The Bureau of Public Procurement (BPP) yesterday said the Federal Government saved about N1.1 trillion within a year through a newly established Price Intelligence Unit. BPP’s Director-General, Dr Adebowale Adedokun, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja yesterday.
Adedokun said the unit benchmarked project costs against national and global prices. According to him, before the reforms, many government agencies obtained “blanket approvals’’ from the BPP and later determined project costs without further scrutiny.
The DG said the practice created wide disparities in contract pricing across Ministries, Departments and Agencies (MDAs). He said: “So what I did was to establish a unit called Price Intelligence Unit made up of young professionals in quantity surveying, architecture, engineering and other numeric-based professions. What they do is benchmarking using global and national prices.”
Adedokun explained that the unit developed a data bank of unit rates for projects across the country, taking into account inflation and regional price differences. “For instance, the cost of buying cement in the SouthSouth is not the same as in the North-Central, so we build rates and benchmark accordingly,” he said.
He said under the new system, all project costs must undergo evaluation by the Price Intelligence Unit before approval. “Before, agencies got noobjection approvals and later determined the costs themselves without reverting to BPP. “I stopped that process and insisted that before any project moves forward, we must evaluate the actual cost.
“In many cases, we discovered disparities between what agencies intended to award and what our market survey showed as the realistic cost, including profit margin.” The DG said the cumulative difference between proposed costs and benchmarked prices accounted for the N1.1 trillion savings recorded within one year. He added that some agencies had already returned to seek approval to deploy part of the saved funds for additional projects.
He said: “Nigeria gained in two ways. We saved public funds and also increased the number of projects and items the government could execute with the same resources. That is value for money.” On concerns that costcutting could compromise project quality, Adedokun insisted that quality remained a major requirement in public procurement.
