted from the statutory provisions, which is supposed to catch up with defaulters after the date it was signed into law, i.e. June 4, 2007.
This article by Yushau A. Shuaib was originally published in Economic Confidential October, Vanguard October 17, Thisday October 19, Weekly Trust October 20, Sunday Tribune October 21, New Nigerian October 22 and Punch October 24, 2007