A DECADE OF THE IMPLEMENTATION OF THE PUBLIC PROCUREMENT ACT, 2007 IN NIGERIA: AN APPRAISAL
igeria, like every other country in the world, was practising public procurement in different and unco-ordinated forms before the enactment of the unified public procurement law, known as the Public Procurement Act, 2007 and its resultant policies, regulations and programmes. Specifically in Nigeria, government Ministries, Departments and Agencies, MDAs, were using treasury and departmental circulars for the public acquisitions of their works, goods and consultancy services. This resulted in each MDA fashioning out its public procurement guidelines to suit their tendering processes and contract management; which obviously, did not guaranteed procurement efficiency and value for money for the public. For example, a World Bank Country Procurement Assessment report established that the sum of sixty kobo was lost in every one Naira spent by government in public procurement resulting to the country loosing US$10 billion annually due to fraudulent practices in the award and implementation of public contracts via inflation of contract costs, inadequate projects need assessment, lack of procurement plans, poor priotizations, poor procurement evaluations, poor budgeting processes, lack of competition, among other sharp practices in public procurement practice. Accordingly, the government of Chief Olusegun Obasanjo, GCFR, embarked on procurement reform by embracing the CPAR 2000 report, which diagnosed the then existing public procurement practice and made its findings and recommendations. The recommendations included the immediate setting up of the Budget Monitoring and Price Intelligence Unit (BMPIU) and enactment of Chartered Institute of Purchasing and Supply Management bill. The BMPIU was set up in 2001 to implement the Federal Government's Public Procurement Reform Policy, aimed at minimizing open abuses to known rules, processes and standards in the award and execution of pubic contracts and therefore became the clearing house for all the Federal Government contracts with unified guidelines. The Public Procurement Bill, was then initiated by the Executive arm of the government and duly passed by the National Assembly on 30th May, 2007 and signed into law by Umaru Musa Yar'adua, GCFR, on 4th June, 2007; making it a decade of practice in Nigeria presently. The Act, among others, provides for its holistic implementation in the MDAs and the formal establishment of the Bureau of Public Procurement and its Council, among other numerous provisions.
Since the inception of the Act, a lot of guidelines and initiatives have been packaged and executed by its stakeholders to ensure its efficient and effective implementation. However, to what extent has the Public Procurement Act, 2007, currently awaiting amendment in the National Assembly been implemented? This is the crux of the matter here and therefore forms the basis of appraising its implementation within the last ten years. In appraising the implementation of the Act, the achievements and challenges of the BPP, compliance level of the Act's provisions by the MDAs and opinions of the relevant Stakeholders will be relied upon. In terms of achievements, comparatively, the public has more confidence and trust in the public procurement practice now, as before the enactment of the Act, only few and pre-favoured bidders participate in MDAs procurements; which created room for public servants to double as contractors in their MDAs.
The BPP as the regulator, based on available facts, has performed tremendously well, despite some administrative and political challenges inherent in the public sector contract management in Nigeria. The Bureau has created public awareness, though not enough; it has been publishing quarterly procurement journals, annual reports, FEC weekly approvals on its portal, provided procurement regulations and manuals and assisted in the production of Tender Journals. It has also established and professionalized the procurement cadre and organized conversion courses for the new intakes from 2008 till date and has been organizing annual retreats with the Federal Permanent Secretaries, who are accounting officers in their Ministries to continually review the risks and challenges associated with the implementation of the Act. The Bureau equally organizes contractors/service providers, Civil Society and Professional bodies interactive sessions with a view to deepening the procurement practice. Also and on a very interesting note, it has secured 2,108 FEC contract approvals from 2007 to 2016 worth N13,333,760,310,500.76 and has assisted 25 States of the Federation to pass their Public Procurement Laws. It has also established Public Procurement Research Centres (PPRC) at the Federal University of Technology, Owerri and Ahmadu Bello University, Zaria, while other such projects are ongoing. The objectives of the Centres are mainly to deepen the knowledge and practice of procurement in the country among practitioners, scholars and the general public. As part of its statutory and economic responsibilities, it has saved the Nation the sum of N735,047,991,479.36 between 2009 to 2016 from its prior reviews of contract recommendations for the issuance of Certificate of No Objection from the MDAs. It is pertinent to stress that the essence of this prior review is to prevent fraudulent and unfair procurements, ensure cost effectiveness, compliance to the provisions of the Act and value for money. In fact, this is the amount the country would have lost from over contract costing and pricing in the MDAs procurements and has enhanced revenue generating performance of Agencies like the FIRS, CAC, ITF, NSITF and PENCOM via its compliance mechanisms. Simply put, BPP has done well despite its challenges.
