THE ROLE OF LAW IN COMBATING PUBLIC PROCUREMENT CORRUPTION IN NIGERIA

BYPROFESSOR MUHAMMED TAWFIQ LADAN (Ph.D)

DEPARTMENT OF PUBLIC LAW, FACULTY OF LAW, A.B.U., ZARIA, NIGERIA

BEING A PRESENTATION MADE AT THE SECOND PHASE OF NATIONAL SENSITIZATION AND

ENLIGHTENMENT PROGRAMME ON THE PUBLIC PROCUREMENT ACT 2007 FOR NORTH-WEST ZONE OF NIGERIA

ORGANIZED BYTHE BUREAU OF PUBLIC PROCUREMENT, THE PRESIDENCY, DUE

PROCESS OFFICE, ABUJA IN COLLABORATION WITH CISLAC, ABUJA

DATE: - 10TH SEPTEMBER, 2009VENUE: - COMMAND GUEST HOUSE, KADUNA

THE ROLE OF LAW IN COMBATING PUBLIC PROCUREMENT CORRUPTION IN NIGERIA

BYPROFESSOR M. T. LADAN (Ph.D)

1. INTRODUCTIONIt is a paradox that Nigeria is a rich country inhabited by the poor. Her

poverty profile in statiscal figures according to a recent study indicates that Nigeria is poverty endemic. Poverty incidence increased between 1980 and 1985 and between 1992 and 1996. The trend also shows that there has been appreciable decrease in poverty rates between 1985 and 1992 and 1996 and 2004. In 2004, growth in population almost equals growth in poverty since 1980.

Poverty has predominated in the rural area than in the urban area by 63.3% and 43.2% respectively. The trends in poverty levels by zones show that in the northern part of the country, the North-East zone has a higher incidence of poverty followed by North-West and North-Central.

Out of over 140 million population at 3.2% population growth rate, 5.3% unemployment rate, real GDP growth rate of 5.7%, oil sector growth rate of 4.31%, non-oil sector growth rate of 8.93%, inflation rate of 8.50%, about half of the total population (68.7million) live below poverty line.

Corruption in the management of public finance is a veritable area for corrupt practices. Every state must at various times procure goods and services. This calls for request for contract practices, is that public officials disclose to those with interest in the bid, the position of things, this unfairness leads to a situation in which honest bidders are outmaneuvered by smart alecs. The bidding process favours those who lest disposed to perform and the end-product suffers from mediocre handling. Very often, the favoured bidders later ask for contract price adjustment upwards. The eventual consequence is that the buildings cost more and are often poorly executed. Transparency and objective criteria should guide government procurements, contract awards and other financial management of public finance.

All information about a tender or contract must be widely disseminate for all those who have an interest to prepare their tenders, consults with their tenders, consults with their financiers, architects, structural engineers and other

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consultants in order to enable them make informed bids. Time, being of essence, must be adequate. Many prospective bidders have been cut by shortage of the time allowed for preparations and have been stampeded into hasty evaluations leading to their inability to perform the contracts or evaluations leading to their inability to perform the contracts or poor performance or even abandonment of work on site. This is very common in developing states. The terrain is littered with uncompleted projects resulting from the initial rush to bid. This is full disclosure of all material facts in order to facilitate the contracts award process, which would eliminate insider informants, insider trading and other malignant practices.

It is against this background that this paper seeks to achieve the following objectives: -

a) To provide conceptual clarification of key terms;b) To justify the central argument of this paper;c) To highlight the clear objective and benefits of the Public Sector

Procurement Reform and the challenge of fighting corruption, promoting transparency and accountability in governance;

d) To conclude with recommendations.

2. CONCEPTUAL CLARIFICATION OF KEY TERMS: - “Due Process, Public Procurement, Certificate of No Objection, Contractor or Supplier, Open Competitive Bidding and Procuring Entity”.

i. Due Process and Public ProcurementDue Process implies that governmental activities and businesses can be

carried out openly, economically and transparently without favouritism and corruptible tendencies. The essence of this is to ensure that rules and procedures for procurement are made in such a way as to be implementable and enforceable. It is hoped that this Due Process should put an end to “the Business as Usual Syndrome” in Nigeria. Due Process is a mechanism that certifies for public funding only those projects that have passed the test of proper implementation packaging and that adhere stringently to the international competitive bid approach in the award process.

There is no gain saying the fact that improved Public Procurement systems would have a beneficial effect on economic condition of the nation. Wittig (1999) views Public Procurement as a business process within a given political

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system, with distinct consideration of integrity, accountability, national interest and effectiveness. These business operations of government, as controlled by public procurement, usually affect many different elements of society. The procuring entities for instance have needs for material support like roads, hospitals, etc, to help in fulfilling their designated national mission. The business communities of actual or potential suppliers on the other hand need to satisfy government procurement requirement. There are also other interested parties like professional bodies, various agencies, interested public, etc who are all affected or influenced in one way or the other by public procurement.

