“Government contracts“, “Tenders”, “Bureau of Public Procurement (BPP)”. These are terms that many business owners do not know but definitely should. Today, you will discoverhow to get government contracts in Nigeria, and the requirements you need to meet to bid for contracts.
One of the most common goal of business owners is to maximize opportunities that could result in higher sales, and eventually growth and profit.
For this reason, brands often engage in strategic branding, advertising, customer service, partnerships, and positioning.
Partnering with the government agencies and ministries is one of the surest ways to expand reach and create tangible impact, and these partnerships are established through government contracts.
So let’s dive in.
What are Government Contracts in Nigeria?
The government does not and cannot exist in a vacuum. This means that it runs on people, companies, agencies, and agreements to carry out its agendas and fulfil its manifestos. This is what we call Public Procurement.
So what exactly is public procurement?
Public Procurement is the process by which the government buys, sells, and manages goods and services. The governing law for this in Nigeria is the Public Procurement Act (2007), and the Bureau of Public Procurement is the body that oversees procurement in Nigeria.
Procurement often begins with the publishing of tenders, which are formal documents used by the government to invite suppliers to provide goods or services.
Government Contracts, therefore, are legally binding agreements between government entities and companies or private firms for the delivery of goods, works, or services.
If you have ever wondered how the government manages to juggle building infrastructure like hospitals, flyeovers, social centers while handling road development projects and matters of education, it is because of the existence of government contracts.
Through these contracts, the government gets to execute crucial projects that fulfil its manifesto and boost economic growth. Through their versatility, these contracts also help reduce poverty, boost entrepreneurship, and create opportunities for members of society, especially women, youth, and persons with disabilities.
Who Needs to Understand Public Procurement?
You should have a basic understanding of this topic if you:
- Want to be patronised by the government to offer goods or services
- Want to understand how the government uses your taxes
- Are a law student, lawyer, agent, or consultant in the field of Public Procurement
Types of Government Contracts in Nigeria
In this article, we will explore three major classifications of government contracts. They are:
1. Construction and Infrastructure Contracts
These are contracts dealing with sectors like transportation, energy, and communication, where projects such as roads, power plants, and sewage systems are developed.
They aim to cater to the needs of the members of society and improve the quality of living for the general public.
An example here is the Second Niger Bridge Project, which connects Asaba to Onitsha. The project was formally commissioned in May 2023 and was executed by Julius Berger Nigeria Plc, one of Nigeria’s leading construction companies.
It aimed to alleviate severe traffic congestion on the aging 1965 Niger Bridge and strengthen regional connectivity between the South-East and West.
2. Service Contracts
These are usually agreed on for the provision of particular services, e.g., Consultancy, ICT/software, or professional training services, that the government or its agencies may require for different needs within its ecosystem. They are mainly entered into for efficiency and professionalism.
For example, the Federal Ministry of Works may engage with engineering consultants to supervise infrastructure projects to ensure that they meet technical standards.
3. Supply Contracts
As the name implies, supply contracts are agreements often involving the need and supply of equipment or products, such as medical and office equipment for institutions, vehicles for government officials, consumables for government events, etc.
A practical example of this contract is the National Home-Grown School Feeding Programme that launched in 2016 to combat hunger and malnutrition in Primary schools across Nigeria. By using locally sourced food, this project also benefits local farmers and creates job opportunities.
Document Requirements to Get Government Contracts in Nigeria
These are the documents that you must obtain before applying for government contracts.
1. CAC Certificate of Incorporation
Every business seeking to win government contracts must first be registered with the Corporate Affairs Commission. This gives your business the identity of a company and informs the government that your business exists.
Under CAMA 2020, any business operating in Nigeria without CAC regulation is illegal and anybody found running such a business could face lausit or possible arrest.
Business Names (BNs) are usually restricted from getting government contracts because they have no distinct legal entity from their owner. Limited liability companies are usually chosen over BNs, particularly for big contracts.
2. Tax Clearance Certificate (TCC)
Getting a Tax Clearance Certificate (TCC) from the Federal Inland Revenue Service (FIRS) is another key requirement.
This is how you show that you pay your taxes and that they are up-to-date.
3. PenCom Certificate
Businesses with three or more employees are required to obtain a Pensions Clearance Certificate (PCC) from the National Pensions Commission (PenCom). This tells the government that you take care of your employees by paying into their pension plans.
4. ITF Certificate
The Industrial Training Fund (ITF) was established to develop a skilled workforce to meet the manpower needs of Nigeria’s industrial, commercial, and economic sectors.
If you’re an employer with five or more employees, you are required to contribute a specified percentage of their annual payroll to the fund and obtain a certificate to that effect.
5. NSITF Certificate
The Nigeria Social Insurance Trust Fund (NSITF) is committed to the welfare of employees in the event of work-related accidents and injuries. Obtaining an NSITF certificate is a key requirement to get government contracts.
6. BPP Certificate
A Bureau of Public Procurement (BPP) certificate is a mandatory certification issued by the Bureau to eligible companies. It confirms that your company is compliant, grants access to government procurement opportunities, and enhances your company’s credibility.
It is a key document required for participating in government tenders. Without it, your company cannot successfully secure government contracts.
7. Company Website
In this current age where competition is high and AI is fast dominating the digital space. Getting a profesional and standard website for your business is what will make you stand out from competitors.
