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The Bureau of Public Procurement (BPP) has queried the Minister of Works, Power and Housing, Babatunde Fashola over the award of 10 road and bridge contracts worth N166 billion.
The BPP said the minister and his ministry violated the laws guiding contract awards in Nigeria in the manner they selected contractors for the projects.
The procurement agency is asking Mr. Fashola to explain, among other things, why the costs of some of the projects were inflated and why some were awarded to unqualified firms.
The construction of the roads and bridges, spread across the country, were appropriated for in the ministry’s 2016 budget.
The projects are the rehabilitation of Numan-Jalingo Road awarded to Deux Projects Ltd for N11.7 billion; replacement of substandard bridges along Gusau-Sokoto Road awarded to Triacta Nig. Ltd (N1.01 billion); construction of Ojutu Bridge in Ilobu, Osun State awarded to Halicass Integrated Ltd (N522.2 million); construction of Ohan-Moro Bridge on Ilorin-Igbeti Road awarded to Bonus Nig. Ltd (N942.6 million); and rehabilitation of Abuja-Kaduna Road awarded to CGC Nig. Ltd (N26.9 billion).
Others are the rehabilitation of Kaduna-Zaria Road in Katsina State awarded to Arab Contractors Nig. Ltd for N14.8 billon; rehabilitation of Zaria-Kano Road in Kaduna/Kano State awarded to Reynold Construction Nig. Ltd (N69.9 billion); and the construction of Burga-Dull-Mbatill-TadnumGpbiya-Badagari-Gwaranga-Sum, Bauchi State awarded to Rahama Civil Works Nig. Ltd (N10.9 billion).
The construction of Tudun Wuss-Wandi-Wandi-Baraza-Durr-Zumbul-Polchi-Dot-Kwanar Road, Bauchi State awarded to Dalum Construction Nig. at N12.2 billion and the construction of Pankshin-Tapshin-Gambar-Sara-Kai-Gindiri Road in Plateau State awarded to Metropolitan Construction Company Limited at N15.3 billion are also among the contracts slated for award by the ministry.
How contracts were awarded
In line with the requirement of the Public Procurement Act, 2007, Mr. Fashola’s ministry had, in a letter dated November 7, 2016, requested the Bureau to issue it Due Process Certificate of “No Objection” for the award of the 10 contracts.
The ministry had earlier in June advertised the projects in some national newspapers as well as the Federal Tenders Journal edition of Monday, May 30- June 10, 2016.
An addendum to the advertisement was further placed in the same newspapers and Federal Tenders Journal of Monday, June 13-Sunday June 26, 2016.
On July 25, 2016, the prequalification documents were opened in the Conference Room of the Ministry in the presence of representatives of prospective contractors, non-governmental organizations, the Nigeria Society of Engineers and some member of the public as well as officials of the ministry.
In line with Part V, Clause 22, Section 4 of the Public Procurement Act (PPA) 2007, the Permanent Secretary/Chairman of the Ministerial Tenders Board constituted a Technical Evaluation Committee to evaluate the tenders received from prospective contractors.
The contractors successful in the technical evaluation exercise were “provisionally prequalified,” with their documents forwarded to the Federal Inland Revenue Service (FIRS), and banks for verification.
They were subsequently invited to submit completed financial tender documents.
The ministry then carried out a verification exercise on some of the claims made by bidders in their technical bids.
After the verification exercise, the ministry wrote to the BPP to request the certificate of no objection for the recommended contractors.
However, the BPP objected to the award of the contracts citing various violations of the PPA Act.
The agency, in a report on the projects, exclusively obtained by PREMIUM TIMES, said it would not grant the ministry due process certificate until its concerns were “adequately addressed.”
The report was signed by the Director General of the BPP, Mamman Ahmadu.
In the 64-page report, the Bureau objected to the award of the contracts because “there are no evidence that feasibility and financial/economic studies were conducted during projects’ preparation.”
It also expressed surprise that the ministry failed to prepare Environmental Impact Assessment (EIA) for the projects.
It said, “There are no evidence that the EIAs were prepared for the Projects and specifically no EIA Reports were submitted for this Due Process Review. The Federal Ministry of Power, Works and Housing should note that Environment Impact Assessment is a very crucial aspect of project preparation.”
Furthermore, the BPP condemned the ministry for failing to submit the technical bids for the companies that participated in the pre-qualification exercise.
