The National Steel Raw Materials Exploration Agency, Kaduna, is insisting on awarding a N809 million contract to a firm disqualified by the Bureau of Public Procurement (BPP) for alleged fraud, officials have said.
The agency, a parastatal of the Ministry of Solid Mineral Development, had requested a certificate of “No Objection” from the procurement bureau to waive contract rules and allow the award of the contract for the acquisition of two drill rigs.
The BPP expressed “gross displeasure” at NSRMEA’s insistence on selecting Lasafa Limited, a Kaduna State-based private firm, for the contract.
Lasafa Limited surfaced after NSRMEA invited tenders from qualified contractors for the acquisition of two crawler mounted multi-purpose and one truck mounted drilling rigs for the industry under its 2016 capital projects.
The crawler mounted rigs, to be accompanied with all accessories and training kits, were to be acquired based on in-house estimates of about N540 million, while the truck mounted rig was valued at N270 million, value added tax (VAT) and withholding tax inclusive.
The two sets of equipment were for the exploration of mineral raw materials for iron, steel and related industries.
Six companies were shortlisted from responses to the request for tender, including Lasafa Limited, whose bid was sent to the BPP for evaluation and review.
At the end of the independent review, PREMIUM TIMES’ investigations showed that BPP found none of the companies met the criteria advertised by NSRMEA for open competitive bidding.
The criteria included evidence of bidder’s registration with Corporate Affairs Commission (CAC); three years tax clearance certificate from 2013-2015; tax identification number (TIN); three years company audited account and evidence of successful execution of similar jobs.
Other criteria included evidence of compliance with Pension Reform Act 2014 and the National Social Insurance Trust Fund (NSITF) as well as Industrial Training Fund (ITF) Amendment) Act 2011.
But BPP noted that the submission by Lasafa Limited was accompanied by a “non-genuine” NSITF certificate, in apparent contravention of Sections 58(4) (f) and (g) of the Public Procurement Act, 2007.
Consequently, the bureau directed NSRMEA to forward a copy of Lasafa Limited NSITF certificate of registration No. 0000001272 to the relevant investigating agencies for further review in compliance with the provisions of Section 53(1) of the PPA, 2007.
PREMIUM TIMES’ investigations at the CAC showed that Lasafa Limited, registered on November 3, 1998, with No. 345035, has Labo Abubakar S.S, Labo Abubakar S.A., Labo Maimuna A., Labo Fatima, Labo Binta A., and Labo Rakiya A. as directors and shareholders.
On September 1, a review report by BPP directed NSRMEA to halt the procurement process and re-advertise, using open competitive bidding in line with Section 16(1) c and 25(2) of the PPA, 2007.
Rather than comply with the directive, NSRMEA on September 5, sent a request to the BPP for a certificate of “No Objection” to enable it use direct procurement method to engage Lasafa Limited for the award of the contract.
To justify its request, the NSRMEA cited the negative impact of the declining global oil prices, pipeline vandalism and economic meltdown on the country’s ability to meet most of its financial obligations.
The acting Director General of the agency, Rabi Sodangi, said the country’s poor revenue situation necessitated the adoption of the direct procurement process as alternative revenue mechanism to reposition the agency’s business.
Mrs. Sodangi said this was in line with government’s current drive to diversify the economy and reduce dependence on revenue generation from oil resources.
But the BPP expressed “deep concern that despite its directive, the NSRMEA was still pushing for the issuance of a certificate of ‘No Objection’ to award a contract to a firm that evidently breached Part XII-Offences Section 58(4) of the PPA, 2007.”
“This action is patently wrong and unacceptable,” acting director-general, BPP, Ahmed Abdu, said in a memo to Mrs. Sodangi.
Mr. Abdu said the bureau was inclined to agree there was an urgent need for NSRMEA to secure the services of dealer, as engaging in tender proceedings, or any other method of procurement was impractical.
He said due to the specialist nature of the equipment, the bureau advised it would be more appropriate and consistent with PPA, 2007 and government policy, for equipment to be procured from original equipment manufacturers (OEMs), or their representatives.
“This strategy has inherent advantages at ensuring the quality of the equipment as well as their warrantees/guarantees’ for the period to be specified by NSRMEA, in order to ensure value for money,” Mr. Abdu said.
Consequently, he said, “Due Process ‘No Objection’ CANNOT BE granted NSRMEA to adopt direct procurement method for the engagement of Lasafa Limited for the procurement of the rigs”.
However, he said the bureau could only grant the agency “Due Process No Objection” to adopt special and restricted tendering method by inviting the OEMs or their representatives to tender for the supply of the equipment.
The bureau therefore directed the agency to forward the financial proposals from the OEMs or their representatives for due process review prior to contract award.
But officials at the BPP said rather than comply, the steel agency continued to mount pressure for the job to be awarded Lasafa Limited.
When contacted, the acting DG of the agency, NSRMEA, denied the request for certificate of “No Objection” by the agency was rejected by BPP.
The directive by BPP, Mrs. Sodangi explained, was informed by the need to adjust the proposal to reflect reality of the current foreign exchange rate, which rose from N200 to the dollar when the budget was done to about N450 to the dollar by the time BPP was considering it.
“By the time the approval was given and the certificate came out, manufacturers could no longer supply at that rate. The agency has gone back to BPP for another certification to buy two of the rigs at a total cost of about N400 million, instead of the three previously proposed initially at about N270 million each,” Mrs. Sodangi said on telephone on Wednesday.
When PREMIUM TIMES sought clarification from her on the status of Lasafa Limited and the contract, Mrs. Sodangi terminated the call abruptly. She did not answer subsequent calls to her. She equally did not respond to the text message sent to her.
All efforts to reach Lasafa Limited to comment on the contract were unsuccessful.
The Minister of Steel and Mines Development, Kayode Fayemi, said in an exclusive interview with PREMIUM TIMES a fortnight ago he was neither aware of the contract, nor the issue involving the BPP and Lasafa Limited.
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