Percentage Response According To Advertisement For The Procurement Construction Essay

Percentage Response According To Advertisement For The Procurement Construction Essay

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Due process is a mechanism for ensuring strict compliance with openness competition and cost accuracy rules and procedures that guide contract award within federal Government of Nigeria it becomes the popularly adopted short form for budget monitoring and price intelligence unit (BMPIUP). This is the unit tasked with implementing Nigerian's public budget procurement reform program.

The budget monitoring and price intelligence unit was establish by president Olusegun Obasanjo in 2001 in fulfillment of his tenacious commitment to ensuring transparency and accountability in the ,management of public resources. It was establish because a diagnostic study conducted in 2001 into the state of federal government public procurements revealed that Nigeria may have lost billion of naira over the last two decades. These losses arose as a result of flagrant abuse of procedure for award of public contracts, inflation of contract costs, and lack of transparency, lack of competence based competition and lack of merit as the fundamental criteria for award of public contracts.

The experience in Nigeria in the procurement of goods, works and services in the past was characterised by a lots of anomalies, despite the existence of rulers and regulations governing such activities. Goods and works were not procured in accordance with standard international best practices; rather contractors were simply awarded on the basis of what Nigeria called ''Man knows man''. This means that procurement of contract was not longer done in normal way of advertising for a job for competent contractor to tender for it. This system allows for incompetence contractors to handle jobs that they are not competent to handle thus, resulting to so many problems in the construction industry such as high cost of procurement, sub-standard products and jobs, project abandonment and building collapses.

Corruption in the construction industry inevitably result as clients, contractors and professional try to circumvent contract agreements and regulations take advantage of the loopholes inherent in their operating environment. Both fraud and corruption are by definition without proper authority and involve breach of trusts.

The setting up of the budget monitoring and price Intelligence Unit popularly known as Due is as a result of all the above mentioned abuse to rules, regulations and standard s in the award and execution of public contract in Nigeria.

The vision of budget monitoring and price Intelligence Unit is to restore transparency, competition, competence, integrity and value for money in the award and execution of public contracts in Nigeria, without sacrificing quality and standards.

The BMPU has a number of objectives in the pursuit of which the unit is seen with functions some of which are to harmonized and update all federal Government's policies and practices on public procurement, to ensure that project conceptualization and packaging match the defined priority and targets as set in annual appropriations. The unit therefore regulates and sets standards to ensure harmonized bidding and tender documents for all Federal Government contracts, formulate general policies and guidelines on public sector procurement.

1.2 STATEMENT OF PROBLEMS

For quite some times Nigerians have noticed that project in Nigeria are procured at higher cost than those of similar projects in this the West Africa sub-region and Africa as a whole as well as internationally. Such a situation apart from given Nigeria a bad image in term of inadequate justification of allotted funds for projects completion, it leads to project cost overrun, project abandonment and waste assets.

It become necessary for government to intervene by putting the necessary mechanism to check the ugly situation, thus Due process was introduced.

1.3 RESEARCH QUESTIONS

To what level is Due process policy being implemented in the institutions?

What are the problems faced in the implementation process?

How can these problems be solved or resolved?

What is the way forward for proper implementation of Due process?

1.4 AIM AND OBJECTIVES OF THE RESEARCH

The aim of the research is to assess the level of implementation of Due process in project delivery (A case study of some tertiary institutions in Niger state)

To achieve this aim, the following objectives were formulated

To assess level of implementation of the Due process in some Tertiary Institutions in Niger state.

To identify the problems associated with the implementation of this policy in the state.

To proffer possible solution and make recommendation to the identified problems.

1.5 SCOPE AND LIMITATION OF THE STUDY

The Due process reform is one of the many reform programmes embarked upon by the Federal Government of Nigeria. This study was restricted to Educational institutions in Niger State covering four selected institutions.

1.6 DEFINITION OF TERMS

Accounting Officer: means the person charge with the line supervision of the conduction of all procurement

Bidder: means a person or a firm that shows interest in executing a contract.

"Certificate of No Objection" means the document evidencing and authenticating that Due Process and the letters of Procurement Guidelines have been followed in the conduct or effect payments to contractors suppliers from the treasury.

"Goods" means objects of every kind and description including raw materials products and equipment and objects in solid, liquid or gaseous form and electricity as well as service incidental to the supply of the goods.

"Lowest Evaluated Responsive Bid" is the lowest price bid amongst the bids that meets all the technical requirements and standard as contained in the tender document.

"Negotiation" means discussions to determine the terms and conditions of a contract or procurement.

"Open Competitive Bidding" means the offer of prices by individuals or firms competing for a contract, privilege or right to supply specified goods, works, construction or services.

"Procurement Proceedings" means the initiation of the process of effecting procurement up to award of the procurement contract.

"Procurement Entity" means any public body engaged in procurement and includes a Ministry. Extra-Ministerial office, government agency, parastatal and corporation.

"Threshold" refers only to the approving and not the actual process of award.

CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

Procurement is the process of acquisition of goods service and works or projects from third parties (including logistic aspects) from initial concept and definition of individual, business or public sector needs through to the end of the useful life of a procured asset or services, contract.

Obieghu (2005) defined procurement as the process that creates, manage and fulfill contracts. Procurement as such from an integral part of construction projects and occurs at any point in a project cycle where external resources are required to provide supplies and services in any combination or in the disposal of surplus plants, equipments and materials and demolition of buildings and infrastructure. Contract procurement strategy covers the overall pattern of decisions made by the client in defining the organization and procedure required for the execution of a project throughout the design, construction commissioning periods.