“The FMPW&H did not recommend the lowest bidders for most of the lots after prequalifying the firms,” the agency said.
“The Bureau further observed that FMPW&H appears to have erroneously categorized some critical projects in such a way that enables contractors that are not in the same category with similar technical and financial capacities to submit bids for such lots.
“This has made the benchmarking and value-for-money checks almost unfeasible and has opened avenues to subject the procurement processes to many frivolous petitions and counter-petitions that could likely delay the immediate commencement of the projects.”
Commenting specifically on each of the 10 projects one after the other, the Bureau noted that although the ministry recommended the lowest contractor for the N11.7 billion Numan-Jalingo Road project, most of the companies that submitted bids for the project were not in the same category and ranking that would enable proper benchmarking.
“Besides, the capacity of most of the firms to upgrade and extend the quality of the design and standard of this road cannot be guaranteed,” it stated further.
The Bureau, therefore, advised the ministry to carry out post-qualification on all the firms that submitted bids for this Lot to verify their actual capacities and eliminates firms that do not have the technical and financial capacity to execute the project.
On the replacement of substandard bridges along Gusau-Sokoto Road, the Bureau said the ministry considered the submission of Messrs. China Zhonghao and Ric Rock Construction Ltd that submitted the third and fourth lowest bids non-responsive.
It, however, noted that the basis for their disqualification was not made known by the ministry.
It asked the ministry to carry out post-qualification on all the firms that submitted for this Lot to verify their actual capacities and eliminate firms that do not have the technical and financial capacity to execute this project.
On the construction of Ojutu Bridge in Ilobu, Osun State, awarded to Halicass Integrated Ltd for N522.2 million, the BPP said the ministry indicated that the rates of the lowest four tenderers were too low while two of the contractors submitted bid securities that were not up to two percent of the contract sum as requested.
It also said the ministry indicated that the submission of Messrs. Metropolitan International Limited was corrected from N704,089,909.48 to N122,430,000.00, which showed the firm lacked the understanding and capacity to execute a project of that magnitude and complexity.
The Bureau said it observed that the actual corrected sum of the company submitted as carried out by FMPW&H and verified by the Bureau was N700,761,140.33.
“Nonetheless, the Bureau is amazed at the ministry’s comment on Messrs. Metropolitan International Limited for this project, whereas the ministry has recommended the firm for a bigger project of N15,385,310,166.29 [Pankshin-Tapshin-Gambar-Kal-Gindiri Road].”
The Bureau wondered why the ministry did not recommend Bilijoe+Berger Nigeria Limited for the construction of Ohan-Moro Bridge on Ilorin-Igbeti Road which was awarded to Bonus Nig. Ltd at N942.6 million despite its (ministry) claiming that the company’s price was reasonable.
The ministry, according to the Bureau, indicated that the rates of the lowest tenderer, Messrs. Blisswood Associates Limited were too low, while the submission of Messrs. Bilijoe+Berger Nigeria Limited, the second lowest tenderer, was considered reasonable.
It, however, wondered why the job was not given to the company even though their submission was lower than that of Messrs. Bonus by N2,228,052.75.
The Bureau said it was not able to verify the ministry’s claim that Messrs. Calipak Nigeria Limited and Fiphs Investment Limited submitted bid securities that were not up to two percent of the contract sum as requested because the bid securities were not forwarded to it.
The BPP expressed surprise at the ministry’s claim that it did not award the rehabilitation of Abuja-Kaduna Road awarded to Messrs. Gilmor Nigeria Limited because its jobs were mostly in irrigation and housing with very few district roads within Abuja and with no completion certificate.
The Bureau noted that from its own database, the company was categorized under category A with an average turnover of over N15 billion in the last three years contrary to the viewpoint of the ministry.
“Messrs. Gilmor Nigeria Limited has the necessary equipment, professional expertise, and personnel to undertake a project of over N10 billion,” it said.
“Messrs. Gilmor has contracts worth over N36 and N40 billion for the development infrastructure facilities for Guzape district I &II and Jahi district respectively.”
The Bureau requested the ministry to provide it with details of why Messrs. Dantata & Sawoe, Setraco Nigeria Limited, and RCC 7& CO Nigeria Limited were disqualified since it (ministry) did not give reasons for doing so.
The Bureau demanded explanation on why the ministry prequalified Messrs. Kaiba International Nigeria Limited and Olivec Ventures Limited for the rehabilitation of Kaduna-Zaria Road in Katsina State despite not having annual turnover of up to the required N10 billion.
