Fed Govt ties contract payment to performance

By Vincent Ikuomola, Abuja 

The era of consultants getting full payment for projects before completion is gone for good, the Federal Government said yesterday.
Henceforth, payments would be tied to performance, government added, even as it announced the establishment of a team to work on a template that will reduce contract cost.

These were some of the decisions reached at the weekly Federal Executive Council (FEC) presided over by President Goodluck Jonathan yesterday. 

Briefing reporters at the end of the meeting, Minister of Information Labaran Maku, said the issue of uncompleted projects has become a source of concern to the president who had directed that  no contract will come to the council without an agreed and verifiable transition plan, to ensure all projects are awarded and completed smoothly and on time.

He said: “Another issue was that of uncompleted projects that has continued to be a source of concern to Mr. President and all Nigerians. “He directed that for the period he is in power, he will want to see all the projects initiated and awarded by his administration are completed on schedule, within the period of his administration.

“He directed the coordinating minister of the economy as well as the Bureau of Public Procurement (BPP), Minister of Finance, to ensure that no contract will come to council without an agreed and verifiable transition plan, to ensure all projects are awarded and completed smoothly and on time.

“The consequence of uncompleted projects is that money is tied down and Nigerians are not benefiting from the services that those projects are suppose to offer. In addition to that, contractors keep coming up with augmentation plans, once execution time plan for a project is exceeded. 

“So, this matter has become a very serious problem not just to the Federal Government but nationwide, but Mr. President believes one of the quick ways of tackling it is to ensure that onward we can make a remedy. 
“So, all contracts every minister is bringing must be proved and backed up with a financial plan that will be smooth and timely exist from those projects. 

“It was agreed that there is no need starting something that will not be completed and Nigerians will not benefit. 

“As you do know part of the strategy of this budget is to complete existing project  awarded by previous administrations, that unless we carry this project to completion, the huge investments in them running to trillions of naira will be wasted,” the minister said. 

On contract cost, Maku said the President is also worried that various measures put in place have not been able to stem the tide as contract cost soars against normal norms.

Government, he said has still not been able to arrive at what could consider to be universally appropriate valuation of projects in the public sector in Nigeria.

SOURCE: The Nation Newspaper, 10 November 2011. http://www.thenationonlineng.net