For the MDAs, despite some sharp practices still being exhibited by many procurement Officers, there is considerable improvement from what public procurement used to be in the pre-Public Procurement Act, 2007, era. At the moment, at least, most MDAs are known to conduct their needs assessment, procurement planning (which they must submit to the BPP at the beginning of every procurement year) and perfect their procurement criteria before their solicitation process. Besides, they now invite bidders and non-bidders for their bids opening and thereafter subject the bids to technical and financial evaluations before submitting their recommendations to the BPP which performs its procurement review for the purpose of issuing the much needed Certificate of No Objection before any award.
The anti-corruption Agencies, namely the ICPC and EFCC as Stakeholders in the procurement system, have shown sufficient interests in sustaining the system, as most of the corrupt cases being handled by them bother on public procurement malpractices and corruption. Accordingly, the EFCC investigated 64, 44 and 21 cases in 2011, 2013 and 2014 respectively in the areas of contract breaches, abuse of procurement process, contract inflation and bid rigging. On their own, the ICPC which maintained that 60% of corrupt cases bother on procurement fraud, established Anti-corruption and Transparency Monitoring Unit (ACTU) to daily monitor corrupt practices in procurement and in other areas. It has also been conducting corruption risk assessments to expose and prosecute corrupt procurement officers and others in the MDAs and have made some convictions.
The observations of the procurement practice by members of the Civil Society Organizations, Professional bodies and the public in an unsolicited manner have increased and have made the MDAs' officials to be conscious of their conducts.
Another public procurement Stakeholder whose efforts has impacted on the Act implementation is the National Assembly. The Assembly, through the Public Procurement Committees of the Senate and House of Representatives have been performing oversight functions lately on various procurements of the MDAs. Although it is evident that they either visit or invite the MDAs for oversight purposes but from the opinions of even the MDAs' officials, such oversight activities are not truly centred on ensuring compliance of the Public Procurement Act's provisions but on ulterior motives; mainly on how to benefit from the contract awards. Recently, the Senate and House of Representatives Committees on Public Procurement embarked on Investigative Hearings on the abuse, breaches and violations of the Public Procurement Act, 2007, on Ministries of Works and Finance, Bureau of Public Procurement, ( BPP), Federal Inland Revenue Service (FIRS) and some Contractors and Consultants. During the Hearings, especially, on the pre-shipment inspection and monitoring of crude oil/gas exports and monitoring from Nigeria, the said Committee of the House, in a very professional manner, invited and caused all the relevant government Agencies that have the statutory responsibilities of issuing the bidding compliance documents to show appearances to authenticate the bidding documents of the invited Contractors/Service Providers. Based on their submissions, it was established that the procuring entities officials connive with contractors/service providers to evade obtaining the compliant bidding documents from ITF, NISTF, PENCON and CAC and most often resort to forging such documents.
However, despite some successes recorded at this period under appraisal, it is pertinent to state that the Act implementation environment is still full of challenges. Firstly, within the MDAs (the Act implementers), Civil Society and Professional bodies (the public procurement observers), BPP (the regulator) and the public, the general opinion is that there is high level of political influence/interference in the public sector contract management. The truism of these opinions can be easily linked to the various Federal and State Governments probes and the ICPC and EFCC anti-corruption prosecutions which bother mainly on public procurement corruptions. The EFCC Public Procurement corruption cases of N2.bn, N2.1bn and N3.9bn, involving Col. Sambo Dasuki (rtd), Chief Raymond Dokpesi of Daar Communications, a former Chief of Defence Staff, Air Chief Marshal Alex Badeh (rtd) respectively are just few examples.
From investigation and as a challenge, it is known that some MDAs discard the Certificates of No Objection duly issued by the BPP and award contracts to their preferred contractors illegally when their preferred bidders are not favoured.
Some members of the National Assembly, especially, the relevant Committee members, on the claim that some projects are their constituency projects and/or that they initiated and appropriated the projects, insist that such projects must be executed by their proxy-companies, even if such companies are not statutorily qualified to handle such projects. Furthermore and most sadly, within the period under review, it is an established fact that the National Assembly does not subject its procurements to the critical provisions of the Public Procurement Act, 2007 and the BPP regulations. This means that their procurements running into hundreds of billion of Naira since the inception of the Act, have not been subjected to procurement need assessments, procurement plans, contract advertisements, known criteria of procurements and requests for the issuance of Certificate of No Objections from BPP before their awards. This further means that their contracts that required Federal Executive Council approvals never went to the FEC since the BPP never reviewed them. The BPP on its own, has never audited the NASS procurements; an exercise that statutorily ensured compliance to the Act. This ugly and unacceptable procurement practice, has established that the NASS merely enacted the Public Procurement Act, 2007, for the other Arms of the Federal Government. Besides, during one of the amendment exercises, NASS even proposed their removal from the Act compliance. Law makers turned to outlaws! This makes mockery of their public hearings and resultant indictments of the Act offenders since they go to equity with soiled hands. The Judiciary is equally observed to rarely adhere to the provisions of the Act in carrying out their procurement activities; yet they interpret the Act and convict public procurement offenders. Ipso facto, the Stakeholders opine that the Legislative and Judiciary Arms accounting officers should be prosecuted based on sections 19 and 58 of the Act as they risk 5 years jail term without option of fine.
