President of the Senate, Sen. Ahmed Lawan
President of the Senate, Ahmed Lawan

Senate increases contract mobilization fee by 30 percent

NEWS DIGEST – The Senate Wednesday increased the amount of mobilization fee payable to contractors in the country from 15 per cent to 30 per cent.

This followed the consideration and passage of the report of the Senate Committee on Procurement on the Public Procurement Act, 2007 (amendment) Bill, presented by Senator Shuaibu Lau (Taraba North).

Senator Lau in his lead debate said the various sections amended in the Act would turnaround the nation’s procurement process and contract award in the country.

On the issue on mobilisation for local contractors, the committee recommended not more than 20 per cent but the Senate approved 30 per cent after much debate on the issue.

The Senate did not fix any percentage as mobilization fee for foreign contractors because some Senators were of the view that they should be ready to use their money for projects and get paid afterwards.

The new amendment also saw the reduction of the time frame for contract award to two weeks for processing and four days to issue certificates to qualified contractors.

Many Senators during the consideration of the report averred that the current mobilisation fee for local contractors was inadequate and that it usually leads to contract abandonment.

The issue of certificate of no objection generated an interesting debate among the Senators when the report was being debated.

Senators were divided over whether certificates of no objection should be issued by heads of the MDAs or a special committee in the Bureau of Public Procurement.

Senate President, Ahmad Lawan, was of the view that the National Assembly should make sure that there was no delay in contract processing and award by giving a realistic timeframe for the necessary document to be issued.

He said doing so would also help to curb corruption.

Some Senators suggested the idea of having a representative of the Bureau of Public Procurement to be posted into the MDAs for the purpose of issuing certificates based on their various thresholds.

The lawmakers after extensive debate agreed to use the timeframe template to save time and prevent corruption in contracts award.

They further agreed that contracts should be processed within two weeks while the certificate should be issued within four days.

Lawan said that there should be a deliberate plan of the government to encourage local contractors through policies and legislation.

He noted that the BPP has been problematic over the years.

He expressed confidence that the procurement process would now be faster with the passage of the Public Procurement Act 2007 (amendment) Bill 2019.

He was optimistic that the House of Representatives would concur to the amendments before the Christmas break so that it could be signed into law by President Muhammadu Buhari.