Procurement Act: Reps in a fix over violation

The rejection of a motion by the House of Representatives to investigate allegations of abuse, breach and violation of the Public Procurement Act of 2007 by the Federal Inland Revenue Service (FIRS) has raised dust in the lower chamber. PHILIP NYAM examines the contending issues



It is a fact that since the 4th Republic was inaugurated in 1999; both chambers of the National Assembly have conducted series of investigations into activities of government ministries, departments and agencies (MDAs).

Incidentally, most of these investigations borders on allegations of corruption, which it’s generally accepted that is the bane of purposeful development in the country.

The House of Representatives particularly, has carried out serious allegations such as the probe of monies expended on the power sector under the Olusegun Obasanjo administration by the Hon. Ndudi Elumelu-led committee on power.

The investigation was later mired in controversy following allegations of bribery against the committee forcing the then Speaker, Dimeji Bankole, to dissolve the committee and constitute an ad hoc committee to review the recommendations of its findings.

In the 7th Assembly, a similar incident played out with the petroleum subsidy probe under the chairmanship of Hon. Farouk Lawan. The attendant bribery allegation from that investigation almost brought the House to its knees.

Similarly, the N44 million bribery allegations that trailed the investigation of the Capital Market and indeed the Securities and Exchange Commission (SEC), under the chairmanship of Hon. Herman Hembe was another sore point in the House oversight of MDAs.

Perhaps, due to the lessons, the leadership of the House has learnt from these incidences, resolutions to investigate MDAs are given in depth scrutiny to avoid bringing the image of the parliament to disrepute.

This probably informed the decision of the House to vote against a motion seeking for the investigation of certain allegations against the Federal Inland Revenue Service (FIRS). On March 9, 2017, the deputy minority leader of the House, Hon. Chukwuka Onyema brought before the plenary, a motion on the need to investigate allegations of abuse, breach and violation of the public procurement act of 2007 by the Federal Inland Revenue Service (FIRS).

However, after presenting the motion, it was rejected by majority of the lawmakers thereby forcing Speaker Yakubu Dogara, who presided over the session to rule that the motion could still be re-presented should the sponsor provide verifiable facts that the allegations were true. Dogara further stressed that if the House was furnished with evidences to substantiate the alleged infractions, FIRS would be investigated.

While presenting the motion, Onyema noted that as an agency of the Federal Government, FIRS is required to fully comply with the provisions of the Public Procurement Act of 2007.

He alleged that there were numerous allegations of gross abuse of the letters and spirit of the Act by FIRS ranging from noncompliance with requirements for competitive bidding, abuse of the restrictive tendering option, award of contracts beyond approved threshold to companies, some of which were registered on the day of award and to companies not having the required compliance documents and certificates. According to him, “such gross abuse and violation of the Procurement Act were partly responsible for the numerous challenges bedeviling the nation, including the current economic recession and infrastructural deficit.”

The deputy minority leader further alleged that the FIRS has consistently shown strong penchant to deliberately violate the Act, as was the case in its engagement of McKenzie, which resulted in huge loss of foreign exchange to the nation.

He expressed concerned that if urgent steps are not taken to investigate these allegations and address any infractions, the abuse is likely to continue, resulting in further losses to the nation. But the prayers put forward by Onyema that the House committees on public procurement and finance to investigate the allegations and report back to the within five weeks for further legislative action was turned down.

It was curious that the motion could not sail through because as a principal officer, it was expected that Onyema would have had his way with the motion but the opposite was the outcome.

However, barely a week after the motion was rejected; more allegations have emerged in the House over why it failed with lawmakers sympathetic to the motion are threatening to re-present the motion with some of the facts in their kitty to buttress its demand.

The FIRS is said to have awarded a multi-million naira contract to a five-day old company. One of the lawmakers pushing for the motion disclosed that “it is almost unheard of that we voted nay to an investigative motion and the matter has become embarrassing, because it seems the House is covering this up. But, what many forgot that day is that motions are a result of legwork.

There are already some facts, before anybody brings a motion before the House.” Documents made available to New Telegraph show that the FIRS awarded a Value Added Tax (VAT) Automation contract, worth millions of Naira, to Active Solutions Integrated Synergy Ltd, five days after it was incorporated with the Corporate Affairs Commission (CAC). According to the document, the company was registered on the December 2, 2016, while the contract letter from the FIRS is dated December 7, 2016.

The contract award stipulates that the firm would be entitled to one percent of the total revenue collected through its platform, with its engagement as a consultant to deploy Revenue Monitoring Solution on telecommunications companies, specifically for International Voice, Internet and other value added network services for the FIRS.

The contract award letter with reference no: FIRS/ PD/15/12/16/378, signed by the Director of Procurement, Aisha Obomeghie, on behalf of the Executive Chairman, said the duration of the contract is one year from the date of deployment of the deployment. “One per cent of the total revenue collected through the platform shall be your remuneration.

The one per cent shall cover the cost of all deliverables as specified above,” the letter read. It is alleged that the management of FIRS unilaterally awarded the contract, without advertisement, bidding, tax clearance, and without following laid down processes for contract awards by government agencies.

But further investigations revealed that “Messrs Active Solutions contract is just one of many, as there are several dozens of such cases, where newly registered companies are engaged for various services by FIRS.

“Obviously, these companies are registered solely for these contracts. It is now so bad that consultants are doing the work of staff, and the staff are now idle. This has caused dissatisfaction in the FIRS,” the source said.

“That motion, in the House of Representatives, was through our lobbying, because we want things done right here, so we were very disappointed that the members voted no. Hopefully they will revisit it, and of course, we will provide evidences to them for the investigations,” the source added.

The scope of engagement as specified in the contract award letter includes to, integrate the telecommunications revenue monitoring solution with the FIRS web portal and FIRS Date warehousing, ensure the full implementation of tax deduction at source technology platform, and facilitate all required integrations with NIBSS, telecommunication companies, FIRS and banks.

Given the information being brandished by the lawmakers against the FIRS, questions are being asked if the House would allow the investigation to be carried out. The motion is due to be represented this week, but with the massive opposition it received when it was first moved on the floor, it is not clear whether those opposed to it would back down on their stance.

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