The procurement strategy chooses will be governed by consideration of priorities, including nature of the job, purpose, speed, degree of complexity, resources availability, quality, flexibility, competition, price certainty, incentive, responsibilities, risk sharing, size and design. The importance of choosing the appropriate strategy for the particular project should not be under estimated,

2.2 PROCUREMENTMETHODS

Contracts procurement are classified according to the relationship between the client and contractor in terms of deviation of contract sum, nature of pre-contract and contract relationship between the parties at the design and construction stages. Oboirien (2006) Ogunsanmi and Bamisile (1997), defined procurement method as the management of total process involved in the construction project delivery that is the management of the design and production from inception to completion. According to Mojekwu (1998), El-rufai (1992) and Ogunsanmi (1997) procurement method that can be identified in the Nigeria construction industry include the following:

(1)The traditional method

(ii) The design and build

(iii) Management contracting method

(iv) Direct labour

(v) Labour only

(vi) Project management method

2.2.1 Traditional Method

The traditional method of contract procurement is based upon the rigid separation of design and construction, The client, usually after undertaking a feasibility study, appoint a Team of consultants (led by Architect or Engineer) to undertake the detailed drawings, specifications and often a bill of quantity for the project. The tender documents are prepared and the contract awarded, usually to the contract with the lowest tender.

The contractor manages the project usually using sub-contractor. Traditional system is always a lump sum contracting, design and construction cannot overlap because the contract documents must be completed before the competitive bid process can begin (Dorsey 1997).

The contractors, who become part of the project team after the design is complete, cannot provide any of its expertise in the selection of materials and systems constructability studies, budgeting and scheduling (Kubal 1994).

In this system, the owner's involvement is minimal after the selection of the lowest bidder. The contract documents used for this system usually specify that the contractor is responsible for construction means, methods and selection of subcontractors. In an adversarial environment, the contractor may consider excessive involvement from the owners loses control over the construction process and the selection of subcontractors, Also this system does not provide a flexible environment for managing charge in owner's requirements (Haltenhoft 1999). Because of the lack of communication and advertisement relationship associated with this system, such changes in many cases result in disputes and even litigation. The architect usually performs limited quality assurance activities when traditional system is utilized.

2.2.2 Management Contracting Method

According to Murdoch and Hughes (1992) management contractor is associated with the client engaging the management contractor to participate in the project at an early stage, contribute construction expertise to the design and manage the construction. Management constructing is a procurement method consisting of 100% subcontracting. Everything of work is subcontracted to works contractors. Under their methods the contractor offers the client a consultant service based on a fee for coordinating, planning the construction, managing and executing the project. The approach ensures that the contractor is part of the Promoter's team from the onset ensuring that maximum construction experience is fed into the design. In a management contract, the client constructs the permanent works under a series of construction contractors placed by the management constructor after approval.

2.2.3 Construction or Project Management Method.

The construction management is very much a team approach involving the client, designers and construction contractors with the construction manager acting as the team leader. He would also provide expert advice at both the design and construction techniques and Build ability. The feature of construction management is that the client places a direct contract with each of the specialist contractors. In order to coordinate these contracts, the client engages the experience of a construction manager who acts as the consultants, the use of constriction management method of procurement has been found suitable under some or all of the following circumstances:.

The client's familiars with construction, and knows some or all the professional team

The project is technically complex, involving diverse technology and subsystem.

The client needs to remain the right to make minor variations to requirements as the project proceeds.

The client requires early start on site.

Where competition is required so as to achieve the least cost.

2.2.4 Labour Only Contract.

The labour-only contract form of procurement involves the client in the purchase of the materials while leaving only construction to a labour only contractor; who gets paid for the cost of engaging labour and of course his overheads and profit.

Labour only contract as a procurement method for construction projects in Nigerian construction industry is becoming an increasingly prominent feature of the labour market. Increasingly large numbers of the work force are now engaged in a typical work arrangement and many of these workers are contract labourers.

Broughton (1965) described labour only method as piece of works which are prevalent in the small building type. Such piece of work includes alterations\modification works, repairs, maintenance, refurbishment and some minor subcontract trade works.

Oyefbsi (1997) in his work on evaluation of the performance of labour only contracts on some selected building projects agreed that the down turn in the economy, with the resulting lean economic resources has forced employers/promoters to expand the scope of its usage to include construction of new projects s a means of saving cost while realizing their objectives of providing needed facility. Labour only contract as a procurement method for scale contracting firm is faced with a lot of management problems arising from improper definition of duties and responsibilities at the implementation stage. The contractor finds it difficult to harness the other production resources by the building owner with the labour resources provided by him for the execution of the project. In most cases, site operational plan is always surrounded with the request to at least break through the relatively low overhead and profit occurring from the labour.

2.2.5 Direct Labour Method

This is the arrangement whereby a client otherwise known as "the owner" uses his or her 'in-house" resources for the design or/and execution of a project. The in-house resources here would include both supervisory staff skilled and unskilled labour force besides equipment. Worthy of note in this system is the elimination of the contractor which makes the direct labour method distinct from other procurement methods. In broad term therefore procurement methods categories as those of "Contracting system" and those of "Direct labour system" The chief reasons for using the direct labour system as against the contracting system are the realization of savings in cost and time with assurance of high quality. The critics against the system had basically complained on its workability for the reason that the financial gain they make under the contract system would be stopped. Also according to Meyer (1993), equipment/plant based, labour intensive communities based are characteristics components/factors associated with the direct labour method of procurement.

2.2.6 Design and Build Method

The problem inherent in the separation of the design and construction functions of the traditional method resulted in the introduction into the industry other systems of procurement which brought designers and constructions closer together. The Design and Build Method is one of the extreme of this development. Turner (1997) indicated that "Design and Build is the procurement where one organization is responsible to the client for both design and construction". The essence is that a single company takes responsibility for both the design and construction function in a bid to satisfy the client's objectives. This apart from giving one -point accountability to the client also gives the contractor full control of both major facts of the projects.

