A couple of weeks ago, the Minister of Information and Communications, Prof. Akunyili gave a press audience where she urged the Federal House of Representative Committee on Information and Communications to reprobe the N8.4bn NTA Outside Broadcasting Vans contract that was probed by the Senate in June 2009 where she appeared and was subsequently indicted by the Senate Committee.

This recent call by the Minister for some of us implies so many things, including that she has no confidence in the earlier probe, therefore asking that her name be cleared from the mess involving her Ministry. Her claim that she was decieved by getting involved in the contract also dismissed an earlier Report submitted on the issue.

This latest Report therefore is an enhanced version of the earlier Report, with more information to analyse as my contribution in the contract saga. It is also to discourage the House of Representative Committee from wasting another round of monies for investigations and Public Hearing giving the fact that Nigerians have enough facts from the first probed to give a verdict.

Mohammed Bougei Attah

Managing Editor, NGO Network

Kaduna

AN INDEPENDENT REPORT IN RESPECT OF THE UNRESOLVED N8.4BN NTA CONTRACT AWARD SAGA

Prepared by

Mohammed Bougei Attah

Managing Editor, NGO Network

A GENERAL INTEREST MAGAZINE MONITORING PUBLIC PROCUREMENT CORRUPTION IN NIGERIA

June 28, 2010

KADUNA, NIGERIA

AN INDEPENDENT REPORT

A.                  INTRODUCTION

While reading the Nation Newspaper of 25th June 2010, I discovered an item on page 3 where the Hon Minister of Information and Communications, Prof. Dora Akunyili, has requested the House Committee on Information and Communication to probe the N8.4bn NTA Contract Saga. Similar news item was relayed in three other dailies of that day.

The above naturally caught my attention, because in this era of ‘PROBES WITHOUT RESULTS’, Nigerians have a duty under the law to challenge these excesses of public office holders and make them accountable for their crime against the people by putting their claims to test. I have therefore prepared this report in response to Prof. Akunyili’s request that a probe into the contract failure by the House of Representatives will help to clear her name, and to ensure that more public funds are not spent by the House of Representatives to investigate an issue whose facts are already clear based on the previous investigation carried out by the Senate without any report or indictment.

The incident that took place on the floor of the Senate in the National Assembly of June of last year is still very fresh in our minds. The Senate Committee on Information had probed this contract award but till date, Nigerians are yet to be informed of the outcome of that exercise several months later. This incident took place some five months before the revokedN64.3bn Second Abuja Airport Runway Contract controversies which the Federal House of Representatives probed and presented report upon. I wish to commend the House Committee on Aviation for their role, as part of their oversight functions that led to the cancellation of the Airport Runway contract.

Two things crossed my mind on reading Prof. Akunyili’s statement; one is that she had demonstrated lack of confidence in the Senate by calling on the House to probe the same contract award that the Senate probed some months earlier with staggering corruption revelations, yet there is no report/result to date that will inform Nigerians on the role of the Minister. Two, Prof. Akunyili may have a grouse to settle with some high level public officers; otherwise, there were enough reports then to proceed with the trial of those involved in themisprocurement.

On June 26, 2009, I had submitted a petition to the Senate President through the Chairman of the Senate Committee on Information and Media, Senator Ayogu Eze. My grouse was the misrepresentation of the thinking of Nigerians and the evaluation report of the Public Hearing by Sen. Ayogu, Chair of the Committee when he wrongly apologized to the DirectorGeneral of the Bureau of Public Procurement (BPP), one of the principal actors in the controversies, for inviting them before the Panel knowing after several revelations that ‘they are indeed saving Nigeria from international shame’

In providing this comprehensive but Independent Report on the NTA Contract Award therefore, it is very supportive to thank Prof. Akunyili for providing the platform again for the engagement of the issue. Most importantly, she has proved to the world her dissatisfaction with the outcome of the previous probe by requesting for a reopening of the case. This Report therefore will reflect the content of the previous Memo while detailing clause by clause analysis of the events, issues and proceedings on the contract.

BACKGROUND TO THE REPORT

The NTA Contract Saga as it is now known began in June 16, 2009 with a public hearing by the Senate over an N8.4bn contract awarded by NTA which the bulk of the outstanding sum was smuggled into the 2010 Appropriation Bill, as the personnel in the Ministry of Information and Communications defends their 2010 budget before the Senate Committee on Information and Media with the oversight responsibility. The controversies evolve around the upgrading of some OB Vans, in lieu of the Under-17 World Cup. The Vans, eight (8) in number are currently being held by a firm named WTS in London , and would not release them until the balance of money paid or a government guaranty is issued. The repairs on the eight OB Vans was said to have been completed four months ago (now 10 months) with a 20% advance payment as part payment of a counter-part funding agreement with the Ministry and already paid to the contractor by NTA from their internally generated revenue. 

During the Public Hearing conducted by the Senate Committee, Prof. Akunyili had stated categorically that the contract was not awarded by her; rather she only received three names of contractors forwarded to her by the NTA (Director General?) which she also forwarded to the President/Federal Executive Council (FEC) for approval.Further she claimed at that time (2009) that the planning of the contract started about two years ago (that is 2007) before her appointment as Minister, though concluded under administration, and that  she is ignorant of the technicalities involved in the procurement processes and therefore failed to participate in the  award of the contract.

