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TRANSCRIPT
Improving lsquoValue for Moneyrsquo (VFM) in Nigeriarsquos Capital Expenditure Projects
Arinze M Oduah FCIPS Senior Procurement Manager Wells and Projects The Shell Petroleum Development Company of Nigeria Ltd Port Harcourt Rivers State Nigeria Lagos 18 April 2018
1 April 2018 copy Arinze Oduah
Copyright of Shell International BV
Agenda
bull Background
bull Case for Improvement
bull Levers for Improvement
o Governance
o End-to-End Supply Chain Management
o Technology
o Capacity Building
bull Summary and Conclusion
bull QampA
April 2018 2 copy Arinze Oduah
Copyright of Shell International BV
Background Structural constraints aside Nigeriarsquos economic growth is
hampered by a massive infrastructure deficit and closing the gap
requires shrewd capital expenditure over the long-term
Debt service a bloated bureaucracy a growing population and
revenue shortfalls constrain the capital budget
The PPA 2007 and BPP provide a platform for lsquoValue for Moneyrsquo
in Capital Expenditure Projects with scope for improvement
There is a widespread consensus that the scope for improving VFM
in capital expenditure is huge
A multi-pronged approach consistently worked over the long
term offers the best chance of success to improve VFM in capital
expenditure and must include systematically blocking leakages
April 2018 3 copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
April 2018 4
ldquoEvery time you spend money you are casting a vote for the kind of world you want you and your children to live
in Your procurement spend determines the quality of your childrenrsquos lives in Nigeriardquo
Sope Williams-Elegbe Professor of Law Stellenbosch University
South Africa copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement ndash contrsquod
April 2018 5
ldquoHis Excellency President Muhammadu Buhari will say lsquoIf we do not kill corruption corruption will kill usrsquo We in the ICRC will add If we do not kill our infrastructure deficit our infrastructure deficit will kill us The best way to kill our infrastructure deficit is by delivering sustainable infrastructure
that will achieve the SDGs for Nigeriansrdquo
Engr Chidi K C Izuwah Snr Ag DG ICRC The Presidency
Note ICRC is the Infrastructure Concession and Regulatory Commission under the Presidency SDGs are Sustainable Development Goals formally Millennium Development Goals or MDGs copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Agenda
bull Background
bull Case for Improvement
bull Levers for Improvement
o Governance
o End-to-End Supply Chain Management
o Technology
o Capacity Building
bull Summary and Conclusion
bull QampA
April 2018 2 copy Arinze Oduah
Copyright of Shell International BV
Background Structural constraints aside Nigeriarsquos economic growth is
hampered by a massive infrastructure deficit and closing the gap
requires shrewd capital expenditure over the long-term
Debt service a bloated bureaucracy a growing population and
revenue shortfalls constrain the capital budget
The PPA 2007 and BPP provide a platform for lsquoValue for Moneyrsquo
in Capital Expenditure Projects with scope for improvement
There is a widespread consensus that the scope for improving VFM
in capital expenditure is huge
A multi-pronged approach consistently worked over the long
term offers the best chance of success to improve VFM in capital
expenditure and must include systematically blocking leakages
April 2018 3 copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
April 2018 4
ldquoEvery time you spend money you are casting a vote for the kind of world you want you and your children to live
in Your procurement spend determines the quality of your childrenrsquos lives in Nigeriardquo
Sope Williams-Elegbe Professor of Law Stellenbosch University
South Africa copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement ndash contrsquod
April 2018 5
ldquoHis Excellency President Muhammadu Buhari will say lsquoIf we do not kill corruption corruption will kill usrsquo We in the ICRC will add If we do not kill our infrastructure deficit our infrastructure deficit will kill us The best way to kill our infrastructure deficit is by delivering sustainable infrastructure
that will achieve the SDGs for Nigeriansrdquo
Engr Chidi K C Izuwah Snr Ag DG ICRC The Presidency
Note ICRC is the Infrastructure Concession and Regulatory Commission under the Presidency SDGs are Sustainable Development Goals formally Millennium Development Goals or MDGs copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Background Structural constraints aside Nigeriarsquos economic growth is
hampered by a massive infrastructure deficit and closing the gap
requires shrewd capital expenditure over the long-term
Debt service a bloated bureaucracy a growing population and
revenue shortfalls constrain the capital budget
The PPA 2007 and BPP provide a platform for lsquoValue for Moneyrsquo
