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