It is a common knowledge that ignorance is not an excuse in law, to accept the above statement and put them as facts before a court of competent jurisdiction is to commit her to the fact that she is ignorant of public office procedures and particularly Procurement Procedures, which she has been part of since July 2007. The first capital error of Prof. Akunyili is that in procurement implementation under Section 19 and 22(5) of the Public Procurement Act (PPA), no one contract is awarded to three contractors at the same time by the Tenders Board with the approval of the Chief Accounting Officer. But Prof. Akunyili shocked Nigerians when she confessed that she forwarded three contractors to the President/FEC. Was it to commit the President/FEC to award the contract and also  approve/give consent for implementation? However the Hon Minister may be excused from this blunder on one ground. The late President Alhaji Umaru Musa Yar’adua had rejected the Memo from Prof. Akunyili and refused to give approval for implementation on realizing that the memo presented to him by Prof Akunyili was not tidy and that it was not his job to award contracts but only to approve/give consent. However, Akunyili still needs to answer many questions before she can be cleared as she requested in her recent request for the reopening of this probe in that publication. This will suffice later in the Report.

The questions that follow the above statement immediately are, who are these three contractors forwarded to the late President by Prof Akunyili that he rejected? Why did Prof. Akunyili failed to refer same to the Bureau of Public Procurement (BPP) that has the statutory function of contract audit and issuance of ‘No Objection Certificate’ for action before sending the three names to the President or return same to the NTA Tenders Board through the DG after noticing that the DG of NTA forwarded names of three contractors to her against the requirement of the law in the PPA 2007? Here, it is right to say the late President; Umaru Musa Yar’adua acted within the law to have refused to give assent and referred the matter to BPP who is saddled with the responsibility of auditing and rectifying all the anomalies. Again to our dismay, instead of auditing and rectifying the anomalies in the contract as requested/forwarded by the President, BPP completed their procurement audit by demonstrating not only lack of competence but evidences of collusion in the contract award  by failing to order for fresh bidding as required under the circumstance.

It is on record that while responding to the above charges before the Senate Committee, the Director General of the Bureau, Engr. Emeka Ezeh admitted on the floor of the Senate, before the nation’s media crew of print and electronic that the President sent the details of the three contractors to him for audit/review. Therefore in this chain of contract awardprocess, the bus stop was now at Engr. Ezeh’s door step. According to Ezeh, on analyzing the contract documents he found out there were errors, which included that the project (contract) was not appropriated for, neither was it advertised for prospective bidders as required by law in Section 24 of the PPA. As a follow up to this, Engr. Ezeh said, “I wrote the Director General (DG) of NTA, Mall Usman Aliyu Magawata and pointed out the errors, but the NTA DG (Prof Akunyili to confirm if this letter passed through her) replied that they are satisfied with the selected bidders as they can match any other competitors if advertised”.  At this stage, it may be said that the DG’s of NTA and BPP went into collusive partnership and bypassed the Minister in the contract award decision, but this is only when Prof. Akunyili can proof that these letters/decisions bypassed her.

Based on the response from Mall Magawata,(DG of NTA) Engr. Ezeh (DG of BPP) informed us that he decided to introduce a ‘Damage Control Mechanism (DCM)’ and then BPP awarded the contract to WTS, one of the three contractors forwarded to him by the President, on the groundsthat WTS is the best of the three contractors because with only 20% down payment on the total sum of N8.4bn, WTS will give reasonable moratorium to the NTA Network Stations before the balance of 80% is paid. Further he claimed that the contractor showed incontrovertible evidence of its ability to fund the project and has agreed that the balance of the money be spread over a period of 24 months, and as such he concluded that “the offer is too good to refuse”

What a scenario! What a billion Dollar movie scene! From a layman’s view, the above scenes appear perfect, the DCM has indeed worked and the Bureau (or the DG) has saved Nigeria (government) money according to Senator Ayogu Eze. There are however many questions that beg for answers here. Let us begin with the first as our common knowledge permits. If Engr. Ezeh’s intervention was indeed a damage control, why then are we having this problem and the Senate Committee is concerned about the probe and now Prof Akunyili requiring her name to be cleared?  How come the OB Vans are now seized overseas at the detriment of Nigerians and our National image? And locating this within the ambit of the law, the next question is, was the process of awarding the contract by NTA  fraudulent as stated by Engr. Ezeh during the investigations? If the answer is yes, then the next question is why did Engr. Ezeaward the contract instead of returning same to the procuring entity (NTA Tenders Board) as required by law? The grey area that requires answers and will probably provide the solution to the role of Prof. Akunyili is, whether she was involved in thesecond round of submission of the award  made by BPP and NTA to the President for assent? Or, as she now wishes Nigeria to believe, did Engr. Eze and Alh. Magawata alone submit the award to the President? Or was the contract awarded without further assent as required by law that certain threshold limits require the approval of the President/FEC? Unfortunately the Senate Committee failed to ask these major questions that would have exposed the truth.

The answers to the above questions are simple. In the foregoing circumstances, the Bureau under Engr. Ezeh did not only become an independent statutory player (referee)  but also a  major party in bid Technical and Financial Evaluation (TFE) in the contract award, a responsibility strictly reserved for procuring entities . In essence, he is now acting as a procuring entity instead of an independent umpire that should adjudicate on the matter when and if there is a dispute. He merely removed his uniform as a referee and became a player with Jersey No. 10. The next action is to score a goal and he did it! The late President acted in line with the rule of law whenhe refused to award and approve the implementation of the award of the contract and forwarded the names of the contractors to the Bureau for Audit/ review, which in procurement parlance is to investigate and recommend corrective measures. Since the Minister, Prof. Akunyili, failed to forward same to the Bureau before going to the President, the DG, Engr. Ezeh should know far more than anyone that the procedure under the law is to forward same to the procuring entity to restart the process, or cause another action under the law.

