Understanding the Procurement Process in Nigeria: Presentation Highlights
Delve into the presentation by Engr. Yusuf Bello Tahir on the procurement process at the 2019 Annual NTA Head of Engineering Conference. Explore learning objectives, discussion outline, challenges, and the significance of procurement reforms. Gain insights into the scope of application, definitions, and key steps involved in the procurement process.
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Presentation Transcript
UNDERSTANDING PROCUREMENT PROCESS PRESENTED BY Engr. Yusuf Bello Tahir Deputy Director Procurement AT THE 2019 ANNUAL NTA HEAD OF ENGINEERING CONFERENCE 10THSEPTEMBER, 2019
LEARNING OBJECTIVES By the end of the session, participant should be able to define what Procurement is list the objectives of Procurement process know the steps necessary to carry out procurement activities explain the basic function of Procurement unit
DISCUSSION OUTLINE Introduction Scope of application Definition of Procurement objective of Procurement process Step in Procurement Procurement planning Prequalification process Tender Board Approval limit Challenges of implementation Conclusion
INTRODUCTION Prior to the procurement reforms of 2007, the procurement process in Nigeria was characterized by open abuses of rules and standards in the award and execution of public contracts. These were done through over invoicing, inflation of contract costs and diversion of public funds through many unsavoury means all in the name of contracts for procurement.
INTRODUCTION CONTD The effects of the flagrant abuse of the procurement process manifested in various forms but the ultimate result was poor service delivery by public service agencies. The Public Procurement Act 2007 puts Nigeria in the league of countries with legislation on how Public Funds would be expended.
SCOPE OF APPLICATION The Procurement Entities. All Entities outside the foregoing which derive at least 35% of funds appropriated or proposed to be appropriated for any described in this Act from the Federation Share of Consolidated Revenue Fund. Shall not apply to procurement of special goods, works and services involving national defense, or national security unless approval has been first sought and obtained Federal Government of Nigeria & all type of procurement President s express
DEFINITION Procurement is defined as the acquisition of goods and/or services at the Best Possible Total Cost of ownership, in the Right Quantity and Quality at the Right Time, in the Right Place for the direct Benefit or use of Government, Corporation generally via a contract. or individuals, Wikipedia Encyclopedia
DEFINITION CONTD Procurement is the process by which government, business organizations and individuals acquire goods, works and services to satisfy their respective needs. It embraces not only the purchase of goods but also the hiring of contractors or consultants to carry out services.
CORE OBJECTIVES The main core objectives of procurement is to achieve the following: Economy & Efficiency Competition Providing level playing ground for all strata of bidders Value for Money Transparency Encourage and develop local content
NINE ESSENTIAL STEPS IN PROCUREMENT Efficient Procurement Plan Driven by Needs Assessment Appropriation Advertisement Transparent prequalification Bid Submission Bid opening Bid Evaluation Technical & Financial Tender Board/FEC Approval Contract Execution
PROCUREMENT PLANNING WHAT IT ENTAILS! Preparing the needs assessment & evaluation Identifying the goods, works or services required, Carry out appropriate market and statistical survey and on that basis prepare cost implications of proposed procurement Aggregating its requirement to obtain economy of scale & reduce procurement cost.
GENERAL PREQUALIFICATION OF BIDDERS Professional & Technical qualifications to carry out particular procurement Financially capable Must have equipment and other related infrastructure. Adequate personnel to perform the obligation of the contract Posses legal capacity to enter a contract. Not be in receivership Have fulfilled all its obligations to pay taxes.
GENERAL PREQUALIFICATION OF BIDDERS (CONT D) Not have any director who has been convicted in any country for criminal offence relating to fraud or financial impropriety. Accompany every bid with an affidavit of disclosure whether any officer of relevant MDA or Bureau is a former or present Director, Shareholder or has any pecuniary interest in any bidder.
PROCUREMENT PLANNING COMMITTEE (PPC) Each MDA must have a PPC to do the afore- mentioned responsibilities. Membership Accounting Officer or its representative to chair Procurement Unit to serve as Secretary Unit directly in requirement of procurement Financial Unit of the MDA Technical Personnel of MDA with expertise in the subject matter for each particular procurement Legal Unit of the procuring entity.
RESPONSIBILITY REST ON Permanent Secretary for the Ministries; Directors General/CEO for Corporations/Commissions/Agencies
TENDERS BOARD FUNCTIONS OF THE TENDER S BOARD The Tenders Board shall be responsible for the award of procurements of goods, works, and services within the stipulated thresholds as contained in the procurement regulations from time to time. Where there is a need for pre-qualification, the Chairperson of the Tenders Board shall constitute a Technical Evaluation Subcommittee of the Tenders Board. The decisions of the Tenders Board shall be communicated to the Minister, Board/Council for implementation.
