A Review of the Nigerian Energy Industry

Nigeria insists no contract variation beyond 15%

BPP-logo04 November 2014, Abuja – In line with international best practices, variation and augmentations to contracts more than 15 per cent are unacceptable, the Federal Government has said.

The directive was issued in the latest procurement journal released by the Bureau of Public Procurement, BPP to all procurement entities; including; ministries; departments and agencies of government.

According to the BPP, the idea is to ensure that all the relevant entities involved in the procurement of contracts minimize the resource to variation.

Part of the steps outlined by the agency to be observed in varying all federal government contract include: undertaking proper needs assessments to determine scope of projects, and facilitate the determination of price-responsiveness through market survey; ensure that contracts are awarded based not on preliminary designs, but on final engineering designs to prevent cases of inadequate quantities in bill provisions.; ensuring that ongoing contracts are provided for under relevant appropriations and effect prompt payment for contracts executed, goods supplied and services provided according to agreed payment schedule.

BPP said, the directive became necessary as it was in conformity with the recent policy of the federal government on Nigeria that any application for variation requiring more than 15 per cent of the original cost of any contract should no longer be entertained.

However, where variation become inevitable, BPP said all such contracts requiring variations should be submitted to the BPP for review and issuance of due process certificate of ‘No Objection’, to facilitate their approvals by the appropriate tenders’ boards.
*Emmanuel Elebeke – Vanguard

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