By selecting one of the contractors forwarded to Engr. Ezeh, which he described as ‘Damage Control’, knowing that the award failed due process makes him a major party in themisprocurement dispute. The invitation of Engr. Ezeh by the Senate Committee to explain his role in the illegality, instead of requesting them to provide the Senate with their independent Audit Report on the dispute to assist the Senate in their constitutional  investigation  is an indictment on the DG and a confirmation of suspicion of collusive act. For the benefit of doubt, Section 53 of the Act establishing the Bureau empowers it to review and recommend for investigation to any relevant authority on any matter related to the conduct of procurement proceedings by procuring entities or the conclusion or operation of a procurement contract, if it considers that a criminal investigation is necessary to detect or prevent an infraction of the law

In any procurement dispute, the BPP is statutory umpire or what you call a quasi-administrativ e court of first jurisdiction whose pronouncements can only be challenged in the Federal High Court on appeal basis. By involving himself in the direct selection and award of the illegal contract makes him the first lawbreaker under the Act in review. The implications are that Engr. Ezeh is now a party to the award of contract and therefore lacks the legal power and moral justification to perform the procurement regulatory or oversights function, but answerable to the criminal intention therein.

Review of the Issue

The film show as it occurred on the floor of the National Assembly is just a new addition to the accumulated investigations that have not seen the light of the day. To prove that the Legislators are true representatives of the people is to forward issues of criminal intentions or corruption to the anti-corruption agencies like the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and other Related Offences Commission (ICPC) and others that have the capacity for criminal investigations and possible prosecutions. The anti-corruption organs will also demonstrate their sincerity by inviting independent expert opinions or witnesses where interpretations are required. Until this is done, Nigeria will continue to live in sorrows arising from the behind-the-scene activities of our leaders. 

My submission therefore as in the previous case is that civil society organizations (CSOs) and indeed Nigerians are watching to see the outcome of the investigations to be carried out by the House of Representatives (if any) to know if this will die off like the one conducted by the Senate for which no report has been produced to date. 

As maintained in many of my earlier submissions, including the Independent Report on the cancelled N6.4bn Second Abuja Airport Runway Contract, what Nigeria needs most urgently and which the President or his cabinet members should adhere to and help us get out of the public procurement corruption is the immediate constitution and inauguration of the National Council on Public Procurement (NCPP).  

To provide useful analysis of the whole scenario and support the claims above, it will be helpful to review the statements and actions of each party, one after the other. This I have no doubt will avail even a lay man an understanding of the entire process and the criminal marriage that takes place daily in our country. Though this is just one of the frauds committed that the perpetrators often get away, it is helpful to put it on record for posterity.

B.            SUMMARY OF FINDINGS AND RECOMMENDATIONS WITH RESPECT TO MAJOR CONTRACT PERFORMANCE INDICATORS.

To provide a professional review of the findings, the Report have been classified into Leading, Coincidence and Lagging(LCL) Procurement Performance Indicators (PPI) as practiced by the Chartered Institute of Purchasing and Supply Management of Nigeria and internationally accepted as contract performance indicators:

LEADING PUBLIC PROCUREMENT PERFORMANCE INDICATIORS (OCCURS BEFORE CONTRACT FAILURE)              

1          Absence of the National Council on Public Procurement and a properly constituted Bureau of Public Procurement in accordance with Sections 1, 7, 8 and 16(1) of the Public Procurement Act 2007 and Section 11(9) of the Chartered Institute of Purchasing and Supply Management Act 2007

The combined effect of the absence of the National Council on Public Procurement (NCPP) that is saddled with the statutory responsibility to approve contract thresholds in Nigeria and in the three arms of Government in accordance with Section 1 and 2 of the Public Procurement Act and the appointment of the Director General of the Bureau of Public Procurement (BPP) without following the procedure set by law in section 7 of the Public Procurement Act and section 11(9) of the Chartered Institute of Purchasing and Supply Management Act 2007 and section 16(1) (b) and 16(4) of the Public Procurement Act 2007 (Fundamental principles for Procurement) is a pointer to the fact that the NTA Contract and all other contracts awarded in Nigeria since June 2007 are null and void, of no effect and illegal and as long as action is not taken to address this lack of statutory responsibility, the contract award illegality will continue .   

2.      Fraudulent Issuance of ‘‘No Objection Certificate’’ by the Bureau of Public Procurement for the award and subsequent approval of the N8.4billion NTA Contract by the President/Federal Executive Council.

There is evidence of fraudulent award and issuance of ‘‘No Objection Certificate”  to NTA by the Bureau for the above project in conspiracy with the Director General of NTA and the Minister of Information. Not until the Minister of Information is able to establish beyond all reasonable doubt that when this contract was rejected by the President and forwarded to the Bureau of Public Procurement to correct anomalies, that the Director General of the Bureau of Public Procurement awarded the contract and the NTA concurred, and the same NTA forwarded the contract so awarded to the President/Federal Executive Council and obtained approval/assent for implementation without her knowledge.More so that Thisday Newspapers published a news item this year that the same WTS that seized the OB Vans in London is still being promoted by the Federal Ministry of Information for more contracts for NTA. Therefore the No Objection Certificate issued for this contract, by whatever officers or party is in contravention of Sections 5(c), 6, 16(4) ,18, 19 etc. of Public Procurement Act.  

3.      Lack of Transparency in the Procurement

There is evidence of lack of transparency in the proceedings, processes and decisions for the award. The proceedings of the contract were not made accessible to the public at large, or at least “representatives” of the public in line with section 19(b) of Public Procurement Act before the purported award of the contract. The invitation of NGOs and professional associations to observe the contract bid opening would have allowed for observation and monitoring, review, comment andwhistle blowing thereby ensuring transparency.

