All Procurement shall be advertised as follows:
- Invitation to Bid: For all contracts under ICB – use of two national newspapers, one relevant internationally recognized newspaper, official websites of the Procuring Entity and the Agency and the State Procurement Journal.
For all contracts under NCB – use of the Notice Board of the Procuring Entity and the State Procurement Journal
- Request for Quotations – Through direct invitation of at least three quotations from suppliers list. This shall be conducted on rational basis to ensure equal opportunities. All statements of requirements shall be distributed to suppliers in writing and all quotations from suppliers shall be submitted in writing.
The principle is that contractors should be qualified and capable of carrying out their responsibilities under the contract. Large contracts should therefore only be awarded to bidders with the financial, equipment and staff resources to carry out the work but there are smaller contracts which would be suitable for newly established firms and small and medium sized enterprises to compete.
An officer can opt to return to his original cadre, provided the request is made within the transitional period (2012-2014)
The Agency may conduct an investigation to prevent or detect a contravention of the LASPPA Law and may cancel a Procurement contract if it is satisfied that there has been a contravention of the provisions of the Law or its Regulations.
The Regulations will provide for direct labour to be used in appropriate circumstances.
After the transition period (2014), the normal rules and procedure for conversion shall apply to any application for conversion to Procurement Cadre.
The Agency is empowered to blacklist or ban any Supplier, Contractor or Consultant that contravenes any provision of the Public Procurement Law and Regulations made pursuant to the Law. There are also offences relating to contraventions of the Law that may lead to firms being barred from all public Procurement for a period of not less than 10 years and further punishment for the individual Directors and Partners.
Conflict of interest is carefully defined in the Law and is made a serious offence. The Agency is empowered to investigate offences and offenders may be prosecuted.
The fair and transparent procedures in the Law are designed to encourage competition among suppliers who are qualified to perform the contract and who put in a responsive bid. Greater competition should lead to value for money.
The Agency shall encourage procuring entities through proper planning of their requirements to begin the Procurement process in sufficient time for goods, works and services to be made available by the time required. The Law also provides that the period between the opening of bids and the award of contract shall not exceed 3 months.
There is provision for emergency Procurement where the State is either seriously threatened by or actually confronted with a disaster, catastrophe, war, insurrection or an Act of God or where the condition or quality of goods, equipment, building or publicly-owned capital goods may seriously deteriorate unless urgent action is taken. In these circumstances, a procuring entity may initiate direct contracting.
It is expected that the new Procurement system will make for more efficient conduct of tendering managed by a professional Procurement cadre, with fewer opportunities for corruption and malpractices, so that contracts are awarded to the supplier offering best value.
Genuine medical emergencies will be covered by the emergency provisions mentioned above. Most medical supplies are required for regular medical services and should be procured through normal arrangements,
All contracts to be procured through National Competitive Bidding (NCB) and contracts below specified thresholds are reserved for local contractors. However, where a foreign bidder indicates interest in NCB, it shall not be included but its bid shall be subjected to the application of a margin of preference in favour of local bidders. Margin of preference may also apply to tenders under all International Competitive Bidding (ICB). In all situations, the limit and formulae for computation of margins of preference to be set by the Procurement Agency, shall be indicated in the Bid Document.
Open competitive bidding must be used when the value of the Procurement exceeds the threshold of ₦100 million. There are separate procedures for lower-value Procurements but these should also be carried out fairly according to rules.
It is the function of the Procurement Officer to carry out the Procurement processes. Finance & Administration Dept has other administrative duties to perform. Procurement Planning Committee must be put in place in all MDAs, composition of which, should include a representative from the Finance & Administration Dept.
An audit of the Procurement module in the Oracle suite is being carried out to ascertain its suitability and adaptability. The outcome will determine to what extent it can be incorporated in the emerging Procurement system.
The Law recognises the need to put adequate and efficient structures in place in order to ensure a seamless implementation. This would include sensitisation programs for all Stakeholders, capacity building for about 600 Procurement Officers service-wide (including the LGAs/LCDAs) and the setting up of the Regulatory Agency (LASPPA). Accordingly, the Law provides for up to two years for a gradual wind-down and transitioning between the outgoing and emerging systems of Procurement. During this transitioning, partial implementation is expected to commence in 2013 and full implementation by 2014. Before then, necessary regulations to guide implementation would have been released.
The Procurement Officer primarily assists the Accounting Officer to drive and facilitate the Procurement process in accordance with the provisions of the Law. In summary and by virtue of his/her training, he/she ensures that each stage of the Procurement process from initiation to contract award is carried out according to the requirements of the Law.
Civil society has a role in monitoring performance to ensure that it is fair and transparent and carried out in accordance with the Law. It is intended that one member of the Governing Board of the Agency should be from a Civil Society Organization. CSOs and other interested members of the public may attend bid openings.
DFID/SPARC and the World Bank provide support for the Procurement reforms in Lagos State through the provision of Consultants to offer expert advice. Their role does not impede on the decision-taking authority of Lagos State Government Organizations.
The Accounting Officer is charged with line supervision of the conduct of all Procurement processes. He/she has overall responsibility for the planning and organization of tenders, evaluation of tenders and execution of all Procurement, as well as certain specific responsibilities that are set out in Section 29 of the Law.