ii. Certificate of No Objection, Contractor or Supplier, Open Competitive Bidding, and Procuring entity"Certificate of No Objection" means the document evidencing and authenticating that due process and .the letters of this Act have been followed in the conduct of a procurement proceeding and allowing for the procuring entity to enter into contract or effect payments to contractors or suppliers from the treasury;"Contractor or supplier" means any potential party to a procurement contract with the procuring entity and includes any corporation, partnership, individual, sole proprietor, joint stock company, joint venture or any other legal entity through which business is conducted; “Open Competitive Bidding” means the offer of prices by individuals or firms competing for a contract, privilege or right to supply specified goods, works, construction or services;“Procuring entity” means any public body engaged in procurement and includes a Ministry, Extra-Ministerial office, government agency, parastatal and corporation; "Public Procurement" means the acquisition by any means of goods, works or services by the government;

3. MAIN ARGUMENT OF THE PAPERThe central argument of this paper is that law is the bedrock of good

governance and democratic consolidation for six (6) basic reasons: -

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I. Law defines the primary purpose of government, the nature and scope of the functions and powers of all the arms and levels of government in Nigeria. (See for example the combined effect of sections 13-14 and 16 of chapter two of the 1999 Nigerian Constitution).

(13) It shall be the duty and responsibility of all organs of government, and of all authorities and persons, exercising legislative, executive or judicial powers, to conform to, observe and apply the provisions of this Chapter of this Constitution.(14)(2) It is hereby, accordingly, declared that:(b) the security and welfare of the people shall be the primary purpose of government:(16) -(1) The State shall, within the context of the ideals and objectives for which provisions are made in this Constitution.

a. harness the resources of the nation and promote national prosperity and an efficient, a dynamic and self-reliant economy;

b. control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity;

c. without prejudice to its right to operate or participate in areas of the economy, other than the major sectors of the economy, manage and operate the major sectors of the economy;

d. without prejudice to the right of any person to participate in areas of the economy within the major sector of the economy, protect the right of every citizen to engage in any economic activities outside the major sectors of the economy.

(2) The State shall direct its policy towards ensuring:a) the promotion of a planned and balanced economic

development;b) that the material resources of the nation are harnessed and

distributed as best as possible to serve the common good;

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c) that the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group; and

d) that suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care and pensions, and unemployment, sick benefits and welfare of the disabled are provided for all citizens.

II. Law sets out the mechanism for combating corruption in public procurement including the legal rules and regulations as well as the guiding principles of the why, who, when, what and how of public procurement of goods, works and services, disposal of public property and management of public funds.

(see e.g., sections 4-6, 15-16 of PPA Act 2007)

4. The objectives of the Bureau are:a) the harmonization of existing government policies and practices on

public procurement and ensuring probity, accountability and transparency in the procurement process ;

b) the establishment of pricing standards and benchmarks;c) ensuring the application of fair, competitive, transparent, value-for-

money standards and practices for the procurement and disposal of public assets and services ; and

d) the attainment of transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.

5. The Bureau shall:a) formulate the general policies and guidelines relating to public

sector procurement for the approval of the Council;b) publicize and explain the provisions of this Act;c) subject to thresholds as may be set by the Council, certify

Federal procurement prior to the award of contract;d) supervise the implementation of established procurement

policies;

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e) monitor the prices of tendered items and keep a national database of standard prices;

f) publish the details of major contracts in the procurement journal;

g) publish paper and electronic editions of the procurement journal and maintain an archival system for the procurement journal;

h) maintain a national database of the particulars and classification and categorization of federal contractors and service providers;

i) collate and maintain in an archival system, all federal procurement plans and information;

j) undertake procurement research and surveys :k) organize training and development programmes for

procurement professionals;l) periodically review the socio-economic effect of the policies on

procurement and advise the Council accordingly;m) prepare and update standard bidding and contract documents;n) prevent fraudulent and unfair procurement and where

necessary apply administrative sanctions; o) review the procurement and award of contract procedures of

every entity to which this Act applies;p) perform procurement audits and submit such report to the

National Assembly bi-annually;q) introduce, develop, update and maintain related database and

technology;r) establish a single internet portal that shall, subject to Section 16

(21) to this Act serve as a primary and definitive source of all information on government procurement containing and displaying all public sector procurement information at all times; and

s) co-ordinate relevant training programs to build institutional capacity.

6.-(1) The Bureau shall have the power to:

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a) enforce the monetary and prior review thresholds set by the Council for the application of the provisions of this Act by the procuring entities;

b) subject to the paragraph (a) of this subsection, issue certificate of "No Objection" for Contract Award" within the prior review threshold for all procurements within the purview of this Act:

c) from time to time stipulate to all procuring entities the procedures and documentation pre- requisite for the issuance of Certificate of 'No Objection' under this Act;

d) where a reason exist:(i) cause to be inspected or reviewed any procurement

transaction to ensure compliance with the provisions of this Act,

(ii) review and determine whether any procuring entity has violated any provision of this Act;

e) debar any supplier, contractor or service provider that contravenes any provision of this Act and regulations made pursuant to this Act;

f) maintain a national database of federal contractors and service providers and to the exclusion of all procuring entities prescribe classifications and categorizations for the companies on the register;

g) maintain a list of firms and persons that have been debarred from participating in public procurement activity and publish them in the procurement journal;

h) call for such information, documents, records and reports in respect of any aspect of any procurement proceeding where a breach, wrongdoing, default, mismanagement and or collusion has been alleged, reported or proved against a procuring entity or service provider;

i) recommend to the Council, where there are persistent or serious breaches of this Act or regulations or guidelines made under this Act for .