This method of procurement is often found to be expensive and exploitive, when no independent expert is involved to cost, plan and enforce necessary ethical practices and procedures.

2.3 THE PROCUREMENT REFORM

Public procurement systems began to receive attention not too long ago. The 9th International Anticorruption Conference held in Abidjan in 1998, stipulated a new look at procurement in many countries. Before then, it was seen as an insignificant part of than administrative function. The developed countries, in recent times have raised their public procurement systems in order to imp rove its efficiency and generate savings (witting 1999). Procurement processes in Africa are undergoing changes that necessitate capacity and skills-building. Between 80 to 90 per cent of Commonwealth African countries have devolved procurement management functions from Central Tender Boards to newly established procurement agencies. (Marah 2007) Marah further said that one of the challenges these new institutions face is being able to measure and evaluate procurement activities in government ministries, departments and agencies so as to achieve value for money. That is why monitoring and evaluation is very central to the procurement process. Procurement reform is clearly a crucial building block in improving governance, public sector management and accountability. Poor public procurement practices result inevitably in waste of scarce public hinds, it is now well-documented that poor or inefficient public procurement not only adversely affects economic womb, but more importantly negatively impact on the investment climate in any country.(Xian 2008). Most countries of the Asia and Pacific region, in order to improve the procurement environment, 'have started to bring substantial changes in this regard by trying to put in place an efficient, transparent, and accountable system of public procurement of their own in Bangladesh, with the technical assistance of the World Rant has played a leading role in undertaking a systemic change in its procurement environment.

The country has a nodal procurement agency and a solid procurement law, with rules containing most of the internationally-recognized good procurement practices. In addition, it made substantial progress in procurement management capacity and procurement.

In 1994, the United States reform program included the reform of the public procurement laws, likewise, in 1998, the United Kingdom's call for efficiency in civil Government led to its reform. The procurement reform of South Africa (1997) was in line with the Abidjan Conference. (Witting 1999). One of the cardinal strategies of the economic reform going on in Nigeria is the implementation of the Due Process Certification in the procurement of public goods and services (Waliab, 2006). He further stated that reforming our procurement system became urgent and imperative as a result of the abuses in the way and manner contracts were awarded and executed in Nigeria over the years. Apart from basing such expenditure decisions on sentiments of ethnicity, tribe or other primordial considerations the abuses were major sources of diversion of public funds to private use, monumental corruption and avenues of denial of social amenities to the people". He listed the means by which this was done to include over-invoicing, use of inexperienced contractors, inflation of costs and proliferation of white elephant projects.

2.4 DUE PROCESS AND PROCUREMENT REFORM IN NIGERIAN

Based on wide spread corruption conducting government business degenerated so much by the year 2000. This was due to the fact that no serious attention was paid to Public Service Rule, Financial Regulations and Ethics and Norms because of selfish reasons. The Federal Government noted the urgent need for transparency in government procedures so as to be able to move the system forward. Hence the Federal Government in 2000 commissioned the World Bank to collaborate with some Private Sector Specialists to study Financial Systems and general procurement-related activities in the country. The essence of this request to the World Bank is to assist Nigerian Government "with a process of enthroning efficiency, accountability, integrity and transparency in Government Procurement and Financial Management Systems" (Ekpenkhio, 2003). It was based on this that the Country Procurement Assessment Report was produced through a participatory review approach from key stake holders including representatives from private sectors and the Federal, State and Local Governments with assistance from international and national consultants. The Country Procurement Assessment Report (CPAR) identified some major weaknesses in the procurement system in Nigeria as follows (Ekpenkhio, 2003):

That Nigeria lacks a modern law on Public Procurement and Permanent oversight and monitor purchasing entities

That the finance (Control and Management) Act, 1958, together with Financial Regulations which set basic rules for managing public expenditure have gaps, deficiencies and faulty implementation of existing regulations on procurement (e.g. lack of permanent arrangements for control and surveillance) which create opportunities for bribery and corruption.

That due to inflation and lack of regular adjustments on the thresholds of the approving limits of the Tender Boards, their authorization were constantly being eroded resulting in abuses, prominent among which is splitting of contracts.

That there was proliferation of tender boards which were perceived by the private sector as sources of delays and non transparency. In addition, these tender boards appeared to have limited mandates with powers to decide contracts de flaclo resting with the permanent Secretary and the Ministry/ Commissioner.

That Customs systems and procedures were cumbersome and major causes of delay in clearing goods, and hence a source of corruption; and

That Procurement is often carried out by staff who substantially lacks relevant training.

Another major problem to the existing procurement system and guidelines in the country is the difficulty of implementation. The reasons for this as Ezekwesili (2004) pointed out include absence of economic cost/benefit analysis of projects. There is lack of genuine competition and transparency since applicable rules are usually tilted in favour of a predetermined winner, most projects are not harmonized and are not selected on priority bases, There are gaps between budget and actual releases, which usually result in underfunding, delayed competition, price escalating and abandonment. It is based on the above identified weaknesses that The Country Procurement Assessment Report (CPAR) made the following recommendations (Ekpenkhio,2003):

The need for a procurement law based on the United Nations Commission for International Trade Model (UNCITRAL).

The need to establish a Public Procurement Commission (PPC) to serve as the regulatory and oversight body on Public Sector Procurements

The revision of key areas of the financial regulations to make them more transparent;

The streamlining of Tender Boards and the strengthening of their functional authority, including powers to award contracts.

A critical need to rebuild procurement and financial management capacity in the public sector; and

A comprehensive review of the businesses related to export, import and transit regulations, procedures and practices.

It should be noted that the government "accepted The Country Procurement Assessment Report (CPAR) report in its entirety with the exception of the Registration of Contractors and the involvement of Political Office holders such as Ministers/Commissioners in the award of contracts in excess of fifty million Naira which the report was against" (Ekpenkhio, 2003). The Obasanjo administration decided to stop the "Business as Usual Syndrome" by establishing the Budget Monitoring and Price Intelligence Unit (BMPIU) in the Presidency by so doing, the government aimed at formulating and implementing appropriate policies on procurement and contract awards.

