Contrary to popular belief, it is possible to successfully bid for government and private sector contracts in Nigeria without necessarily needing connections to pull it off. To achieve this, it is important to be knowledgeable about the relevant procedures and be fully prepared in order to increase your chances. As those who have executed contracts for governments and big companies in Nigeria can testify to, winning a contract can very often lead to significant profit margins that are difficult to replicate elsewhere. Even in this period of recession, contracts are awarded almost daily at different levels of government and by different organisations in the private sector.
There are 774 local governments, 36 state governments and the Federal Capital Territory (FCT), the Federal Government, and hundreds (if not thousands) of relatively large corporations which altogether awards contracts worth hundreds of billions of Naira annually for numerous procurement, development, maintenance, consulting, and specialised projects. Recession or not, services must be rendered, infrastructure must be maintained, and in a nutshell, life must go on. This means that the prospects and opportunities in contracting for indigenous companies are humongous, and there is no reason why you should not make an effort to partake in this lucrative ecosystem.
It is therefore important to be equipped with the necessary knowledge and guidance that can enable you partake in the action and smile to the bank.
First, it goes without saying that you must have a duly registered company to be eligible to apply for contracts, since most government and multinational companies’ contract tenders prequalify only registered companies, which rules out bidding by individuals or unregistered entities.
Depending on the area you are interested in (e.g. procurement, health services, consultancy, project management, etc.), it is worthwhile to attain some specialisation through training and certification before registering your company accordingly.
There are many categories of contractors within the contracts ecosystem in Nigeria. However, these can be grouped broadly as major contractors and subcontractors. On one hand, major contractors are the very large, often foreign companies that possess extensive technical expertise, funding, and experience to execute most landmark projects – especially as regards construction, engineering, and technical leadership. On the other hand, subcontractors are typically indigenous operators who provide support services or handle relatively smaller scale value chain processes involving procurement, consulting, supplies, and other ancillary services. The latter category of contractors is where you should focus on as a first timer and a small scale operator who is seeking to explore the world of contracting in Nigeria.
Bidders on contracts for governments and large corporations are generally expected to meet the following conditions before they are deemed eligible:
(1) Statutory Requirements
(a) Evidence of Incorporation of the Company with the Corporate Affairs Commission (CAC), updated Annual Returns, Article of Association, Form C02 and Form C07.
(b) Evidence of fulfilling Tax obligations involving the following:
- Current Tax Clearance Certificate (TCC) for the last three (3) years ending 2014; VAT Registration Certificate; and TIN Number (Tax Identification Number).
- Audited Account of the Bidding Company for the last three (3) years duly endorsed by a firm of Professional Accountants.
- Evidence of financial capacity to execute contract (Statement of Account or Turnover) and reference letter from your bank.
(c) Evidence of inclusion in the PENCOM register.
(d) Evidence of fulfilment of statutory contribution to the Industrial Training Fund (certificate of compliance).
(e) A Sworn Affidavit in conformance with section 6 of the Procurement Act 2007.
(f) A letter authorizing the Authority or her representative(s) to conduct Due Diligence on all the documents submitted by the company from any source with the view of confirming their genuineness or otherwise.
(2) Technical Requirements
(a) Evidence of work experience as the main contractor executing or having executed a minimum of four similar projects, compared to the proposed work, one of which must have been within the last 3 years. This should be accompanied by scanned copies of award letters and Interim Certificate of Valuation for any ongoing project, Completion Certificate and Final Maintenance Certificates where applicable need to be enclosed.
(b) Evidence of personnel holding of at least four (4) relevant professionals, stating their roles, designation and experience.
(c) Where applicable and depending on the nature of the contract, evidence of possession of relevant equipment and machinery.
(d) Methodology of the project implementation – this should include a summary of your company’s operational capabilities and a clear indication of the means by which you plan to execute the contract.