4.       Lack of Fairness in Procurement  

Contract award decisions were not fair but partial. . The bidders and suppliers,  providing services and contractors were not selected on the basis of their qualifications and the merit of the offers, but the interest of the Director General of NTA, Director General of Bureau of Public Procurement, the Minister of Information and others to be identified who were responsible for processing the proceedings of this contract without an explicit approval of the Tenders Board of NTA to conduct this public procurement with an approved plan in accordance with section 17 and 18  of the Public Procurement Act 2007. All the information provided on the floor of the Senate suggests collusion.

5.       Lack of Integrity in Procurement”

The procurement process   was not honest and not in compliance with the 2007 Public Procurement Act (PPA). The best available and most suitable technical expertise was    not employed. The process of invitation to bid was discriminatory. There is no fair and open competitive selection process which should lead to quality contractor at a fair price (value for money). The Contract did not take into account the legitimate aspiration and concerns of the stakeholders, particularly the Chartered Procurers and the broadcasting professionals. The NTA did not advertise this contract in accordance with the provisions of the Act and did not follow the procedures for quotations or direct procurement in accordance with sections 41 and 42 of Public Procurement Act 2007

6.    Lack of Accountability in Procurement

Some government’s officials within the NTA as a procuringentity failed to correct and complete the execution of their tasks and duties, and for the decisions and actions made in their area of responsibility for this contract. The technical experts in NTA allowed this contract to be awarded in lump sum basis in their procurement plan , therefore failed in their responsibility for market survey, preparation of appropriate technical specification and detailed bill of quantities  required for effective planning of this contract in accordance with section 18 of Public Procurement Act 2007.

7.       Fraudulent and Corrupt Procurement Practice

There is evidence of deliberate omission and misrepresentation of information, documents etc that misled the President/Federal Executive Council on the basis of which they approved the contract. And this deliberate mis-presentation of information is an attempt to obtain financial benefit. The use of false documents, including the Bureau’s ‘‘No Objection Certificate’’ is evident here.

8.      Collusive Procurement Practice

There are evidences of pre-conceived arrangement between the NTA officials and the Ministry of Information and on the basis they initially bypassed the Bureau of Public Procurement  and went directly to the President to obtain approval, but when this failed and the document were forwarded to the Bureau of Public Procurement, they investigated and found out all the anomalies that initially made the Ministry and the NTA to bypass the BPP, and instead of doing the right thing, they were also recruited by the NTA officials and until the Minister proof her role in the second round of submission, and also the involvement of her Ministry to achieve an improper purpose of inflating the contact sum, without appropriation by the National Assembly and the approval of the President in the budget, with the aim of diverting /spending internally generated revenue(IGR) earned by NTA  without an appropriation which is  in violation of the PPA and the Constitution, . 

Note

Collusion is presumed from a set of acts from which it can be assumed that there was an understanding, implicit, formal or informal, overt or covert under which each person involved reasonably expected that the other would adopt a particular course of action which would interfere with the faithful and proper application of the provisions of Public Procurement Act.

9.       Procurement Malpractice 

There is evidence of undue influence and abuse of office bythe Director General of BPP and that of NTA   in the award of this contract. The Bureau of Public Procurement Officials, headed by the Director General knew that everything was wrong about the contract referred to them by the President including that there was no budget but they still pushed the papers back to the President in connivance with NTA and again until the Minister declares her role also with the Ministry of Information and the President/Federal Executive Council approved the contract without knowing the details of the technical anomalies.

10.       Obstructive Procurement Practices

The Director General of Bureau of Public Procurement obstructed the timely intervention of late President Umaru Musa Yar’adua and the Federal Executive Council when they initially refused to approve the contract. It is on record and confirmed by the Director General of the Bureau of Public Procurement on the floor of the Senate that the Presidentacted within the law by rejecting the issuance of consent to the award of the contract and requesting for Audit/review and a “Certificate of No Objection” evidencing and authenticating that due process and the letters of  Public Procurement Act 2007, have been followed in the conduct of  the  procurement proceeding and allowing for the  NTA  to enter into contract or effect payments to contractors or suppliers from the Treasury before the contract will be awarded by the NTA and approved by the Federal Executive Council.

11.     Disregard to   the procurement policies, process and procedures laid down for contract award.

The deliberate issuance of ‘No Objection Certificate’ by the BPP   against the 2007 PPA, procedures etc is an anti-government activity  especially  when  the BPP Director General had  told Nigerians via the national television that late President queried  the contract because  that was not covered under the budget of Information Ministry.

The Director General of the Bureau stated on the floor of the Senate that part of the money the NTA had anticipated to use in the payment of the contract sum were the funds that would be generated by the Local Organizing Committee (LOC) from the hosting of the U-17 World Cup. The funds, according to the members of the Senate committee, run into billions of naira but not yet appropriated by the National assembly.

The Accountant General of the Federation, Ibrahim Dankwanbo, said that till date, no amount has been remitted by the LOC. He said categorically that: “I am not aware of a single ‘kobo’ which has been paid into the Consolidated Revenue Fund (CRF) from the LOC. 

The Director General  of NTA,  Mal. Magawata however said the authority applied to the budget office for the project to be included in the budget, but the budget office turned it down because the amount was too much, “higher than the budget funds ceiling” of the whole Ministry of Information. It is equally on record that the Director General of BPP supported his position to award the contract to WTS-Sunny by stating that“the offer from WTS was too good to refuse” but that Thomson Grass-Valley had offered that, if they get the contract, they would discuss with their bankers the funding options available without favourable offer. On that ground, the BPP declined to issue a ‘Certificate of No Objection’ in favour of Thomson Grass-Valley and instead issued it in favour of   WTS Sony which they  thought  to be the  more responsive bidder  but did not tell us that the vendor financing of WTS  is inflated and together with 5% interest to be paid by NTA.

