Procurement Reforms: We Need Due Process

07.06.2005

Oby EzekwesiliHow times change. In days of yore, we are told that contractors wishing to do business with government just walk into the appropriate agency to get relevant information regarding procurement contract notices, prepares a bid, and if successful after a competitive and transparent process, executes the contract without much ado. But with the venality and debauches in the society seeping into the bureaucracy, such stories can now be recalled only during our spells of nostalgia.

The tale recently recalled by Thisday newspapers’ Olusegun Adeniyi about a Nigerian minister and his foreign colleague on award of contracts with 100% and 10% kickbacks respectively has become a favourite folklore. We know that over a long period of time, public procurement contracts in Nigeria were kalo kalo transactions (the more you look, the less you see) and managed by a cartel of bureaucrats, public servants and a few businesspeople with the right connections. Today, civil servants are also company CEOs of the Mustapha Adebayo and Adebayo Mustapha kind moving public funds to private accounts. As a result, we have decrepit infrastructure in basic services like education and health littering our national landscape. For this reason too, Nigeria seemed eligible to apply for permanent residency in the bottom rung of Transparency International’s Corruption Perception Index.

That is why it would have been impossible for any Nigerian government to initiate a reforms programme without tackling the question of public procurement reforms. According to the National Economic Empowerment and Development Strategy (NEEDS), this necessitated the setting up of the Budget Monitoring and Price Intelligence Unit (BMPIU), which commenced a process of contract award review, oversight and certification now commonly referred to as the ‘Due Process’. According to the NEEDS document, the ‘Due Process’ mechanism certifies public funding for only those projects that have passed the test of proper project implementation packaging and as part of the Strategy, the Federal Government submitted a Public Procurements Reforms Bill, to among others, establish a Public Procurement Commission “with a broader mandate of oversight over all federal procurements.” Curiously, the House of Representatives rejected the bill at first reading without the legislative courtesy of a public hearing. To some observers, this almost smacks of a hidden intention to continue ‘the same old song’.

I do not know the contents of the bill but with the success of the ‘Due Process’ mechanism piloted by the very able Mrs. Oby Ezekwesili and global trends in public procurement reforms, I strongly believe that the bill deserves another day at the legislature, at least in the interest of the nation.

A public procurement reform is a constantly evolving phenomenon in developed and developing countries alike because government is usually the largest buyer of goods and services. In the United States of America, federal procurement reform was initiated in the 1990s. In an article written by Hope A. Lane, it was pointed out that the reform was aimed at streamlining the buying process by using new “commercial acquisition” rules and that the emergence of government-wide acquisition contracts (GWACs) has vastly improved the process of selling goods and services to the government sector. According to Lane, the features of the reform include that contracts establish prices based on how much something was sold for versus how much it cost to produce it; eliminate the need for complex cost-accounting systems; and shorten the government’s buying cycle from 270 days to just 30 days.

The fundamental objective of any public procurement reform is the management of public resources in such a way that public procurement becomes a good steward of the budget. With the realities of shrinking resources, a well-organised procurement system makes significant savings for the government. In a simplified model of procurement, the elements of due process in public sector contracting involves advertisement of tender notices, pre-qualification of prospective bidders, public opening of bids and announcement of winning bids. Such a process ensures transparency, accountability and efficiency with the ultimate goal of achieving value for money. Because of the complexities in public procurements, it has also become reforms expedient globally to have a central procurement agency to coordinate procurement policies, harmonize contracting procedures and standardize bidding processes with necessary decentralisation to the ministries and agencies. It is against this backdrop that the mysterious rejection of the public procurements bill by our federal representatives becomes very worrisome. Is it that our federal lawmakers have become ossified in their views or that they want to maintain the pre-‘Due Process’ status quo? I know that vested interests always attempt to defang the efficacy of reforms but does this ignoble group include honourable members of Nigeria’s House of Representatives? If not, what alternatives have they put on the table regarding public procurement reform? The truth is that this country is in dire need of it. Successful economic growth is rooted in the development of infrastructures but it will be self-executing if the scarce resources are not utilized appropriately to ensure that the money is well spent. That is where due process comes in.

At this year’s 2nd Annual National Dialogue organised by the Media Trust Limited (publishers of Daily Trust and Weekly Trust newspapers) with the theme, “Reforming Nigeria: Which Model?”, late General Sani Abacha’s economic czar, Prof. Sam Aluko, berated the ‘Due Process’ mechanism by recalling that due process was a natural practice of the good old days. But that is what they are: good old days. Things have changed and it is the calling of our times to respond to present realities and organise governance to create better new days. Public procurements have become a rent-seeking cesspool and legislative leadership is required to push such difficult reforms.

However, in embarking on public procurement reforms, I hope the framers of the bill took note of a few salient points. Public procurement reforms should encourage professionalism in procurement by creating a professional procurement stream within the public service. This will lead to further development of procurement skills and competences. There should also be a standardization of bidding documents so that contractors will more readily get accustomed with the processes across board. The reformers should also establish a system of encouraging small and new businesses to gain entry into the government marketplace. As it is, the due process conditions give a head- start to established businesses whose comparative advantage asphyxiates first timers. In the United States, the Small Business Administration’s programmes include federal contract procurement assistance for small businesses. This has helped to grow their economy and could help in growing ours too. There should also be appropriate legal frameworks to offer losing bidders an option of appeal. It may also be imperative to establish a forum for closer interaction between public sector buyers and private sector suppliers on mutual procurement contract problems. I had also called for a Public-Private Sector Partnership Compact on Anti-Corruption, Best Practices and Due Process. Intending beneficiaries of government contracts will be invited to sign up to it. The Compact will commit signatories to joining government’s efforts to institute a regime of anti-corruption and due process as well as encourage the private sector (contractors) to pursue best practices in bidding/tendering and implementation of government contracts. It can then be implied that companies (contractors) that refuse to be signatories would rather undercut government’s best efforts. Public procurement is also a two-way street between buyers and sellers. Therefore, reforms must also ensure that government pays its bills regularly and on time.

Fortunately, recent media campaigns of BMPIU have been very effective and as a result many more Nigerians are understanding and imbibing the habit and culture of due process. The media has also responded in kind. Increasingly, our federal legislators may alienate themselves from the Nigerian people with respect to public procurement reforms.

In conclusion, there is a rather ‘selfish’ reason for the legislators to encourage public procurement reforms and revisit the bill. The final destination of such reforms is the halls of equity. The federal legislators’ current strategic advantage in getting public procurement contracts will not be indefinite, as former legislators-turned-contractors would attest. The musical chair of electoral politics swings at least once every four years and today’s federal legislators will become tomorrow’s ordinary citizens still seeking public sector contracts. Skimmed of their privileged access, then, and only then, will they appreciate the need for equity. And due process.

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