LASPPA oversees the Procurement system and issues a Certificate of Compliance prior to the award of contracts above a threshold.
The first step should be to seek amicable settlement, without compromising important requirements under the contract or allowing the contractor to reduce the quality of the goods, works or services provided. Contracts should also include an arbitration clause. Legal action may sometimes be necessary but should be taken only as a last resort when other steps have failed. Contractors who fail to execute contracts satisfactorily and to meet contractual obligations may be blacklisted by the Agency.
The Lagos State Public Procurement Law is based on the UNCITRAL model which is a properly regulated Procurement system benchmark on international best practice. The model draws from different legal cultures; balances the interest of foreign and domestic bidders; promotes transparency and allows great flexibility in the use of the provisions of the Law. The Law also established the Lagos State Public Procurement Agency and its Governing Board to formulate policies and guidelines for the application of the Law and ensure compliance by all public bodies.
Public Procurement is the process whereby public sector organisations acquire goods, services and works from third parties. The process should be efficient, transparent, and competitive as much as feasible, in order to attain best value for public expenditure and inspire public confidence, considering the fact that the public are the major stakeholders of Government.
Private sector Procurement (generally called Purchasing and Supply) also seeks to obtain goods and services at best value but, unlike a public sector organization, is not obliged to provide equal treatment to all its citizens in the business community. Accordingly, it is common in the private sector to construct longer-term relationships with a key group of suppliers and contractors and to seek efficiencies throughout the supply chain.
In the old system, Procurement is centralised with contract award decisions taken by a central Tenders Board. Operations are guided by Financial Regulations / Treasury Circulars on public expenditure as issued by the Ministry of Finance. Over time and as Procurement expanded the FR/TC became grossly inadequate, giving room to discretionary application and promoting corruption
In the new system, Procurement is decentralised but with a central regulation through a Procurement Law. Responsibility for compliance rests with the Accounting Officer of the MDA and enforcement through a specialised Regulatory Agency. The new system is robust and effective and gives a step by step approach for each category of Procurement through the use of various standard documents and manuals
The Planning, Research and Statistics Unit will be one of the offices represented on the Procurement Planning Committee, to which the Procurement Office will be the Secretary. Planning, Research and Statistics will also support the Procurement Office in market research and surveys of costs and prices.
The two offices are separate and perform different functions. However, the Office of PPP as a procuring entity is expected to comply with the Procurement Law where it applies to its functions.
Each cadre has its own responsibility and job description and is to work together as a team. Each should have representatives in the Procurement Planning Committee of the MDA
Procuring entities should make use of the assistance of the Lagos State Bureau of Statistics in estimating costs and determining whether a tendered price is fair.
The size and structure depends on the category of the MDA in terms of budget size and nature. Key spend MDAs like Ministries of Works and Infrastructure, Health, Environment, Education, Housing, Agriculture etc will have full-fledge Departments while smaller MDAs could operate a Procurement Unit. In any case, the Procurement Office reports directly to the Accounting Officer.
The bidder who offers the lowest priced bid among bidders who are qualified to perform the contract and whose bids meets the specifications in the bid document is the lowest evaluated responsive bidder.
The Procurement Department is responsible for conducting market survey for all items to be procured under Goods category but may be supported by the User Department if the item is highly specialised or technical in nature. For procurement of Works, the Engineering Dept/Ministry of Works & Infrastructure is responsible for vetting the prices while the estimated fee for Consultancy Services is built up from the Terms of Reference (TOR) drafted by the User Department. Estimated prices should be set out in the Procurement plan which is endorsed by the Procurement Planning Committee made up of broad representation within the MDA. Final approval with respect to the operational feasibility of the procurement plan shall be given by the Agency.
The procuring entity may reject any bid and cancel Procurement proceedings without incurring any liability to bidders if the lowest evaluated bid does not offer value for money. Moreover, the Agency may refuse to endorse the award of a contract on the grounds that the price is manifestly excessive. In these circumstances the procuring entity should begin the Procurement process again with amended specifications that are more in line with what the market can provide and its budgetary limitations. If there has been reasonable competition, the procuring entity should consider whether the in-house estimate is realistic.
For a two-year transitional period, the State Tenders Board will continue to be the approving authority for the award of contracts within a benchmark to be set by the Agency, after which each Ministry, Extra-Ministerial entity, Government Agency, Parastatals or Corporation will be expected to have set up its own Tenders Board.
Ministerial Tender Boards will be the approving authority for contracts awarded by that Ministry, though contracts above a threshold will also require a Certificate of Compliance to be issued by LASPPA.
The Lagos State Public Procurement Agency is empowered by law to maintain a database of contractors and service providers and to describe their classifications and categorizations. However, each Procuring Entity is expected to maintain a registered supplier list drawn from the Procurement Agency’s master list for their regular procurement and from which ‘Request for Quotations’ (RfQ) should be involved.
The appointment of the Governing Board will provide oversight of the actions of the Agency staff to ensure that they carry out their responsibilities impartially and in accordance with the Law.
The MDAs will carry out all their own Procurements, subject to a Certificate of Compliance being issued by LASPPA.