Procurement Act and the Corruption Within

WEDNESDAY COLUMN by USSIJU MEDANER

The fundamental purpose for the existence of any government, in any nation, developed or developing is the pursuit of the happiness of its citizens. It is by this commitment that the government adds value to the quality of life of its citizens in all echelons of the society. Governments all over the world are known to be pre-eminent providers of services or public goods to members of their societies. Achieving this objective by a constituted state authority does not overtly depend on the resources endowment of the country but also on the efficient and effective utilisation of such resources at its disposal in ensuring scarce resources are deployed in the overall interest of the people. This however calls for prudence, transparency and accountability in government spending, particularly in the procurement of capital goods for long-term development.
For a very long time since the emergence of sovereign Nigeria state, Nigerians have always had high hopes and expectations for a rapid and superlative socio-economic growth and development. Lamentably enough, developmental leap in Nigeria has been foot dragging overtime – against the drop of our enviable resource endowment – and has been impeded by a host of mitigating internal and self-inflicting factors.
Nigeria today can be described as an irony as the socio-economic performance over the years has remained superficial and unimpressive. This harsh experience is largely attributed to a high level of corruption and mismanagement of public resources closely linked up with the public sector procurement systems and with predictable consequences of untold hardship on the economy, development and the citizens. To reverse this curable irony of poverty in the midst of plenty, the government repeatedly in the past revisited the nation’s procurement acts introducing universal “Best Principles,” notably the due process mechanism, into the country’s public procurement systems.
However, a lot of questions, misconceptions and criticisms have trailed its implementation ever since which has even made it increasingly difficult for the present Administration of President Muhammadu Buhari to effectively carry out its commitment to development that would yield maximum fruitful outcomes and secure maximum affection from the majority of the Nigerian populace.
Nevertheless, the efficacy of the reform, hitherto has only partially addressed the deep rots in the nation’s procurement processes. While the potency of the acts fall short in addressing the problems of procurements, some of the handlers of the acts have proven to be unrepentant. Whatever potential gain the nation could have been enjoying from the “Best Principles” of the due processes introduced into the public sector procurement, is being swallowed up by innate, institutionalised corruption in the nation often being exhibited by the insatiable appetite of some procurement handlers to corruptly enrich themselves through each and every government contract.
So, it becomes imperative to review and study the thrust of the procurement policy and the current attendant challenges. Also, it is an imperative to begin mounting control measures against sharp practices of some of these wrecking handlers of the procurement processes and heads of parastatals and ministries who have the penchant and audacity to willfully abuse the processes.
At a time in the recent past, the nation’s procurement processes were seriously hampered as some government officials and contractors alike were exploiting loopholes, defrauding the nation and keeping the nation in a perpetual state of underdevelopment through undelivered projects and a variation of it: project abandonment. At that time, the acts and those responsible for overseeing it, created or rather permitted the inclusion of sharp practices leading to the proliferation and ineffectiveness of tender boards, lack of professionalism in the execution of the procurement functions, weaknesses in bank financed projects, excessive deposit for opening of letters of credit, lack of communication strategy, weaknesses in the export, import and tariff procedures, lack of streamlined quality control practices and a host of others issues including the notorious conspiratorial arrangement between some government officials and contractors to share earmarked payments for approved contracts and thereafter abandon the projects – even when full payments have been made.
Summarily, the procurement system in the nation became one of the major channels through which the nation’s wealth and resources have been robbed by some elements within the country – both within and outside the government – who were bent on stealing all that the nation has for personal aggrandizement. We were experiencing on a very large scale a lack of competition and transparency in public project procurement leading to high cost of government projects; a constant scenario where budget proposal submitted by MDAs were not matched to justifiable needs; intentional improper project packaging and definition; compounding ineffectiveness; projects not prioritised, recorded and synchronised among MDAs to the extent that many Ministries, Departments and Agencies (MDAs) pursue the same or similar needs simultaneously with resultant lack of economic efficiency and effectiveness while creating overlap and waste, preference for new projects which encourage regular midstream abandonment of projects in progress. It is a vexing issue for anyone interested in the Nigeria project.
The Public Procurement Act highlights the guidelines for the award of contracts and services; just as the Bureau for Public Procurement was created for the singular purpose of bringing efficiency to government businesses and procurement processes. To achieve this, several pathways and objectives clauses were included to guide the operational goal of the Bureau. These include the harmonisation of existing government policies and practices on public procurement and ensuring probity, accountability and transparency in the procurement process, the establishment of pricing standards and benchmarks, ensuring the application of fair, competitive, transparent, standards and practices for the procurement and disposal of public assets and services; and the attainment of transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.