As a challenge, the yearly BPP public procurement auditing of the MDAs has not been regularly done. Also, apart from the conversion courses, the Bureau has not embarked on general advanced procurement workshops and seminars for its officers that are posted to all the MDAs; as these trainings will expose them to the current trend and dynamics of public procurement as obtained in advanced climes. The BPP core staff and reviewing officers also deserve specialized trainings, especially, in the areas of defence, roads, railway, marine infrastructure, medicals, among others, so as to be acquainted with modern developments in those areas and for effective and efficient procurement reviews prior to issuance of Certificate of No Objection. These inadequacies on the part of the BPP are obviously due to lack of funds.
It is very worrisome that the National Council of Public Procurement, since the inception of the Act in 2007, has not been inaugurated, despite several public outcry. According to some public procurement Stakeholders and based on legal opinions, the non existence of the Council and performing of its statutory responsibilities, renders all the public procurement activities so far carried out in the country since the inception of the Act null, void and of no effect, based on the provisions of Part I, section 2(a-f) of the Act. In summary, the Council is legally empowered to amend the monetary and prior review procurement thresholds, approve procurement policies, modernize procurement processes, approve the appointment of the BPP Director General and to perform other functions that will achieve the Act objectives. Most of these functions have been carried out without regard to the relevant provisions of the Act.
Another area of challenge is the non amendment of the Act to cater for the inadequacies therein. For example, the Act has technically made it difficult for indigenous companies, especially, in the construction sector, to adequately bid for construction contracts by not considering the inequalities in the financial and operational strengths of the foreign and local contractors. The implication of this anomaly is that the foreign/multinational companies that are mostly favoured, make their huge profits and transfer such out of our economy and while the local ones are becoming extinct . The impact of such capital flight, especially, in our era of recession, cannot be over emphasized. It is opined that certain threshold of such procurements should be reserved for our indigenous companies; more so, when the foreign ones are usually aided with soft loans (as low as 1.5% by their home countries as against our bank loans of over 20% with hidden charges), construction equipment and other wherewithal by their countries of origin. The proposal of the procurement observers for an amendment that will give them unfettered access to observe and monitor all the procurement processes to enable them have comprehensive and independent opinion on each procurement needs to be considered as it awaits the Act amendment.
Despite the inadequacies in the implementation of the Act, the procurement Stakeholders believe that procurement practice is now better than the pre-Act era. As per its prospects, the public should engage the Government to inaugurate the procurement Council, since it is only its existence and performance of its statutory responsibilities will give teeth to the Act implementation and ensure that the activities of the BPP are legal and meet the test and acceptance of the international best practices.
The Legislature and Judiciary should be robustly engaged to subject its procurements to the provisions of the procurement law and regulations. This will not only give confidence in the procurement system but also ensure that the MDAs, without reservations, obey the provisions of the Act. The NASS should also be charged to promptly conclude all the amendments of the Act so as to correct all the inadequacies in the extant law.
Furthermore, the yearly auditing of the MDAs should be intensified to expose and correct malpractices regularly in the procurement system.
Another strategy to strengthen the implementation of the Act is to ensure that all the MDAs have functional procurement departments and which should be headed by BPP trained and certified procurement officers. Presently, some Parastatals do not have such departments and staff, rather procurement activities are being conducted by the office of the Chief Executive Officers with their untrained loyalist performing procurement functions. This situation has undoubtedly resulted to inefficiencies, abuses and fraud in the procurement practice.
The BPP should be statutorily provided with more funds to carry out its responsibilities or should apply for good governance grants to deepen the procurement practice in the country. Some Stakeholders opine that compulsory fund be created for its operations. This fund can be obtained from .01% of the contract sums of procurements from N5bn and above as a procurement sector charge or fee as obtainable with some other regulatory bodies. The availability of this fund will also slightly guarantee the financial independence of the Bureau from the politicians and other Government Agencies that may be hampering the activities of the Bureau. The current open contracting and open contracting data standards in public procurement in some other countries should be embraced in our clime. This system, in a single medium, discloses all aspects and processes of a particular procurement and guarantees procurement best practices. This can be achieved via the Procurement Journal portal which presently merely shows procurement advertisements.
In conclusion, the public procurement practice has come to stay in Nigeria, despite the observed challenges. What is important now is for the Stakeholders to initiate policies and programmes to sustain the implementation of the Act and to resist the observed malpractices. This can be achieved by strategically engaging the procurement system, Stakeholders and practitioners; if need be, institute legal actions to challenge observed anomalies based on the provisions of the Public Procurement and Freedom of Information Acts.
Mazi Emmanuel Onyema is a Procurement Expert/Executive Director Crime Free & Peace Initiative (NGO)