Invalid Tax And BPP Clearance Yet Aviation Ministry Awards N1.09 Billion Airport Contracts To Shady Companies

Secrets Reporters

An audit of procurement activities at the Nigerian airports has raised serious questions over contracts worth 1.09 billion awarded to two companies after tax clearance and Bureau of Public Procurement certificates submitted by the contractors reportedly failed verification on the official government platforms.

The contracts, according to the audit findings, were awarded to Messer Cone Bridge Company and Bammami General Ventures for a range of supplies and services, including desktop computers and laptops for use at Akanu Ibiam International Airport, Enugu; Port Harcourt Airport, Omagwa, Rivers State; and Owerri Cargo Airport.

The companies were also awarded contracts for the supply of diesel to various airports and the provision of aviation security shoes and socks to the Headquarters Annex in Lagos for operational purposes.

Together, the contracts amounted to N1,092,962,577.98 but rather than focusing only on the size of the contracts, the audit drew attention to what it described as a potentially more troubling issue the validity of documents used by the contractors to qualify for the procurement process.

According to the audit, tax clearance certificates presented by some of the contractors were subjected to verification through the Federal Inland Revenue Service (FIRS) website and were returned as invalid.

The auditors also reported a similar problem with the BPP certificates presented by the contractors. The audit stated that when the certificates were checked against information available on the BPP website, the details did not correspond with the records on the official platform.

Instead, the auditors said, the information displayed on the BPP website belonged to other companies, suggesting that the certificates presented during the procurement process had allegedly been altered.

The findings raise questions about how the companies passed the procurement process in the first place, particularly because the documents in question are not obscure paperwork but certificates that can be verified electronically through government platforms.

A N1.09 Billion Procurement Trail

The contracts covered a range of supplies considered important to airport operations. The companies were contracted to supply computers and laptops to airports in different parts of the country, including Akanu Ibiam International Airport in Enugu, Port Harcourt/Omagwa in Rivers State and Owerri Cargo Airport.

Other contracts involved the supply of diesel to various airports, a critical commodity for facilities that rely heavily on generators and other power systems, as well as aviation security shoes and socks for operational personnel at the Headquarters Annex in Lagos.

The audit, however, did not treat the issue as a mere administrative error. It cited provisions of the Public Procurement Act, particularly Section 58, which criminalises certain forms of misconduct in the procurement process, including altering procurement documents with the intention of influencing the outcome of a tender and using fake documents or encouraging their use.

The auditors also referenced Financial Regulations provisions relating to the alteration or use of fake documents. Procurement certificates are intended to provide government agencies with assurance that companies seeking public contracts have met statutory requirements.

A valid tax clearance certificate, for instance, provides evidence of a contractor’s tax compliance, while BPP related certification forms part of the regulatory framework governing public procurement.

If such documents are invalid or altered, the credibility of the entire procurement process becomes questionable. It also raises a fundamental question “How did companies whose certificates allegedly failed verification get to the point of receiving contracts worth more than N1 billion?”

The Verification Question

According to the findings, the tax clearance certificates were checked against the FIRS platform, while the BPP certificates were similarly verified through the Bureau’s online system. The auditors therefore questioned how the documents could have passed through the procurement process despite the discrepancies discovered during their verification.

The report went as far as stating that, because the verification process is automated, it was difficult for the auditors to believe that there was no collusion between the Board and the contractors. That is an allegation contained in the audit finding and would require further investigation and responses from the affected parties before any conclusion can be reached.

Still, the question remains difficult to ignore, if the documents could be checked online, why were the discrepancies not detected before the contracts were awarded? Was the verification carried out before the companies were selected? If it was, what records were relied upon to establish the companies’ eligibility? and if verification was not conducted before the awards, why was a basic procurement safeguard overlooked on contracts worth more than one billion naira?

These questions are particularly important because public procurement is ultimately funded by taxpayers.

Every naira spent on computers, diesel, security equipment and other supplies comes from public resources. The procurement process is therefore expected to protect those resources by ensuring that contracts are awarded to eligible companies through transparent and verifiable procedures.

What the Audit Says Was at Risk

The auditors identified several risks arising from the procurement irregularities, among them were lack of transparency, accountability and probity in the awarded contracts; bid rigging; loss of public funds; and difficulties in funding the nation’s budget. These risks go beyond the two companies named in the audit.

Where procurement documents cannot be reliably authenticated, the government may struggle to establish whether the winning companies were genuinely qualified to compete for the contracts.

It could also create an uneven playing field in which companies that complied with procurement requirements compete against firms whose eligibility documents may not withstand verification.

For businesses that spend money obtaining genuine tax and procurement certificates, such a system could discourage compliance and undermine confidence in government contracting.

More importantly, if contracts are awarded on the basis of invalid documentation, questions may arise about whether the government received value for the money eventually paid.

The audit finding, however, does not establish that the supplies were not delivered or that the entire N1.09 billion was lost.

The finding specifically concerns the validity and verification of documents presented in the procurement process. Establishing whether the contracts were fully executed, whether the goods and services were supplied, whether payments were made, and whether the government received value for those payments would require additional investigation.

Five Year Jail Term for Procurement Violations

The audit cited Section 58 of the Public Procurement Act, which provides sanctions for certain procurement related offences.

According to the provision referenced in the report, a person found guilty of the relevant violations could face a term of imprisonment of not less than five years without an option of fine, as well as dismissal from government service where applicable.

The severity of the sanctions underscores the importance of ensuring that procurement officers properly verify documents before awarding public contracts.

It also places responsibility on accounting officers and other officials involved in procurement.

The audit cited Section 20 of the Public Procurement Act, which places overall responsibility for procurement planning, tender organization, evaluation and execution on the accounting officer of a procuring entity.

The law also provides that the accounting officer is responsible for ensuring compliance with the Act and can be held personally liable for breaches or contraventions, even where functions have been delegated to subordinates.

This provision makes the issue more than a question concerning the contractors alone. If the audit findings are sustained, attention would also need to turn to the officials responsible for reviewing and approving the procurement documents.

Auditors Demand Answers

Rather than merely flagging the problem, the auditors recommended that the Managing Director provide an explanation for why the Board allowed the use of what they described as invalid tax clearance and BPP certificates in awarding the contracts.

They also recommended that the matter be reported to the Economic and Financial Crimes Commission (EFCC) and the relevant tax authority.

The auditors further recommended that the companies involved be blacklisted. Alternatively, where the findings are established, they recommended the application of sanctions provided under the relevant provisions of the Public Procurement Act.

The recommendations effectively place the next responsibility on the management of the organization and relevant investigative authorities.

For the public, however, the bigger question is whether the audit findings will result in consequences or become another entry in a government audit report that attracts attention briefly before disappearing.

The N1.09 billion involved is too significant to be treated as a mere paperwork discrepancy.

These are public contracts awarded for supplies connected to airports and aviation operations. If the companies were properly qualified and the documents were merely affected by an administrative or technical problem, the agencies involved should be able to explain that clearly.

If, however, the certificates were indeed altered or fabricated, then the issue becomes considerably more serious. It would mean that companies may have entered a public procurement process using documents that did not withstand basic verification and that those documents somehow survived the checks required before contracts worth more than one billion naira were awarded.