The Budget Monitoring and Price Intelligence Unit (BMPIU) serves as a "vanguard of ensuring fiscal transparency, strict compliance with Federal Government guidelines on Due Process Certification as it concerns budgeting for and procurement of facilities/services/contracts at appropriate costs(Ezekwesili, 2005).

2.5.0 PROCURERMENT REFORM IN NIGER STATE

In line with the Federal government reform programme in contract procurement, the government of .Niger State saw the need to adopt the Due Process Mechanism in procurement and award of contract in the state. In the circular released on 23" August 2007 to all Heads of ministry, Extra-ministerial Departments, Parastatals and State owned companies after the meeting of the state executive council on 8"' August, 2007, approved with immediate effect the following contract policy and procedures for the state:

2.5.1 Departmental Tenders Board (DTB):

The Departmental Tenders Board for each Ministry, Extra-ministerial department/bureau shall have the following members

Director (of other department) Other than that asking tender -Chairman

Director of Department asking for Tender -Member.

Director Administration and Finance -Member.

Director P.R.S (where in place) -Member

A representative of the SSG's office -Member

A representative of the Ministry of justice -Member

A representative of Office of the Due process unit -Member

The Directorate of PRS (where in place) shall serve as the secretariat of the Board otherwise the Directorate of administration and finance shall serve.

FUNCTIONS:

The Departmental Tenders Board shall handle all contract awards (supply and construction) of below N500, 000.00 (five hundred thousand Naira). The Permanent Secretary of the Ministry or the Chief Executive of the Extra-ministerial Department approves the recommendations of the Board

2.5.2 Ministerial Tenders Board (MTB):

The ministerial Tenders Board for each Ministry/Extra-ministerial Department shall have the following members

The Permanent Secretary of the ministry/Chief executive of the Extra-ministerial Department -Chairman

All Directors of the Ministry Extra-ministerial dept . -Member

A representative of the SSG's office -Member

A representative of the Ministry of works and housing -Member

A representative of the Ministry of Budget and planning -Member

A representative of the Ministry of Finance -Member

A representative of the Ministry of justice -Member

A representative of the Due Process Unit -Member

The Directorate of the PBS where in place shall serve as the secretariat of the Board otherwise the Department of Administration and Financial shall be the secretariat.

FUNCTIONS:

The Ministerial Tenders Board shall handle all contract awards (supply and construction) whose value is between N500, 000.00 and N10, 000,000.00 (Five hundred thousand and ten million Naira). The Honorable Commissioner for the ministry or the Chief Executive of the Extra-ministerial Department approves the recommendation Tenders Board. However, for contracts above N10,000,000:00 (Ten million Naira), the Honorable Commissioners approval will have to be ratified by the Governor.

2.5.3 The State Tenders Board (STB):

The State Tenders Board shall have the following membership

The Executive Governor -Chairman

The State Deputy Governor -Member

The Secretary to the State Government -Member

All Hon. Commissioners -Member

The Permanent Secretary, Ministry of Budget and Planning -Member

Permanent Secretary (Cabinet and special services) -Member/Secretary

The Special Assistant Senior Special Assistant/Representative of Due Process Unit -in attendance The Cabinet and Special Services Department in the Office of the Secretary to the State Government shall serve as the Secretariat of the State Tenders Board (STB).

FUNCTIONS:

The State Tenders Board shall handle contract awards (supply and construction) whose value exceeds N10, 000, 000.00 (Ten million naira)

2.6.1 Contract Technical Bid Analysis Sub-Committee

The Technical Bid Analysis Sub-Committee shall assist the State Tenders Board to analyze contract documents submitted by Contractors and forward same to State Tenders Board.

Composition

Permanent Secretary (Cabinet and Special Services) -Chairman

Representative of Department handling the Contract in the Ministry -Member

Representative of the Ministry of Budget and Planning -Member

Representative of the Ministry of Works and Housing -Member

Representative of the Ministry of Justice -Member

Representative of the Due Process Unit -Member

Co-opted member(s) relevant to the project -Member

Senior staff from SSG's Office -Secretary

The Contract Technical Bid Analysis Sub-committee shall forward its report and recommendations to the state Tenders Board after the analysis for deliberation and approval.

2.6.2 Parastatals and State Owned Companies

The State Owned Companies and Parastatals without prejudice to the edits or Laws establishing them are to adopt the State Governments Contract Policy and Procedures to suit their peculiar situations, that is, with regards to the composition and functions of the Departmental Tender and Ministerial Tenders board. The Chief Executive of each Parastatal approves the recommendations of the Departmental Tenders Board below N500, 000.00 while the recommendations above N500, 000.00 is to be approved by the Hon. Commissioner or Head of the Extra- ministerial Department responsible for the supervision of the parastatals.

However, Parastatals and Companies shall refer all tenders between N500, 000.00 (Five hundred thousand naira) and Nl10 million (ten million naira) to His Excellency through their supervising Ministry/Extra-Ministerial Departments for final approval.

2.6.3 Procedures for Contract Award by the Departmental Tenders Boards (DTB), Ministerial Tenders Boards (MTB) and State Tenders Board (STB)

The procedures for Contract Awards are as follows;

Contractors bidding must register with the Niger State Ministry of Works Registration Board.

Not have been blacklisted by Local, State and Federal Government or any other organization in the country.

Show evidence of previous good performance in the relevant/similar jobs.

Show evidence of payment of Tax for three years duly certified by the issuing agents.

Ministries/Parastatals must advertise appropriately.