The charge of the Due Process in the nation’s procurement process is to ensure good administration of public funds and resources, to shrink corruption, advance positively, system planning and project preparation work to achieve accuracy of costing, cost-benefit analysis and prioritisation in deciding the spending pattern and plan for any given year. It is also to bring about improved fiscal management through more effective expenditure management, institutions, processes and control mechanisms.
Unfortunately, even when the current Administration’s policies and principles are clamping down government-wide corruption and institutionalised corrupt practices, heads of government agencies and most probably in collusion with heads of procurement and account officers have devised a different way to perpetuate corruption in the system. The current reality is that contractors must first dance to the tune of the some heads of agencies and procurement officials to secure contractual agreement and as well as to get paid when the contract is completed and retired. The untold negative implication of this pervasive behaviour on national development remains that once a contractor has made side payment – or make a conspiratorial pledge in other cases – to facilitate the award of a contract and is further made to make additional payments in the process of implementing the contract, it mostly becomes easy for such contractor to either abandon the project on site or to compromise on the quality of project deliverable.
This unholy practice is mostly responsible for the catalogue of abandoned projects which became an integral component of the nation’s developmental attributes until now (as at 2015, the nation boast of unbelievable number of abandoned and uncompleted projects, not to talk of the thousands of NDDC abandoned or even non-initiated projects after huge payments have been made). It is equally responsible for a high number of low quality government projects across the nation; a situation where constructed roads become impassable only after few months or years at best. A good example is the Abuja-Lokoja-dualised road under construction; yet earlier finished parts are already damaged.
So to say, it has over time become easy for government contractors to abandon ongoing work either because the job is no longer profitable because of the illegal and undue kickbacks they have been forced to make, or because payment for the work is being intentionally delayed by some compromised government officials because the contractor is “stubborn” as they say in their circle. Whatever, the nation loses.
To establish prudency, transparency and accountability in government spending, it is a matter of necessity that procurement principle of the nation be readjusted/amended forthwith; that ministries and agencies of government are to work in unison to achieve aggregation of consumables. One suggestion is that, there should be a static cost attached to each and every consumable – subject to a periodic review. For instance, since every government establishment uses computer systems, it should become the responsibility of the Bureau of Procurement to determine what product of computer system meets the average quality requirement of the country at a reasonable, minimal cost. With this in place, it becomes easy to attach a general price to all computer systems purchase orders by MDAs, except when specific requirement dictate the need for a custom product.
If a particular company wants government patronage, then it has to comply with the quality requirements of the nation and be ready to discuss favourable price regime with the Bureau, which will then decide to recommend the product to government establishment. This in itself would promote healthy competition among suppliers. A situation whereby different government agencies and ministries purchase same product from same company – though through different suppliers – at sometimes unbelievable varying prices should be discouraged; embedded in the status quo is a pathway and leeway for corruption.
A mile of road construction in Osun state should cost just as much as the same in Kano, for as long as the terrains are similar; there must be in practice a standard gauge for award of construction jobs. The era of contractors submitting varying bids for similar projects should be over. The Bureau for Public Procurement should be empowered to assigned costs to every project in the country with an earmarked margin of profit for prospective contractors who are at liberty to consider accepting the given cost structures. The Bureau should also include an open process for any contractor to be free to challenge the cost structure and its components if they can justify their quotes. It is my strong belief that a new process like this will foster synergy among contractors to cut costs, bid responsibly and professionally.
The intentional acts of officials to derail project performance and payments for personaàl gain must be addressed immediately if the gain of the current Administration’s bold strides to develop the country would be felt holistically by Nigerians.
While the Public Procurement Act, 2007, section 37 clearly states that:
(1) Payment for the procurement of goods, works, and services shall be settled promptly and diligently.
(2) Any payment due after more than sixty days from the date of the submission of the invoice, valuation certificate and confirmation or authentication by the Ministry, Extra-Ministerial Office, Government Agency, Parastatal or Corporation shall be deem a delayed payment.
(3) All delayed payments shall attract interest at the rate specified in the contract document.
(4) All contracts shall include terms, specifying the interest for late payment of more than sixty days,
Handlers of the process including account officers still often delay or deny payments to contractors who proved to be ‘stubborn’ by not submitting to their corrupt demands. The antics of these enemies of Nigeria include refusing to prepare necessary payment schedules for completed jobs after being duly notified by complying contractors or in some other case, these officials pretend as if the jobs have not been completed and could at times, withheld payments for many completed jobs for a period of time running into sometimes years. This is one of the major reasons why many contractors cannot pay their staff on time and why government money does not flow in a healthy manner in the economy.
