How to Leverage Merit and Connection to Secure Government Contracts in Nigeria

Securing government contracts in Nigeria can be both lucrative and career-defining for businesses and individuals.

However, the process can be complex, requiring a delicate balance between leveraging merit and building connections within government procurement departments.

This article provides a comprehensive guide on how to achieve this balance, the key documentation required, and actionable strategies to make inroads into procurement departments for a better chance at winning contracts.

Understanding Government Contracts in Nigeria

Government contracts in Nigeria are procurement opportunities where the government hires private companies to deliver goods, services, or projects.

These contracts range from small-scale local government projects to multimillion-dollar national-level infrastructure developments.

Nigeria’s government agencies, ministries, and parastatals are constantly seeking contractors for projects such as road construction, ICT services, consultancy, and more.

To win these contracts, a combination of competence (merit) and relationships (connections) is essential.

The Role of Merit in Winning Government Contracts

Merit refers to the qualifications, capabilities, and credibility that a business brings to the table. Government entities are obligated to seek competent contractors who can deliver quality work, as stipulated by Nigeria’s Public Procurement Act.

Merit-based selection involves:

1. Demonstrating technical competence: Your company must show that it has the skills, resources, and experience to complete the project. This can be achieved by submitting evidence of past projects, showcasing industry certifications, and having a strong portfolio.
2. Complying with legal and regulatory requirements: Government contracts in Nigeria require strict adherence to regulatory guidelines. Key documents needed include:
   • Company registration: Register your company with the Corporate Affairs Commission (CAC).
   • Tax clearance certificate: Ensure that your company has a tax clearance certificate for the past three years.
   • PENCOM compliance certificate: This is mandatory to show your business complies with pension regulations.
   • NSITF (Nigeria Social Insurance Trust Fund) compliance certificate: Required for insurance contributions.
   • ITF compliance certificate: Certifies that your company contributes to the Industrial Training Fund.
   • Bureau of Public Procurement (BPP) registration: To be eligible for government contracts, your company must be registered with the BPP National Database.
3. Developing a solid bidding proposal: Submitting a well-structured proposal is critical. It must include a clear understanding of the project, detailed costing, and a timeline for delivery. This document should also demonstrate your company’s qualifications, experience, and unique value proposition.
4. Financial capability: You must be able to demonstrate the financial ability to undertake the project. This may involve providing bank statements, a bank guarantee, or proof of existing financial backing.

The Importance of Connections in Government Contracting

While merit is essential, building connections with the right people is equally important when vying for government contracts in Nigeria.

The country’s procurement process, although regulated, often involves relationships, networks, and trust.

Connections can help you gain insights into upcoming opportunities, enhance your credibility, and open doors that merit alone might not.

How to Build Connections in Nigeria’s Government Procurement Departments

1. Attend government and industry events: Procurement officers, government officials, and key stakeholders often attend conferences, workshops, and seminars related to public procurement and government projects. These are ideal venues to network and make connections.
2. Engage with relevant ministries and agencies: Identify the government ministry or parastatal responsible for the type of contract you are targeting, such as the Ministry of Works, Ministry of Interior, or Ministry of Trades. Visit these ministries, attend open days, and network with key personnel to build relationships over time.
3. Leverage personal networks: In Nigeria, personal networks can be highly influential. If you have connections with individuals working in government or related sectors, you can tap into these networks to create introductions and foster relationships.
4. Join industry associations: Many industries have associations or bodies where key players from the public and private sectors converge. These associations often advocate for businesses within the industry and can offer useful connections.
5. Hire a government relations consultant: If you are not well-versed in government processes or do not have existing connections, a consultant specialising in government relations can provide valuable insights and open doors.
6. Seek mentorship from experienced contractors: Contractors who have successfully navigated the government contracting space can provide useful guidance and introductions to key procurement personnel.

