The Bureau of Public Procurement (BPP) says the Federal Government saved about N1.1 trillion within a year through a newly established Price Intelligence Unit.
Dr Adebowale Adedokun, Director-General(D-G), BPP, disclosed this in an interview with the News Agency of Nigeria(NAN) in Abuja on Sunday.
Adedokun said that the unit benchmarked project costs against national and global prices.
According to him, before the reforms, many government agencies obtained “blanket approvals’’ from the BPP and later determined project costs without further scrutiny.
The D-G said the practice created wide disparities in contract pricing across Ministries, Departments and Agencies (MDAs).
“So what I did was to establish a unit called Price Intelligence Unit made up of young professionals in quantity surveying, architecture, engineering and other numeric-based professions.
“What they do is benchmarking using global and national prices,” he said.
Adedokun explained that the unit developed a data bank of unit rates for projects across the country, taking into account inflation and regional price differences.
“For instance, the cost of buying cement in the South-South is not the same as in the North-Central, so we build rates and benchmark accordingly,” he said.
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He said under the new system, all project costs must undergo evaluation by the Price Intelligence Unit before approval.
“Before, agencies got no-objection approvals and later determined the costs themselves without reverting to BPP.
“I stopped that process and insisted that before any project moves forward, we must evaluate the actual cost.
“In many cases, we discovered disparities between what agencies intended to award and what our market survey showed as the realistic cost, including profit margin.”
The D-G said the cumulative difference between proposed costs and benchmarked prices accounted for the N1.1 trillion savings recorded within one year.
He added that some agencies had already returned to seek approval to deploy part of the saved funds for additional projects.
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“Nigeria gained in two ways. We saved public funds and also increased the number of projects and items the government could execute with the same resources.
“That is value for money,” he said.
On concerns that cost-cutting could compromise project quality, Adedokun insisted that quality remained a major requirement in public procurement.
“Quality is the main ingredient of procurement.
“If we discover deliberate compromise on quality or pricing, we forward such cases to the EFCC and ICPC,” he said.
The D-G, however, admitted that weak monitoring and evaluation had contributed to abandoned and substandard projects in the past.
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According to him, President Bola Tinubu has directed the institutionalisation of a comprehensive monitoring and evaluation framework for procurement projects nationwide.
Adedokun said the new approach would strengthen accountability among professionals such as engineers, architects and builders involved in project supervision.
“If a building collapses after professionals certified it, we will hold them accountable through their professional bodies.
“We must begin to sanction bad behaviour,” he said.
The BPP boss also dismissed the perception that government contracts were awarded solely on the basis of the lowest bid.
“We do not award contracts based on the lowest price. We award based on the lowest evaluated responsive bid.
“That means we combine technical competence with competitive pricing,” he said.
He explained that contractors quoting unrealistical low prices for critical project components were often disqualified to avoid poor quality execution.
“If you are going to build a 10-storey building and you say you will buy one bag of cement for N5,000 when the market price is about N12,000, it already tells you the contractor is likely going to give you a bad job.
“In such cases, we reject the bid because the contractor is likely to deliver substandard work.”
The D-G, however, noted that some contractors were allowed to justify lower pricing where they had existing stock purchased before market price increased, provided they agreed in writing not to request contract variation later.
Adedokun added that in some situations, BPP had also reviewed upward contract prices considered too low to a competitive price to ensure quality delivery.
(NAN)
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