Ministries or Organizations awarding contract must avoid breaking down unit contract jobs into bits to avoid going to Tenders Board.

Projects to be executed must be appropriated for in Government approved budget for that year otherwise; there should be vehement or supplementary budget to back the expenditure.

Due Process procedures must be duly followed vice-verse

Advertisement

Prequalification (where applicable)

Invitation to tender (where applicable)

Opening of Tender

The Bid Evaluation Process

Determination of Winning Bid

Advertisement:

For advertisement and all other processing fees, the ministry concerned should write a memo to His Excellency (Governor) for release of funds.

Contracts for Departmental Tenders Board (DTB) and Ministerial Tenders Board (MTB) must be advertised on the Notice Boards of the Ministry implementing the project(s) and the State Secretariat Complex Notice Board.

For contracts to be considered by the State Tenders Board, ( NTB) the advertisement must be carried out in Two (2) National Newspapers. (One state owned Newspaper and any other National Daily with wide coverage).

Pre-qualification.

The pre-qualification requirements where applicable must be clearly shown in the advert.

Upon the collation of the submissions of all respondents to the advertisement for prequalification,' the Ministry, Agency or Departmental shall analyze all the submissions made by the respondents to the advert.

The analyses shall be based on technical and financial capacity criteria. The aim is to short-list and select competent respondents to the advert. It is also an opportunity to weed out those who do not qualify to be adjudged competent to participate in the commercial/financial bid.

Invitation to tender: Only those pre-qualified can be invited in writing to tender.

Opening of Tender:

Opening of the bid to tender must be done in public at a designated date and time,

The opening should immediately follow the closing of the bidding period to minimize the risks of bid tampering.

The bidder or their representatives should be invited as well as members of the civil society organization and the Press should be encouraged to attend.

The tender that offers the lowest price (best evaluated bid) shall be awarded the contract.

Bid Evaluation Process:

Evaluation of bids shall be based on technical and financial bids of the contractor

The evaluation team shall constituted from among the members of the Departmental tenders Board (DTB) or the Ministerial Tenders Board (MTB) to examine the technical and financial bids of the contractors and with the report recommending three (3) qualified contractors (where applicable) to the Departmental Tenders Board or Ministerial Tenders Board as the case may be for final selection.

Determination of the Winner:

The lowest evaluated tender cost i.e. the best responsive bidder should be adjudged the right winner.

The winner in a competitive bid is that competent bidder that is prequalified and technically evaluated that comes out of the financial competition offering the lowest price for the execution of the contract.

Contract Agreement:

The awarding Ministry shall liaise with the Ministry of Justice to produce the contract Agreement.

Due Process Certificate:

For the Departmental Tenders Board and Ministerial Tenders Board, once the Technical bid Sub-committee and both DTB and MTB have certified the bid analyzed, it should be sent to the Accounting officer of the organization concerned for approval.

For the State Tenders Board (STB), the Due Process certificate must be obtained and attached to any memo that must go to the State Tenders Board for approval.

Processing Fees:

For all processing fees, the parent ministry should write a memo for the release of finds to the Governor of the state to enable them carryout the basic things or requirement for the award of contracts.

2.6.4 Institutional Procurement Planning Committee

VC/Rector/Provost -Chairman

Registrar -Member

Bursar -Member

DPP And M -Member

Representative of NGO -Member

Representative of Institution Legal Counsel -Member

Representative of EFCC -Member

Deputy VC/Rector/Provost -Member

Deputy Registrar -Secretary

2.7 COMPARISM OF THE OLD PROCESS OF PROCUREMENT TO DUE PROCESS

The old contract procurement method is not different from the new one, except for the superimposition of additional safety values which to check the circumvention of any aspect of the process by omission of commission. (Udensi 2005) In comparism, the Due Process has the following modifications in relation to the Old system.

Inclusion of Prequalification process and criteria, prequalification of contractors has earlier crept into contract procurement process in Nigeria, through the influence of some multinational companies. This exercise is necessary in order to weed out contractors who do not qualify to be adjudged competent to participate in the bid, based on an objective set of technical and financial capacity criteria. This is done by the Ministry, Agency or Department upon the collation of the submission of all respondent to the advert for prequalification.

The criteria set by the BMPIU for prequalification is as seen below.

Evidence of incorporation or Business name registration 0%

Registration with Federal or State ministry of works in relevant category 0%

Company Audited Account for three years 0%

Evidence of Tax clearance certificate for three years 0%

Evidence of Financial capacity and Banking support of key personnel 25%

Experiences/Technical qualification and experience of the industry 25%

Similar project executed and evidence of knowledge of the industry 20%

Equipment and technology capacity 20%

Annual Turnover 50%

VAT Registration and evidence of past VAT remittances 5%

In furtherance of the Federal Government total content policy for building indigenous capacity, a bonus score of 15% is available to respondents showing a history of such local emphasis. Mother bonus of 5% shall be assignable for history of community social responsibility. The promoters scored zero are perquisites, the absence of any which automatically disqualifies the respondent while 19 score of 70% and above are considered of competent for the preparation of a list of prequalified contractors.

2.7.1 Advertisement

The advertisement in the old process was usually a call for tender. In which case, respondents would follow instruction on the advert brief regarding submission of tender. In the case of Due Process, companies and firms must pass through a prequalification process for each job before it could be awarded to the company. Two categories of Advertisement Guidelines have been released by the BMPIU:

Advert Guidelines for all contracts below =N=lMil1ion, Advertisement of such projects must be placed in the notice board in a conspicuous layout at the ministry, agency or department. The problem in this, is that it cannot give equal opportunities to all competent Nigerians who could have bided for the job as the information on such localized notice boards would only be know to people in that ministry. Since the bidder would continue to produce bids which might not be the most competitive. Also, the ministry or agency of the government would continue to be competence on the capacity of the local contractors whereas this level of competence and financial capability might be for below what a wider coverage could have provided.