12.        Lack of capacity at the BPP in handling procurement management and regulation of procuring entities.

The lack of capacity of the officials of the Bureau of Public Procurement in handling Public Procurement   Management and regulation to deliver value for money for Nigerians is not in doubt. The law specifies in section 7 of the PPA that the Director General of the Bureau of Public Procurement shall concurrently have adequate and relevant professional qualifications in procurement for a minimum of 15 years each. The Chartered Institute of Purchasing and Supply Management of Nigeria (CIPSMN) Act 2007 also specify that the head of any purchasing and supply management in Nigeria must be a professional procurer. Since the Supreme Court of Nigeria has ruled in   many cases that lack of capacity to perform an assignment   is not an irregularity that can be waived or cured without that capacity being developed as required by law, I do not see any other way that the lack of capacity in BPP can be cured without compliance with the relevant laws.

FINDINGS IN RESPECT OF COINCIDENT PUBLIC PROCUREMENT PERFORMANCE INDICATIORS (OCCURS ALMOST AT THE SAME TIME OR IMMEDIATELY AFTER THE CONTRACT FAILURE

1.     Lack of Value for money

The N8.4 billion payable is not reasonable in terms of quantity and quality of work done. There was also no proper feasibility study involving financial and economic analysis before the commencement of the award process. Equally, N8.4billion was not available in the budget when the contract was awarded.  

According to the Association of Broadcasters of Nigeria (ABN), that cost on the WTS and Sony bids (even if at lowest price), are prohibitive and will see Nigeria losing billions of Naira that will go into the pockets of unscrupulous Nigerian officials that care less about their country.

Looking at the cost of the OB Vans supplied to South Africa for the just-concluded 2010 World Cup,
[Johannesburg, report of 9 September 2008] - The South African Broadcasting Corporation (SABC) won the right to proceed with a R380 million contract with Sony SA. The deal covers the provision of four outside broadcasting (OB) vans to broadcast the 2009 Confederation Cup and the 2010 Soccer World Cup in high-definition. The specifications of these OB vans supplied for the World Cup are far superior to that of NTA and are as follows:
SABC will deploy all four of the new Obs. Identically specified, each 30-ton vehicle is equipped with 18 cameras, and wired for 24, including 3 super-slot HD cameras. The interior is divided into four main areas: Production, Sound, Video Tape Area (VT) and Vision Control.

Note that SABC OB Vans are BRAND NEW vans, whilst WTS intends to ‘renovate’ the current NTA OB vans, which are more than 10 years old with HD Equipment. Let us therefore examine this issue further. 
The WTS approved tender is for 12 cameras and the facilities being provided are not as expandable as the vans to be supplied to SABC. This is obvious in what SABC ordered for, compared with what has been approved for NTA.

In terms of cost it would seem that the WTS OB vans are well over-priced, and not value for money. The total cost of 4 x 18 camera HD OB vans with far superior facilities to SABC is N6.3 Billion. This includes new equipment, new 30-ton vans, generators and towable equipment hauls. Nigeria on the other hand is paying N6.7 Billion for renovating 6 x existing OB facilities supposedly from SD to HD, and with only 12 cameras (as against 18 in the SABC vans) and far inferior equipment are being supplied. Additionally, all equipment within the existing NTA OB’s will be removed, so no new vans are supplied, just the old ones being reused; no new generators, just a total overhaul of what has been on the ground for about 10 years. And for that we pay a substantial amount and lose out on actually upgrading with new equipment totally.

Other additional costs of the WTS project include DSNG’s, the IBC and other facilities. However, we are certain that a proper investigation and evaluation of value for money will reveal that Nigeria once again is receiving the short end of the stick.

2.         Questionable decisions of authorization of procurement loan without the involvement of the National Assembly, Ministry of Finance and Debt Management Office in advance to obtain approval.

One of the advantages of the project that has been peddled is the Contract Project Financing (CPF) aspect of the project, where the government pays back to the contractor over a period of time with an interest rate of 5%. Whilst this does look very patriotic and a good deal, it must be said that when the cost of a project is already over-loaded, contractor-financin g amounts to nothing, but profiteering when you charge interest on a project that is already over-loaded.

The decisions of the Director General of Bureau of Public Procurement in this regard are highly questionable. The DGtold the Senate that he observed that in the conception of the project, NTA had no money to fund it; neither did it make provision for the project in any of its budgets since 2007.

The decision of the Director General of Bureau of Public Procurement and the NTA to go ahead with the project without appropriation of the National Assembly is questionable. TheDG BPP also told Senate that the Bureau had to go into damage control and therefore considered the funding capacity of NTA, as well as the funding options proposed by the two contractors that bid for the contract before the BPP decided to award the contract to WTS- Sony, as against the recommendations of the NTA.

3.         Divergences from Procurement Plans

There is evidence of approval of Tenders Board for conduct of Public Procurement as in section 17 of Public Procurement Act. And there is nothing in the annual budget to show that the plan that was being executed by the Ministry of Information and NTA was an approved plan of the Federal Government in accordance with the appropriation Act. This shows clear divergence from the original procurement plan without approvals from the National Assembly and the Executive arm of Government.

DG BPP stated that about three months to the hosting of the event, the ministry of information sent me a request for due process No Objection Certificate.” And the BPP held a meeting with all the parties and investigated the contract proceeding, and what BPP found out was very revealing. Further he stated that during the review on that day, they got the letter of invitation that NTA claimed they issued to contractors dated 2nd September 2008, which one of the contractors said he never received but the other person received. But unfortunately, the letter of submission of the bid of the contractor who received it was dated July 2008 and which means that before the advertisement came out, he (Thomson Grass-Valley) had already applied? signifying bid rigging and fraud

4.         Spending internally generated revenue (IGR) without the appropriation of the National Assembly and the approval of the President.

