THE ROLE OF LEGAL ASSESSMENT ON
TENDER OF CONTRACTS IN NIGERIA
(A CASE STUDY OF MINISTERIAL TENDER
BOARD UNIT, MINISTRY OF INTERIOR, ABUJA)
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is a paradox that Nigeria is a rich
country inhabited by the poor. Her poverty profile in statistical figures
according to a recent study indicates that Nigeria is poverty endemic. Poverty
incidence increased between 1980 and 1985 and between 1992 and 1996. The trend
also shows that there has been appreciable decrease in poverty rates between
1985 and 1992 and 1996 and 2004. In 2004, growth in population almost equals
growth in poverty since 1980.
Poverty has predominated in the rural
area than in the urban area by 63.3% and 43.2% respectively. The trends in
poverty levels by zones show that in the northern part of the country, the
North-East zone has a higher incidence of poverty followed by North-West and
North-Central.
Out of over 160 million population at
3.2% population growth rate, 5.3% unemployment rate, real GDP growth rate of
5.7%, oil sector growth rate of 4.31%, non-oil sector growth rate of 8.93%,
inflation rate of 8.50%, about half of the total population (68.7million) live
below poverty line (Ladan, 2002).
Corruption
in the management of public procurement and finance is a veritable area for
corrupt practices. Every state must at various times procure goods and
services. This calls for request for contract practices, is that public
officials disclose to those with interest in the bid, the position of things,
this unfairness leads to a situation in which honest bidders are outmaneuvered
by smart allies. The bidding process favors those who lest disposed to perform
and the end-product suffers from mediocre handling. Very often, the favored
bidders later ask for contract price adjustment upwards. The eventual
consequence is that the buildings cost more and are often poorly executed.
Transparency and objective criteria should guide government procurements,
contract awards and other financial management of public finance.
All
information about a tender or contract must be widely disseminate for all those
who have an interest to prepare their tenders, consults with their tenders,
consults with their financiers, architects, structural engineers and other
consultants in order to enable them make informed bids. Time, being of essence,
must be adequate. Many prospective bidders have been cut by shortage of the
time allowed for preparations and have been stampeded into hasty evaluations
leading to their inability to perform the contracts or evaluations leading to
their inability to perform the contracts or poor performance or even
abandonment of work on site. This is very common in developing states. The terrain
is littered with uncompleted projects resulting from the initial rush to bid.
This is full disclosure of all material facts in order to facilitate the
contracts award process, which would eliminate insider informants, insider
trading and other malignant practices.
1.2 STATEMENT OF THE PROBLEM
Corruption
in public procurement of goods and services and management of government
contracts have marred every efforts put by the federal government in
establishing the procurement act 2007. This problem of corruption starts right
from the invitation for contractors to summit tenders for government contracts (Eziokwu ,
2008).
Legal
assessment (through the ministerial tender board units) of contracts which is a
mandatory process every contractor biding for a government contract must pass
through is not as effective as it ought to be. Despite the legal assessment on
contractors and contracts, we still have cases of abandoned projects, elephant
projects and poorly delivered projects. All these problems indicate a loophole
hole in our legal systems and high rate of nepotism and favoritism in our procurement
systems.
1.3 OBJECTIVES OF THE STUDY
The
main aim of this study is to examine the role legal assessment has played with
respect to contract and tenders for contracts in Nigeria. Specific objectiveof
the study are:
1. To
examine challenges militating against the effective assessment of contracts and
tender for contracts in Nigeria.
2. To
identify the role the ministerial tender board unit (MTB) has played in
promoting transparent and efficient contract tender system for contracts in
Nigeria.
3. To
evaluate the impact of legal assessment on contracts and tenders for contracts
in Nigeria.
1.4 RESEARCH QUESTIONS
In-order
to achieve the above objectives, the researcher formulated the following
research questions:
1. What
are the challenges faced by the ministerial tender board in the assessment of
contracts and tenders for contracts in Nigeria?
2. What
specific roles have the ministerial tender board (MTB) played in promoting
transparent and efficient tender system in Nigeria?
3. What
impact has legal assessment on contracts and tenders for contracts had on the
outcome of the project?
1.5 RESEARCH HYPOTHESIS
The
following null and alternate hypotheses were formulated for the study:
1. Ho:
The Ministerial Tender board (MTB) has not effectively carried out their task
due to government interference and favoritism.
