The Bureau of Public Procurement (BPP) has announced that the Federal Government saved approximately N1.1 trillion in the past year through the establishment of its Price Intelligence Unit.
Dr. Adebowale Adedokun, the Director-General (D-G) of BPP, disclosed this in an interview with our correspondence on Sunday in Abuja.
Adedokun explained that the unit was created to benchmark project costs against both national and global price standards. He noted that before the reforms, government agencies often received “blanket approvals” from the BPP and were free to determine project costs without further scrutiny, leading to significant disparities in pricing across Ministries, Departments, and Agencies (MDAs).
“In the past, agencies were given no-objection approvals, and they would later determine the costs themselves without consulting the BPP,” Adedokun said. “This led to discrepancies in pricing. To address this, I established the Price Intelligence Unit, which consists of young professionals from fields like quantity surveying, architecture, engineering, and other data-driven professions.”
He described the unit’s primary role as benchmarking project costs using global and national price data. They developed a comprehensive data bank of unit rates for various projects across Nigeria, factoring in inflation and regional price variations. For example, he pointed out that the cost of cement in the South-South region differs from that in the North-Central region, and this was accounted for in the unit’s calculations.
Under the new system, all project costs must be evaluated by the Price Intelligence Unit before they can be approved. “What we’ve done is ensure that all project costs are examined by our unit before approval,” he said. “In many cases, we found disparities between the figures proposed by agencies and the realistic costs based on our market survey, including profit margins.”
The difference between the proposed costs and the benchmarked prices has led to the N1.1 trillion in savings, Adedokun confirmed. He added that some agencies had returned to request approval to use part of the saved funds for additional projects.
“Nigeria benefitted in two ways,” he said. “We saved public funds and were able to execute more projects and items with the same resources. That is value for money.”
Regarding concerns that cost-cutting could affect project quality, Adedokun reassured that quality remains a top priority in public procurement. “Quality is the most important aspect of procurement,” he said. “If we discover intentional compromises in quality or pricing, we forward such cases to the EFCC and ICPC for further investigation.”
He also acknowledged that weak monitoring and evaluation had contributed to the prevalence of abandoned and substandard projects in the past. However, he revealed that President Bola Tinubu has directed the creation of a comprehensive monitoring and evaluation framework for procurement projects across the country to ensure better accountability.
Adedokun emphasized that professionals involved in project supervision, such as engineers, architects, and builders, would be held accountable if projects failed due to their negligence. “If a building collapses after it has been certified by professionals, we will hold them accountable through their professional bodies. We must begin to sanction bad practices,” he said.
The BPP boss also clarified that government contracts are not awarded based solely on the lowest bid. “We do not award contracts based on the lowest price,” he said. “We award based on the lowest evaluated responsive bid, which combines technical competence and competitive pricing.”
He explained that contractors who quote unrealistically low prices for critical project components are often disqualified to prevent poor-quality work. “For example, if a contractor says they will buy a bag of cement for N5,000 when the market price is N12,000, that already indicates the contractor is likely to deliver substandard work,” Adedokun explained.
However, he noted that some contractors are allowed to justify lower prices if they have existing stock purchased before the price increase, provided they agree in writing not to request contract variations later.
Adedokun also mentioned that in some cases, BPP has adjusted contract prices that were considered too low to ensure competitive pricing and quality delivery.
