Tuesday, 17 November 2015

From Public Procurement FRAUDS to Public Procurement REFORMS.

By 2000, the conduct of government business in Nigeria had become difficult and expensive due to widespread corruption, particularly procurement fraud. Although procurement fraud is one of the most common avenues of corruption in most countries, its incidence in Nigeria by 2000 was particularly widespread 

Reform Actions
The federal government noted the urgent need to reform the procurement process and bring about transparency in procurement procedures. In order to address the problem, the federal government in 2000 commissioned the World Bank to collaborate with some private sector specialists to study the financial systems and general procurement-related activities in the country. The essence of the request to the World Bank was to assist the government with a process of enthroning efficiency, accountability, integrity, and transparency in government procurement and financial management systems. The outcome of the study was the production of a Country Procurement Assessment Report (CPAR) 2000, which was a detailed diagnosis of the Nigerian procurement system and included both findings and recommendations (short- and medium-term). Some major weaknesses identified in the public procurement system in Nigeria were as follows:
  1. Nigeria lacked a modern law on public procurement and permanent oversight and monitoring of purchasing entities.
  2. The Finance (Control and Management) Act, 1958, together with Financial Regulations, which set basic rules for managing public expenditure, had gaps, deficiencies, and faulty implementation of existing regulations on procurement (e.g. lack of permanent arrangements for control and surveillance), which created opportunities for bribery and corruption.
  1. Due to inflation and lack of regular adjustments on the thresholds of the approving limits of the Tender Boards, their authorisations were constantly being eroded resulting in abuses, prominent among which was the splitting of contracts.
  2. There was proliferation of Tender Boards which were perceived by the private sector as non-transparent and sources of delays. In addition, the Tender Boards appeared to have limited mandates, with powers to decide contracts de facto resting with the Permanent Secretary and the Minister/Commissioner.
  3. Customs systems and procedures were cumbersome and major causes of delay in clearing goods, and hence a source of corruption.
  4. Procurement was often carried out by staff who substantially lack relevant training.
The Country Procurement Assessment Report (CPAR) 2000, therefore, formed the basis of the Public Procurement Bill later sent to the National Assembly, which was revised and enacted into law in 2007 as the Public Procurement Act, 2007.

Consequent upon the Country Procurement Assessment Report, and prior to preparation of a bill for procurement reforms, the federal government moved to implement the recommendations of CPAR, to the extent possible prior to legislative reforms. The federal government set up the Budget Monitoring and Price Intelligence Unit (BMPIU) in June 2003 as an operationally independent body headed by a Senior Special Assistant to the President. The BMPIU was charged with the responsibility of serving as the clearing-house for all federal government contracts and procurements of goods and services, and functioned until commencement of implementation of the Public Procurement Act 2007.

The BMPIU operated under clear goals, objectives, and strategies. Its overriding goal was to put in place and ensure full compliance with laid down guidelines and procedures (produced by it) for the procurement of capital and minor capital projects as well as associated goods and services. 

Its objectives were to:
  1. Harmonise existing government policies/practices and update same on public procurement.
  2. Determine whether or not due process has been observed in the procurement of services and contracts.
  3. Introduce more honesty, accountability, and transparency into the procurement process.
  4. Establish and update pricing standards and benchmarks for all supplies to government.
  5. Monitor the implementation of projects during execution with a view to providing information on performance, output, and compliance with specifications and targets.
  6. Ensure that only projects that have been budgeted for are admitted for execution.
Following the enactment of the Public Procurement Act, (PPA) 2007, the federal government established the Bureau of Public Procurement (BPP) to take over the functions of BMPIU and implement the provisions of the Act. The Bureau also inherited the staff and physical structures of the BMPIU.

Main Achievements
The federal government introduced a ‘Due Process’ regime that informed the processes set out in the PPA (2007). These reforms have saved, and continue to save, the country more than ₦618 billion (more than US$3 billion) that could have been lost to inflated contracts or contracts for non-existent goods, works, and services. The Due Process regime and the
Public Procurement Act aim to effectively regulate public procurement, harmonise existing government policies and practices on procurement, set common procurement standards, and develop the legal framework and professional capacity for public procurement in Nigeria.

Other key achievements of the public procurement reform policy include:
  1. The establishment of the Bureau of Public Procurement (BPP) to oversee, regulate, and monitor government procurement process.
  2. Establishment of the Procurement Cadre within the federal public service.
  3. Development and adoption of a code of ethics for public officers involved in procurement processes.
  4. Development of a Procurement Manual and implementing regulations, as well as Standard Bidding Documents (SBDs) and Standard Request for Proposals (SRFPs) for the procurement of goods, works, and consultancy services. The SBDs and SRFPs provide step-by-step processes that must be followed in contracting and provision of procurement of works, goods, and consulting services in the country. The SBDs and SRFPs have been approved by the World Bank for use on the Bank’s financed projects since 22nd September 2011
  5. Development of national database of the particulars, classification, and categorisation of federal contractors and service providers, with a view to encouraging serious business organisations to register and position themselves for competitiveness in government business.
  6. Translation of PPA (2007) into the three major Nigerian languages of Hausa, Igbo, and Yoruba.
  7. Publication of details of all contracts awarded in the print media and Bureau’s website.
  8. The development of a robust complaint/recourse mechanism, which allows aggrieved parties in a procurement process to petition against procurement outcomes.
  9. The wide applicability of the PPA in the federal public service. Thus, all federal and state MDAs are subject to it.
  10. The streamlining of Tender Boards and the strengthening of their functional authority, including powers to award contracts.
  11. Increased transparency, competition, integrity, best value, and efficiency in procurement practices.
  12. Provision of a system of supplier remedies through administrative review of procurement decisions.
  13. Development of a debarment procedure whereby indicted firms are debarred from participation in procurement activities.
  14. Publication of Public Tenders Journal periodically as a means of reducing patronage in the award of contracts.
  15. Certification of completed government projects as a requirement before final payments are effected.
  16. The existence of a standard practice for all MDAs to base their annual procurement budgets on verifiable need assessment.
  17. Regular and ad-hoc procurement audits of government agencies’ procurement activities to check for compliance with the law, regulations, and procedures.

  1. Twenty-four states of the Federation have so far passed their own versions of the procurement laws.
  2. Continuous capacity building programmes and hands on procurement skills training for procurement officers and key actors involved in the public procurement process; including conversion training for officers migrating to the established Public Procurement Cadre in the Civil and Public Service
  3. Continuous Capacity building of Non-State actors involved in procurement monitoring activities and Anti Corruption Agencies
  4. Supported the establishment of the Public Procurement Research Centre (PPRC) and its training programmes at the Federal University of Technology, Owerri
  5. Recent transfer of the responsibility for posting and transfer of officers in the procurement cadre to the BPP
  6. Establishment of a BPP procurement management system/ database with the support of UNODC
  7. Establishment of a National Public Procurement Forum which brings together the BPP and Heads of Public Procurement Authorities in the States as a mechanism for deepening procurement reform outcomes across the country. 

    Reference:  Public Service Reforms in Nigeria (1999-2014) - A Comprehensive Review

    Click to view Compendium 

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