This indecent practice has persisted because there are no provision for direct consequences on public officers who, for personal gains, derail contractual agreement; even if the contractors were to file for delayed payments which is very rare, the government still bear the brunt.
It is high time the Procurement Act is amended to include appropriate penalties for officers found culpable in such malpractices that negate the principle of prudence, accountability and transparency. The magnitude of the negative implication of such corrupt behaviour on the nation’s development stride should dictate stringent consequences which may include both fine and imprisonment for defaulters; beyond relieving them of all governmental assignments if its established that there is no cogent and verifiable reason adduced to such delay.
At the same time, the Act must be amended to mandate payment for all jobs that have been certified completed and confirmed to meet all contractual agreement and quality specification to be made with all tax deductions within a maximum period of 14 working days; and every extension beyond, should without the contractor asking incur interest for the contractor and penalties for the processing officials as suggested above.
Furthermore, the Act should be strengthened and for good reasons by providing that contractors who have complied with the provisions of the Act are to submit copies of all the documents with respect to job completion to the Bureau or relevant department of the MDAs as the case may be via an online platform. This provision in itself has the potential of serving many useful purposes including fiscal, audit, legal and developmental implications.
The growth of Nigeria hinges on continuous improvement and expansion of infrastructures across the country and at the shortest possible time; all effort to achieve that objective must be followed up with absolute prudency, consistent accountability and unwavering commitment. Since no nation can be oyster-locked from the global community in its drive for total development, Nigeria’s bilateral agreements and relationships with any other nation, an indispensable reality, must be designed to be substantially mutually benefiting to both parties – but much more, for the consideration of what Nigeria gets from such agreement(s).
The United States of America, despite attaining an advanced level of development has in recent times insists that in exchange for business agreement with China on technological developments, the latter must in return, among other conditions, buy agricultural products, especially food from the USA. The United States is not only pursuing benefits from the trade agreements but equally and actively seeking opportunity to further develop its agriculture sector by creating formidable market for its farmers.
In the last five years, we seem to have built a robust relationship with China. This relationship is as exciting as it is, considering the laudable infrastructures that are coming our way and the massive loan facilities we can secure from China. While China would give us loans on the condition that the attached projects would be undertaken by Chinese corporations; which means they are not only going to earn interests on these loans but also apparently creating jobs for their corporations and citizens operating in Nigeria. Our take is limited to the project outcomes which we ended up incurring much more real costs than any relative benefits. As it stands, there is no white paper – none that am aware of – that has evaluated the costs and benefits of these Chinese financed big ticket projects.
If our procurement acts is to be fully beneficial to the growth of the country, it must be structured to insist that foreign countries that have their companies bid to undertake massive project(s) in the country must in return create market for at least, a major Nigerian product in their own country as well. China could become a strong market for Nigerian foods and cash crops if only we will insist on the principle of reciprocity; and we could imagine what that would mean to farmers and creation of employment in Nigeria.
On the premises of all the mentioned challenges, I will humbly recommend that the government should deploy all means possible through sincere political will, not only to sustain the gains of the procurement policy but also to re-invigorate it by putting “biting razor teeth” and a “hot iron knots” to crack6 leakages through which the policy is being abused. Also, there is need for the Bureau for Public Procurement to robustly train and retrain principal procurement staff to acquire obligatory procurement skills, proficiency and professionalism in order to update their knowledge in modern procurement “Best Practices.” Appropriate equipment and tools should be provided to the staff in order to enable them effectively and efficiently discharge their tasks. The government should urgently address the unduly long bureaucracies to complete a procurement cycle; a challenge to further beat our new commendable record in the global ease of doing business ranking. Thus, the Bureau should fix time frame from the start to completion or certification with respect to project types. This could make the people to be able to predict the expected time frame for projects and payment certification which would restore trust in the system.
The National Assembly, on the other hand, should sincerely exercise its constitutional power of oversight functions without political compromise and pecuniary benefits to hold the executive arm of government to standards of accountability, transparency and procurement “Best Practices.” The government should also ensure that relevant organs promptly approve and release funds to avoid undue stress in the procurement processes, regular stock-taking, adequate, effective and efficient projects and programmes particularly ensuring monitoring and evaluation mechanisms are put in place. There should be a database, taking advantage of modern computing prowess, for proper record keeping and documentation of all our procurement processes at all levels in the country.
It is also important that all anti-corruption bodies beam their searchlight on the activities of all procurement entities and take appropriate actions on all established corrupt practices.