in Capital Expenditure Projects with scope for improvement
There is a widespread consensus that the scope for improving VFM
in capital expenditure is huge
A multi-pronged approach consistently worked over the long
term offers the best chance of success to improve VFM in capital
expenditure and must include systematically blocking leakages
April 2018 3 copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
April 2018 4
ldquoEvery time you spend money you are casting a vote for the kind of world you want you and your children to live
in Your procurement spend determines the quality of your childrenrsquos lives in Nigeriardquo
Sope Williams-Elegbe Professor of Law Stellenbosch University
South Africa copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement ndash contrsquod
April 2018 5
ldquoHis Excellency President Muhammadu Buhari will say lsquoIf we do not kill corruption corruption will kill usrsquo We in the ICRC will add If we do not kill our infrastructure deficit our infrastructure deficit will kill us The best way to kill our infrastructure deficit is by delivering sustainable infrastructure
that will achieve the SDGs for Nigeriansrdquo
Engr Chidi K C Izuwah Snr Ag DG ICRC The Presidency
Note ICRC is the Infrastructure Concession and Regulatory Commission under the Presidency SDGs are Sustainable Development Goals formally Millennium Development Goals or MDGs copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
April 2018 4
ldquoEvery time you spend money you are casting a vote for the kind of world you want you and your children to live
in Your procurement spend determines the quality of your childrenrsquos lives in Nigeriardquo
Sope Williams-Elegbe Professor of Law Stellenbosch University
South Africa copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement ndash contrsquod
April 2018 5
ldquoHis Excellency President Muhammadu Buhari will say lsquoIf we do not kill corruption corruption will kill usrsquo We in the ICRC will add If we do not kill our infrastructure deficit our infrastructure deficit will kill us The best way to kill our infrastructure deficit is by delivering sustainable infrastructure
that will achieve the SDGs for Nigeriansrdquo
Engr Chidi K C Izuwah Snr Ag DG ICRC The Presidency
Note ICRC is the Infrastructure Concession and Regulatory Commission under the Presidency SDGs are Sustainable Development Goals formally Millennium Development Goals or MDGs copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement ndash contrsquod
April 2018 5
ldquoHis Excellency President Muhammadu Buhari will say lsquoIf we do not kill corruption corruption will kill usrsquo We in the ICRC will add If we do not kill our infrastructure deficit our infrastructure deficit will kill us The best way to kill our infrastructure deficit is by delivering sustainable infrastructure
that will achieve the SDGs for Nigeriansrdquo
Engr Chidi K C Izuwah Snr Ag DG ICRC The Presidency
Note ICRC is the Infrastructure Concession and Regulatory Commission under the Presidency SDGs are Sustainable Development Goals formally Millennium Development Goals or MDGs copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
What do we mean when we say ldquovalue for moneyrdquo
April 2018 6
Was the money spent on what was considered the right item
Was the item delivered as and when due
Was the item delivered cost-competitively
hellip Focus is on the last item that is more politically neutral where as supply chain
professionals we can make a huge impacthellip
Value For Money
What
When Cost
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Case for Improvement
Savings against projected capital expenditure is 1 -
15 over a 3-yr period (BPPrsquos summary Mar 2017
summary reflects aggregate saving of 1 for capital
allocation of gtN2tn)
In 2017 5 MDAs accounted for gt90 of capital
allocation with average savings just below 1 - Power
Petroleum Transport Water Resources and FCT
2017 Capital expenditure cost savings across MDAs
varied between 0 and 19 with lower spend MDAs
saving more
Much of the combined capital expenditure at State and
Local Government levels escapes comparable oversight
April 2018 7
Source pwc
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Capital Allocation Cost Savings Profile ndash 2015-2017 (BPP)
April 2018 8
Legend Green gt15 Amber 6-14 Red 0-5
Notes Highest spend MDAs delivered lower savings rates eg Power Savings trend over 3 years is poor and declining
MDAs
SAVINGS ()
2015
SAVINGS ()
2016
SAVINGS ()
2017
2017 Award Against
Capital Allocation
(NGN)
Fed Capital Territory Admin 26 1 3 36908986211
Agriculture 0 3 0 560029320
Finance 12 13 2 16902181605
Health 0 5 0 358333335
Water Resources 6 7 6 77414464164
Education 11 0 0 10212699807
Transport 3 0 1 213545597694
Defence 1 0 5 25376226091
Interior 11 3 0 1991443008
Petroleum 8 0 1 953055758008
Power 4 1 0 2097158933966
