The federal government has set a new threshold for approval of projects by the ministerial tenders board. The ministerial tenders board can now approve projects of above N30 million and not more than N1.5billion.
This new threshold raises a question about accountability and transparency of these agencies, but could also create room for efficiency and to solve problems associated with bureaucracy in project implementation.
Previously, the MDAs could only approve N5 million to N100 million and parastatals N10 million to N100 million for goods. For works projects, MDAs were limited to projects below N30 million.
However, with the new benchmark, an increase of about 200% over the previous, MDAs can now approve goods projects from N20 million to N300 million and N30 million to N1.5 billion for works projects.
These new thresholds essentially mean they can be award contracts without following BPP requirements.
The aim of the public procurement procedure by the Bureau of Public Procurement is to ensure accountability, transparency, and probity in the procurement process. There are nine steps in the public procurement procedures that contractors with projects over 300 million had to go through before this new threshold was introduced.
The threshold approval would accelerate the award of projects without having to go through these steps.
Public procurement is one of the most vulnerable government activities to corruption. The new threshold approved for ministerial boards would have an effect on transparency and accountability now that projects that fit within this threshold would not follow the Bureau of Public Procurements guidelines.
Events in the past have shown how in similar situations, where contract awards were done outside of BPP guidelines, controversies have followed. A report by
Dataphyte, revealed how MDAs’ direct award of COVID procurement contracts violated section 43 of the public procurement act of 2007.
However, this new threshold also has some positives. The threshold approval could accelerate development and generate jobs since the ministries do not have to go through the rigorous processes of approval, it could take less time to carry out projects and there might be swifter delivery. On the other hand, this could also promote corruption since there might be no transparency and accountability.
The recently approved 2022 budget has 509 new projects out of 525 projects for goods that fall under the new benchmark. These 509 projects will cost N22.24 billion for which the MDAs have the power to award to vendors.
Likewise, works projects in the budget that fall under this new threshold for approval are 2,544 out of 2,577 new projects. These projects are worth N307.14 billion.
Thus, the MDAs are now authorized to directly award contracts worth N329.38 billion in total. If these projects are well implemented, then the MDAs will reap from the new threshold and the benefits of direct award of contracts. However, the very real danger of adding to the long list of corrupt practices, if these projects are not well implemented and monies are not properly accounted for, remains.