FG Introduces 3–5 Year Debarment for Defaulting Contractors

The Federal Government has introduced new rules that could see contractors, consultants and service providers barred from participating in federal procurement for periods ranging from three to five years.

The new measure is contained in a circular titled “Implementation of the National Guideline on Debarment of Contractors,” signed by the Secretary to the Government of the Federation, George Akume.

According to the directive, the guideline is aimed at strengthening integrity, transparency and accountability in public procurement, while protecting government funds from contractors whose conduct or performance undermines the delivery of public projects.

Six grounds for debarment

Under the new framework, contractors and other service providers may be considered for debarment on six major grounds.

These include offering money, gifts or other benefits to influence a procurement decision; providing employment or other financially measurable benefits to government procurement officials for the same purpose; being convicted of fraud or another offence connected with a public contract; deliberately failing to meet contractual obligations; having a record of poor or unsatisfactory contract performance; and falsifying documents.

A contractor that has already been debarred by a multilateral organisation may also be considered for exclusion from Federal Government procurement.

Restrictions on blacklisted contractors

Once a contractor is formally debarred, Ministries, Departments and Agencies will be prohibited from inviting the contractor to submit bids, awarding contracts to the contractor or approving subcontracts involving the affected party.

A debarred contractor will also be prohibited from conducting government business as an agent or representative of another contractor, consultant or service provider.

However, the new rules allow an existing contract or subcontract to continue in certain circumstances where the relevant government agency determines that there are sufficient reasons to permit its continuation.

The sanctions may also extend to partners involved in a joint venture.

How the debarment process will work

The Bureau of Public Procurement will play a central role in investigating and processing cases under the new system.

Proceedings may begin where the BPP, during a review, surveillance exercise or audit, has reason to believe that a contractor has violated the Public Procurement Act or related regulations.

A procuring entity may also recommend debarment after conducting appropriate investigations and obtaining evidence approved by its Accounting Officer.

The BPP is expected to acknowledge a debarment request within seven working days, while the Secretary of the Debarment Committee is required to review the submitted information within 10 working days.

If the available evidence establishes a case that could result in debarment, the BPP must issue a notice to the affected contractor within five working days. The notice is required to identify the allegations and the specific grounds being relied upon.

The contractor will then have 10 working days to respond. An extension of up to five additional working days may be granted upon request.

The response may be submitted personally or through legal counsel and may include documents or other information supporting the contractor's defence. The guidelines also require the response to be accompanied by a verifying affidavit confirming that the information supplied is truthful and was provided after due diligence.

Publication of proceedings

Where the authorities are unable to serve the notice physically or electronically, the proposed debarment may be published in two national newspapers, the Tenders Journal and the BPP's website for at least 10 working days.

If the contractor fails to respond within the prescribed period following publication, the Debarment Committee may proceed to determine the case using the information available to it.

Where a response is received, the committee is required to consider it and reach a decision on the merits within 15 working days.

If debarment is approved, the BPP must issue a final notice within five working days of receiving the committee's decision.

The final notice must state the decision, the grounds for debarment, the duration of the sanction and the consequences for the affected contractor.

The name of the sanctioned contractor will subsequently be entered into the BPP's database and published through the Bureau's website, the Federal Tenders Journal and other designated platforms.

Sanction may last up to five years

The Debarment Committee is authorised to impose a sanction lasting not less than three years and not more than five years.

The framework therefore establishes a formal process for excluding contractors from federal procurement rather than leaving sanctions solely to individual procuring entities.

The new guideline operates within Nigeria's existing public procurement framework established by the Public Procurement Act 2007, which created the BPP and provided the legal foundation for regulating federal procurement.

The Act seeks to promote competition, transparency and value for money while providing offences and sanctions for various forms of procurement misconduct.

Immediate implementation

The circular has been distributed to senior government officials, ministries, departments, agencies, security institutions, commissions, government-owned companies and other public bodies involved in federal procurement.

Accounting Officers have been directed to ensure that Tenders Boards, Procurement Planning Committees, Procurement Departments and other officials responsible for procurement are made aware of the new requirements.

The Federal Government said implementation of the guideline is effective immediately and directed all relevant institutions to ensure strict compliance.