i) the suspension of officers concerned with the procurement or disposal proceeding in issue ;

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ii) the replacement of the head or any of the members of the procuring or disposal unit of any entity or the Chairperson of the Tenders Board as the case may be;

iii) the discipline of the Accounting Officer of any procuring entity;

iv) the temporary transfer of the procuring and disposal function of a procuring and disposing entity to a third party procurement agency or consultant; or

v) any other sanction that the Bureau may consider of appropriate ;

j) call for the production of books of accounts, plans, documents, and examine persons or parties in connection with any procurement proceeding ;

k) act upon complaints in accordance with the procedures set out in this Act ;

l) nullify the whole or any part of any procurement proceeding or award which is in contravention of this Act ;

m) do such other things as are necessary for the efficient performance of its functions under this Act

(2) The Bureau shall serve as the Secretariat for the Council.(3) The Bureau shall, subject to the approval of the Council, have power to:

a) enter into contract or partnership with any company, firm or person which in its opinion will facilitate the discharge of its functions;

b) request for and obtain from any procurement entity information including reports, memoranda and audited accounts, and other information relevant to its functions under this Act; and

c) liaise with relevant bodies or institutions national and international for effective performance of its functions under this Act.

15. (1) The provisions of this Act shall apply to all procurement of goods, works, and services carried out by:

a) the Federal Government of Nigeria and all procurement entities;b) all entities outside the foregoing description which derive at least

35% of the funds appropriated or proposed to be appropriated for

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any type of procurement described in this Act from the Federation share of Consolidated Revenue Fund.

(2) The provisions of this Act shall not apply to the procurement of special goods; works and services involving national defense or national security unless the President's express approval has been first sought and obtained.

16. -(I) Subject to any exemption allowed by this Act, all public procurement shall be conducted: -

a) subject to the prior review thresholds as may from time to time be set by the Bureau pursuant to Section 7(1) (a)-(b);

b) based only on procurement plans supported by prior budgetary appropriations and no procurement proceedings shall be formalized until the procuring entity has ensured that funds are available to meet the obligations and subject to the threshold in the regulations made by the Bureau, has obtained a "Certificate of ' No Objection' to Contract Award" from the Bureau;

c) by open competitive bidding ;d) in a manner which is transparent, timely, equitable for ensuring

accountability and conformity with this Act and regulations deriving there from ;

e) with the aim of achieving value for money and fitness for purpose; f) in a manner which promotes competition, economy and efficiency;

andg) in accordance with the procedures and time-line laid down in this Act

and as may be specified by the Bureau from time to time.(2) Where the Bureau has set prior review thresholds in the procurement regulations, no funds shall be disbursed from the Treasury or Federation Account or any bank account of any procuring entity for any procurement falling above the set thresholds unless the cheque, payments or other form of request for payments is accompanied by a certificate of "No Objection" to an award of contract duly issued by the Bureau.(3) For all cases where the Bureau shall set a prior review threshold. The Bureau shall prescribe by regulation, guidelines and the conditions precedent to the award of Certificate of "No Objection" under this Act.

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(4) Subject to the prior review thresholds as may be set by the Bureau, any procurement purported to be awarded without a "Certificate of ‘No Objection' to Contract Award" duly issued by the Bureau shall be null and void.(5) A supplier, contractor or service provider may be a natural person, a legal person or a combination of the two. Suppliers, contractors or service providers acting jointly are jointly and severally liable for all obligations and or responsibility arising from this Act and the non-performance or improper performance of any contract awarded pursuant to this Act.(6) All bidders in addition to requirements contained in any solicitation documents shall:

a) possess the necessary;i) professional and technical qualifications to carry out particular

procurements ; ii) financial capability ; iii) equipment and other relevant infrastructure ; iv) shall have adequate personnel to perform the obligations of the

procurement contracts. b) possess the legal capacity to enter into the procurement contract;c) not be in receivership, the subject of any form of insolvency or

bankruptcy proceedings or the subject of any form of winding up petition or proceedings;

d) have fulfilled all its obligations to pay taxes, pensions and social security contributions

e) not have any director who has been convicted in any country for any criminal offence relating to fraud or financial impropriety or criminal misrepresentation or falsification off acts relating to any matter;

f) accompany every bid with an affidavit disclosing whether or not any officer of the relevant committees of the procurement entity or Bureau is a former or present director, shareholder or has any pecuniary interest in the bidder and confirm that all information presented in its bid are true and correct in all particulars.

(7) The procuring entity may require a bidder to provide documentary evidence or other information it considers necessary as proof that the bidder is qualified in accordance with this Act and the solicitation documents and for this purpose any such requirements shall apply equally to all bidders.