Section 57 and 58 of the Constitution as well as sections 80 and 81 require an appropriation of internally generated revenue of NTA and the approval of such by the President before money can be spent. NTA in collaboration with the Ministry of Information and the Director General of the Bureau of Public Procurement paid 20% of N8.4 Billion from the internally generated revenue illegally.

5.         Request by WTS for issuance of a Bank Guaranty by the Federal Ministry of Finance in their favour as a condition for returning the outside broadcasting van.

This request is not part of the agreement signed with NTA/Ministry of information. For the Ministry of Finance to issue this guaranty to WTS as requested, it means Finance ministry will undertake collaterally to answer for payment of 8.4 billion less 20% advance payment paid to WTS by the NTA/Ministry of information at an interest rate of 5% per annum in respect of an over inflected contract or to accept the performance of the responsibilities of NTA and the Ministry of Information with respect to their duties in respect of this contract or their liability or obligations. It simply means to ask the Federal Ministry of Finance to assume the responsibility of a Guarantor without the approval from the President and the National assembly for such which amounts to approving loan without consent of the appropriate authorities. It is important to note that once the Ministry of Finance issues the guaranty; they will be become secondarily liable for the debt of NTA/Ministry of Information (The primary debtor). The then Hon. Minister of Finance and the Director General of the Debt management office should be congratulated for refusing to grant such a guaranty without the necessary authorization.

FINDINGS IN RESPECT OF LAGGING PUBLIC PROCUREMENT PERFORMANCE INDICATIORS (occurs long after contact has failed)

1.         Threat to national security

The failure of the statutory surveillance, auditing and review system of BPP on public procurement, strategic planning, conduct and management of the N8.4billion contract proceedings can be directly linked to or viewed as a  threat toour National Security, otherwise referred to as Public Safety or Homeland Security in the American government.This thinking explains why all deliberate contract failures and petitions are seen as criminal offence in the Public Procurement ACT and are being investigated by anti-graft and security agencies. The interest of the Federal Government of Nigeria in our national security  does  not only involve safeguarding  our political identity and framework but include the preservation of  professionalism  and international best practices in strategic public Institutes such as the Bureau of Public Procurement and the Chartered Institute of Purchasing Supply Management of Nigeria (CIPSMN) which are principally and respectively  involved in supporting the daily activities of the federal government in the determination of the direction and fostering of our economic well being, helping to  promote good governance especially in the economy, power, security, electoral process, infrastructure sectors, and to encourage the blistering of National and International Procurement Order (NIPO) and the fight against corruption, actively supporting  the operations of all  MDAs  and vital interest of Nigeria including but not limited to the police, military, State Security Service, fire service, emergency medical service, etc and consumer protection.

The competition has come and gone, but the vans which were flown abroad   will still remain there unless the Federal Government shows enough commitment to their fate, the contractor handling the project has said. Deji Osibogun, a representative of WTS Sony, said this in Abuja when he and other government officials involved in the award of the contract met with the Senate committee on information and communication.

Mr. Osibogun said the refurbishment contract was completed some four months ago, but he cannot deliver the vans until the federal government gives him a letter of comfort and guarantee which will enable him obtain a line of credit from his financiers. He said he and his bankers want to be sure that the government will live up to its words when he delivers the upgraded vans.

RECOMMENDATIONS

1.         A  review/ renegotiation of the purported contract of N8.4billion with appropriate actions against the          officers concerned in accordance with  Sections 7 (4) 16(4) ,16(15),16(17) , 16(18), 35,36 and 58 of PPA

2.         To take all necessary and urgent steps by the concerned authority (i.e. the President) to inaugurate the

National Council on Public Procurement (NCPP) with the   Hon Minster of Finance as Chairman in line with sections 5(1).148(1) of the 1999 constitution, Sections 1 and 2 of Public Procurement Act 2007 and the Finance (Management and Control Act) 1958.

3.         To take all necessary steps in the earliest possible time to get the Council to advertise for the position of the Council’s Secretary/Director General of the Bureau of Public Procurement in accordance with Sections 7(1) and  7(2c) of the Public Procurement Act 2007, as well as section 11(9) of the CIPSMN Act 2007.

4.         To take all necessary steps in the earliest possible time to get the Council to review the present contract threshold in use for award of contracts   which is in conflict with procurement principles and law and does not cover contracts being awarded by the other arms of Government as required by law.

AN INDEPENDENT REPORT   IN RESPECT OF THE UNRESOLVED N8.4BILLION NTA OB VANS 

Prepared by Mohammed Bougei Attah, Managing Editor, NGO Network, a general interest magazine monitoring public procurement corruption in Nigeria

DETAILED REVIEW OF ISSUES AND ACTIVITIES BY RESPECTIVE PARTIES INVOLVED IN THE CONTRACT PROCESS/PROCEEDINGS AGAINST PERFORMANCE BENCHMARK   IN THE LAW.

In support of the above recommendations, below is the detailed summary of the legal, professional and security implications of issues observed, considered and analyzed in respect of this contract investigation.

ISSUE NO 1

Violation of the Fundamental Principles for Procurementin accordance with Sections 16 (1) (a), (b), (c), (d), (e), (f) and (g) 16 (15), (18), (24) and (28)

Problem and Person responsible

The DG of NTA  and  the Director General of BPP should be held accountable for the above violations, which requires that“procurement shall take place only based on procurement plans, supported by prior budgetary appropriation and that no procurement proceedings shall be formalized until the procuring entity has ensured that funds are available to meet the obligations and subject to threshold in the regulations made by the Bureau and approved by the Council”- Section 16 (`1)(b) .There is failure to conduct the procurement in a transparent, equitable and in conformity with accountability. Other violations include issues of procedures and lack of economy and efficiency in the procurement process. There is problem of obtaining value for money and fitness for purpose in accordance with Sections 16 (1) (c) - (g)

ISSUE NO 2

Non Compliance with statutory Surveillance and Review of Procurement process/proceeding in accordance with Section 53 and 54   of PPA

Problem and the person involved

The Director General of the Bureau as the Chief Security Officer of the Public Procurement process should be held accountable for directly participating in a flawed bidding process rather than keeping statutory Surveillance responsibility   and receiving petitions from bidders for review and to address the problems – Section 53 and 54. The Minister of Information, Dora Akunyili told Nigerians that she only received three names of contractors forwarded by the DG of NTA which she thereafter forwarded to the Federal Executive Council (FEC) for approval.

