The first law to be promulgated by President Umaru Yar’Adua following his inauguration in May 2007 tightened up the rules for the award of government contracts and the sale of government property.
It introduced more transparent and more competitive procedures for awarding contracts to buy goods and services.
It also imposed stiffer penalties on those caught pouring public money illicitly into private pockets through the award of crooked contracts.
Last year Patricia Etteh was forced to resign as Speaker of the House of Representatives in the light of evidence that she irregularly spent 628 million Naira on the refurbishment of her official residence and diverted much of this money into illicit payments.
Etteh is a prime example of someone who could be prosecuted under the terms of the new Bureau of Public Procurement Act.
And if she were convicted, the disgraced politician could find herself serving a prison sentence of up to 10 years.
Another big shot who has reason to fear the new legislation is Senator Iyabo Obasanjo-Bello, a daughter former president Olusegun Obasanjo.
The Austrian company M. Schneider recently accused her of using a false name to negotiate a 10 percent commission for a company controlled by the Obasanjo family on Schneider’s contracts to supply and install electrical power equipment in Nigeria.
Obasanjo-Bello was serving as Health Commissioner of Ogun State at the time of the alleged deal in 2005.
The Bureau of Public Procurement Act makes such offences punishable by jail terms ranging between five and 10 years, without the option of a fine.
It also empowers the Bureau for Public Procurement (BPP), which is now charged with vetting all major government contracts, to initiate prosecutions
“Once a provision of the Act is contravened, we will invite the law enforcement agencies – the Police, the Economic and Financial Crimes Commission, or the Independent Corrupt Practices Commission – depending on the gravity of the offence,” said Orji Ogbonnaya Orji, the BPP’s Head of Public Affairs.
If the BPP decides to get tough with offenders, we may soon be hearing more about its Director General, Emeka Ezeh.
This little known technocrat is also President of the Nigerian Society of Engineers, and a firm advocate of the use of Nigerian professionals for Nigerian projects.
However, business insiders fear that corruption in public procurement is so deeply entrenched in Nigeria that Ezeh and his team will be unable to curb it.
“It’s difficult to deal with it because everyone is involved,” said one senior accountant whose firm provides services to the government.
One of the duties of the new BPP is to monitor the market price of goods and services in the economy in order to prevent government contractors from over-charging. But the accountant, who asked not to be named, said this simply would not work.
He said government officials charged with awarding contracts consistently demand bribes that add up to 50 percent to the final cost of each deal.
“To recover your cost, you have to inflate the price,” he stressed.
The accountant said no government contractor could over-charge “without (the collusion of) someone in the system because such things are usually discussed and agreed upon.”
“Without it, you cannot win the contract,” he said bluntly.
The Bureau of Public Procurement is the direct successor of the Budget Monitoring and Price Intelligence Unit, which was widely known as the Due Process Office.
This body was charged with scrutinizing all Federal Government contracts worth more than 50 million Naira and blocking any irregularities which it found.
It was set up in 2003 by Oby Ezekwesili, a special assistant of Obasanjo, who went on to become a vice-president of the World Bank.
The Due Process Office reported directly to the president and according to Orji it managed to save the government 300 billion Naira during its five years of operation.
That is a lot of money – almost as much as the Federal Government is planning to spend on education and health in 2008.
The new Bureau of Public Procurement has been given beefed up powers and responsibilities and a new political master.
It no longer forms part of the presidency.
Instead the BPP reports to the National Council on Public Procurement, a committee which is headed by the Minister of Finance. Its statutory members also include the Attorney General and the Economic Advisor of the President amongst others.
The BPP has also been given the implicit authority to vet contracts signed by the state governments and local governments.
These were out of bounds for the old Due Process Office. It had no power to scrutinize contracts awarded by state governors or local council chairmen.
But according to the new Bureau of Public Procurement Act, the BPP is empowered to scrutinize all public sector contracts “which derive at least 35 percent of the funds appropriated or proposed to be appropriated….from the Federation share of the Consolidated Fund.”
In other words, the BPP has the right to poke its nose into any big contract which is being largely paid for by Federal Government money.
The Act charges the BPP with ensuring that all participants in a procurement process have equal access to information through “open competitive bidding.”
All government contracts must be openly advertised in the media and all potential bidders must be given the same information at the same time to avoid situations where insiders with privileged information gain a special advantage.
Where necessary, the BPP must apply administrative sanctions against erring suppliers and service providers.
Offending companies can be fined up to 25 percent of the total value of a disputed contract value. They can also be barred from doing any further business with the government and public sector bodies for five years.
Government officers found guilty of contravening the new tighter procurement rules meanwhile face summarily dismissal and a mandatory prison sentence of at least five years.
“All we are trying to achieve is to establish a procurement culture that is based on competition, transparency, and value for money, as well as professionalism, in the conduct of government business in Nigeria,” said Orji.
The BPP is also charged with ensuring the proper disposal of government property at fair value through open and competitive tendering.
It must prevent scandals such as the secret allocation of 207 Federal Government houses in the up-market Lagos suburb of Ikoyi to friends and relatives of President Obasanjo’s wife Stella and big shots who were political allies of the head of state at the time.
Obasanjo was so embarrassed by the public revelation of this deal in 2005 that he was forced to cancel it and issue an apology.
But the “Greedy Stella” affair was not an isolated incident.
Under Obasanjo, whose government drew up but never promulgated the Bureau of Public Procurement Act, countless state assets ranging from official residences to offshore oil blocks were simply signed over to individuals in a discretionary fashion.
But will Yar’Adua have the political courage to let the BPP do its work unhindered and bring the rich and powerful to justice?
His failure to intervene to prevent Nigeria’s Nuhu Ribadu from being removed as head of the Economic and Financial Crimes Commission (EFCC) has discouraged many reformers.
Ribadu’s reward for dragging eight former state governors before the courts on corruption charges was to be sidelined and sent on a nine-month training course for senior policemen.
What message of encouragement does that send to Ezeh and his team at the BPP?
In late 2007, Wilbros, a US oil services company and Siemens, a German engineering giant, were convicted by courts in America and Europe of bribing Nigerian officials, including government ministers, in order to gain lucrative contracts in Nigeria.
These two companies were forced to pay heavy fines and some of their senior officials may be sent to prison.
But what are the chances that Bureau of Public Procurement in Abuja will manage to jail any of the corrupt Nigerians who took their money?