New public procurement law raises contract mobilisation fee from 15% to 50%

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New changes have been introduced into public procurement to shorten contract processing and execution period.

These were contained in a “Bill for an Act to Amend the Public Procurement Act, 2007,” which passed Third Reading at the House of Representatives in Abuja on Thursday.

One of the new provisions is the raising of mobilisation fee on contracts from 15 per cent to “not more than 50 per cent.”

However, in another provision in Section 35(3), a contractor who has been paid the mobilisation fee but abandons the project, faces a prison term of two years on conviction.

It notes, “Any person or authority who accesses mobilisation fee and absconds or does not carry out the services or works commensurate to the fee paid, shall be guilty of an offence and punishable with 2 years imprisonment or a fine equivalent to the fee paid or both.”

The new law also makes provisions, simplifying contracts processing to shorten the time from the current average of four months in a bid to speed up the execution of jobs and procurement.

In addition, the new law removes the Minister of Finance as Chairman of the National Council on Public Procurement on the grounds that the ministry itself is a procurement entity, which should not be presiding over its own case.

In the place of the minister, the law has empowered the President to appoint the chairman from a pool of qualified persons.


Source – The Punch

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