A website is like a passport and a testament of your company history, values and vision. You can create insightful articles in your niche, educate the public and even drive traffic and awareness to your brand.
Government ministries often prioritize contractors with a clear defined website, it exudes competence and professionalism.
8. Company Profile
A company profile also perfoms the similar work of a website. If you can not afford paying developers to build a website for you, you can opt for having a professional company profile.
A company profile is a special designed and customised document that highlights a company’s acheivements, projects and organogram
It does not just communicate what the company does but what it represents in terms of its mission, vision and objectives.
If you want to easily secure government contract in Nigeria, having a company profile should be something to consider.
9. Evidence of Competence and Relevant Experience
You will be required to provide documents demonstrating your company’s capacity and experience in executing similar services or contracts.
These may include your Company Profile, Details of Key Staff, and Evidence of Similar Jobs Completed (usually in the form of photographs or documented project records).
These documents help establish your company’s competence and readiness to handle the proposed contract.
10. Bank Reference Letter and Sworn Affidavit
You need to obtain a reference letter from a reputable bank, which guarantees that your company has the financial backing required to execute the contract if awarded. You are also to obtain a Sworn Affidavit confirming that:
- No director of your company has been convicted of any fraudulent offence.
- Your company is not bankrupt or under any form of insolvency proceedings.
- No officer of the procurement agency has any direct or indirect interest in your company.
Other Special Requirements
Certain industries require additional professional qualifications for key personnel. For example, if you operate an engineering firm, you must ensure that your key staff hold valid certifications from recognised professional bodies such as the Council for the Regulation of Engineering in Nigeria (COREN).
Similarly, if you run an accounting firm, your staff must be chartered accountants, typically certified by recognised bodies like the Institute of Chartered Accountants of Nigeria (ICAN). Ensure that all certifications and professional credentials remain current, valid, and verifiable.
The Public Procurement Process
The public procurement process generally follows these stages:
1. Assessment of Need – The government first identifies and assesses a need within a Ministry, Department, or Agency. This could involve the procurement of goods, services, or works required for public administration or development.
2. Publication of Tenders – Once the need is established, a tender notice is published, inviting qualified contractors or companies to submit bids.
This is usually done through newspapers, procurement portals, or official government platforms and typically remains open for about six (6) weeks before the bidding process.
3. Review and Evaluation of Bids – Submitted bids are reviewed and evaluated in two key stages. The first is the technical bid, which is used to assess your competence, qualifications, experience, and overall capacity to execute the project. Here, the procuring entity examines the relevant documents.
The second is the financial bid, which contains your proposed cost or quotation for carrying out the project.
Here, the procuring entity will review the pricing and financial terms you submitted. For a bid to be successful, it must satisfy the required standards in both the technical and financial evaluations.
4. Award of Contract – The contract is usually awarded to the bidder whose submission is most responsive and offers the best value, often the quotation closest to the estimated project cost and within the required timeframe.
5. Project Monitoring and Implementation – After the contract is awarded, the government monitors the contractor’s performance to ensure that the project is executed according to the agreed specifications, timeline, and budget.
Mistakes When Applying For Government Contracts
Here are some mistakes or omissions that can disqualify your company from the procurement process;
- Failure to meet required qualifications or certifications – Ensure you have the necessary professional credentials or company capabilities as outlined in the requirements.
- Incorrect bid submission – Be careful when placing the technical and financial bids in their envelopes, so that you don’t place one in the wrong envelope. You should always submit technical bids first, regardless of intent.
- Quotation errors– Any error in your pricing can lead to automatic disqualification.
- Late submission – You must submit your bids within the specified timeframe. Even a few minutes past the deadline can lead to rejection.
- Unrealistic bid figures – Ensure that your bids are not significantly higher or lower than the market value, as they may be rejected. Your quotation should reflect a fair and competitive price.
- Outdated or incomplete documents – All documents you submit must be current, accurate, and complete.
Ensure that you pay attention not to make any of these costly mistakes.
Before going into the requirements, you should understand the key principles of Public Procurement.
FAQs on Winning Government Contracts in Nigeria
Q: Do I need a registered company to get government contracts in Nigeria?
A: Yes. Your business has to exist before even seeking to apply for contracts, and so registration is non-negotiable. It makes it exist in the eyes of the government.
Q: What documents do I need to apply for government contracts in Nigeria?
A: You need your business’s CAC certificate of incorporation, certificates from PenCom, BPP, ITF, NSITF, and the TCC certificate. You also need documents to show capability and a bank reference letter.
Q: Where can I find government contract opportunities in Nigeria?
A: Government contract opportunities in Nigeria can be found from publications made by the BPP or announcements made on particular government sites.
Getting acquainted and involved with government agencies and ministries is another way to get updates on government contract opportunities.
Q: Can small businesses get government contracts in Nigeria?
A: Yes, small businesses can get government contracts if they are registered with CAC only if they are registered as a company
Q: How long does it take to win a government contract in Nigeria?
A: There is no specified timeframe for government contracts in Nigeria because it is highly dependent on the nature of the project and the procuring entity.
Q: Is tax compliance important for government contracts?
A: Yes, tax compliance is very important. The government screens out businesses that are not up-to-date on their taxes from the bidding process.
Conclusion:
In closing, I hope with the tips provided in this article, and the suggested documents required to obtain a government contract with either state government or federal government in Nigera has been insightfuly
See you on at the top.
