FG vows crackdown on inflated public contracts

The Federal Government ordered government-owned institutions that use public funds to conduct procurement according to the Public Procurement Act, 2007. The aim is to protect transparency, accountability and value for money. The directive also requires accounting officers to circulate and implement the instruction immediately.

The order targets contract awards made without proper regard to the law. The government cited prices above approved benchmarks, exclusive arrangements that restrict competition and inadequate regulatory oversight. Heads of affected institutions must liaise with the Bureau of Public Procurement for guidance before continuing procurement activities.

The warning is direct: accounting officers who keep awarding contracts outside the Act can face sanctions. The circular does not specify the exact penalties. It makes clear, however, that non-compliance is unacceptable and that responsibility rests with the heads of the institutions involved.

Public procurement means how government institutions purchase goods, services or works using public funds. It includes the steps for planning purchases, inviting or selecting contractors, awarding contracts and overseeing delivery. The Public Procurement Act provides the governing framework for these decisions in the institutions covered by the directive.

Rules matter because public money must be spent openly and responsibly. In this case, the government raised concerns about contract sums above approved pricing benchmarks, exclusive contractor arrangements and missing regulatory oversight. Procurement requirements are designed to make awards more accountable and prevent institutions from bypassing approved procedures.

Nigeria’s directive applies the Act to federal enterprises, corporations, councils, authorities and commissions that use public funds. It also places implementation responsibility on their accounting officers. The government said compliance should help achieve transparency, accountability and value for money, while violations can lead to sanctions.

The directive is broad because it covers every listed federal government-owned enterprise, corporation, council, authority and commission that utilises public funds. It is not limited to one ministry or one type of contract. Each covered institution must align its procurement activity with the Public Procurement Act, 2007.

The circular was addressed to ministers, permanent secretaries, heads of government agencies and parastatals, along with other senior public officials. It also specifically targets the heads of affected institutions because they serve as accounting officers. Those officials must ensure the directive reaches the people responsible for procurement decisions.

The government ordered immediate circulation and strict implementation. It also told accounting officers to contact the Bureau of Public Procurement for guidance. The breadth of the instruction shows that compliance is expected across publicly funded federal institutions, not only agencies already identified as violating the rules.

A contract priced above an approved benchmark can make government pay more than established pricing guidance allows. That reduces the value obtained from public money and can contribute to inflated contract sums. The government specifically linked these practices to contract prices above established benchmarks and other procurement lapses.

Awarding work through exclusive arrangements can restrict competition. The circular described this as creating captive markets for exclusive contractors. With fewer competing bidders or arrangements, institutions may have less pressure to secure reasonable prices and suitable performance. The government also cited significant departures from approved guidelines.

The wider problem is weak control over public purchasing. When agencies award contracts without recourse to the Act, regulatory oversight may be absent or inadequate. The Federal Government said these practices would no longer be tolerated and warned that institutions continuing to violate procurement rules could face sanctions.

Accounting officers are being held responsible because they head the institutions covered by the directive. The circular identifies heads of enterprises, corporations, councils, authorities and commissions as both institutional leaders and accounting officers. That position connects them directly to the systems used to spend public funds and award contracts.

The mechanism is accountability at the point of decision. These officials must ensure procurement follows the Public Procurement Act, circulate the circular and seek guidance from the Bureau of Public Procurement. If contracts continue to be awarded without regard to the law, the accounting officer is the official named in the warning.

The government said any accounting officer who contravenes the directive and continues unlawful awards shall be sanctioned accordingly. The circular does not name specific penalties. It does make clear that responsibility cannot be shifted away from the heads of institutions overseeing procurement.

Nigeria’s Bureau of Public Procurement serves as the guidance point named in the circular. The Secretary to the Government of the Federation instructed accounting officers to liaise with it on implementing procurement regulations. This gives institutions a designated source of advice when applying the Public Procurement Act.

The mechanism is consultation before or during procurement implementation. Institutions that use public funds must follow the Act, while their accounting officers must seek the Bureau’s further guidance. This is especially relevant because the government identified awards made without proper regard to the law and inadequate regulatory oversight.

The article does not state that the Bureau itself will impose the sanctions. Instead, the circular says accounting officers who continue awarding contracts outside the Act shall be sanctioned accordingly. The Bureau’s role described here is to guide compliance, while the Federal Government issues the warning and holds officials accountable.

Transparency means procurement decisions and procedures can be examined. It helps show how a contract was awarded and whether officials followed approved guidelines. Accountability then gives institutions and officers responsibility for those decisions. The Federal Government identified both principles as central to public procurement.

Competition helps by allowing more than one contractor or offer to be considered. That can challenge inflated prices and reduce dependence on exclusive arrangements. Approved benchmarks provide another reference point for judging contract sums. These mechanisms address the problems named in the circular, including captive markets and prices above established benchmarks.

Value for money means public spending should produce a worthwhile result rather than simply approve a contract. The directive says its purpose is to achieve transparency, accountability and value for money. Applying these principles consistently can strengthen oversight and reduce the procurement lapses the government warned against.