Key Documentation for Securing Government Contracts in Nigeria

To position your company for success in bidding for government contracts, the following key documents are typically required:

1. Certificate of Incorporation: This document proves that your company is legally registered with the Corporate Affairs Commission (CAC).
2. Tax Clearance Certificate: Required for all public contracts, this shows your tax compliance over the past three years.
3. PENCOM Certificate: A certificate of compliance from the National Pension Commission (PENCOM) showing that your company is up to date with pension contributions.
4. Industrial Training Fund (ITF) Certificate: Proof that your company is compliant with contributions to the ITF, which is required for skills development.
5. NSITF Compliance Certificate: Evidence that your company complies with the Nigeria Social Insurance Trust Fund, which provides compensation for workers in case of occupational injuries or diseases.
6. Bureau of Public Procurement (BPP) Registration: Registration with the BPP National Database of Contractors is mandatory for eligibility to bid on government contracts.
7. Audited Financial Statements: This demonstrates the financial health of your company and its capacity to handle large projects.
8. Company Profile and Past Project Records: A detailed company profile with a portfolio of past projects helps build credibility and shows that you have relevant experience.
9. Bank Guarantee: Some projects may require proof of financial capability in the form of a bank guarantee.

How to Make an Inroad into Procurement Departments

Building relationships with procurement departments requires patience, persistence, and strategic planning. Here are practical steps to help you make inroads:

1. Understand the procurement process: Government procurement in Nigeria follows specific guidelines, including tender notices, submission of proposals, and evaluation processes. Familiarise yourself with the Public Procurement Act and how contracts are advertised.
2. Respond to tenders: Regularly check the BPP website and the procurement portals of various ministries for advertised tenders. Submitting bids even when you may not win is important for building recognition within the system.
3. Get feedback from past bids: If you have submitted a bid but did not win, reach out to the procurement office and request feedback. This shows you are proactive and willing to improve, while also giving you another touchpoint with procurement officers.
4. Maintain regular communication: Stay in contact with key people in procurement departments. Whether it is through email, phone calls, or in-person visits, consistent communication keeps you top of mind when opportunities arise.
5. Leverage professional social platforms: Platforms like LinkedIn are useful for connecting with procurement officers and key government stakeholders.
6. Show commitment to transparency: Demonstrating transparency in your dealings, from tax compliance to regulatory certifications, positions your business as a credible and trustworthy partner for government contracts.

Common Misconceptions About Winning Government Contracts in Nigeria

1. Misconception: Government contracts are only awarded through corruption.
   • Reality: While corruption can be an issue in Nigeria, many contracts are awarded based on merit and adherence to procurement rules. Building a strong portfolio and maintaining the right documentation can increase your chances.
2. Misconception: Only large, well-known companies can win contracts.
   • Reality: Small and medium-sized enterprises (SMEs) also stand a good chance of winning contracts if they meet the requirements, especially for smaller projects.
3. Misconception: You must bribe officials to win a contract.
   • Reality: Offering bribes is illegal and unethical. Instead, focus on building genuine relationships and providing value.
4. Misconception: You need direct connections with top government officials to win contracts.
   • Reality: While having connections helps, you do not always need top-tier contacts. Relationships with mid-level procurement officers can also open doors.
5. Misconception: The bidding process is rigged.
   • Reality: The procurement process is regulated, and while there are challenges, companies that follow the guidelines and submit strong proposals can still win contracts.

Frequently Asked Questions (FAQs)

How do I register my company to be eligible for government contracts in Nigeria?

To be eligible, your company must be registered with the Corporate Affairs Commission (CAC) and comply with tax, pension, and other regulatory requirements such as PENCOM, ITF, and NSITF.

What is the role of the Bureau of Public Procurement (BPP) in securing government contracts?

The BPP ensures transparency, competitiveness, and fair play in the procurement process. It maintains a national database of contractors and suppliers. Registration with the BPP is mandatory for bidding on government contracts.

Can small businesses win government contracts?

Yes, small businesses can win government contracts, especially for smaller projects or where niche expertise is required. Meeting all the regulatory requirements and submitting a strong bid are key factors.

How can I improve my chances of winning a government contract?

You can improve your chances by ensuring your company meets all legal and regulatory requirements, submitting competitive and well-prepared bids, and building relationships with procurement officers.

Are connections more important than merit in winning government contracts in Nigeria?

Both merit and connections play a role. While merit ensures you meet the qualifications, connections can help you gain insights and position yourself better within procurement departments.

Conclusion

Securing government contracts in Nigeria is a competitive process that requires a strategic combination of merit and connections.

While merit demonstrates your competence, building relationships within procurement departments can increase your chances of success.

By adhering to regulatory requirements, submitting compelling bids, and fostering genuine relationships, businesses of all sizes can win lucrative government contracts and grow their operations.