Adverts Guidelines for all contracts Above =N1O Million. This requires on advertisement calling for prequalification in at least two (2) National Newspapers or government gazette.

Invitation to Tender

This is open to only those who qualified to be included in the list of prequalified contractors otherwise competent contractors. This is distinct from a situation where an agency could simply invite some reputable contractors to tender based on their track record of "Perceived competence" and reputation. This has a merit in that it gives an opportunity to all contractors to continue to improve and grow, such that when the company becomes competent and scales the huddle of prequalification, it stands the chance of winning the job- This also creates competition continuous such that the government could expect to get the best offer always. However, care must be taken beyond this point to ensure that the process is not truncated.

Evaluation of Tender

Due Process provided that tender submission by prequalified bidders is made in two parts, technical and commercial/financial, and shall be evaluated by the evaluation Team of the procuring entity. This is the area in the entire process that provides room for leakage of trust and open to abuse. This is because Due Process further provides that the tender evaluation committee shall, probability inevitably be appointed within the procuring entity, at an appropriate level to examine, evaluate and prepare a report with recommendations for award, and submit to the accounting authority (Account Department) with the entity.

2.7.4 Determination of Winner

The Ministry or Organization is required under Due Process to submit the report of his handling of the procurement process to a compliance review scrutiny by BMPIU in order to secure the validating certificate upon which the Federal Executive Council (FEC) may give a final approval for award of the contract. The documents required for this purpose are the background documents that include technical and financial preparation of the project by the spending units and which includes and limited to, bills of quantities, contract drawings and engineering designs, other related technical documents, final summary and statements, project reports. Etc.

Internal cost estimates, variation in scope request and variation orders arising, evidence of advertisement as appropriate.

Prequalification exercise, the objective criteria for short listing the prequalified bidders.

Prequalified bidders.

Prequalification evaluation report.

Evidence of invitation to tender sent to all prequalified bidders.

In case of purely service or goods contracts, the supporting documentations would vary according to the nature of the project but include all such documents that provide Gill information on the competency of the bidders, specification of the product or service and the variety of types and costs from which choice would be made.

All these are to ensure that.

The contract award process was right

The recommended winner is the right one -

The cost of award is right.

SOME MAJOR PROBLEMS OF PAST PROCUREMENT SYSTEM

The defects of previous procurement systems can be categories as follows;

Lack of Adequate Justifications for Budget proposals: there exist unjustified gap between budget and actual releases leading to underfunding, time and cost overrun. According to Ezekwesili (2004) Due process is meant to ensure the use of budget to generate sustainable economic growth and development and that budget spending is not only based on authentic, reasonable and fair costing, but also appropriately geared to the realization of set priorities and target. But this is not so in the past procurement system.

Lack of Cost/Benefit Analysis in project selection; before now projects were selected not based on the needs of society but was based on the isolated parties in the society

Lack of Competition and Transparency in the process of contract awards: often the winner is pre-informed before the process of vendor selection begins. Procurements have been used as an avenue for political patronage and the settlement of party stalwarts (Eze onyekpere 2005). In this process the decision to award a contract to a company or individual will not be based on merit but on some appropriate political consideration, which have no bearing to the entity's ability to perform the contract. The result is that such contracts are seen as avenues for the beneficiary to have assess to his own share of the "national cake".

Absence or Total lack of project monitoring to achieve original target set: many projects have not been monitored and checked to watch the development of such project over a period of time in order to see how it develops so as that changes can be made when it is not meeting the desired target. (Mohammad 2005). Project monitoring is meant to confirm the level of progress for each project.

Lack of Project Prioritization and Harmonization: projects were not done in the order of needs of the society but used to score cheap political points by awarding contracts with full knowledge that there is no money to pay the contractor. (Eze Onyekwere 2005). Procurement law is to be structured and operated to create wealth and add value and also be harmonized with the prevalent macroeconomic framework, these have fallen short in the previous procurement laws.

PUBLIC PROCUREMENT ACTS 2007

The Public Procurement Acts 2007 (2007 ACT No 14) is an act to establish the National Council on Public Procurement and the Bureau of Public Procurement as the regularly Authorities responsible for the Monitoring and oversight of public procurement, harmonizing the existing Government policies and practices by regulating, setting standards and developing the legal framework and professional capacity for public procurement in Nigeria, and for related matters.

Eze (2007) said the Public Procurement Act, 2007 which 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, would ensure rapid economic recovery. The Act was enacted on 4th June, 2007 by the National assembly of the Federal Republic of Nigeria which establish the bureau of public procurement (BPP), with the powers to enforce the monetary and prior review threshold set by the council for the application of the provisions of the Act by the procuring entities, to issue Certificate of No Objection for the Contract Award within the prior review threshold for all procurements within the Act, to mention but a few. The Act also establish in each procuring entity a Tenders board, which shall be responsible for the award of procurement of goods, works and services within the threshold set in the regulation.

2.9.1 Benefits of the Procurement Act 2007

Procurement system will become transparent and create equal assess for bidders of public sector contracts.

Through efficient and effective management of Nigeria's economic resources, all avenues of wastages and leakages in the economy as a result of inefficiency in the award of Government contracts and procurements would be minimized thereby increasing Government revenue base.

It will enable Contractors have a fair hearing as there will be a statutory contract Appeal Board where aggrieved Contractors and Suppliers would file their protests; and

It will assist in the codification of all the relevant laws in the aegis of procurement as already done under the Corrupt Practices and other Related Offences Act, 2002.

CHAPTER THREE

3.0 INTRODUCTION

This research work was designed to assess the level of implementation of Due Process Policy in the award of contracts and also to identify the implementation problems in the selected tertiary institution in Niger state. In this chapter, the procedure employed by the researcher in sourcing for information, collection and the method of data analysis for this study was discussed.