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(8) Whenever it is established by a procuring entity or the Bureau that any or a combination of the situations set out exist, a bidder may have its bid or tender excluded from any particular procurement proceeding if: -

a) there is verifiable evidence that any supplier, contractor or consultant has given or promised a gift of money or any tangible item, or has promised, offered or given employment or any other benefit, item or a service that can be quantified in monetary terms to a current or former employee of a procuring entity or the Bureau, in an attempt to influence any action, or decision making of any procurement activity;

b) a supplier, contractor or consultant during the last three years prior to the commencement of the procurement proceedings in issue, failed to perform or to provide due care in performance of any public procurement;

c) the bidder is in receivership or is the subject of any type of insolvency proceedings or if being a private company under the Companies and Allied Matters Act, is controlled by a person or persons who are subject to any bankruptcy proceedings or who have been declared bankrupt and or have made any compromises with their creditors within two calendar-years prior to the initiation of the procurement proceeding;

d) the bidder is in arrears regarding payment of due taxes, charges, pensions, or social insurance contributions, unless such bidders have obtained a lawful permits with respect to allowance, difference of such outstanding payments or payment thereof in installments;

e) the bidder has been validly sentence for a crime committed in connection with a procurement proceeding, or any other crime committed to gain financial profit;

f) the bidder has in its management or is in any portion owned by any person that has been validly sentence for a crime committed in connection with a procurement proceeding, or other crime committed to gain financial profit; and

g) the bidder fails to submit a statement regarding its dominating or subsidiary relationships with respect to other parties to the proceedings and persons acting on behalf of the procuring entity participating in same proceeding or whom remains in subordinate relationship with other participants to the proceedings.

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(9) In such cases the procuring entity shall inform the Bureau and person referred to in subsection (8) (a)-(g) of this Section, in writing that the bid or tender in question has been excluded and the grounds for the exclusion and to keep a record of same in the file pertaining to the public procurement proceeding in question.(10) All communications and documents issued by procuring entities and the Bureau shall be in English language.(11) All communications regarding any matter deriving from this Act or proceedings of public procurement shall be in writing or such other form as may be stipulated by the Bureau.(12) Every procuring entity shall maintain both file and electronic records of all procurement proceedings made within each financial year and the procurement records shall be maintained for a period often years from the date of the award.(13) Copies of all procurement records shall be transmitted to the Bureau not later than 3 months after the end of the financial year and shall show:

a) information identifying the procuring entity and the contractors;b) the date of the contract award ;c) the value of the contract; andd) the detailed records of the procurement proceedings.

(14) All unclassified procurement records shall be open to inspection by the public at the cost of copying and certifying the documents plus an administrative charge as may be prescribed from time to time by the Bureau.(15) The criteria stipulated as the basis upon which suppliers or contractors would be evaluated shall not be changed in the course of any procurement proceeding.(16) The burden of proving fulfillment of the requirements for participation in any procurement proceeding shall lie on the supplier or contractor.(17) A contract shall be awarded to the lowest evaluated responsive bid from the bidders substantially responsive to the bid solicitation.(18) Notwithstanding subsection (16) of this Section, the Bureau may refuse to issue a 'Certificate of "No Objection" to Contract Award' on the grounds that the price is excessive.(19) Pursuant to subsection (17) of this Section, the Bureau may direct either that the procurement proceedings be entirely cancelled or that the procuring entity conduct a re-tender.

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(20) Pursuant to subsection (18) of this Section, the Bureau may either direct that the procurement proceedings be entirely cancelled or that the procuring entity conduct a re-tender.(21) The accounting officer of a procuring entity and any officer to whom responsibility is delegated are responsible and accountable for any actions taken or omitted to be taken either in compliance with or in contravention of this Act.(22) The accounting officer of a procuring entity has the responsibility to ensure that the provisions of this Act and the regulations laid down by the Bureau are complied with, and concurrent approval by any Tenders Board shall not absolve the accounting officer from accountability for anything done in contravention of this Act or the regulations laid down hereunder.(23) Procurement and disposal decisions of a procuring entity shall be taken in strict adherence to the provisions of this Act and any regulations as may from time to time be laid down by the Bureau.(24) Persons who have been engaged in preparing for a procurement or part of the proceedings thereof may neither bid for the procurement in question or any part thereof either as main contractor or sub-contractor nor may they cooperate in any manner with bidders in the course of preparing their tenders.(25) A procuring entity shall not request or stipulate that a bidder should engage a particular subcontractor as a requirement for participating in any procurement proceedings.(26) All procurement contracts shall contain provisions for arbitral proceedings as the primary forms of dispute resolution.(27) The values in procurement documents shall be stated in Nigerian currency and where stated in a foreign currency shall be converted to Nigerian currency using the exchange rate of the Central Bank of Nigeria valid on the day of opening a tender or bid.(28) All procurement contracts shall contain warranties for durability of goods, exercise of requisite skills in service provision and use of genuine materials and inputs in execution.

1. (1) There shall be established, a body to be known as the Fiscal Responsibility Commission (in this Act referred to as “the Commission”).

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(2) The Commission shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.

2. (1) For the purpose of performing its functions under this Act, the Commission shall have power to:

a) compel any person or government institution to disclose information relating to public revenues and expenditure; and

b) cause an investigation into whether any person has violated any provisions of this Act.