Further she claimed that   NTA awarded the contract and yet sent three names to her.

The DG of BPP went as   far as confirming that when Late President Yar’Adua referred the issue to him, that he went outside the legal mandate of BPP to take the responsibility of the award of contract to a contractor that was neither recommended by the Minister nor the DG of NTA for award before the Federal executive council was misdirected to approve the contract,

NOTE

INFORMATION NOT AVAILABLE TO NIGERIANS DURING THE PUBLIC HEARING

1.         The BPP did not tell Nigerians before awarding the contract to WTS the international pricing and quotation formula used for this contract and why the equipment quoted in the tender did not carry detailed Bill of Quantities or Bill of Materials. Since the equipments that make up the HD system are purchased from various manufacturers who sell at a price in the open market indicated for transparency purposes.

2          The BPP did not tell Nigerians before awarding the contract to WTS that the OB Vans are well over-priced, and that there is no value for money since the real estimated total cost of 4 x 18 cameras HD OB vans with far superior facilities awarded by South Africa Broadcasting Corporation (SABC) is N6.3billion, which includes new equipment, new 30-ton vans, generators and towable equipment hauls.

3.         The BPP did not tell Nigerians before awarding the contract to WTS that the cost on the WTS and Sony bids (even if at lower price), are prohibitive and Nigeria losing billions of Naira when compared to the cost of OB Vans supplied to South Africa for the World Cup 2010.

4.         The BPP did not tell Nigerians  before awarding contract to WTS  that we are paying N6.7 billion for renovating 6 existing OB facilities supposedly from SD to HD, and with only 12 cameras (as against 18 in the SABC vans) and far inferior equipment being supplied.

5          The BPP did not also tell Nigerians  before awarding contract to WTS  that all equipments within the existing NTA OB Vans will be removed, so no new vans are supplied, just the old ones being reused; no new generators, just a total overhaul of what has been on the ground for 10 years.

6          The BPP did not also tell Nigerians before awarding contract to WTS that the ‘bait’ about Contractor Project Financing aspect of the project, where the government is expected to pay back to the contractor over a period of 24months is with an interest rate of 5%. This is to be paid over a contract that is already   over-priced. This is   not contractor-financin g, but amounts to nothing but profiteering.

7          The DG of NTA and BPP as well as the Minister did not  tell Nigerians  before awarding contract to WTS  that  the original suppliers of  the  OB Vans in 1999 also  upgraded it to  8 x 10 camera Standard Television OB vans for the All Africa Games 2003, and who provided other facilities like the International Broadcast Centre (IBC), microwave links, earth stations and Digital Satellite vehicles in the same Standard TV formats submitted detailed bill of Materials to the Federal Government before the award of the contact and that these equipments are presently being used by NTA and are located in various parts of Nigeria including Abuja.

8.         The DGs of NTA, BPP did not tell Nigerians before awarding contract to WTS that Sony’s quote for ‘New’Equipment with the same specifications as WTS for renovation is less by 20% of the cost approved for WTS, and they failed to provide Nigeria the rationale to approve award for renovation of SD equipment to HD, for a higher cost when for a much cheaper price you could have had new equipment.

9.         The DGs of NTA and BPP did not tell Nigerians before awarding contract to WTS   that the approved tender is for 12 cameras with facilities that are not as expandable as needed for such an investment especially when compared to the vans to be supplied to SABC for a lesser cost for the WORLD CUP 2010.

ISSUE NO 3

The improper preparation of needs assessment and requirements of goods, works and services by the user department in NTA for submission to the Procurement Department as required by sections 18(a) and 18(b) of the Public Procurement Act 2007.

Problem and Persons to be held Accountable

The DG of NTA (Chief Accounting Officer) and any other person(s) in the user department of NTA to whom responsibility is delegated for procurement planning is to be held responsible for  failing to properly carry out needs assessment and requirements of goods ,works and services  in accordance with  the Appropriation Act in contravention  and lack of regard to Sections  18, 16(22), 16(21), 20(1), and 20(2) of Public Procurement Act and extant financial regulations revised in 2006.

The Nigerian Television Authority has been accused   by the BPP of breaching due process in the award of a contract for the refurbishment of Outside Broadcasting (OB) vans during the Senate hearing when they stated amongst others that plan was duly followed but carried out a fire brigade approach to the procurement.  

The DG BPP stated early in 2010 that the contract was conceived two years back, when Nigeria got the hosting right of the FIFA U-17 world cup, and questioned   why NTA had to wait till the event was three months away before they commenced the due process for the award of the contract. He accused NTA of plotting to bypass due process and persuade the president to breach the Procurement Act.

The Senate meeting however saw the government officials concerned scrambling to distance themselves from what has become a veritable mess.

ISSUE NO 4

The evaluation of needs assessment as presented by the user departments in accordance with section 18(a) of the Public Procurement Act 2007

The Problem and Persons to be held Accountable

The need for the renovation of the NTA OB Vans, as the DG of NTA, Mall. Magawata informed the Senate that as at the time Nigerian government agreed to host the tournament, the issue of going to the producers/ manufacturer of these facilities, as it was done in the past, was just not possible; so the best option available to NTA was to upgrade.