3.1 AREA OF STUDY

The study was conducted in Niger state. Niger State is located in the North-Central zone of Nigeria with latitude 7°49'N and longitude 6°44'E. The state shares boundaries with Kebbi, Nasarawa, Kaduna, Kwara and Federal capital territory.

3.2 DESIGN OF THE STUDY

Sample survey was carried out on selected educational institutions in Niger State to obtain necessary information for the research. Questionnaire was designed, oral interview and field survey was carried out on contract awarded and executed in the selected tertiary institutions across Niger state. The basic aim of the questionnaire was to carryout survey of the people's response, correlates the data obtained and draws inference from the answers.

3.3 RESEARCH POPULATION

Survey study of capital projects executed or being executed was made from selected higher educational institution. The institutions are located in the south. north and west senatorial districts of Niger state, The institutions are:

Federal polytechnic Bida

IBB University Lapai

Federal College of Education kontagora

College of Education, Minna

3.4 SAMPLING TECHNIQUES

The sampling method will take into consideration Building and Engineering/civil projects that have been awarded and executed or being executed in the institutions chosen. Individuals that were directly involved in the projects and that are in the best position to provide the required information was chosen on project basis. This will include the Director of physical planning unit I works department, quantity surveyors, Builders, Architects, engineers etc and the Resident Due Process personnel within the institutions, This was required to be able to get the participants report on the effective performance of such projects.

3.5 DATA COLLECTION

In order that a thorough research work is carried out, two methods of sourcing for information were employed. The methods to be adopted was through Primary and Secondary sourcing.

3.5.1 Primary Sourcing

Questionnaire was administered to participants involved in the project. In order to ensure detailed information, the six core ingredients for a right contract award process will be broken down into sub-groups. This six core ingredients are:

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Pre-qualification

Invitation to Tender

Opening of Tender

Bid Evaluation process

Determination of Winning Bid

Respondents were required to respond based on these identified ingredients for a right contract award.

3.6 DATA ANALYSIS

Different analytical tools would be used for the analysis of the data collected. Descriptive statistic such as percentage averages, frequency, tables, charts, simple description and relative importance index would be used to determine the degree of severity of the implementation problems of Due Process. Percentages analysis was adopted to calculate the percentage compliance to Due Process Policy and also in knowing the level of implementation through the use performance grading.

Performance Grading Level

Good 4 (76-100%)

Average 3 (51-75%)

Fair 2 (26-50%)

Low 1 (0-25%)

CHAPTER FOUR

4.0 INTRODUCTION

The researcher sampled population response in the institution, fifteen (15) questionnaires were served in each school making a total of sixty (60) only forty-eight was eventually received which showed 80% response. Table 4.1 shows the result of sampled population

Table 4.1 Distribution of Questionnaire according to Institutions

INSTITUTIONS

NO. SERVED

NO. RECEIVED

% RECEIVED

Fed. Poly Bida

15

15

25

F.C.E Kontagora

15

13

21.1

IBB University Lapai

15

9

15

COE Minna

15

11

18.3

TOTAL

60

48

80

A total of questionnaire were distributed, 15 each institution and 48 questionnaires were received back. In Federal Polytechnic Bida 15 questionnaires were received representing 25% of the total questionnaire, Federal College of Education Kontogora 13 questionnaires were received representing 21.7%, IBB University 9 (15%) and COE Minna 11 (18.3%).

4.1 DATA PRESENTATION AND ANALYSIS

The data collected through various methods have been presented in tabular, graphical and descriptive forms analyzed as shown below:

KEY

FDB - Federal Polytechnic Bida

FCE - Federal College of Education

IBBU - Ibrahim Badamasi Babangida University

COE - College of Education

RESPONDENTS CHARACTERISTICS

Table 4.2 Ages of Respondents.

Ages

FPB

FCE

IBBU

COE

Total

25-35

Number

12

12

5

4

33

Percentage

18

92.3

55.6

36.4

68.8

35-45

Number

3

1

4

6

14

Percentage

20

7.7

44.6

54.5

29.2

45-above

Number

0

0

0

1

1

Percentage

0

0

0

9.1

2.0

Total

Number

15

13

9

11

48

Percentage

100

100

100

100

100

According to table 4.2, 68.8% of the respondents are between ages 25-35 years, 29.2% respondents are between 35-45 years, 2% respondents are between 45 and above.

Table 4.3 Gender of Respondents

Gender

FPB

FCE

IBBU

COE

Total

Male

Number

12

12

9

11

44

Percentage

80

92.3

100

100

91.7

Female

Number

3

1

0

0

4

Percentage

20

7.7

0

0

8.3

Total

Number

15

13

9

11

48

Percentage

100

100

100

100

100

The result in the table shows that 91.7% of the respondents are male while 8.3% of the respondents are female.

TABLE 4.4 Professions of Respondents

Professions

FPB

FCE

IBBU

COE

Total

Architect

Number

2

2

4

2

10

Percentage

13.3

15.4

44.4

18.2

20.8

Builder

Number

3

2

0

1

6

Percentage

20

15.4

0

9.1

12.5

Engineers

Number

2

3

2

6

13

Percentage

13.3

23.4

22.2

54.4

27.1

Estate Surveyor

Number

1

1

1

0

3

Percentage

6.7

7.7

11.1

0

6.3

Quantity Surveyor

Number

3

1

1

0

5

Percentage

20

7.7

11.1

0

10.4

Land Surveyor

Number

1

2

0

2

5

Percentage

6.7

15.4

0

18.2

10.4

Planner

Number

1

1

1

0

3

Percentage

6.7

7.7

11.1

0

6.3

Draftsman

Number

0

1

0

0

1

Percentage

0

7.7

0

0

2.1

Accountant

Number

1

0

0

0

1

Percentage

6.7

0

0

0

2.1

Administrator

Number

1

0

0

0

1

Percentage

6.7

0

0

0

2.1

TOTAL

Number

15

13

9

11

48

percentage

100

100

100

100

100

In table 4.4, the respondents professions in FPB comprises (13.3%) architect and engineers, (20%) Builders and quantity surveyors, others are made up of state surveyors, land surveyors etc. FCE: engineers (23.4%), Architects, Builders and land Surveyor (15.4%). IBBU: Architects (44.4%), Engineers (22.2%), Estate surveyors, Quantity Surveyors and Planner (11.1%). COE: Engineer (54.4%), Architect and Land surveyor (18.2%).