(2) If the Commission is satisfied that such a person has committed any punishable offence under this Act violated any provisions of this Act, the Commission shall forward a report of the investigation to the Attorney-General of the Federation for possible prosecution;

3. (1) The Commission shall:

a) monitor and enforce the provisions of this Act and by so doing, promote the economic objectives contained in section 16 of the Constitution;

b) disseminate such standard practices including international good practice that will result in greater efficiency in the allocation and management of public expenditure, revenue collection, debt control and transparency in fiscal matters;

c) undertake fiscal and financial studies, analysis and diagnosis and disseminate the result to the general public;

d) make rules for carrying out its functions under this Act; and e) perform any other function consistent with the promotion of the

objectives of this Act.

(2) The Commission shall be independent in performance of its functions.

(3) The provision of Public Officers Protection Act shall apply to the members of the Commission in discharge of their functions under this Act.

48. -(1) The Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely

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disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances.

(2) The National Assembly shall ensure transparency during the preparation and discussion of the Medium-Term Expenditure Framework, Annual Budget and the Appropriation Bill.

49. -(1) The Federal Government shall publish their audited accounts not later than six months following the end of the financial year.

(2) Federal Government shall, not later than two years following the commencement of this Act and thereafter, not later than 7 months following the end of each financial year, consolidate and publish in the mass media, its audited accounts for the previous year.

(3) The publication of general standards for the consolidation of public accounts shall be the responsibility of the office of the Accountant-General of the Federation.

50. The Federal Government through its budget office shall within 30 days after the end of each quarter, publish a summarized report on budget execution in such form as may be prescribed by the Fiscal Responsibility Commission and not later than 6 months after the end of the financial year, a consolidated budget execution report showing implementation against physical and financial performance targets shall be published by the Minister of Finance for submission to the National Assembly and dissemination to the public.

III. Law Prescribes the Code of Conduct for Public Procurement.

E.g. Section 57 of the Public Procurement Act 2007

57. (1) The Bureau shall, with the approval of the Council, stipulate a Code of Conduct for all public officers, suppliers, contractors and service providers with regards to their standards of conduct acceptable in matters involving the procurement and disposal of public assets.(2) The conduct of all persons involved with public procurement, whether as official of the Bureau, a procuring entity, supplier, contractor or service provider

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shall at all times be governed by principles of honesty, accountability, transparency, fairness and equity.(3) All officers of the Bureau, members of Tenders Boards and other persons that may come to act regarding the conduct of public procurements shall subscribe to an oath as approved by Council.(4) All persons in whose hands public funds may be entrusted for whatever purpose should bear in mind that its utilization should be judicious.(5) Where a transaction involves the disposal of assets, principles of honesty, accountability, transparency, fairness and equity shall continue to apply to the same extent as where it involves procurement.(6) These principles shall apply at all times, particularly when:

a) making requisition for or planning of procurements;b) preparing solicitation documents;c) receiving offers in response to any form of solicitation towards a

procurement or disposal;d) evaluating and comparing offers confidentially and in complete neutrality;e) protecting the interest of all parties without fear or favor; andf) obviating all situations likely to render an officer vulnerable to

embarrassment or undue influence.

(7) All public officers shall handle public procurement and disposal of assets by: -

a) ensuring adequate time for preparing offers;b) complying with this Act and all derivative regulations ; andc) receiving strict confidentiality until completion of a contract.

(8) All public officers involved in public procurement and disposal of assets shall maintain the highest standards of ethics in their relationships with persons real or corporate who seek government commerce whether as a bidder, supplier, contractor or service provider by developing transparent, honest and professional relationships with such persons.(9) Every public officer involved directly or indirectly in matters of public procurement and disposal of assets shall:

a) divest himself of any interest or relationships which are actually or potentially inimical or detrimental to the best interest of government and the underlining principles of this Act; and

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b) not engage or participate in any commercial transaction involving the federal government, its ministries, extra-ministerial departments, corporations where his capacity as public officer is likely to confer any unfair advantage - pecuniary or otherwise on him or any person directly related to him.

(10) Any person engaged in the public procurement and disposal of assets who has assumed, or is about to assume, a financial or other business outside business relationship that might involve a conflict of interest, must immediately declare to the authorities any actual or potential interest.(11) Such a declaration shall be given such consideration at the relevant level as is necessary so that, where it is seen that remedial action is taken, a conflict of interest is present. (12) A conflict of interest exists where a person:

a) possesses an interest outside his official duties that materially encroaches on the time or attention which should otherwise be devoted to affairs of government;

b) possesses a direct or indirect interest in or relationship with a bidder, supplier, contractor or service provider that is inherently unethical or that may be implied or constructed to be, or make possible personal gain due to the person's ability to influence dealings;

c) entertains relationships which are unethical, rendering his attitude partial toward the outsider for personal reasons or otherwise inhibit the impartiality of the person's business judgments;

d) places by acts or omissions the procuring entity he represents or the Government in an equivocal, embarrassing or ethically questionable position;

e) entertains relationships compromising the reputation or integrity of the procuring entity he represents or the Government;

f) receives benefits by taking personal advantage of an opportunity that properly belongs to the procuring entity he represents or the Government;

g) creates a source of personal revenue or advantage by using public property which comes into his hands either in course of his work or otherwise; and

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h) discloses confidential information being either the property of his procuring entity, the Government or to a supplier, contractor or service provider to unauthorized persons.