Sec to the Govt of the Fed 52 18 2 24148601786
INEC 9 9 0 863490000
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Capital Budget Savings Potential
April 2018 9
Key Ministries Budget
Current
Savings Rate
(1)
Target Savings
(15)
Aspirational
Savings (25)
Works Power amp Housing 556 56 834 1390
Transportation 263 26 395 658
Education amp UBE 162 16 243 405
Special Intervention 150 15 225 375
Defense 145 15 218 363
Water Resources 95 10 143 238
Health 71 07 107 178
Interior 63 06 95 158
Totals 1505 15 226 376
2018 Proposed Budget and Savings Target amp Aspiration (NGN bn)
bull A savings of 25 will meet the capital expenditure needs of the Defense Water Resources Health and Interior ministries
bull In 2015 Sec to Govt saved 52 on Capex while FCT saved 26 so these aspirations are realistic
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Why ldquovalue for moneyrdquo in capital expenditure matters
April 2018 10
Using 2018 proposed capital expenditure budget of N243 trillion a 10 cost-saving of
N243 billion translates into
Capital expenditure for Universal Primary Education AND Agriculture and Rural Development
Capital expenditure for Health Education North East Intervention Niger Delta and FCT
~1000 MW of new electricity generation capacity
4 equipped100-bed specialist hospitals across the country
600km of 4-lane standard dual carriageway at ~N400m per km (Lagos ndash Port Harcourt)
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Based on the 2018 budget an aggregate cost saving of even 5 exceeds the capital expenditure required for the following projects
April 2018 11
Roads new builds (including 2nd Niger Bridge) and rehabilitation of
existing roads (N55bn)
Railway - new tracks and rehabilitation (N10bn)
Health ndash including HIV program and investment in tertiary health
institutions (N106bn)
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Levers for Improvement ndash save more prevent leakages
Governance
End-to-End Supply Chain Management
Technology
Capacity Building
April 2018 12
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Governance
Transformative leadership at all tiers of Government including Federal MDAs
Fully operationalize the Public Procurement Act (2007) particularly Part 1 Establishment Of National Council On Public Procurement
Under the Act The Council shall
(a) consider approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring
entities
(b) consider and approve policies on public procurement
(c) approve the appointment of the Directors of the Bureau
(d) receive and consider for approval the audited accounts of the Bureau of Public Procurement and
(e) ldquoapprove changes in the procurement process to adapt to improvements in modern technologyrdquo
(f ) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act
Mandate implementation audits backed by sanctions to compel compliance
Realign planning budget and contracting cycle which also enables longer-term cost-competitive contracts
Develop deploy and embed Ethics and Compliance systems processes procedures plans and underpinning culture to block leakages (in
partnership with NP FIU EFCC ICPC Fiscal Responsibility Commission NGOsCSOs FBOs etc)
April 2018 13
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV April 2018 14
End-to-End Supply Chain Management
Develop and deploy an e2e Supply Chain Management framework including category management across
MDAs with a value-driven mindset
Rollout standardized end-to-end scope packages systems processes and procedures
Develop and deploy lsquoProcurement Planrsquo plans with stretching VFM targets (no Plan no approval)
Implement post-award contract management and assurance - monitor report and improve hellip continuously
In collaboration with relevant expertise holders (NSE CIPSMN etc) establish a commercial benchmark lsquofactoryrsquo
that is continuously refreshed and calibrated against international market norms
Institute strategic supplier management and tighten supplier registration and categorization
Move from tender managementhellip hellip to front-end strategic SCM
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Technology ndash digitization e-sourcing tools ERP e-2-e enablement
April 2018 15
A digitization strategy to drive technology deployment
An overarching ERP architecture that delivers a lsquoBig Datarsquo ecosystem amenable to Data analytics
Enabling platforms and e-Sourcing tools for supplier and tender management to maximize commercial
leverage eg JQSNipeX in the oil and gas industry
Consider low-cost easily implementable high benefit solutions at the local state and fed levels as a
prelude to scaling up eg On-Line-Bidding (public) reverse auctions
Establish
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Capacity Building
April 2018 16
hellip only the most capable people can create and manage the best supply chains to secure value for money hellip
Develop a Competence Development Framework and Career Ladder for supply chain