Table 4.5 Educational Qualification of Respondent

Educational Qualification

FPB

FCE

IBBU

COE

Total

MSC

Number

3

1

3

3

10

Percentage

20

7.7

33.3

27.3

20.8

B.Tech

Number

3

0

2

1

6

Percentage

20

0

22.2

9.1

12.5

B.Eng

Number

2

4

1

2

9

Percentage

13.3

30.8

11.1

18.2

21.4

BSC

Number

2

0

0

1

3

Percentage

13.3

0

0

9.1

6.8

LLB

Number

1

0

0

9.1

1

Percentage

6.6

0

0

0

2.3

HND

Number

2

4

1

2

9

Percentage

13.3

30.8

11.1

18.2

21.4

ND

Number

2

3

2

2

9

Percentage

0

23.1

22.2

18.2

21.4

Technical school

Number

0

1

0

0

1

Percentage

0

9.1

0

0

2.3

TOTAL

Number

15

13

9

11

48

Percentage

100

100

100

100

100

In table 4.5 above, the respondent's educational qualifications, the result shows that 21.4% of the respondents has ND, HND and B.Eng respectively, 20.8% of respondents has MSC, 12.5% of the respondents and 6.8% has BSC

Table 4.6 Year of Experience of Respondent

YEARS OF EXPERIENCE

No of Respondents

Percentage of Respondents

FPB

FCE

IBBU

COE

FPB

FCE

IBBU

COE

1-5

5

3

2

2

38.3

23.1

22.2

18.2

6-10

5

4

3

4

38. 3

30.8

33. 3

36.4

11-20

5

6

4

4

33. 3

46 .2

44 .4

36. 4

21-30

0

0

0

1

0

0

0

9.1

31-40

0

0

0

0

0

0

0

0

Total

15

13

9

11

100

100

100

100

Table 4.6 shows that 36.4% of the respondents have 6-10 and 11-20 years of experience, 18.2% 1-5 years and 9.1% 21-30 years of experience.

PROJECT CHARACTERISTICS

Table 4.7 Participating Project Characteristics

PROJECT CHARACTERISTICS

FPB

FCE

IBBU

COE

Project

Conversion of abandoned Refractory to student center and construction of library complex

Construction girl's hostel building

Construction of lecture theatre

Construction of blocks offices

Project type

Recreation center and library

Hostel building

Lecture theatre

Office complex

Procurement Method

Opening tender

Opening Tender

Opening Tender

Opening Tender

Project value

=N=35-50m

=N=35-50m

=N=10-20m

=N=10-20m

Project duration

9 months

6 months

9 months

14 months

Table 4.7 shows the project on which the research was carried and their characteristics.

All the project were procured by opening tendering system and the project type

Project cost ranges from N10- 50m.

Table 4.8 Percentage Response according to Advertisement for the Procurement

Response

No. of Respondents

Percentage of Respondents

FPB

FCE

IBBU

COE

FPB

FCE

IBBU

COE

YES

15

13

9

11

100

100

100

100

NO

0

0

0

0

0

0

0

0

TOTAL

15

13

9

11

100

100

100

100

In line with the fundamental principle for public procurement to give room for equal opportunity to interested contractors to bid for a project, table 4.8 shows that the projects understudies were advertised in all the selected institutions representing 100% response.

See appendix A for copies of the adverts.

Table 4.9 Percentage Response according to whether Prequalification Exercise

Response

No. of Respondents

Percentage of Respondents

FPB

FCE

IBBU

COE

FPB

FCE

IBBU

COE

YES

15

13

9

11

100

100

100

100

NO

0

0

0

0

0

0

0

0

TOTAL

15

13

9

11

100

100

100

100

Based on the response on pre-qualification exercise, 100% of respondents agreed that prequalification exercise was carried out. See also appendix B for attendance sheet for the prequalification exercise in Federal Polytechnic Bida and Federal College of Education Minna.

Table 4.10: Response to Invitation to Tender sent to Qualified Contractors as at when due

Response

No. of Respondents

Percentage of Respondents

FPB

FCE

IBBU

COE

FPB

FCE

IBBU

COE

YES

14

11

5

4

93.3

84.6

55.6

18.2

NO

1

2

4

90

6.7

15.4

44.4

81.8

TOTAL

15

13

9

11

100

100

100

100

In attempt to find out whether letter of invitation to tenders was sent to pre-qualified contractors, the result shows that 93.3% for FPB, 55.6% for IBBU Lapai and 84,6% for FCE Minna respondents admitted it was done while 81.8% responded it was not carried out in COE Minna. 818% of the respondents in responded NO in COE and 44,4% also responded No in IBBU. The reasons for these high percentage of NO was that past project handled I the institutions only to this set of people invitation to tender was sent to and also some political power uses this opportunity of award of contract to compensate the party members.

Table 4.11 Percentage Response according to Tendering Opening Exercise carried out

Response

No. of Respondents

Percentage response (%)

FPB

FCE

IBBU

COE

FPB

FCE

IBBU

COE

YES

14

11

5

4

93.3

84.6

55.6

18.2

NO

1

2

4

90

6.7

15.4

44.4

81.8