It said the firms had an average turnover of about N250 million and ought not to have been prequalified.
On the rehabilitation of Zaria-Kano Road in Kaduna/Kano State awarded to Reynold Construction Nig. Ltd at N69.9 billion, the BPP expressed concern about the “excessive unit rates” posted by the company for the project, saying they were “not commensurate rates with similar rates posted by other contractors with similar ranking that submitted bids for similar projects.”
It added, “The Bureau is bemused why the cost of the Kano-Zaria axis that is about 78km. Furthermore, the cost of approximately 2.5 times the cost of Abuja- Kaduna that has about the same distance. The Bureau is not convinced that there was competition for this Lot.”
It, therefore, requested the Ministry to re-examine the submission of Messrs. RCC and ensure that the contract price was realistic that would give government best value for money.
The Bureau said Messrs. Rahama Nigeria Limited should not have been given the contract to construct the N10.9 billion Burga-Dull-Mbatill-Tadnum Gpbiya-Badagari-Gwaranga-Sum road.
According to the Bureau, the company with an average turnover of about N250 million entered into a joint ventures agreement with Messrs. F.I.K Global Limited to meet the N2 billion minimum turnover requirements.
“However, it was also observed that Messrs. F.I.K Global Limited also submitted tender separately for this same project. Messrs. F.I.K Global Limited tender in the sum of N11,225,398,261.78 was ranked fourth lowest bid,” it said.
“However, this action by the two firms amounts to bid-rigging and is contrary to section 58 of the public procurement act, 2007. This has rendered the submissions of both firms non-responsive.”
Nevertheless, the Bureau asked the ministry to carry out post-qualification on all the firms that submitted bids in this Lot to confirm the actual capacities and eliminate firms that do not have the technical and financial capacity to execute this project.
On the construction of Tudun Wuss-Wandi-Wandi-Baraza-Durr-Zumbul-Polchi-Dot-Kwanar Road, Bauchi State at Dalum Construction Nig. Ltd, the Bureau observed that the companies that submitted bids for this Lot were not in the same category and ranking to enable proper benchmarking.
It noted that the capacity of most of the firms to upgrade and extend the quality of the design and standard of this road could not be guaranteed.
The Bureau further said the Lot might likely end up with series of petitions due to the outcome of the evaluation exercise.
It, therefore, asked the ministry to carry out post-qualification on all the firms that submitted bids.
On the Pankshin-Tapshin-Gambar-Sara-Kai-Gindiri Road in Plateau State, the Bureau said though the FMPW&H indicated that the rates of Messrs. CBC Global Nigeria, Well Town Stone Nigeria Limited, Hypertek Limited, Bonus Limited, Xedex Nigeria Limited and Duex Limited that submitted the lowest to the six corrected tenders were reasonable, the ministry did not however indicate why the lowest tenders of Messrs. CBC Global was not recommended.
The Bureau observed that the technical evaluations for all the projects were not carried out professionally and was, therefore, surprised that the ministry refused to recommend the lowest bidders after prequalification exercise which was an indication of credibility.
“This has cast doubt on the integrity of the technical evaluation process,” the BPP said.
“As the federal government is committed to improving the road network within the country with such huge resources allocated towards the projects, it has become necessary to learn from past failure so as to avoid repeated problems in the future that will result in a waste of the limited economic resources.
“The need to ensure that the scopes of works cover all major concerns and only competent contractors are recommended has, therefore, become very imperative so as to prevent loss of valuable lives, properties, and resources that always accompany such failure.
“Therefore, the FMPW&H is requested to furnish the Bureau with comprehensive details of the scope of work in the BEME for all the projects sufficient to demonstrate how the qualities were derived.”
When PREMIUM TIMES contacted Hakeem Bello, the minister’s spokesperson, he declined to comment on the Bureau’s report, saying he does not speak for the ministry but the minister.
A staff of the ministry, who only identified herself as Grace told this newspaper on the phone that she was not aware of the report.
Some officials of the works ministry however wondered why the BPP asked the ministry to go through another process of post-qualification of firms after all award processes have been completed.
“What the BPP should have done is to compel the ministry to choose the most qualified contractor with the lowest bids,” an official said. “Allowing for any kind of post-qualifications is like changing the rules in the middle of the game.”