Reviewing the reasons given for the project to come on board, the Procurement Planning Committee  together with the DG (Accounting Officer) and any other person to whom responsibility is delegated are still to be held responsible for wrong evaluation and or assessment of the needs of  NTA without regard to the Appropriation Act of 2009,    in contravention of procurement planning principles and lack of due regard  to sections 18, 16(22), 16(21), 20(1), and 20(2) of Public Procurement Act and extant financial regulations revised in 2006 .

Why are Nigerians being told that the facilities are being renovated, when it is clear as stated by the broadcasting professionals of Nigeria that the OB Vans cannot be upgraded?

The Broadcasting Professionals (BP) have stated many times that High Definition TV (HDTV)  provides a higher quality display, with a vertical resolution display from 720p to 1080i and higher and an aspect ratio (the width to height ratio of the screen) of 16:9, for a viewing experience similar to watching a movie. In comparison, SDTV has a range of lower resolutions. New television sets will be either HDTV-capable or SDTV-capable, with receivers that can convert the signal to their native display format. SDTV, in common with HDTV, uses the MPEG-2 file compression method. However, in Nigeria we are years away from this as more than 97% of TV sets in Nigeria can only receive Standard TV signals – Analog for that matter. 

Clearly it is a misnomer for the Nigerian Government and Nigerian public to be given the impression that SD equipment is being renovated to HD. It cannot be renovated, as such the current OB vans and other facilities, which NTA have and which are Standard Definition, must be completely removed and a complete refit of the facilities carried out to meet the terms of the renovation as stated in the contract. That isREPLACEMENT, not RENOVATION OR “UPGRADE.” 

You cannot adapt, manipulate or change any equipment within that Standard Definition equipment chain or renovate it and expect it will give you a High definition (HD) signal. It just does not work like that. So to say that you are renovating from SD to HD is not completely true.. Unless what is being said is that the present facilities will be completely turned into shells and new HD equipment installed.. And if that is the case, there are a few issues we need to look at.

In 2002-2003, the Federal Government of Nigeria invested more that USD28 Million to upgrade 8 x 10 camera Standard Television OB vans for the All Africa Games. Other facilities provided were the International Broadcast Centre (IBC) and other facilities, which included microwave links, earth stations and Digital Satellite vehicles in the same Standard TV formats. All these equipment are presently being used by NTA and are located in various parts of Nigeria including Abuja. It is these facilities we are informed would be renovated from SD to HD. Is this possible, and at what cost and what are the alternatives? Is this in the best interest of Nigeria, or is this a scam to milk the coffers of the Nigerian treasury? We will examine these issues in this memo, and hopefully provide an impartial and professional perspective to the current approval for these funds and leave Nigerians to decide if it is value for them as a people.

The dummy being sold to Nigeria is that these existing facilities would now be renovated to HD to ensure that Nigeria meets the demands and specifications of FIFA to cover and broadcast the U-17 Junior World Cup to the rest of the world, right? Let us look at the technical issues first.

Standard definition television (SDTV) is a digital television format that provides a picture quality of a lower resolution to High Definition. In Nigeria where we use the PAL signal, our Standard definition signal is 720 Lines of resolution and 4:3 aspect ratio. Standard and High definition television are the two categories of display formats for digital television (DTV) transmissions, which are becoming the standard around the world.

But how are these picture processed? Basically, the processing is the same. You must have cameras to acquire the pictures and process them. These signals must be manipulated, recorded, treated audio and graphics added and then transmitted to your television. The keynote here is that if you acquire your pictures in Standard definition you will have to process and transmit your pictures in Standard definitions.

ISSUE NO 5

Proper identification of goods, works and services required and the description of the essential element of the proposed 2nd Abuja Runway Procurement Project by BPP in accordance with section 18 (b)of the Public Procurement Act 2007.

The Problem and Persons to be held Accountable

 The Accounting Officer (DG) of NTA and any other engineer in the User Department or person to whom responsibility is delegated for this description should be held accountable for the description of project needs outside budget and without the approval of the National Assembly and the President in contravention and lack of regard to   Sections 18, 16(22), 16(21), 20(1), and 20(2) of Public Procurement Act and extant financial regulations revised in 2006

ISSUE NO 6

Initiating and planning Procurement actions and the determination of the required goods, works and services in accordance with sections 18(g) of the Public Procurement Act 2007 by the procurement Planning committee.

The Problem and Persons to be held Accountable

The Accounting Officer DG OF NTA) and the Procurement Planning Committee of NTA and any other person to whom responsibility is delegated for any action taken is to be held accountable for wrong initiation and planning of Procurement actions and for determination of required goods, works or services without compliance with budgetary provisions, financial regulations and in contravention and lack of regard to Section 18, 16(22), 16(21), 20(1), and 20(2) of Public Procurement Act 2007.

We found it   outrageous to note that the NTA and the Bureau of Public Procurement finally conceived and approved this project in conspiracy to use the funds in the NTA funds that is not yet appropriated by the National Assembly, as expected from FIFA and the internally generated revenue too.

ISSUE NO 7

Carrying out appropriate market/statistical survey/analysis of Procurement cost implications in accordance with Section 18(c) of the Public Procurement Act 2007

The Problem and Persons to be held Accountable

The Accounting Officer of  NTA  (The DG), the Procurement Planning Committee of DG  and any other person to whom responsibility is delegated for carrying out appropriate market and statistical surveys is to be held responsible for failing to carry out appropriate  market/statistical survey/ analysis of the Procurement cost implications of the Abuja second runway   before award of contract  in contravention and lack of r