TENDERS BOARD- CONTD The Chairperson of the Tenders Board shall constitute a Technical Evaluation responsibility for the evaluation of bids and assisting with prequalification, where necessary. Subcommittee with the The Technical Evaluation Subcommittee of the Tenders Board shall be made up of relevantly qualified and experienced professional staff of the Procuring entity. The Secretary of the Tenders Board shall be the Chairperson of the Technical Evaluation Subcommittee
COMPOSITION OF TENDERS BOARDS Ministry Chairman:- Permanent Secretary Members:- Heads of Departments Parastatals: Chairman:- Chief Executive Officers Members:- Heads of Departments
ADVERTISEMENT Advertisement for solicitation of bids in National Newspapers/Federal Tenders Journal. Observation of every procurement process by TWO credible persons a professional and non-governmental anti corruption organization Transparent Evaluation Process Approval by the authority before award DEBRIEF the bid losers on request. relevant private sector
SUBMISSION OF BIDS All bids shall be deposited in secured tamper proof bid box All procuring entities shall issue receipts showing the date and time the bid was delivered. Any bid received after the deadline for the submission shall not be opened and must be returned to the supplier or contractor. A supplier or contractor may withdraw or modify his bid prior to the deadline for the submission of bids and is effective so long as it is received by the MDA before the deadline for the submission of bidders.
BID EVALUATION Bid Evaluation will generally be preceded by examination of bids to ensure that the minimum eligibility requirements stipulated in the bidding documents are met, that the bid is responsive and duly endorsed.
PURPOSE OF EVALUATION To determine and responsive bid. No other criteria shall be used excepts as stipulated in the solicitation documents Prompt notice shall be given to the contractor of any arithmetic errors that are discovered during the examination of tenders. After opening of bids, examination, clarification and evaluation of bids and recommendation, concerning award shall not be disclosed to bidders or persons not officially concerned with the evaluation process until the successful bidder is notified of the award. select the lowest evaluated information relating to
REVISED SPECIAL FINANCIAL LIMITS AND THRESHOLDS Approving Authority No Goods Works Non-Consultant Consultant Objection to award Services Services BPP issues No Objection to N100 million and N1.0 billion and N100 million and N100 million and award/FEC approves above above above above Ministerial Tenders Board N5 million and N10 million and N5 million and N5 million and above but less above but less than above but less above but less than N100 1.0 billion than N100 million than N100 million million Parastatal Tenders Boards N2.50 million N5 million and above N2.50 million and N2.50 million and above but but less than N250 above but less and above but less than N50 million than N50 million less than N50 million million Accounting Officer: Less than N5 Less than N10 Less than N5 Less than N5 Permanent Secretary million million million million Accounting Officer: Director Less than N2.50 Less than N5 million Less than N2.50 Less than N2.50 General / CEO million million million
CHALLENGES AFFECTING PROCUREMENT PROCEDURE NATIONWIDE AND WAY FORWARD 1. Time Frame to accomplish the procurement processing is cumbersome i.e. Earlier start time to accomplish Nine Essentials steps of Procurement processes to finish start time needs to be addressed (Under amendment). 2. Delay in Releasing fund from Federation Account affecting the Execution/Implementation of projects across the Nation which resulted to abandonment of the projects. 3. 15% Mobilization fee for the commencement of projects (i.e. Works and Consulting Services) is relatively small needs to be amended. Services/Non-Consulting
4. Inflation Rate Economy also affecting procurement processes. 5. Lack of Implementation of National Council of Procurement Committee members affects the procurement policy. 6. Exchange Rate of Dollars to Naira affects the projects Implementation which resulted into abandonment of several projects. 7. Award of Contract to the lowest Responsive Evaluated Bidders without getting Release of fund from Federal can lead to Mitigation between the Preferred Bidder and the Clients (Organization) in case government refused to release capital allocation.
WAYFORD TO OVERCOME THE CHALLENGES 1. e-Procurement processes introduced by BPP to minimize time frame of procurement procedure and interactive policy is in place between BPP, MDAs and GIFMIS. 2. Fund should be released on time by FG to execute projects to avoid abandonment of the tasks. 3. 15% Mobilization fee is insufficient and amendment of the fee is on-going. 4. Implementation of National Council of Procurement Committee members should kick-off in order to amend all green areas and improve the policy of procurement procedure. 5. Procurement processes should be compel on time but award of contract to preferred bidders is subject to release of fund by the Federal Government.
CONCLUSION The Public Procurement Act 2007 provides the legal and institutional framework for the enthronement of Transparency, Accountability, Value for Money and Efficiency in the procurement of works, goods and services within the Federal Ministries and Extra Ministerial Departments. A system like this one shall help the FG to work better with contractors, complete more projects, allow reasonable profits, improve infrastructure and lives of our citizens.
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