(13) A person involved in the disposal of assets, shall not either by a third party or by himself be interested in any manner in buying directly or indirectly these assets and shall not have or obtain any type of advantage or revenue from the disposal for a period of three years after the disposal.

IV. Law warns of the consequences of non-observance or abuse of due process of law by prescribing for offences and sanctions relating to public procurement. E.g., Section 58 of the PPA Act

58. (1) Any natural person not being a public officer who contravenes any provision of this Act commits an offence and is liable on conviction to a term of imprisonment not less than 5 calendar years but not exceeding 10 calendar years without an option of fine.(2) Any offence in contravention of this Act shall be tried by the Federal High Court.(3) Prosecution of offences under this Act shall be instituted in the name of theFederal Republic of Nigeria by the Attorney-General of the Federation or such other officer of the Federal Ministry of Justice as he may authorize so to do, and in addition, without prejudice to the Constitution of the Federal Republic of Nigeria 1999, he may:

a) after consultation with the Attorney-General of any state of the federation, authorize the Attorney-General or any other officer of the Ministry of Justice of that state; or

b) if the relevant authority so requests, authorize any legal practitioner in Nigeria to undertake such prosecution directly or assist therein.

(4) The following shall also constitute offences under this Act:a) entering or attempting to enter into a collusive agreement, whether

enforceable or not, with a supplier, contractor or consultant where the prices quoted in their respective tenders, proposals or quotations are or would be higher than would have been the case has there not been collusion between the persons concerned;

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b) conducting or attempting to conduct procurement fraud by means of fraudulent and corrupt acts, unlawful influence, undue interest, favor, agreement, bribery or corruption;

c) directly, indirectly or attempting to influence in any manner the procurement process to obtain an unfair advantage in the award of a procurement contract;

d) splitting of tenders to enable the evasion of monetary thresholds set;e) bid-rigging;f) altering any procurement document with intent to influence the

outcome of a tender proceeding; g) uttering or using fake documents or encouraging their use; and h) willful refusal to allow the Bureau or its officers to have access to any

procurement records.(5)Any person who while carrying out his duties as an officer of the Bureau, or any procuring entity who contravenes any provision of this Act commits an offence and is liable on conviction to a cumulative punishment of:

a) a term of imprisonment of not less than 5 calendar years without any option of fine; and

b) summary dismissal from government services.(6) Any legal person that contravenes any provision of this Act commits an offence and is liable on conviction to a cumulative penalty of:

a) debarment from all public procurements for a period not less than 5 calendar years; and

b) a fine equivalent to 25% of the value of the procurement in issue.(7) Where any legal person shall be convicted pursuant to subsection (4) of this Section, every director of the company as listed on its records at the Corporate Affairs Commission shall be guilty of an offence and is liable on conviction to a term of imprisonment not less than 3 calendar years but not exceeding 5 calendar years without an option of fine.(8) An alternation pursuant to subsection 4(f) shall include:

a) insertion of documents such as bid security or tax clearance certificate which were not submitted at bid opening ; and

b) request for clarification in a manner not permitted under this Act.(9) Collusion shall be presumed from a set of acts from which it can be assumed that there was an understanding, implicit, formal or informal, overt or covert

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under which each person involved reasonably expected that the other would adopt a particular course of action which would interfere with the faithful and proper application of the provisions of this Act.(10) Bid-rigging pursuant to subsection 4(e) means an agreement between persons whereby:

a) offers submitted have been pre-arranged between them; orb) their conduct has had the effect of directly or indirectly restricting free and

open competition, distorting the competitiveness of the procurement process and leading to and escalation or increase in costs or loss of value to the national treasury.

(11) For the purposes of the presumption under Section 51 (7) of this Section, consideration shall be given to a suspect's ability to control the procurement proceedings or to control a solicitation or the conditions of the contract in question, whether total or partial.(12) For the purposes of Section 59(5) of this Section, it shall be sufficient to prove that a reasonable business person should have known that his action would result in his company or firm having an undue advantage over other bidders to the detriment of the national treasury.

V. Law Empowers the Bureau of Public Procurement to “Blacklist”/”Debar” Corrupt Business Entities

The legal regulation of public procurement in Nigeria is a recent development. Hitherto, no specific or general legislation governed the processes by which business entities are debarred from participating in government contracts. With the enactment of the Public Procurement Act of 2007, PPA, the legal landscape has changed.

The new regime on “blacklisting” or “debarment” of corrupt business entities from participating in government contracts or bids in Nigeria raises several important issues. Interestingly, the word “blacklist” is not used in the PPA itself. However, it cannot be doubted that the impact is the same regardless of whether the word ‘debarment’ is preferred to “blacklist”.

Under the newly enacted legislation, a Bureau of Public Procurements (bureau) is established. This new governmental agency is vested with the authority to debar or blacklist entities from participating in public procurement. Section 6(1)(e) of the PPA empowers the bureau to “debar any supplier,

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contractor or service provider that contravenes any provision of this Act and regulations made pursuant to the provisions of this Act”.

A significant development under the new regime is that a clear procedure is laid down under section 53 of the Public Procurement Act (PPA) regulating the process of blacklisting or debarring business entities found to have deployed corrupt practices in pursuit of their business interests in Nigeria.