Hi:
The ministerial Tender Board (MTB) has effectively carried out their task
without government interference and favoritism.
2. Ho:
Shortfall in the legal assessment process of contract tenders is responsible
for low quality construction projects in Nigeria.
Hi:
Shortfall in the legal assessment process of contract tenders is responsible
for low quality construction projects in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The
study will give insights into the various challenges faced by contractors in
the tendering/bidding process for government contracts. These heighted
challenges will enable the government and other stakeholders to help develop a
leveled playground that will enable both small and medium scale contractors to
be able to bid for contracts effectively without fear. The study will also go a
long way in recommending some policies that will enable the government to
implement policies that will make our contract tendering process more
transparent and effective.
1.7 SCOPE OF THE STUDY
The
study will cover the role of legal assessment in contract tenders for companies
in Nigeria, using the Ministerial Tender Board (MTB) unit of the Federal
Ministry of Interior, Abuja as a case study.
1.8 LIMITATION OF THE STUDY
Some
of the people felt reluctant to answer the questionnaire also few who answered
did not comprehend how to answer the questionnaire properly. Certain vital
questions relating improvement have being massively ignored.
The
researcher was not able to see all the teachers, non-academic staff and
students to share thoughts on the topic, due to busy schedules of the
populations
1.9 DEFINITION OF TERMS
1.
Legal: Allowable or enforceable by being in conformity with the law of the land
and the public policy;
not condemned as illegal. See also lawful
and legitimate.
2. Law: Law is a term which does
not have a universally accepted definition,but one definition is
that law is a system
of rules and guidelines which are enforced through social institutions to
govern behavior. Laws are made by governments,
specifically by their legislatures.
3. Finance: This is the study of how
people allocate their assets
over time under conditions of certainty and uncertainty. A key point in
finance, which affects decisions, is the time value of money, which states that a
unit of currency today is worth more than the same unit of currency tomorrow.
Finance aims to price assets based on their risk level, and expected rate of
return. Finance can be broken into three different sub categories: public finance,
corporate finance and personal finance.
4. Tender: A tender is a formal,
structured invitation to suppliers to bid to supply products or services. In
the public sector, such a process may be required and determined in detail by
law to ensure that such competition for the use of public money is open, fair
and free from bribery
and nepotism.
5. Project management is the
discipline of planning, organizing, motivating, and controlling resources to
achieve specific goals. A project
is a temporary endeavour with a defined beginning and end (usually
time-constrained, and often constrained by funding or deliverables),undertaken
to meet unique goals and objectives, typically to bring about beneficial change
or added value. The temporary nature of projects stands in contrast with business as usual (or operations),which are repetitive, permanent, or semi-permanent functional activities
to produce products or services. In practice, the management of these two
systems is often quite different, and as such requires the development of distinct
technical skills and management strategies.
5.
Contract: Erikson (2002) defined Contract
as an agreement that creates an obligation binding upon the parties
thereto. The essentials of a contract are as follows: (1) mutual assent; (2) a
legal consideration, which in most instances need not be pecuniary; (3) parties
who have legal capacity to make a contract; (4) absence of fraud or duress; and
(5) a subject matter that is not illegal or against public policy.
6.
Contract Planning: According to Simmons (2007), Contract planning is the
process of systematically and efficiently managing contract creation, execution
and analysis for maximising operational and financial performance and
minimising risk.
7.
Cost: Hudson (1999) defined cost as the value of money
that has been used up to produce something, and hence is not available for use
anymore. In business,
the cost may be one of acquisition, in which case the amount of money expended
to acquire it is counted as cost. In this case, money is the input that is gone
in order to acquire the thing. This acquisition cost may be the sum of the cost
of production as incurred by the original producer, and further costs of
transaction as incurred by the acquirer over and above the price paid to the
producer. Usually, the price also includes a mark-up for profit over the cost
of production.
8.
General contractor, organization or
individual that contracts with another organization or individual (the owner)
for the construction of a building, road or other facility.
REFERENCES:
1. Eziokwu
S.A., Good Governance: – Theory and Practice (2008): – The Regent Publishing
Co. Ltd, Abuja.
2. Ladan
M.T. (2002) Civil Society and Government Relations: – The Ideal. A paper
presented at a one-day seminar organized by the Civil Liberties Organization,
North-West Zone, held in Kaduna.