House Amends Public Procurement Act, Raises Contract Mobilisation Fee to 50%

Removes finance minister as council chair

The House of Representatives yesterday passed a bill seeking to amend the Public Procurement Act, 2007 into law.

The new procurement act increases contracts mobilisation fee from 15 per cent to not more than 50 per cent while mobilised contractors risk a two-year jail term should they abandon projects.

With the amendment, the Minister of Finance also ceases to be chairman of the National Council on Public Procurement and further replaces the minister with a person to be appointed by the President.

The appointment and removal of the Director General of the Bureau of Public Procurement (BPP) will now be subject to confirmation by the Senate to protect and ensure the independence of the position of the appointee.

It further stated that the Director General of BPP can only by relieved of his/her appointment by the President acting on an address supported by two-thirds majority vote by the Senate.

The implementation of the act was further extended to cover the national defense and security agencies.

Membership of the council was also extended to include the Minister of Budget and National Planning and eight part-time members to represent the Chattered Institute of Purchasing and Supply Management of Nigeria and Nigerian Institute of Quantity Surveyors among others.

However, Section 35(3) prescribes a two-year jail term as punishment for “any person or authority who accesses mobilisation fee and absconds or does not carry out the services or works commensurate to the fee paid shall be guilty of an offence and punishable with two years imprisonment or a fine equivalent to the fee paid or both.”

Importantly, Section 25(3) of the law shortened the time provided in the bill for emergency procurement activity to ensure timely execution but “the procurement entity acting with respect to paragraph (i) of this section shall notify the Bureau within seven days of such action.”

Furthermore, the new law provides for the establishment of Parastatal Tenders Board in each federal ministry, extra-ministerial department and all agencies of government.

Commenting on the import of the bill, Speaker of the House of Representatives, Hon. Yakubu Dogara, said he intended to sanitise the country’s business environment and improve the ease of doing business by ensuring that Nigeria has value for money through smoother implementation of national budgets as passed by the National Assembly.

He said the amendment had become critical because the extant provision runs contrary to “the principle of natural justice, where you sit as a judge on your own matter.”

Dogara, who also revealed that the House bill shortened the procurement time by the BPP on procuring entities said: “Right now, you will find that if you commence procurement activities, it lasts for not less than four months and then we feel that that is very restrictive and will not serve the needed planning and implementation of projects that deal on national priorities.”

Dogara, in a statement by his Special Adviser on Media and Public Affairs, Turaki Adamu Hassan, also shed more light on the rationale for increasing the mobilisation fee from 15 to not more than 50 percent.

He, however, urged the president to assent to the bill as soon as it is transmitted to him.