Energy

BPP urges court to void N1.786b contract for PHCN’s liquidation

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The Bureau of Public Procurement (BPP) has urged a Federal High Court in Abuja to void a N1.786,287,040 contract awarded for the wind-up/liquidation of the Power Holding Company of Nigeria (PHCN), claiming it was illegal.

It is BPP’s contention that the contract – for the provision of legal advisory services for the liquidation of PHCN – awarded in 2014 by the Bureau of Public Enterprises (BPE) to a law firm, JP Gadzama LLP (formerly J.K. Gadzama & Partners LLP) was without compliance with due process as required under the Public Procurement Act (PPA) 2007.

The BPP stated that the BPE allegedly awarded the contract and made part-payment to the law firm, without first obtaining a “certificate of no objection” from it (BPP), as required under the Public Procurement Act 2007.

This formed part of BPP’s argument in documents filed by its lawyer, Wahab Olatoye in response to a suit by J.K. Gadzama LLP and Joe-Kyari Gadzama (SAN), marked FHC/ABJ/CS/997/2015.

The plaintiffs had sued, alleging among others, that BPP unlawfully effected a downward review of the cost of the contract from N1.786, 287,040 to N929, 613,188.94 and queried BPP’s right to so act.

In their amended originating summons, the plaintiffs claimed to have bided N2, 864,349,600 for the contract, while the BPE agreed to “a negotiated N1, 786,287,040.”

The plaintiffs argued that the review allegedly effected on the contract sum by the BPP was unlawful, contending that under the Public Enterprise (Privatisation and Commercialisation) Act, the National Council on Privatisation (NCP), through the 2nd defendant (BPE) is the final authority in the award of such contracts.

They also faulted the petitions written by the BPP on June 17, 2015, to the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and other related offences Commission (ICPC), querying the transparency of the contract award process and sought its investigation.

The plaintiffs want the court to either restore the N2,864,349,600 contained in the original bid they submitted or the N1,786,287,040, “being the initial negotiated fee between the 1st plaintiff (J.K.Gadzama LLP) and the 2nd defendant (BPE) “as the binding contract sum for the provision of legal advisory services for the liquidation of PHCN.”

In its counter-affidavit, the BPP stated that it refused to issue a “certificate of no objection” (approval) for the award of the contract in line with its statutory functions and pursuant to the advice of the Attorney General of the Federation (AGF), who faulted the contract.

Court documents revealed that the AGF, in a letter dated September 11, 2014, said any approval of the contract should be subject to review on the scope of work to be done, “mindful of the fact that the liquidation of PHCN is merely notional and will not involve most of the services outlined in the consultant’s scope of work.

“Items 1, 3, 5, 6 and 8 of the scope of work for the Legal Advisory Services, as contained in Appendix B of the Draft Agreement are unnecessary for the liquidation of PHCN. Similarly, any of the remaining items 2, 4, 7 and 9 which is not contemplated by the procedure described in sections 457 – 468 (and there is hardly any contemplated) would equally be unnecessary to accomplish the liquidation.

“I am to reiterate my earlier opinion that the proposed engagement of consultants for provision of legal Advisory Services for the liquidation of PHCN and valuation of PHCN’s non-core headquarters assets is inconsistent with the provisions and spirit the Electric Power Sector Reform (EPSR) Act, and that the proposed agreement to this effect, should not be executed by parties.”

The BPP argued that, in awarding the contract to the 1st plaintiff (J.K.Gadzama LLP), the 2nd defendant (BPE) violated existing laws, more so, when it was not the nature of contracts that involved national security or defence to warrant it from being exempted from the application of the PPA 2007.

It argued that from a community reading of sections 16(1) & (2), 41(10 of the PPA 2007 the award of consultancy contract for a legal advisory service is a public procurement within the meaning of Section 15(10 and 60 of the PPA 2007.

The BPP, while challenging the BPE to produce the certificate of no objection, on which basis it purportedly awarded the contract, argued that its petitions to the EFCC and ICPC on the issue were not frivolous, but intended to ensure that due process was adhered to.

It further said: “in the instant case, the 2nd defendant (BPE), in gross violation of instant law, particularly section 16(1)(2) of the PPA 2007, after being denied the request for the issuance of a certificate of no objection to award a consultancy contract for legal advisory services for the winding up of PHCN pursuant to Section 16(18) of the PPA 2007 and also, on the objection and advice by the AGF, BPE went ahead to award the contract.

“It is noteworthy to state that the issue in contention is not the selection of the 1st plaintiff as the winner of the bid, but whether the award of the said contract to the 1st plaintiff by the 2nd defendant, without a certificate of no objection duly issued by the 1st defendant, is lawful.

“We submit that the award of the contract to the 1st plaintiff by the 2nd defendant, without due compliance with Section 16(1)(2) of the PPA is illegal, null and void and same should be set aside accordingly pursuant to Section 16(4) of the PPA 2007,” the BPP said.

It equally objected to the suit on ground of jurisdiction, arguing that not only was there no cause of action against it and that the suit was statute-barred within the contemplation of Section 2(a) of the Public Officers’ Protection Act, having been filed about seven months after the downward review of the contract sum was effected.

The BPP noted that while the plaintiffs stated that the downward review was effected in April 2015, they filed the suit on December 8, 2015.

After taking arguments from parties on June 7 this year, Justice Adeniyi Ademola reserved judgment and said the court will inform parties when the judgment is ready.

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