practitioners in public service
Professionalize the supply chain management cadre and protect them
Mandate continuous professional development after initial Conversion Examination
High-grade and resource BPPrsquos competence oversight role in line with the Act
Consider exchange programs and lsquosecondmentrsquo initiatives with the private sector and other
government entities
Consider external recruitment campaigns for key jobs in public procurement
Leverage support from multilateral institutions to enhance capacity ndash UN World Bank AU
EU ADB AFC
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Recommendations
April 2018 17
Fully operationalize PPA 2007 including establishing the National Council on Public Procurement
Expand BPPrsquos oversight from lsquodue processrsquo to end-to-end supply chain management and strengthened
to influence State and Local governments through compelling outcomes and positive examples
Make lsquoProcurement Plansrsquo mandatory for MDAs underpinned by sanctions and set and publicize cost
savings targets and aspirations with matching incentives
Adopt scalable technology to commercially transform procurement activities and enhance transparency
Strengthen the organic link between BPP and ICRC to expand the scope for PPPs in asset construction
and service delivery so Capex is optimized through a wider variety of commercial models
Establish a public sector Supply Chain Competence Framework for that cadre of SCM professionals
Consider realignment or consolidation of supply chain investigation capabilities in anti-graft institutions
Adopt and publicize commercial benchmark norms for capital expenditure items ndash roads power
classrooms etc through membership of Construction Sector Transparency Initiative ndash CoST
Extend NEITI Beneficial Ownership Disclosure to Public Procurement actors ie IDD
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV
Summary
Value for Money in capital expenditure encompasses the right scope delivering on time and at competitive cost
Potential cost-saving relative to budget is in the range of 15-25 making this the largest readily accessible
opportunity for speedily addressing governmentrsquos capacity to finance the huge infrastructure deficit
Levers for improvement include Governance End-to-End Supply Chain Management Technology and Capacity
With PPA 2007 and the BPP in place as its executive agency the transformation platform to drive these
improvements exists for a willing government to build on
State and Local Government tiers of government need to be enrolled into the same thinking and commitment to
create the laws and enabling institutions to improve capital expenditure
A sound ethics and compliance culture is essential otherwise the value gained can be so easily squandered
April 2018 18
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Questions and Answers
April 2018 19
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
Copyright of Shell International BV April 2018 20
httpsmyoutubecomwatchv=Qim7lQZ03CM
Construction Sector Transparency Initiative
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah
April 2018 21
SN MINISTRY TOTAL PROJECT COST AS REQUESTED (N) TOTAL PROJECT AS CERTIFIED (N) SAVINGS (N) SAVINGS
1 Fed Capital Territory Admin 3690898621080 3582853588410 108045032670 3
2 Environment 204617606325 165813927508 38803678817 19
3 Commerce 12567500000 11434500000 1133000000 9
4 Communication 44135032719 39904031426 4231001293 10
5 Agriculture 56002932000 56002932000 - 0
6 Transport 21354559769370 17362608865650 246014139709 1
7 Water Resources 7741446416391 7251867865812 489578550579 6
8 Women Affairs 18087157500 18087157500 - 0
9 Interior 199144300845 198545800845 598500000 0
10 Niger Delta Affairs 452754300350 450549300350 2205000000 0
11 Health 35833333500 35833333500 - 0
12 Defence 2537622609078 2411770361590 125852247488 5
13 Education 1021269980791 1021269980791 - 0
14 Finance 1690218160505 1654271628056 35946532449 2
15 Budget 683147611570 583516247650 99631363920 15
16 Labour amp Productiv ity 14398653333 14398653333 - 0
17 Petroleum 95305575800814 3439909476953 934532087282 1
18 Power 209715893396576 31155539881734 1025011562484 0
19 Justice 192484128296 192484128296 - 0
20 Sec to the Govt of the Fed 2414860178616 2371824720890 43035457726 2
21 Mines amp Steel 147745534650 142968034650 4777500000 3
22 Presidency 240000000000 240000000000 - 0
23 CBN 719729229364 703925016330 15804213034 2
24 EFCC 197870504828 192547522696 5322982132 3
25 MORTGAGE 47606000000 47606000000 - 0
26 INEC 86349000000 86349000000 - 0
348824817758500 3180522849582 091
Exchange Rate As at December 31st
2017-
US$ 100=N30550
Euro 100=N36626
Pds 100=N41297
THE BUREAU OF PUBLIC PROCUREMENT
THE PRESIDENCY STATE HOUSE ABUJA
SUMMARY OF AWARDS AGAINST CAPITAL ALLOCATIONS IN 2017
AS AT DECEMBER 31 2017
TOTAL 73431881955970
copy Arinze Oduah