The PPA distinguishes company liability from individual liability. Part xii, section 58(1) of the PPA states that “any natural person not being a public officer who contravenes any provision of this Act commits an offence and is liable on conviction to a term of imprisonment not less than 5 calendar years but not exceeding 10 calendar years without an option of fine.” In respect of companies, section 58 (6) of the PPA states that:

“any legal person than contravenes any provision of this Act commits an offence and is liable on conviction to a cumulative penalty of: Debarment from all public procurements for a period not less than 5 calendar years; and a fine equivalent to 25% of the value of the procurement in issue.”

Section 53(4) of the PPA lays down the procedure for debarring business entities from public procurement. The provision states as follows:

“The Bureau shall, if satisfied that there has been a contravention of this Act or any regulations in relation to procurement proceedings or procurement contracts, take action to rectify the contravention which shall include:

Nullification of the procurement proceedings; Cancellation of the procurement contract; Ratification of anything done in relation to the proceedings; or A declaration consistent with any relevant provisions of this Act.

Section 53 (5) of the PPA requires the bureau to inform the bidder or contractor of the outcome of the investigation. Section 53(5) provides: “on completion of the investigation, the relevant authority shall if an offence is disclosed, take all necessary steps to commence prosecution and inform the Bureau and the procurement entity accordingly, but where no offence is disclosed, the file shall be closed and the Bureau and procuring entity shall be duly informed”.

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By virtue of Section 60 PPA “procurement entity” means any public body engaged in procurement and includes a Ministry, Extra-ministerial office, government agency, parastatals, and corporations. A problematic omission in the PPA is that it makes no provision for a process by which business entities that are debarred or blacklisted could overturn their debarment through an administrative process.

VI. Law Empowers the Anti-Corruption Agencies to Enforce the Law and for Civil Society/Citizens to Monitor Compliance with Due Process of Law by all those Responsible for the Management of Public Funds, Public Procurement Entities and all those in positions of Authority or Power in Nigeria.E.g., Section 14(2)(a-c) and 15(5) of the 1999 Nigerian Constitution.See also section 51 of the Fiscal Responsibility Act 2007 as well as the ICPC and EFCC Act.

14 (2) It is hereby, accordingly, declared that:(a) sovereignty belongs to the people of Nigeria from whom government

through this Constitution derives all its powers and authority;(b) the security and welfare of the people shall be the primary purpose of

government; and(c) the participation by the people in their government shall be ensured in

accordance with the provisions of this Constitution.

15. (5) The State shall abolish all corrupt practices and abuse of power.

51. A person shall have legal capacity to enforce the provisions of this Act by obtaining prerogative orders or other remedies at the Federal High Court, without having to show any special or particular interest.

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4. OBJECTIVE AND BENEFITS OF PUBLIC SECTOR PROCUREMENT REFORM AND THE CHALLENGE OF FIGHTING CORRUPTION, PROMOTING TRANSPARENCY AND ACCOUNTABILITY IN GOVERNANCE AS WELL AS RESPECT FOR THE RULE OF LAW

i. Objective and Benefits of Public Sector Procurement ReformThe clear objective of Public Procurement Reform in Nigeria was and still

is, to reduce the scope of corruption in Public Procurement and to improve the efficiency in the management of Nigeria’s public expenditure.

The Public Procurement Reform aims at using Due Process Mechanism to establish transparent, competitive and fair procurement system, which is integrity driven, encourages spending within budget and ensures speedy delivery of projects, while achieving value for money without sacrificing quantity and standards for the Federal Government of Nigeria.

Benefits of procurement reforms include the following:a) Procurement system will become transparent and create equal access

for bidders of public sector contracts.b) Through efficient and effective management of Nigeria’s economic

resources, all avenues of wastages and leakages in the economy as a result of inefficiency in the ward of Government contracts and procurements would be minimized, thereby increasing Government revenue base.

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

ii. The Challenge of Fighting Corruption, Promoting Accountability and Transparency in Governance/Respect for the Rule of Law.

Fighting corruption is another criterion and challenge of democratic governance in Nigeria. Many African leaders and African States, Nigeria inclusive have been ranked among the most corrupt in the world. The need for concerted action to combat corruption and promote accountability and transparency in governance is principally due to the negative impact of corruption on economic development, democratization and the realization of social and economic rights in Africa. This is consistent with the emerging global consensus that something has to be done to fight corruption.

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Transparency in governance is one surest way of effecting probity in public institutions by requiring public and government institutions and agencies to make a full statutory commitment to achieving transparency in their policies and actions. This would include setting benchmarks, roadmaps and timetables on which evaluation of their efforts could be based.

On the other hand, accountability is essentially the power of political institutions to satisfy the democratic demand for an effective government that respects the people who are the source of its rule. In most democratic theory, accountability is defined in terms of the relationship of the rulers to the ruled, primarily measured through the electoral process and party competition. Accountability also means that there are state agencies and private organizations empowered to oversee government performance and to stop unlawful actions or omissions by other agents of government. Anti-corruption commission, public complaints and national human rights commissions are typical examples of such states institutions.

The Nigerian Constitution, like many other African Constitutions, enshrines an elaborated array of institutions supporting constitutional democracy that serve as a check on political and administrative authority. The efficacy of these institutions is dependent on four factors: - their location and status in the system of governance, whether they have a powerful champion in the governmental system, the unqualified support of the legislature in the exercise of their functions, and the level of their resources. Despite these institutions, the novelty of exercising political power produces major constraints on setting limits on government.

