BPP blocks inflated contracts, saves FG N1.4trn in 18 months
*Contractors now seek price benchmarks before bidding — DG
By Babajide Komolafe
The Bureau of Public Procurement, BPP, has saved the Federal Government about N1.4 trillion in 18 months by blocking inflated contract prices through the introduction of price intelligence and benchmarking.
Director-General of BPP, Dr. Adebowale Adedokun, disclosed this yesterday in Lagos, saying the reforms had also forced contractors to seek the agency’s price benchmarks before submitting bids.
He spoke during a media interview on the sidelines of the public procurement capacity-building workshop for Senior Management and Executive Staff that the Nigeria Deposit Insurance Corporation (NDIC) organized with the Bureau.
He said: “At the advent of the procurement reforms that we embarked on about two years ago, one of the things that we introduced was price intelligence and benchmarking. That had not been there before.
“What that department does is to ensure that the cost of projects is verified and checked against fair pricing standards all over the world. We have professionals trained in how to cost projects.
“So, if a government agency prices a project and it comes to the BPP, we benchmark it. Through benchmarking, we can arrive at what we consider a fair price for that project.
“That is why we are saying that we are beginning to see fair pricing across government agencies.”
According to him, contractors who previously quoted excessive prices are now changing their approach because the BPP refuses to approve inflated costs.
“Even contractors today, because in the last two years we have denied approvals when we see that costs are high, have tried it over time.
“They found out that we are refusing to budge on the price that we feel is fair. Now, they are the ones asking us: ‘Tell us what the range is so that we don’t go against your law,’ because they know that we are going to turn them back.
“You can see that in the bids we are getting today, people are dropping the way they frivolously quote for projects because they know that BPP will not agree, because of this benchmarking and the price intelligence that we have introduced.”
Adedokun said the savings remain with the government and can be deployed to other developmental projects.
“It is only what is approved that will be allowed to be utilized, while the difference is what we call cost savings. The government can still use it to do other developmental projects.
“Within just six or seven months of the year, I think we have saved N400 billion through price intelligence. For last year alone, we were able to save N1.1 trillion through price intelligence.”
He added that the reforms were also driving greater accountability, technical prudence and improved quality in government projects.
“The most important thing is the awareness that has been brought into the system. The technical prudence that has been introduced is beginning to give the government not only savings, but also the ability to demand that contractors do a good job.”
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