Upholding the rule of law in a democratic society is a necessary condition to establish a just, fair and equitable system of government, where individuals are allowed to express themselves freely and to bring about a change of government should the people so decide periodically as may be provided by law.

In contemporary Africa, the rule of law needs the backcloth of democratic conditions within which to thrive. In Nigeria, however, two democratic experiments in 1963 and 1979 have proved the inability of the Nigerian society to develop a sound and stable political system. This is often exhibited in the form of political maladministration, economic mismanagement, embezzlement of public funds, corrupt enrichment of party men, oppression of political opponents by government in power, massive rigging of elections when they fall due

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accompanied by rioting, murder, arson and general destruction of lives and property. These conditions prevalent in any government cannot be said to foster the rule of law principles.

Democratic leaders would have to work to educate state officials and law enforcement agents about the implications or resultant consequence of abuse of legal power. That it is a threat not only to the existence of the rule of law, but also to the corporate existence of the society. It is, in fact, a betrayal of trust of that power. The solution, of course, lies in the eradication of abuse of legal power. Where this is done, a young or growing democracy is bound to survive and flourish.

As much as anything, African States need time to work with and become habituated to democratic institutions, to shape them to fit their particular cultural and political circumstances, and to allow them to sink deep roots of commitment among all major political players and the public at large. Time itself is an important determinant of institutionalization. Political parties, legislatures, judicial systems, civic organizations, and other key structures of democracy cannot develop institutional capacity, coherence, complexity, adaptability, autonomy, and broad support unless they are permitted to operate continuously without undue interruption.

5. CONCLUSION AND RECOMMENDATIONSIt is evident from the above overview that the successful implementation of the

2007 Public Procurement Act represents a daunting challenge to all Nigerians. However, with determination and collective efforts, the challenges of today can become the reality of tomorrow.

Undoubtedly, the PPA 2007 seeks to regulate the procurement of goods, works, services and construction in the public sector, thereby enhancing probity, accountability and transparency in public sector procurement practices. The Act represents a fairly adequate legal institutional framework and financial mechanism to achieve the laudable goals of government in its efforts to enthrone transparency, accountability and equal access to public sector procurement.

For the nation to reap fully the benefits of the Public Procurement Reform, there is need: -

i. to encourage the Civil Society to re-examine the assumption that the return of democracy should mean an abandonment of engaging the

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government because government has obviously not thought through the partnership even though it holds numerous stakeholders’ meetings with Civil Society Organizations;

ii. for Mr. President to expedite action in constituting and inaugurating the National Procurement Council in accordance with the PPA 2007;

iii. to build consensus among the three tiers of government in order to promote the smooth and effective implementation of the procurement reform consistent with the provisions of section 15 of the PPA 2007;

iv. to organize capacity building and training workshops, seminars and courses (at home and abroad) for the new cadre of Procurement and contracting officers and all those involved in procurement awards.

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REFERENCES 1. Public Procurement Act, No. 14, 20072. Fiscal Responsibility Act, No. 31, 2007.3. The Constitution of the Federal Republic of Nigeria, 1999.4. Ladan M.T., Challenges of democratic consolidation in Nigeria. A paper presented at the

end of the year Annual Conference of the Civil Rights Congress, Kaduna and the Civil Society Alliance. Held at Transcorp Hilton Hotel, Abuja, Nigeria. Thursday, 13 December 2007.

5. Esiemokhai E.O., “The UN Convention Against Corruption” in Legal Developments in the New World Order: - Essays in Honour of Prof. U.O. Umozurike (2009) (ed.) Unegbu M.O. and Okoronye I., at pp. 304-340.

6. Eziokwu S.A., Good Governance: - Theory and Practice (2008): - The Regent Publishing Co. Ltd, Abuja.

7. Lai O. and Akinboye S.O. (ed.) Democracy, Good Governance and Corruption in Nigeria: - 1999-2005.

8. Obasanjo O. (2003) ‘Nigeria: - From Pond of Corruption to Island of Integrity’. Lecture delivered at the 10th Anniversary Celebration of Transparency International, Berlin, Germany.

9. Ekpenhio S.A. (2003) ‘Public Sector Procurement Reforms: - The Nigerian Experience’. A paper presented at the Regional Workshop on Procurement Reforms and Transparency in Government Procurement for Anglophone countries held in Dares-Salam, Tanzania.

10. Wittig W.A. (1999) Building value through Public Procurement: - A focus on Africa. A paper presented at the 9th International Anti-Corruption Conference, held in Durban, South Africa.

11. Ladan M.T., Good Governance and Human Rights Protection in Nigeria (2001). A paper presented at a 3-day National Conference on Democracy and Democratization in Nigeria: - 1999-2001. Organized by the Centre for Democracy, Bayero University, Kano, Nigeria. Jega A. et. al (ed.) at pp. 139-156.

12. Ladan M.T. (2002) Civil Society and Government Relations: - The Ideal. A paper presented at a one-day seminar organized by the Civil Liberties Organization, North-West Zone, held in Kaduna.

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